Illustrative image (Photo: VNA) Minister of Finance Ho Duc Phoc said the move was aimed to solve a number ofcurrent problems.
The ministry would also review the Law on Securities and the Law on Enterprisesto amend the regulations on the conditions for issuing corporate bonds and forprofessional securities investors.
Regarding the capital market, Minister Phoc said that with the rising capitalmobilisation scale, the market had gradually affirmed its role as an effectivemedium and long-term capital mobilisation channel for enterprises, which is inline with the State's orientation on the balanced development of the capitalmarket and credit market, reducing the pressure on the bank credit channel'scapital supply for the economy.
Meanwhile, the country's corporate bond market size is quite modest compared tothe region's peers, according to the ministry. The outstanding debt of thecorporate bond market is currently over 15% of GDP, while the FinancialStrategy sets a target that the corporate bond market size will be 20% of GDPby 2025 and at least 25% of GDP by 2030.
The stock and bond market in 2022 has experienced many ups and down, mainly dueto the reduction of investors' confidence and low domestic liquidity, as wellas investors' cautious sentiment amid uncertainties and less positiveeconomy and policies in the world.
For the domestic market, higher interest rates tend to shift cash flows to thecommercial banking system, resulting in the tightening of the economy'sliquidity.
The corporate bond market is even affected by investors' confidence due to theviolations of some enterprises that have just been handled and the fact thatsome media report unorthodox and false information about some bond issuers. Onthe other hand, both issuers and service providers also worry about theinspection and supervision focused on monitoring the purpose of bond issuances.
To restore confidence and ensure the rights and interests of investors andmarket participants, the head of the MoF said that the agency had implementedmany synchronous solutions.
Most recently, the Ministry held a meeting on November 23 with 39 issuers andsecurities companies to discuss the payment of bond principal and interest, andpropose solutions for the market.
The MoF requires issuers to use all resources to ensure payment of bondprincipal and interest as committed to investors. In case of difficulties inbalancing sources for payment, the issuer actively negotiates with investors toconsider and take harmonised measures to restructure bond debts in line withthe actual situation of the economy and in accordance with the law.
The ministry has suggested that enterprises consider using audit, creditrating, and asset valuation services to assess the business and financialsituation of enterprises and promptly publish official information forinvestors to grasp the companies' actual financial situation.
According to the minister, it needs to strengthen communication, stabiliseinvestors' sentiment and confidence, continue to focus on communicating with a clear message about theState's development orientation for the corporate bond market whilecoordinating with the Ministry of Information and Communications in orientingcommunication issues, preventing unregulated and unorthodox news reporting;promptly detect and take measures to strictly handle cases of fake news,affecting the market.
In addition, the MoF also has to focus on management and supervision, improvethe efficiency of law enforcement; review and reform the process of licensingsecurities offering to the public, creating favourable conditions for eligibleenterprises to offer bonds to the public; direct the stock exchanges to prepareindividual corporate bond trading platforms in order to develop a transparentsecondary market.
The ministry has proposed to the State Bank of Vietnam (SBV) to focus onimplementing measures to ensure liquidity of the commercial banking system andmanage credit growth in line with the development of the economy in the contextthat the corporate bond market is facing difficulties./.
VNA
