Customers visit a Vietcombank branch on Cat Linh Street in Hanoi. The bank is no longer a market maker in the local debt market from 2020. (Photo: vietnambiz) Hanoi (VNA) - Thirteen commercial banks andsecurities firms will be allowed to join the debt market or Government bonds(G-bonds) market in Vietnam this year.
According to the Government’s Decree No. 95/2018/ NĐ-CP, three securities firms, nine commercial banks and a member company ofAgribank are identified as the market makers of government debt instruments,which are known as G-bonds, government-guaranteed bonds or Government notes.
Compared to 2019’s version, the new list saw theinclusion of Orient Commercial Joint Stock Bank (OCB) and removal of JointStock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Lien VietPost Joint Stock Commercial Bank (LienVietPostBank) and Vietnam InternationalCommercial Joint Stock Bank (VIB).
According to the Ministry of Finance (MoF),market makers have to send yearly reports to the ministry for evaluationbetween November 1 and 10 every year. The ministry will assess the conditionsfor maintaining the market maker status and announce it before December 31every year. For market makers who did not meet the conditions, the MoF willsend them notices with reasons on why they were removed.
For the three banks removed from this year’slist, however, the MoF has not so far made an announcement.
Joining the G-bond market, market makers havethe right to participate in the issuance and repurchase of Government bonds andnotes by bidding, to be given priority as the main guarantee organisation forthe issuance of G-bonds and other government guaranteed bonds as well asGovernment debt swaps or repurchase agreements.
They can also participate in discussions andpolicy making of the bond market.
According to a recent report of the AsianDevelopment Bank (ADB), the local bond market has seen significant changes andsteady progress over the past 10 years, adding that Viet Nam’s bond and capitalmarkets have improved significantly as the government continues to initiatereforms and pass enabling legislation.
As of December 31, 2019, the total value ofG-bonds and other notes listed on the Hanoi Stock Exchange (HNX) reached morethan 1.15 quadrillion VND (49.45 billion USD)./.
VNA
