Bond investors need more options to choose from.

Mr. Phung Xuan Minh, Chairman of the Board of Directors of Saigon Ratings (the first independent domestic credit rating organization licensed by the Ministry of Finance ), believes that bond-issuing companies must have relatively high creditworthiness so that investors can assess the value of the bonds and have more options to choose from.

Mr. Phung Xuan Minh, Chairman of the Board of Directors of Saigon Ratings (the first independent domestic credit rating organization licensed by the Ministry of Finance), believes that bond-issuing companies must have relatively high creditworthiness so that investors can assess the value of the bonds and have more options to choose from.

Mr. Phung Xuan Minh, Chairman of the Board of Directors of Saigon Ratings

How do you view the bond market developments in 2024?

Comparing the issuance volume in 2024 with that of 2022-2023, the market hasn't seen a significant surge. However, more positive signs have emerged as issuing companies are focusing more on and beginning to raise new capital for business restructuring, implementing projects with resolved difficulties, and repaying debts, etc.

Another indicator, different from previous years, is that the number of businesses issuing bonds to the public market has increased somewhat compared to private placements. In addition, businesses are planning to continue rating assessments in preparation for raising capital in the first and second quarters of 2025.

Based on these signs, I believe that the most difficult period for bonds has passed, and the market is gradually recovering and stabilizing, but this recovery is not yet clear or truly sustainable.

According to him, what will the pressure on the bond market be like in 2025?

According to our data, the pressure to meet maturity dates in 2025 remains relatively high, similar to 2024, and is expected to continue at a high level during 2026-2027. In 2024, many businesses successfully extended the principal and interest repayment periods of their bonds, pushing the pressure into 2025-2026. This number, along with the value of bonds maturing earlier, creates significant pressure on bond maturity dates during this period.

The bond market currently faces three main problems.

Firstly, there is market confidence. Through the policies of regulatory agencies and the sanctions imposed on those involved in recent scandals, investor confidence has been strengthened.

Secondly, there's the issue of the quality of the publishers. In reality, publishing organizations are trying to recover, but their ability to overcome difficulties is not yet strong; they are still only in the "healing" phase to maintain their existence.

Thirdly, there is the issue of the quality of information provided to the market. According to legal regulations, only certain entities are required to be rated before they can issue credit ratings, leading to a lack of transparency and objectivity in the information provided to the market. The proportion of entities requiring credit ratings in the market is not high compared to the actual number of entities issued.

How will the new regulations related to bonds in the amended Securities Law affect supply and demand in the corporate bond market in 2025?

The amended Securities Law, upon its implementation, must also take into account the policy's time lag in influencing the market. Therefore, supply and demand trends in the market will need more time to become more clearly defined. However, I also have high expectations for this new policy from many perspectives.

Firstly, it increases the safety factor for investors through collateral assets, either bank guarantees or collateral assets with credit ratings. In line with international practice, this involves transparency of information, allowing investors to determine their own risk tolerance.

Secondly, the quality of investors and issuers is gradually improving. Globally, most businesses with a credit rating of 4 or higher are the ones that successfully issue bonds. In Vietnam, however, the focus has primarily been on interest rates, while risk factors have been largely overlooked. Issuers must have relatively high creditworthiness so that investors can assess the value of the bonds, reduce risk, and have a wider range of options to choose from.

Thirdly, investors' perception of participating institutions as members of the market will contribute to improving the quality of the market.

In the stock market, many analysts are expressing expectations for sectors with strong growth potential in 2025, including real estate. Will the prospects of these sectors have a positive ripple effect on the bond market?

The real estate market has shown signs of recovery, with various segments gradually heating up. With pressure to disburse public investment funds, sectors supporting real estate and infrastructure construction are also resuming development and gradually increasing their need for capital mobilization. I expect that the economic recovery will have an impact on the real estate and construction industries.

I have particular faith in technology-related businesses. Although the share of these businesses in the market is still very small, looking to the future, with the pace of digital transformation, the prospect of leading global technology corporations like NVIDIA coming to Vietnam, and supportive policies, the technology sector will be further boosted. This will lead to a greater need for capital for businesses to participate in new technology sectors.

Furthermore, as the economy develops, export-related production and business will progress positively, and industries such as manufacturing, import and export, ports, and other sectors will also need to issue bonds to secure funding.

Source: https://baodautu.vn/nha-dau-tu-trai-phieu-can-them-menu-de-lua-chon-d238976.html