Orientations to bond market development till 2020

Hanoi (VNA) – The Finance Ministry will refine policies, ensure supply-demand and develop intermediary institution this year to develop a stable bond market, head of the ministry’s Finance-Banking Department Phan Thi Thu Hien told a press conference in Hanoi on February 28.

The ministry plans to submit a roadmap on the development of the bond market for 2017-2020 with a vision to 2030 to the Prime Minister this year, and a decree replacing another one on corporate bond issuance to the Government.

It is also due to issue a Circular on purchasing government bonds to contribute to the restructuring of government debts portfolio.

The government bond market, set to be a model in the financial market, will offer bonds with 10-year, 15-year, 20-year and 30-year maturity, and those at floating interest rates.

The Vietnam Social Insurance’s investment mechanism in the bond market will be renewed in line with the government’s Decree 30/2016/ND-CP while insurance firms, especially life insurance ones, and foreign investors are encouraged to join the market.

More credit rating organisations are expected to be born to improve the openness and transparency of the process of raising bond capital. Meanwhile, the State management agencies will strengthen liaison with the Vietnam Bond Market Association along the process.

In order to develop the domestic bond market in line with international practices, further attention will be paid to international cooperation.

According to the ministry, as many as 281.75 trillion VND (12.25 billion USD) worth of government bonds were issued last year, or 98.3 percent of the yearly target, 91 percent of them offered the maturity of at least five years. Notably, 30-year government bonds had been issued to foreign investors for the first time.

Thanks to restructuring, the government debt portfolio attracted capital accounting for 27.3 percent of the gross domestic product, compared to 16.2 percent in 2015.-VNA