Two traders at the trading floor of DSC Securities Co in Hanoi. (Photo: VNA)According to Dinh Trong Thinh, Senior Lecturer of the Academy of Finance, theseparate bond trading system is necessary and should have been implementedearlier. Privately-placed bonds need a separate trading market, which allowsbondholders who do not want to hold bonds for a long time to sell them toothers.
This will help the bonds circulate easily and the bonds will be valued moreaccurately, and at the same time, their safety will be more assured, he said.
According to Nguyen Ba Khuong, an analyst from VNDIRECT Securities Joint StockCompany (VNDIRECT), private placement is still quiet.
According to VNDIRECT, in the second quarter of 2023, there were 29 successfuldomestic corporate bond issuance tranches, with a total issuance value of about19.28 trillion VND, down 34.4% compared to the first quarter of 2023, and down83.1% over the same period last year; in which there were 28 tranches ofprivate placement with a total issuance value of 17.28 trillion VND, accountingfor 89.6% of the total issuance value.
There was only one tranche where bonds were issued to the public with theissuance value of 2 trillion VND, accounting for 10.4% of the total issuancevalue in Q2.
Accumulated in the first six months of 2023, the total issuance value reachedabout 48.69 trillion VND, down 73.3% compared to the same period last year; inwhich, the total value of private placements reached 42.78 trillion VND, down75.6% over the same period last year, the total value of public issuancereached 5.9 trillion VND, down 15.9% year-on-year.
Real estate was the industry group with the largest proportion of corporatebond issuance in the second quarter of 2023 when accounting for more than 34.9%of the total issued value, followed by the banking group, accounting for 29% ofthe total issued value. The group of multi-industry groups and the logisticsgroup accounted for 10.4% and 8.5%, respectively, and other industriesaccounted for 17.2%.
Enterprises with the largest private bond issuance value in the second quarterof 2023 include Nui Phao Mineral Exploitation and Processing Limited LiabilityCompany issuing 2.6 trillion VND, with an interest rate of 9% per year and termof 60 months; Construction Business Development Company Limited 3 issuing 2.25trillion VND with the interest rate of 14% per year for a term of 60 months.
The TMT Real Estate Development Investment Joint Stock Company issued 2.01trillion VND of bonds with interest rate of 13.75% with a term of 84 months, theHCM City Development Commercial Joint Stock Bank issued 2 trillion VND ofbonds, with an interest rate of 9.1% for an 84-month term.
Private placement in the second quarter of 2023 was quiet, said VNDIRECTSecurities Co.
VNDIRECT said that investors' confidence had not improved in the context thatmany issuers are facing cash flow difficulties, leading to late payment of duebond debts.
According to the MB Securities Joint Stock Company (MBS), the poorly-performingreal estate and corporate bond markets will create a bottleneck for the capitalflow of the economy, causing investment to shrink, slowing down the economicgrowth.
According to VNDIRECT, as of June 26, about 59 enterprises on the HNX were onthe list of late payment of interest and principal debt of corporate bonds,according to the announcement of HNX.
VNDIRECT estimated that the total outstanding debt of these enterprises reached159.5 trillion VND, accounting for about 14.6% of the total outstandingcorporate bond debt in the market.
In fact, after the incident at Tan Hoang Minh, Van Thinh Phat and a series oflarge enterprises failed to pay bond principal and interest on time, investorshave gradually lost confidence in the market.
Therefore, operating a secondary trading floor of corporate bonds would make manybondholders feel secure, said bond investor Nguyen Van Hanh.
According to Deputy General Director of the Vietnam Construction SecuritiesJoint Stock Company (CSI), Do Bao Ngoc, the Vietnamese bond market lacks acentralised secondary trading market and this market should have been inoperation a long time ago.
He said that the operation of this bond market would be a factor in thedevelopment of the Vietnamese market in the long term, making the liquidity ofbond transactions increase.
The floor would be a professional and effective capital mobilisation channel.
“We gradually have a more professional financial system, thereby attractingmore foreign capital,” Ngoc said.
The separate bond trading system must operate safely and efficiently, in linewith international practices and meet the requirements of future development ofthe corporate bond market.
According to Director of the Market Development Department, State SecuritiesCommission, Ta Thanh Binh, when the market is in place, member securitiescompanies will monitor the participation of investors more effectively.
The new secondary bond market increases corporate bond transparency andincreases access from issuers to investors, thereby improving payment qualityand minimising risks for investors./.
VNA
