The Ministry of Finance is taking measures to better develop the corporate bond market safely and effectively.
Accordingly, the ministry is drafting a circular to establish a private corporate bond market for professional securities investors.
It is also upgrading a corporate bond information page and a listing and trading system of corporate bonds.
In order to strengthen the inspection and supervision of the corporate bond market, the ministry has directed the State Securities Commission to inspect the supply and demand of corporate bonds at ten securities companies in October 2021.
The ministry also inspected enterprises, whose bond issuance was large or without collateral and had weak financial strength, to give timely warnings to investors and service providers.
To enhance the transparency in capital mobilisation through bond issuance, the ministry is considering a proposal to amend Decree No 153/2020/ND-CP on the offering and trading of corporate bonds in the domestic and international markets to limit enterprises from issuing a large amount of bonds without using the mobilised capital to serve production and business.
According to experts, the Vietnamese corporate bond market has room to expand in the future as its size remains small compared to other regional countries. Corporate bonds are an important capital channel for enterprises, especially real estate firms, but have developed unsustainably.
Do Ngoc Quynh, secretary general of the Viet Nam Bond Association, suggested Viet Nam should set tight rules to diminish the negative impact of corporate bond products, while constructing flexible regulations for bond issuance to effectively manage and supervise the corporate bond market.
Ensuring the healthy development of the bond market and the capital market requires the synchronous development of all components participating in the market, including State management agencies, businesses, and investors, according to Quynh.
While developing the equity market, market regulators must ensure effective operation and necessary management over the market. If the management is too tight, the market cannot develop, but if the regulations are too loose, a crisis can occur, thus management agencies must always observe and adjust the policy as needed.
Businesses issuing bonds publicly would have wider access to investors but also have to bear greater responsibilities, such as transparent information disclosure, and ensuring credit ratings, Quynh said. — VNS