Corporate bond market robust in recent months

Nguyen Hoang Duong, deputy director of the Banking and Financial Institutions Department under the Ministry of Finance, said that the market started to see positive signs from the second quarter of this year with increases in bond issuance volume.

Statistics showed that about 70 enterprises issued bonds worth 180.4 trillion VND (7.6 billion USD) in the first ten months of this year and bought 190.7 trillion VND of bonds before maturity, an increase of 30.3% over the same period last year.

In October alone, the private bond issuance value totalled 41 trillion VND, 17 trillion VND higher than September.

“The market is recovering thanks to the Government’s drastic policies and changes in market participants”, Duong said.

The corporate bond market has been frozen after the breakout of violations in issuance by some big real estate developers.

However, the Government took drastic measures to stabilise the macro-economy and operate fiscal and monetary policies with flexibility to support production and business, enabling enterprises to have cash flow for debt repayment.

Most importantly, market participants were more aware of their rights and obligations, which would help the market develop transparently and sustainably, he said.

Duong urged investors to study regulations, and information and financial capacity of issuers carefully and be responsible for their investment decisions.

He noted that the risk of bonds is the risk associated with the bond issuers, not to the bond distributors.

The finance ministry would continue to work with relevant ministries and agencies to ensure stability, transparency, safety and sustainability for the corporate bond market which would help attract medium- and long-term capital for investment and development, he said.

The ministry would closely watch the market developments and ask enterprises to arrange resources for payment following the established regulations. Enterprises, in case of facing difficulties in repayment, must negotiate with investors on solutions for bond restructuring.

Besides, inspection would be enhanced to improve quality of bond issuance and services to consolidate investors’ confidence./.