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Vietnam plans bond information centre

Publication Date : 17-02-2014

 

The corporate bond market performed well last year, and Vietnam is aiming even higher by preparing technical and legal assistance for issuers.

The Vietnam Bond Market Association (VBMA) has submitted to the Ministry of Finance their programme to build a corporate bond information centre that would be the first of its kind in the domestic market, once the Ministry of Finance ratifies the plan.

"The center would offer investors sufficient information, partially improve transparency and provide the market more opportunities for development," said VBMA's General Secretary Do Ngoc Quynh.

VBMA expects a decision from the finance ministry by the end of March. In the meantime, VBMA has been cooperating with other parties to collect the historical data of all corporate bonds circulating in the market.

"Once we have a corporate bond information centre, VBMA will consult to set up a standard price system, or yield curve," Quynh added.

The association is also hurrying to develop a handbook on standard corporate bond issuance that is expected to assist issuers.

Vietnam's corporate bond market featured the participation of 20 issuers, though only one-fourth are active in the market.

However, few fully comprehend Vietnam's corporate bond market due to the lack of a unit providing information about both the primary and secondary markets.

In order to enhance public confidence in corporate bond issuance, the Ministry of Finance has submitted a scheme detailing the establishment of credit rating agencies. The ministry also expects to receive a nod from the Government within the first quarter of this year.

The Ministry of Finance plans to mobilise up to 35 trillion dong (US$1.65 billion) from corporate bonds this year, up 1.8 per cent against 2013. Last year, the volume of corporate bonds sold was 34.41 trillion dong ($1.62 billion), a surge of 19.87 per cent from 2012, 37.64 per cent against 2011 and 14.7 per cent over 2010.

While refusing to comment about the target of 1.8 per cent growth for corporate bonds this year, Quynh stressed that: "Every market has its own routine, let's say flat or hot periods of development."

"Our economy is going through a major economic restructuring process that, so far, has shown positive consequences. This process filters incompetent enterprises, which are able to borrow on the debt market, and I think the quality of development would be better."

In the July-September period, Vietnam led the emerging East Asian bond market, in terms of its market growth, on an annual basis, according to the Asian Development Bank's Asia Bond Monitor report in November.

With the rate of 18.8 per cent, Vietnam had the fastest growing bond market, followed by Indonesia (16.3 per cent), China (14.4 per cent), the Philippines (12.5 per cent), and South Korea (10.4 per cent).

 

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