The size of Vietnam's bond market accounts for less than 10% of GDP.

Speaking at the workshop "Developing the corporate bond market towards professionalism and sustainability" organized by Investor Magazine/Nhadautu.vn electronic magazine this morning (August 16), Mr. Pham Duc Son, Editor-in-Chief of Investor Magazine/Nhadautu.vn said: Since mid-2022, the corporate bond market has had many fluctuations, a series of major cases were discovered and handled, causing investors' confidence to decline sharply, the corporate bond market (TPDN) plummeted, and for a period of time it almost froze.

However, after a difficult period, the corporate bond market has gradually recovered since the beginning of the year. According to the Ministry of Finance , in the first half of the year, 41 enterprises issued individual bonds with a volume of 110.2 trillion VND, 2.6 times higher than the same period in 2023. This is a positive sign, showing that the bond market is gradually warming up.

According to the Ministry of Finance, in the first half of the year, 41 enterprises issued private bonds with a volume of VND110.2 trillion, 2.6 times higher than the same period in 2023 (illustrative photo).

On December 29, 2023, the Prime Minister approved the Strategy for stock market development until 2030. Accordingly, the target of corporate bond market outstanding debt is set to reach at least 20% of GDP by 2025 and 25% by 2030. To achieve this goal, according to estimates of some units, on average in the next 8 years, each year Vietnam must have about 370,000 billion VND of newly issued corporate bonds. This is a challenging goal but also an opportunity for market development.

In developed countries, the stock market, credit market and bond market are the three pillars of capital sources for the economy . In which, the corporate bond market is a channel for mobilizing medium and long-term capital.

Statistics from research agencies show that many developed countries have bond markets reaching 50-70% of GDP. In some Southeast Asian economies such as Thailand, Singapore and Malaysia, the bond market size is also up to 26-54% of GDP. Meanwhile, Vietnam by the end of March 2024 reached less than 10% of GDP.

Some existing problems continue to pose risks and challenges for the corporate bond market in the coming time, including: Corporate bonds maturing and overdue in the fourth quarter of 2024 and 2025 are still high. In particular, bonds of real estate enterprises have a much higher risk of overdue and potential bad debt than the market average.

The market still relies mainly on privately issued corporate bonds. In the first half of 2024, only VND 10,377 billion of bonds were issued to the public, accounting for 9.09% of the total issuance value, the rest were private bonds. This imbalance continues to create liquidity risks for the market. The structure of corporate bond investors has not developed.

Commercial banks are currently still the main buyers in corporate bond issuances, while other institutional investors such as insurance companies, pension funds, investment funds, securities companies, etc. still account for a small proportion. Demand depends heavily on the commercial banking system, making the bond market unable to fully play its role in providing medium- and long-term capital for the economy.

Along with that, the application of Decree 65/2022/ND-CP with stricter regulations demonstrates the management agency's efforts to clean up the market, but also leads to concerns about creating barriers to the issuance of individual corporate bonds, while the legal corridor for public bond issuance has not been shortened and cleared, which will continue to lead to congestion of the corporate bond channel.

An Ha

Source: https://www.congluan.vn/quy-mo-thi-truong-trai-phieu-viet-nam-chiem-chua-toi-10-gdp-post307934.html