Private corporate bond placement plunges 56% in 11-month value

The value of corporate bonds issued via private placements in Vietnam dropped 56% year-on-year in the past 11 months, while that of public offerings was down 60%.

In November, there were five private bond placements worth VND1,935 billion ($82.1 million), according to the Vietnam Bond Market Association (VBMA).

Masan Group was the largest issuer with VND1,700 billion ($72.1 million), while the four others were BIDV bank, Duc Trung Investment JSC, and City Auto Corp.

In the 11-month period, there were two international IPOs worth $625 million conducted by Vietnam’s largest private conglomerate Vingroup; 23 public offerings worth VND10,599 billion ($449.6 million), accounting for 4% of the total issuance value; and 420 private placements worth approximately VND242,865 billion ($10.3 billion), or 96% of the total.

The banking group still led the market in terms of issuance value with VND136,371 billion ($5.78 billion), equivalent to 53.8% of the total value of issued bonds. Real estate ranked second with VND51,829 billion ($2.2 billion), 20.4%.

Since the beginning of the year, businesses have bought back VND163,974 billion ($6.96 billion) of bonds, up 32% year-on-year. VBMA said that bonds worth VND308,622 billion ($13.09 billion) will mature next year.

Chairing a recent government meeting on fiscal, monetary, and macroeconomic policies in Hanoi, Prime Minister Pham Minh Chinh said that the government has set up three working groups to restore market stability.

The group for credit liquidity is led by Deputy PM Le Minh Khai, the group to deal with real estate woes by Minister of Construction Nguyen Thanh Nghi, while Minister of Finance Ho Duc Phoc is in charge of corporate bond problems.

Thanks to that, the situation has stabilized again, with increasing market sentiment and confidence, he said, adding that unexpected and complicated issues have been handled calmly, surely and effectively, especially in dealing with some weak banks.

“The stock market has shown positive signals; the corporate bond market still faces many difficulties but issuers’ initial solutions have come out for bond buyers in the manner of 'mutual benefit and risk sharing',” PM Chinh said.

Relevant agencies have also worked with real estate businesses to listen to their petitions, he added.