Continue to stabilize the corporate bond market

According to the report of the Ministry of Finance on the situation of the corporate bond market, solutions to continue stabilizing the market and handling violations, in the individual corporate bond market in the first 10 months of the year, there were 70 enterprises issuing with a volume of VND 180.4 trillion (down 45.1% over the same period in 2022); the volume of early repurchase was VND 190.7 trillion (up 30.2% over the same period in 2022).

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Since Decree 08/2023/ND-CP of the Government took effect (March 5, 2023), the issuance volume was VND 179.5 trillion. In October alone, the issuance volume was VND 41 trillion, an increase of VND 17 trillion compared to September (VND 23.4 trillion).

Notably, to date, enterprises have bought back VND190.7 trillion of bonds before maturity (higher than the total issued amount). In October 2023 alone, enterprises bought back about VND14.2 trillion. The main investors buying individual corporate bonds in the primary market are institutional investors (accounting for 95% of the total issued volume), individual investors account for only 5%. In the secondary market, individual investors hold about 28.5% of the total outstanding individual corporate bonds (equivalent to about VND285.6 trillion).

In order to meet the criteria for upgrading the stock market from a frontier market to an emerging market, the Ministry of Finance has discussed with two rating organizations MSCI and FTSE, along with the World Bank's consultancy. Among the 12 groups of issues that need to be improved for the Vietnamese stock market, there are policy and practical problems that need to be focused on, such as: pre-transaction margin requirements, foreign ownership limits, etc.

The Ministry of Finance will preside over and coordinate with the State Bank and relevant ministries, branches and units to conduct a comprehensive review to submit to competent authorities to amend and supplement relevant regulations, and soon put the payment clearing system under the CCP model into operation.

Among the 12 groups of issues that need to be improved for the Vietnamese stock market, there are policy and practical problems that need to be focused on resolving, such as: margin requirements before trading, foreign ownership limits, etc.

Regarding foreign ownership limits, the Ministry of Finance has requested the Ministry of Planning and Investment to fully publicize the maximum foreign ownership ratio of conditional and restricted business lines; regularly update the Ministry's website in both Vietnamese and English to facilitate foreign investors to easily access and learn; study and reduce the number of business lines that do not necessarily restrict market access for foreign investors according to the current list of business lines that have not been granted market access and conditional market access.

The Ministry of Finance also reviewed and revised regulations on information disclosure of public companies in the direction of requiring large-scale listed companies (expected to be listed companies in the VN100 index basket) to make mandatory information disclosure in Vietnamese and English, and at the same time implement the notification of the maximum foreign ownership ratio at all public companies so that foreign investors can easily obtain information about their ability to participate in enterprises.

In the solutions to continue stabilizing the corporate bond market, managers continue to send out many important messages. Accordingly, in addition to synchronously implementing solutions to manage macro policies, control inflation, and promote disbursement of public investment capital, the Ministry of Finance emphasizes the need to quickly remove difficulties, stabilize the real estate market; monitor the payment of corporate bonds due and strengthen information and propaganda work; organize the market and improve the effectiveness of management and supervision...

In addition, it is necessary to continue to conduct a comprehensive review to perfect legal provisions in the Securities Law, Enterprise Law and related laws; study policies to encourage credit ratings, promote the roadmap for upgrading the stock market, develop the system of institutional investors; and increase resources and personnel for specialized inspection and examination agencies.

In particular, the Ministry of Finance emphasized: Issuing enterprises must be responsible for their debts, at the same time, investors must protect their assets, and management agencies must further promote propaganda and strengthen supervision. Hopefully, with these moves, the corporate bond market will continue to be regulated and operate stably and effectively, enhancing the vitality of enterprises in Vietnam.

According to Nhan Dan Newspaper

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