Real estate bond issuances reach $2 billion in H1

Tuesday, Aug 18, 2020 15:02

Real estate enterprises issued bonds worth around US$2 billion in the first half of this year. — Photo

Real estate enterprises issued bonds worth VND45.59 trillion (around US$2 billion) in the first half of this year, equal to 80 per cent of the figure last year as a whole.

The growth was attributed to the safety of bonds compared to other investment vehicles currently facing fluctuations, said Nguyen Duc Quan, director of the Asia - Pacific Securities Joint Stock Company.

Lower deposit interest rates at banks also contribute to fuelling the flow of capital into the bond market, he added.

Financial and banking expert Nguyen Tri Hieu, meanwhile, warned that a lack of sound control may lead to a bursting of the bond bubble after a short period of heated growth, like a decade ago.

The COVID-19 pandemic is expected to plague the real estate market in another way, with companies likely to face difficulties from plunging transaction numbers and the distinct possibility of bankruptcy.

Ineffectively run businesses may be unable to pay bond holders when the due date arrives. The fact that real estate companies have quickly issued bonds has made some experts concerned about a host of associated risks. — VNS


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