FiinRatings gives 4 reasons for predicting that the corporate bond mobilization channel this year will be more exciting than 2023.
From the beginning of the year to February 4, the corporate bond market had 4 issuance transactions with a total value of VND 6,450 billion from 4 units. Compared to the bustling period, when the market recorded VND 10,400 billion and VND 19,700 billion in January 2021 and January 2022, respectively, the figure at the beginning of this year is still very modest.
However, compared to the total issuance value in the same period in 2023, only 490 billion VND, it is also significant progress, according to the assessment in a recent report by FiinRatings.
Along with that, the total value of individual bond transactions last month reached VND 74,500 billion, down 24.5% compared to the average level in December 2023. Bank bonds were the most active group, both short-term and long-term, even over 7 years.
According to current information, a number of businesses have plans to issue bonds in the near future, such as HB Bank, VietBank and two real estate businesses including Vingroup and Development and Investment Corporation (DIG).
Forecasting the whole year, FiinRatings said it is difficult to predict the issuance value but there is a prospect that the corporate bond mobilization channel will be more vibrant than in 2023, for 4 reasons.
First , most banks will plan to issue bonds to meet the credit growth target for 2024 (expected to be 15% of the whole system) and the following years. The additional capital will also increase Tier 2 capital and contribute to better meeting the State Bank's capital safety and risk management indicators.
Second , the domestic interest rate environment is forecast to remain low, while international interest rates tend to decrease. Since most current bond offerings have a floating interest rate mechanism and are anchored to the reference interest rates of major banks, this will be a catalyst for businesses to issue bonds, preparing to anticipate economic recovery in the second half of 2023.
Third , consumer finance companies will enter a growth phase again, as debt collection issues of many units have been resolved. The real estate industry needs more time to recover strongly, but the measures to remove legal risks help investors mobilize capital again, including through the bond channel.
Finally , investor confidence has gradually improved. FiinRatings has recorded certain participation of professional individual investors in some individual bond lots issued by leading enterprises.
According to the Ministry of Finance , 7% of the more than VND300 billion of private bonds successfully offered in 2023 were purchased by professional individual investors. This level is very modest compared to the rate of over 30% in the period of 2019-2022, but is a welcome sign after the new regulations of Decree 65 on private bonds.
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