Corporate bond market to get healthier: chief government advisor

Vietnam’s corporate bond market will get more transparent and develop more sustainably as market regulations are being tightened up, the government’s chief economic advisor said Thursday.

The stock market regulator, State Securities Commission, on Monday announced the cancellation of nine bond issuances from July 2021 to March 2022 by three companies under developer Tan Hoang Minh Group, with a total value of over VND10 trillion (almost $439 million) for disclosing false information and concealing information in private offerings.

Dr. Nguyen Duc Kien, head of the government’s economic think tank, told The Investor that the move is a good signal for the corporate bond market. “The cancellation shows the regulators’ determination to build a sustainable and transparent corporate bond market, together with competent companies and legal projects,” said Kien, former Vice Chairman of the National Assembly’s Economic Committee.

Kien noted that investors now have enough instruments to know the legal basis and approved state plans related to projects, like information on the portal of ministries, agencies and localities. "They need to make due diligence on bond issuers and how they will spend proceeds. Investors are responsible for their decisions."

He added that the Tan Hoang Minh case would have little impact on the corporate bond market as the bonds cancelled are worth $439 million, while the market value is VND1,150 trillion ($50.3 billion).

"If Tan Hoang Minh operates as normal, it will have to refund the investors. If it goes bankrupt, its assets will be liquidated to pay investors."

Prime Minister Pham Minh Chinh on Thursday ordered regulators to make a closer watch on corporate bond market activities and land use right auctions.

The Ministry of Public Security, Ministry of Finance and State Securities Commission are required to investigate violations to ensure the issuance of corporate bonds, related investments and use of proceeds comply with the laws.

The PM also asked the Minister of Finance and State Bank Governor to work out response scenarios and make strong actions to stabilize the market and investor sentiment. Relevant reports must be submitted to the PM Office by April 15.