Cash notes being counted. The corporate bond market continued cooling down in October with total bonds sold worth 409 million USD, down 12.8 percent monthly. (Photo laodong.vn)Hanoi (VNS/VNA) - The value of corporate bonds issued in October was 9.5trillion VND (409 million USD), down 12.8 percent from September, according tothe Hanoi Stock Exchange (HNX).
Compared to August, the figure was down 84 percent.
Creditors remained the biggest issuers as the value of their sold bonds was 3.7trillion VND, accounting for nearly 39 percent of the total figure.
Real estate firms ranked second with 3.07 trillion VND worth of corporate bondssold to investors in September, which accounted for 32.3 percent of the total.
Services and construction companies issued 226 billion VND and 300 billion VNDworth of bonds in September, respectively.
Their figures accounted for 2.4 percent and 3.2 percent of the market’s total,respectively.
In October, 20 companies organised 90 bond auctions. The average term of thebonds was 5.47 years.
Bonds sold by lenders had the highest average annual yield rate of 6.08 percent,followed by construction companies (5.33 percent), property developers (4.61 percent),and services suppliers (2.69 percent).
The northern market regulator said that the market continued cooling down inOctober since Decree 81/2020/NĐ-CP took effect on September 1 to tighten thecorporate bond market in order to protect investors that are vulnerable torisks and make the market more transparent.
According to the HCM City Real Estate Association (HoREA), outstanding loansfor real estate companies in HCM City increased by 5.9 percent in 10 months to 293.8trillion VND in October.
The figure was equal to 12 percent of the total outstanding loans for allsectors in the southern hub city, which rose 5.5 percent in 10 months to 2.42quadrillion VND in October.
About 2.7 percent of outstanding loans for real estate projects were consideredbad debts, according to HoREA.
The Vietnamese economy continued progressing in the first nine months at a paceof 2.12 percent, inflation was controlled well and the consumer price index(CPI) rose only 3.71 percent.
Those factors mean the bad-debt ratio in the real estate sectorremains under control, HoREA said.
“But a large amount of loans made to real estate firms, including bondpurchases by both institutional and individual investors, may turn tonon-performing loans,” the association warned.
The regulators should pay attention to consumer lending, especially when somepeople borrow money to buy properties instead of building and repairing theirhouses as contracted, HoREA said.
Those loans may account for 1.7 percent of the total real estate loans and suchloans require stricter supervision from the authorities, the association added.
Property developers made big bond issuances in January-August but the sectorcooled down in September and October due to Decree 81/2020/NĐ-CP.
It should be noted that the number of individual investors accounts for 20percent of all investors while bond purchases by banking institutions occupy amajority of the total figure, HoREA said.
Those underline potential risks for investors, issuers and financial companieswhen the bonds come to maturity, the association said.
There needs to be an independent rating agency to evaluate the bond issuers,thus making the market more transparent and better protecting the investors,HoREA said./.
VNA
