The Minister of Finance has directed the HCM Stock Exchange to urgently build and implement a separate corporate bond trading system from June 16 this year to develop a transparent secondary market and increase liquidity for corporate bonds.

Minister of Finance Ho Duc Phoc said that the corporate bond market had witnessed many fluctuations due to the arising of law violations such as the case involving Tan Hoang Minh Group in April 2022 and the case of Van Thinh Phat Group and SCB Bank in October 2022.

After the above violations, the corporate bond market lost investors’ confidence; market liquidity dropped, and the economy had not recovered after the pandemic, so some bond issuers had difficulty balancing resources to pay bond principal and interest, leading to late payment of debt.

The Ministry of Finance has required bond issuers to disclose transparent information and actively use credit rating and asset valuation services to assess their business performance.

The finance ministry is also proposing the Ministry of Public Security actively speed up the investigation and handling of past violations to have soon a plan to handle and pay money to corporate bond investors, contributing to market sentiment stabilisation.

In 2022, the Ministry of Finance inspected 12 bond issuers, 27 securities companies, seven accounting service providers, 16 auditing firms and 15 valuation enterprises.

In the future, the Minister of Finance Ho Duc Phoc said that he would continue to monitor the disclosure of information of enterprises, work directly with enterprises with large mature bonds and require businesses to be responsible for paying full payments to investors.

This agency also requested the State Bank to coordinate with the State Securities Commission and relevant units to continue strengthening the inspection and supervision of activities of financial institutions related to the issuance of corporate bonds.

In the medium and long term, the Ministry of Finance said it would review and propose amendments to legal documents related to the issuance of individual corporate bonds and develop the system of institutional investors, especially the system of investment funds.

First quarter

According to the Ministry of Finance, in the first quarter, the volume of corporate bonds issued reached VND24.7 trillion. The average interest rate and issuance term were 7.75 per year and 2.37 years, respectively.

In terms of structure, 98.2 per cent of the issuance volume was in the real estate sector, with customers being mainly institutional investors, accounting for 99.99 per cent.

In the first quarter of this year, 69 companies were being late for payment of principal and interest of corporate bonds with a total value of a late payment of about VND19.2 trillion.

For the Government bond market, the Ministry of Finance said that in the first quarter of this year, the total mobilisation volume was VND104.9 billion, reaching 26.2 per cent of the yearly plan of VND400 trillion and 97.1 per cent of the quarterly plan. — VNS