Vietnam corporate bonds outstanding tops $4 billion

By Dat Nguyen   March 21, 2019 | 05:20 am PT
Vietnam corporate bonds outstanding tops $4 billion
Vietnam’s corporate debt over GDP remains low. Photo by Reuters
Vietnam’s local currency (LCY) corporate bonds outstanding last year increased year-on-year by 29.4 percent to over $4 billion.

An Asian Development Bank (ADB) report says this is one of the factors that contributed to the 9.3-percent year-on-year growth in the country’s LCY bonds outstanding to VND1,180.5 trillion ($51 billion) last year.

However, Vietnam was the only market among the Emerging East Asia countries to see its bonds market decline in the last quarter of 2018.

The country’s bonds outstanding amount fell by 5.3 percent quarter-on-quarter at the end of December due to a 6.2 percent decrease in the government bond market in the fourth quarter when all outstanding state bank bills matured, the ADB report said.

Vietnam’s corporate debt over GDP remains low. It was 6.19 percent of GDP in 2017, while in other countries in the region, this figure is 20-50 percent, according to the Ministry of Finance.

Pham Hong Hai, CEO of HSBC Vietnam, said that Vietnam lacked a secondary market to increase the liquidity of corporate bonds. Corporates also have to obey many tight regulations in issuing bonds while banks offer more simple lending procedures, he added.

The Ministry of Finance wants to increase corporate debt to 20 percent of GDP by 2030.

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