Some potential problems in Vietnam corporate bond market today such as: Banks increase bond holdings; Through banks, a large amount of bonds are distributed to tens of thousands of indiv
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Research, system analyze and clarify some basic theoretical contents about the corporate bond market, the role, operating characteristics, and factors affecting the development of the bond market enterprise.
On the basis of surveying domestic and foreign experiences, drawing lessons learned to develop the corporate bond market, and proposed solutions to develop Vietnam's corporate bond market.
Chapter 1: General overview of corporate bond market development
Chapter 2: Vietnam corporate bond market situation
Chapter 3: Solutions to develop Vietnam's corporate bond market
BASIC THEORY ON VIETNAM CORPORATE BOND MARKET
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Corporate bonds are securities issued by companies to raise capital for investment, development, and business expansion, serving as an alternative to bank loans or equity financing These debt instruments obligate the issuer to pay interest to bondholders at specified intervals and to repay the principal amount upon maturity In Vietnam, corporate bonds are defined under Article 4 of Decree No 153/2020/ND-CP as securities with a term of one year or more, confirming the legitimate rights and interests of bondholders in relation to the issuer's debt.
In addition to the characteristics of debt securities, corporate bonds have the following characteristics:
A bondholder is a lender who receives regular interest payments and the principal amount upon bond maturity As a result, bondholders do not have the right to engage in the operational activities of the issuing company and are excluded from making decisions regarding the allocation of the borrowed funds.
Bonds provide a fixed income through interest, independent of a company's performance In the event of bankruptcy or dissolution, bondholders have priority over shareholders for repayment of principal and interest Consequently, corporate bonds offer greater stability and lower risk compared to stocks.
- Corporate are classified in many different ways, based on the issuer, the applying interest rate, and the bond's terms and conditions.
When an enterprise plans to issue bonds for capital raising, it is crucial to select the appropriate bond type based on its operational and financial capabilities Additionally, conducting market surveys to gauge investor interest and prevailing interest rates is essential for ensuring a successful bond issuance with manageable debt costs The chosen bond type will significantly impact interest payment expenses, payment methods, issuance feasibility, and the liquidity of the bonds.
Corporate bonds can be categorized into various types based on different classifications, with the market featuring a blend of these bond types The primary criteria for classifying corporate bonds include factors such as credit quality, maturity, and interest rates.
1.3.1 Classified by form of bond
In the form of bonds, corporate bonds include registered bonds and non-registered bonds Print there:
A registered bond is a specific type of bond that identifies the investor by name, ensuring that only the named holder receives the interest and principal payments The issuer is responsible for making these payments solely to the registered investors listed on the bonds.
- Unregistered bond is a type of bond that does not bear the name of the investor who owns the bond Investors who own bonds receive interest, principal and other benefits.
1.3.2 Sort by interest rate of bonds
According to interest rates, bonds are classified into fixed-rate bonds, floating-rate bonds and zero-interest-rate bonds, in which:
A fixed-rate bond is a traditional financial instrument whose yield is based on a predetermined percentage of its face value Commonly issued in the corporate bond market, these bonds offer a consistent interest rate, with periodic interest payments made throughout their duration This makes fixed-rate bonds an ideal choice for issuers who have stable and regular cash flows.
Floating rate bonds are debt securities with interest rates that fluctuate based on changes in a reference rate, along with an adjustment margin The issuer determines the reference rate, which may include the Libor rate, the central bank's base rate, or the capital mobilization rate from other commercial banks, depending on market lending rates and the timing of issuance.
Investors must be informed about the reference interest rate and the principles governing the adjustment margin This adjustment margin is established based on the issuing enterprise's financial strength, market reputation, and the appeal of its bonds.
A zero-coupon bond is a type of bond that does not pay periodic interest to investors Instead, these bonds are sold at a price lower than their par value, with the difference determined by the discount rate At maturity, investors receive the full par value of the bond The primary benefit for the issuing enterprise is the avoidance of periodic interest payments, making zero-coupon bonds an attractive financing option.
1.3.3 Classification by level of payment security
According to the degree of payment security of the bond, including payment secured bonds and unsecured bonds:
- Payment security bond is a type of bond with a commitment to pay principal and interest to investors even in case the opening enterprise is unable to pay.
An unsecured bond is a financial instrument that relies solely on the revenue generated by the issuing enterprise for repayment Established and reputable companies can issue these bonds without the need for collateral, making them a viable option in the market.
1.3.4 Classification according to the nature of the bond
According to the nature of bonds, including non-convertible bonds, convertible bonds, warrant-backed bonds and callable bonds Print there:
Convertible bonds are unique financial instruments that allow holders to convert them into common shares of a company at a specified conversion rate These bonds are particularly attractive when the market price of the shares increases, enabling investors to profit from the difference between the conversion price and the market price Companies that issue convertible bonds benefit from several advantages, including lower interest rates and the potential to attract a broader range of investors.
+ Convertible bonds can be sold at a lower interest rate than that of bonds or common stocks.
The number of shares in the market rarely increases rapidly because the bond-to-stock conversion occurs over a long period of time.
However, issues also face difficulties when opening convertible bonds, specifically as follows:
+ Shares of the company are diluted at the time of conversion
+ The conversion will change the company's ability to control (then voting power increases because common stock increases, thereby affecting control of the company)
+ A decrease in the amount of debt of the business means that the company loses financial leverage because then the debt has become shareholder capital after the time of conversion.
+ Change the owner's equity structure of the enterprise.
When the market share price is low at the time of conversion, investors are less likely to convert their holdings into shares As a result, the company must fulfill its obligation to repay the principal and interest to the investor, leading to significant cash flow pressures for the issuer.
Bonds with warrants are investment instruments that allow investors to purchase a specific number of shares at a predetermined price within a set timeframe, without granting them the right to dividends These bonds serve dual purposes: they help businesses raise capital while also addressing shareholder interests However, the exercise of warrants can negatively impact earnings per share; if a company's after-tax profits do not rise when warrants are exercised, the overall profits are diluted, leading to a decrease in earnings per share.
A callable bond is a financial instrument that grants the issuing company the option to repurchase part or all of the bond before its maturity date, often at a redemption price that exceeds the bond's face value Companies typically issue callable bonds under specific circumstances.
MARKET SITUATION OF VIETNAM CORPORATE BOND
Activities of entities in the Vietnamese corporate bond market recently
Figure 4: Ratio of issuance sort by sectors comparison between Q1/2022 and
TY TRONG PHAT HANH THEO NHOM NGANH
Table 2: Issuance volume sort by sectors - comparison between Q1/2022 and
HANG HOA VA DICH VU TIEU DUNG 3,545 964 267.66%
In the last quarter, the real estate sector dominated the market, contributing VND 24,235 billion, which represents 92% of the total value Notably, 7 out of 8 enterprises in this group have their issuances secured by real estate or backed by bank guarantees.
In the first quarter, the issuance of corporate bonds experienced a significant decline, dropping 63% compared to the same period in 2022 Activity in this sector was notably limited during the first two months, but began to pick up in March following the implementation of Decree 08/2023/ND-CP.
In the first quarter of 2023, HNX reported that 24 issuers were delayed in paying bond principal and interest, totaling VND 6,472 billion Notably, 15 of these issuers were real estate companies, highlighting the challenges of capital mobilization and adverse conditions in the real estate market.
Figure 5: Ratio of private and public issuance 2015-2023
TY TRONG PHAT HANH RIENG LE VA RA CONG CHUNG
20195 2016 2017 2018 2019 2020 2021 2022 2023 mmm Công chúng mm Riêng lẻ ==@—Tỷ trọng TP PH công chúng ==@==*% Dư nợ/GDP
In 2023, the proportion of improper placements through private placements significantly decreased, accounting for 80-90% compared to previous years In the first quarter of 2022, individual disbursements made up 84.66%, alongside 9 public issuances totaling VND 8,696 billion, which represented 15.34% Notably, the volume of corporate bond offerings in 2021 peaked at VND 51,125 billion, reflecting a substantial increase of 51.8%.
In 2020, the registration volume of corporate bonds rose by 11.8%, representing 5.3% of the total underappropriation volume By the first quarter of 2022, businesses had issued VND 5.486 trillion in corporate bonds to the public However, the first quarter of 2023 showed a decline in recorded activities.
6 overspending of bonds to the public worth VND 3,521 billion, accounting for 12.3% of the total unpaid value and 12 separate overspending worth VND 25,035 billion, accounting for 87.7%
Since the implementation of regulations in 2021 that require professional securities for purchasing private-issued bonds, businesses have increasingly opted for public corporate investors However, the lengthy process of public bond issuance and the significant demand for large corporate bonds have diminished the incentive for companies to transition from private to public offerings.
Figure 6: Corporate bond redemption value 2022-2023
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In the first quarter of 2023, businesses repurchased bonds totaling VND 29,863 billion, marking a 63% increase compared to the same period in 2022 The Real Estate sector led this trend, buying back VND 8,682 billion, which represents 29% of the total acquisition value The Construction sector followed with VND 5,454 billion, accounting for 18% A significant portion of these redeemed bonds is set to mature in 2023 and 2024.
Real estate enterprises continued to buy back bonds quite a lot in the context of many difficulties in mobilizing capital and paying interest and principal of bonds on time.
Figure 7: Corporate bonds to maturity 2023-2024
A report by VNDIRECT Securities Joint Stock Company indicates that the total value of individual corporate bonds maturing in the first quarter of 2023 is projected to be VND 30.655 billion, reflecting a significant decrease of 40.3% compared to the previous quarter.
In 2022, there was a significant increase in maturity pressure, with values rising by 246.7% compared to the previous year This trend is expected to continue in Q2 and Q3 of 2023, with projected maturity values of VND 93,139 billion (up 169% year-on-year) and VND 89,488 billion (up 49.9% year-on-year), respectively However, a decline is anticipated in the fourth quarter of 2023, with maturity values cooling down by 33.4% from the previous quarter to VND 59,571 billion, reflecting a 16% increase compared to the same period last year.
VNDIRECT analysts project that the maturity value of corporate bonds in 2023 will reach approximately VND 272,853 billion, reflecting a 76.6% increase compared to the previous year The maturity rates for corporate bonds are 37.6% in real estate, 37% in finance and banking, and 25.5% across other industries, encompassing individual corporate bond issuances from 2019 to the present, including those redeemed before maturity.
Domestic investors dominate the corporate bond market, holding approximately 98% of the total issued volume from 2017 to 2020, while foreign investors account for only about 2%.
Figure 8: Structure of investors in primary corporate bonds in 2021 eT BẢO HIẾM
(Source: VBMA, Vietnam Bond Market Summary Report 2021)
As of the end of 2021, banks and securities companies dominated the corporate bond market, investing a total of VND 373 trillion, which represents 52% of all corporate bonds issued that year Specifically, these institutions purchased VND 154 trillion in bank bonds, accounting for 68% of the total issued, predominantly focusing on short-term bonds with maturities of 1-4 years They also acquired VND 153 trillion in real estate bonds, making up 48% of the issued volume In 2018, credit institutions held approximately 35.8% of the issuance volume, while securities companies accounted for 39.4% Other investors included insurance enterprises (3.2%), investment funds (1.9%), personal investors (5.6%), and foreign investors (2.67%) By 2019, institutional investors significantly increased their presence in the primary market, purchasing 91.6% of individual corporate bonds, leaving individual investors with just 8.4%.
Figure 9: Structure of real estate bond Figure 10: Structure of creditors bond investors in 2021 investors 2021
Co cấu nhà đầu tư TP Bất động sản 2021 Cơ cấu nhà đầu tư TP TCTD 2021
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(Source: VBMA, Vietnam bond market summary report in 2021)
Within 15 commercial banks with total outstanding loans accounting for about 75% of the credit market share of the whole system (excluding Agribank), the total balance of bonds of financial institutes that commercial banks invest in December 31, 2021, was about VND
As of the end of 2021, the total value of corporate bonds held by commercial banks reached VND 214 trillion, reflecting a 17% increase since the end of 2020, with corporate bonds comprising 3.1% of the total credit in these banks Techcombank led the market with VND 62,809 billion in corporate bonds, a 34.4% rise from the previous year, followed by Military Commercial Joint Stock Bank (MB) with nearly VND 43 trillion, Vietnam Prosperity Commercial Joint Stock Bank (VPBank) at VND 27,782 billion, and TPBank with VND 18,577 billion Several other banks, including BIDV, Vietcombank, VietinBank, and HDBank, also hold over VND 10,000 billion in corporate bonds Typically, investors retain these bonds until maturity, although they may sell them early to securities companies if necessary.
In 2021, regulatory changes led to a decrease in corporate bond ownership by commercial banks and securities companies, as stricter guidelines were introduced under Circular 16/2021/TT-NHNN This circular mandates that credit institutions can only purchase bonds from issuers with no bad debts in the past year and prohibits the redemption of unlisted corporate bonds within 12 months Consequently, commercial banks are shifting their focus to short-term credit, while corporate bonds are evolving into a medium and long-term capital mobilization channel for enterprises This shift indicates a significant transformation in the corporate bond market, limiting the involvement of commercial banks and securities companies as both issuers and investors.
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1 Development orientation of corporate bond market in Vietnam
Vietnam aims to stabilize its macro-economy and maintain public debt within safe limits from 2021 to 2030, adhering to international commitments in free trade agreements, including the CPTPP and EVFTA The Asian Development Bank (ADB) projects a 6.5% economic growth for Vietnam in 2023, with an increase to 6.8% in 2024 Additionally, the World Bank's March 2023 report indicates a favorable outlook for Vietnam's economy, despite facing domestic and international challenges, with GDP expected to grow by 6.3% in 2023.
The Vietnamese corporate bond market holds significant growth potential, currently representing only 6% of the total credit market, which stands at 10,500 trillion VND According to the Financial Strategy to 2030, outstanding bond debt is projected to reach 47% of GDP by 2025, with corporate bonds contributing 20% of this figure, and increasing to 58% of GDP by 2030, with corporate bonds reaching 25% Additionally, Vietnam's positive macroeconomic outlook, with a growth target of 6.5-7% by 2030, further underscores the market's potential.
The COVID-19 pandemic continues to pose a risk of outbreaks, as evidenced by the situation in China during April-May 2022 Additionally, significant fluctuations in the international political and economic landscape, particularly the conflict between Russia and Ukraine, threaten global economic growth and contribute to a downward trend in international trade and investment.
As global public debt increases, risks in the international monetary and financial markets are often present.
Domestically, macroeconomics, major balances still have potential risks, inflation control faces difficulties; The risk of outbreaks due to new strains still exists High oil prices
SOLUTIONS TO DEVELOP VIETNAM CORPORATE BOND MARKET .o 5Ý£Ố
Development orientation of corporate bond market in Vietnam
From 2021 to 2030, Vietnam aims to stabilize its macro-economy while maintaining public debt within safe limits, continuing its commitment to international free trade agreements like CPTPP and EVFTA According to ADB, Vietnam's economy is projected to grow by 6.5% in 2023, with an increase to 6.8% in 2024 The World Bank's March 2023 report also highlights a favorable outlook for Vietnam's economy, despite facing domestic and international challenges, with GDP growth forecasted at 6.3% for 2023.
The Vietnamese corporate bond market has significant growth potential, as it currently represents only 6% of the total credit volume of 10,500 trillion VND According to the Financial Strategy to 2030, outstanding bond debt is expected to reach 47% of GDP by 2025, with corporate bonds making up 20% of this figure, and further increasing to 58% of GDP by 2030, where corporate bonds will account for 25% Additionally, Vietnam's macroeconomic outlook remains positive, targeting a growth rate of 6.5-7% by 2030, as outlined in Congress Resolution 13.
The COVID-19 pandemic continues to pose a risk of outbreaks, as evidenced by the situation in China during April-May 2022 Additionally, significant fluctuations in the international political and economic landscape, particularly the conflict between Russia and Ukraine, threaten to negatively impact global economic growth, international trade, and investment.
As global public debt increases, risks in the international monetary and financial markets are often present.
Domestically, macroeconomics, major balances still have potential risks, inflation control faces difficulties; The risk of outbreaks due to new strains still exists High oil prices
Rising costs of commodities, raw materials, and transportation are negatively affecting production and business operations Additionally, there are significant risks associated with credit, bad debt, the stock market, corporate bonds, and real estate These challenges have led to increased input costs, complicating the overall development trends in the market.
Many countries are adopting sustainable development models such as the digital economy, circular economy, and green growth, influenced by the United Nations 2030 Agenda for Sustainable Development This agenda significantly impacts global economic cooperation, trade, and investment, with a notable shift towards renewable and green energy in the near future Additionally, advancements in science, technology, and innovation, driven by the Fourth Industrial Revolution, are set to have profound and multifaceted effects worldwide, becoming crucial for enhancing national competitiveness.
Digital technology is transforming economic development and societal structures, influencing state management, production, business models, consumption, and social interactions Concurrently, trends in international finance, including digital banking, comprehensive finance, and digital currencies, are gaining traction, revolutionizing transaction methods and financial management globally As countries compete to establish themselves as financial hubs, innovation has become a widespread phenomenon.
The rising trend of urbanization and smart city development has heightened the demand for infrastructure capital, prompting many countries, including Vietnam, to enhance corporate bond instruments for infrastructure financing Vietnam faces a significant need for infrastructure investment, requiring medium to long-term capital of VND 700,000 to 1 trillion annually until 2030 To ensure a healthy market, it is crucial to foster market development while managing risks effectively Addressing recent negative incidents is essential to rebuild investor confidence and prevent the establishment of detrimental precedents.
The above trends require corporate bond products to be more diversified to suit new tastes and investment trends.
In recent years, the government has established a clear development direction for the nation, emphasizing the enhancement of a socialist-oriented market economy The focus is on two key growth drivers: promotion and development.
To enhance the private sector and foster innovation and technology application, the bond market's development from 2021 to 2025 should prioritize specific strategic objectives aligned with these economic goals.
To enhance the bond market, it is essential to develop it synchronously in terms of scale, quality, and efficiency Strengthening the connection between the bond market and the money-credit market will effectively address the capital mobilization needs of the economy.
To enhance capital mobilization for enterprises, it is essential to focus on the development of the corporate bond market as a key medium and long-term financing channel Additionally, promoting the operation of the government bond market will serve as a foundational step towards advancing the overall bond market.
Enhancing market publicity and transparency is essential for strengthening corporate governance and ensuring effective information disclosure, while also safeguarding the legitimate rights and interests of all market participants.
- Promote the application of technology in the bond market to organizations operating and providing services, meeting the needs of all types of organizations and individuals participating in the market.
- Building and developing the bond market in accordance with the development level of the economy, implementing international practices and standards; expand and connect with regional and international markets.
The Financial Strategy to 2030 aims to enhance the corporate bond market by achieving specific targets: by 2025, the bond market's outstanding debt is expected to reach 45% of GDP, with the corporate bond market comprising approximately 20% of GDP Within this, the listed bond market is projected to represent 7% of the corporate bond market's outstanding debt Additionally, the strategy seeks to increase the annual trading volume of corporate bonds, including both listed and private placement bonds, to 5% of the outstanding balance of listed bonds by 2025.
To ensure the stable and sustainable development of the bond market, it is essential to implement a comprehensive set of solutions encompassing the policy framework, primary and secondary markets, and the enhancement of the investor system and market infrastructure The following section presents and analyzes several key recommendations to achieve these objectives.
Some recommendations to develop the corporate bond market in Vietnam
2.1 Completing the legal and policy framework
To establish a robust corporate bond market, it is essential to finalize a legal framework that aligns with the varying stages of market development, ensuring adaptability while maintaining a stable legal environment.
+ Raise the standard of conditions for corporate bond issuance;
+ Distinguishes between corporate bonds issued to the public and corporate bonds issued to the public;
+ Improve market organization for listed corporate bonds and privately issued corporate bonds;
+ Strengthening the responsibility of organizations and institutions to manage and supervise the corporate bond market;
+ More details on the purpose of issuing and monitoring the use of capital raised after issuing bonds;
+ Issuing consulting units, auditing firms must be responsible for issues related to their major;
+ The issuer must be responsible for the truthfulness and accuracy of the submitting documents and for using the capital for the right purposes as announced;
The management of security assets for settling bond debt requires clearer guidelines, particularly regarding the timeline for collateral handling and the prioritization of payments to bond investors in the event of corporate insolvency, especially in relation to other enterprise debts.
Key issues requiring prioritization include the amendment of Decree 153/2020 regarding private placements of corporate bonds and Decree 156/2020 on sanctioning administrative violations in the securities sector Additionally, the ongoing review of the Securities Law 2019 aims to enhance the standards for professional investors It is crucial to establish appropriate regulations concerning collateral, underwriting, and bond distribution, along with a robust management mechanism to ensure that issuers fulfill their obligations in utilizing the capital raised from bonds for intended purposes.
To enhance the effectiveness of domestic credit rating companies and assist investors in accurately assessing credit risk, it is crucial to implement solutions based on the existing legal framework for credit rating organizations Key reforms should include strengthening information disclosure and transparency requirements, particularly mandating that bond issuers obtain independent credit ratings This essential change will stimulate both primary and secondary markets, improve the quality of issued bonds, and foster a culture of utilizing credit ratings to evaluate bond risks effectively Additionally, regulations should be supplemented for specific types of issued bonds to further enhance market transparency and public awareness.
Establishing a Bond Information Center with clear operational regulations is essential for enabling investors to access vital market information that aids in their investment decisions Additionally, the corporate bond information page on the Stock Exchange should include comprehensive details such as the purpose of issuance, interest rates, and intermediaries involved, rather than just basic data like volume and maturity Prompt implementation of a corporate bond trading floor is necessary to ensure that businesses provide standardized and easily accessible information to investors.
To foster the growth of the secondary trading market for bonds, it is essential to enhance regulations governing bond transactions among credit institutions Given the challenge of rapidly diversifying the investor base in the bond market, the Government should develop a comprehensive competitive strategy to attract foreign investors This could include offering a wider range of interest rate-exchange hedging tools and implementing more appealing tax and fee policies.
Relevant authorities, including the Ministry of Finance, the State Bank, and the State Securities Commission, are actively promoting awareness of corporate bond regulations among businesses, investors, and service providers to ensure compliance with legal requirements in the market.
To enhance the skills, knowledge, and capacity of issuers and investors in the market, it is essential to implement robust measures For businesses, fostering effective corporate governance is crucial, alongside elevating the quality of enterprises through improved financial and governance capabilities Additionally, the adoption of international standards in governance, accounting, and information disclosure is vital for sustainable growth and transparency in the market.
66 in operations, diversifying business models and strategies, etc to increase investor confidence and increase the attractiveness of issued bonds and shares.
- Accelerate the establishment of the individual corporate bond trading market at the Stock
Exchange for professional investors to increase liquidity; increase the publicity, transparency, serving the management and supervision of bonds put into trading on the secondary market.
2.2 Market supervision and management mechanism
To enhance the management and oversight of the corporate bond market, it is crucial to strengthen coordination with relevant ministries, particularly the Ministry of Finance and the State Bank of Vietnam Regular inspections and compliance checks on issuers and service providers are essential to prevent market shocks, such as the Tan Hoang Minh case Implementing stringent financial disciplines for businesses issuing corporate bonds is necessary, especially concerning collateral risks Measures should include halting the licensing of real estate companies to issue international bonds, closely monitoring and classifying these enterprises, and restricting the use of funds raised through corporate bonds Since the end of 2016, real estate firms have been prohibited from using bond capital for commercial housing projects, allowing only for social housing initiatives and the renovation of old housing areas.
Timely and decisive handling of violations is crucial to prevent enduring negative consequences It is essential for management and supervision regulations to strike a balance between ensuring market stability and safety while also fostering growth and respecting market mechanisms.
To enhance market diversity and attract both issuers and investors, it is essential to research and develop innovative bond products By creating a wide range of new offerings, we can effectively address investor needs and improve capital-raising capabilities within Malaysia's bond market.
Thailand have succeeded in developing a variety of corporate bonds, Vietnam can consult and evaluate the implementation ability.
Enterprises should diversify their bond types to align with their capital requirements, while also promoting public bond offerings Establishing standards for green bonds will not only create new channels for capital mobilization but also attract a broader range of investors.
To enhance the quality of corporate bonds, it is essential to establish more specific regulations regarding their size, frequency, issuance conditions, and standards Additionally, public implementation activities should receive support and facilitation, which includes simplifying procedures and reducing document processing times.
To enhance their appeal in the corporate bond market, businesses must strengthen their financial capacity and ensure transparency in information disclosure regarding operations and associated risks Strict adherence to accounting, auditing, and reporting regulations is essential to build trust among investors Additionally, companies should consider leveraging credit rating services from both domestic and international agencies to effectively signal their financial strength and capabilities to the global market.
- Review and improve investment mechanisms and policies to attract professional investors, long-term investors, foreign investors, diversifying types of target investment funds, including investment funds, bond investment
To enhance the investment landscape, it is essential to establish a robust system of investment funds, including retirement funds, mutual funds, and bond investment funds, that actively engage in the bond market This can be achieved by refining investment policies, particularly in terms of tax and fee structures, to promote the growth of corporate bond portfolios By 2025, the goal is to have approximately 200,000 individuals participating in retirement insurance products or voluntary retirement funds, with cumulative voluntary pension fund sales reinvesting around VND 12-15 trillion into the economy Additionally, similar to the successful models in Singapore and Thailand, where Real Estate Investment Trusts (REITs) significantly stimulate demand in the real estate corporate bond market, implementing regulatory measures on leverage ratios—such as 45% in Singapore and Hong Kong, 50% in Malaysia, and 60% in Thailand—can help mitigate risks associated with REITs in the region.
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