The State Securities Commission (SSC), Vietnam’s market regulator, plans to assign the Hanoi Stock Exchange (HNX) to restructure the local bond market by reducing bond types to boost liquidity, a senior official said.
Nguyen Son, head of the SSC’s Stock Market Development Department, said the plan is aimed to attract foreign investors in 2010 as they have been not keen on investing in the market which has up to 500 codes of bonds with various terms and yields.
The Ministry of Finance (MoF) is considering to set standard terms and quantity for each bond issuance, and then re-buy sub-standardized bond codes in the market, said Nguyen Ngoc Anh, deputy chief of the MoF’s Finance and Banking Department.
Analysts forecast foreigners will get more interested in Vietnam’s bonds in 2010 as the country is expected to strongly recover from the global crisis than other nations while the potential of its bond market is still untapped.
Hoang Huy Ha, chairman of Vietnam Bond Association, said the bond market now accounts for only 17% of the country’s GDP, compared to 53% in China, 58% in Thailand, 74% in Singapore and 82% in Malaysia.
Corporate bonds now make up 10% of the total bonds in the market, and companies are predicted to raise more funds from bonds issues in 2010 as bank loans will be limited on the central bank’s cap on credit growth.
Companies issued bonds in 15 tranches, with total value of VND20 trillion in 2009, compared to only two or three firms in 2008.
Overseas investors have recently bought in more corporate bonds, the Dau tu newspaper reported, without giving specific figures.
At end-2009, foreigners held an estimated US$300 million worth g-bonds in Vietnam and they have no plan to pour more money in the next six months on concerns about the return of inflation, said Trinh Hoai Giang, vice chairman of Vietnam Bond Association.
During the year, the country finished only 13% of VND56 trillion g-bond issuance plan due to little interest of investors in the primary market.
Vietnam’s economy is targeted to grow 6.5% in 2010, but some financial institutions forecast higher figure. (Investment)
Vietnamese
