Increasing opportunities for transparency in the separate cooperate bond market
Increasing opportunities for transparency in the separate cooperate bond market

Transparency is the primary purpose

Ms. Vu Thi Thuy Nga, Deputy General Director of the Hanoi Stock Exchange (HNX), told the press that the operation of the separate corporate bond trading system will contribute to enhancing transparency and reducing risks for investors in trading, as well as promoting liquidity in the corporate bond market.

According to HNX's Deputy General Director, separate corporate bonds included in centralized trading also provide regulators, market participants, and the investing public with more information about the separate corporate bond market from primary to secondary levels. Simultaneously, the trading focuses on improving investor self-responsibility in bond purchase and sale, as well as boosting the efficiency of State agency management and supervision for compliance with legal regulations on separate corporate bond transactions.

Leaders of HNX also stated that, in addition to the trading system, the full database of all separate corporate bond transactions has been upgraded, allowing investors to access more complete information on separate corporate bonds, thereby gradually reviving investors' trust and helping the corporate bond market to develop more transparently and sustainably.

There are more benefits

According to Nguyen Quang Thuan, Chairman of FiinGroup, the centralized listing of separate corporate bonds will increase the market’s transparency, particularly concerning the information of issuers. While some funds are only permitted to invest in listed bonds to ensure the safety indicators of fund activities, listing on the secondary market will help expand the investor base.

Mr. Thuan also claimed that the listing helps to build the bond valuation mechanism. The market value of corporate bonds will depend on the credit quality or credit rating of the issuer or the bond itself, as well as the liquidity of the bond, as per international practices and standards of bond risk management. The yield curve will then have a basis for formation as well as a valuation reference.

According to Mr. Thuan, this will make the evaluation of bond funds' effectiveness more transparent and contribute to lowering the risk of bond-run requirements, or the process of determining the price for investors' withdrawal transactions while the funds are in operation.

Furthermore, the listing aids in clearly identifying bond holders concentrated at the Vietnam Securities Depository, reducing the risk of disputes and ensuring investors' legal rights.

"The listing of corporate bonds is a significant step forward for the market, gradually contributing to the restoration of faith in the corporate bond market, particularly among professional and amateur individual investors," emphasized Fiingroup Chairman.

Experts from KB Securities Vietnam Joint Stock Company also stated that the fact that the separate corporate bond trading system is currently operational and listed centrally, rather than trading through the systems of individual securities companies will make it easier for investors to access information and make comparisons.

Moreover, investors will benefit from strict regulations on timely and transparent information disclosure, thus allowing them to make accurate and effective investment decisions. Easier transactions will also improve market liquidity and facilitate businesses to access capital from professional investors and financial institutions.