The Hanoi Stock Exchange (HNX) has just reported on the private bond issuance situation in the first half (H1) of the year. Through 818 successful issuances, businesses mobilised more than 156.3 trillion dong of bonds on a total of more than 226.3 trillion dong of registered volume. The winning rate was nearly 70%.
unlike H1 of 2019 when banks overwhelmed the bond issuance, this year witnessed the balance of this group and real estate businesses with a proportion of approximately 30%. However, the bond issuance of real estate businesses recorded a spike.
Specifically, credit institutions (CIs) issued more than 47.3 trillion dong of bonds in H1, equalling to 43.5 percent of the whole year 2019. Meanwhile, real estate businesses issued nearly 45.6 trillion dong, equivalent to nearly 80 percent of the whole year 2019.
Among CI group, Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), HCM City Development Commercial Joint Stock Bank (HDBank) and Vietnam Prosperity Commercial Joint Stock Bank (VPBank) were the three largest bond issuers with seven trillion to 15 trillion dong.
Among real estate businesses, Vingroup, TNR Holdings, Sovico group, Novaland or Sungroup were the leading nams. The issuance scale of each of them was fromsix trillion to 15 trillion dong. Vinhomes issued 12 trillion dong of bonds in the first two quarters, TNR Holdings issued more than 9.7 trillion dong of bonds, while Sovico group issued more than 10 trillion dong.
In addition, some businesses in retail sector (represented by Masan) or energy also attracted large capital via bond channel.
In a recent report, Saigon Securities Incorporation Research (SSI Research) assessed that corporate bond is becoming an attractive investment channel thanks to the interest rates which are 0.8 1.7 percent per annum higher than the most competitive savings interest rate. If excluding the corporate bonds that banks are holding, the volume of bonds owned by non-credit organisations and individuals is about 385 trillion dong, equivalent to 4.2 percent of the total deposits of the entire system and nearly the same as the deposit scale of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank).
However, SSI Research also warned that profits often coms with risks. Owning bonds means that the investor becomes the creditor of the issuing organisation and will face the risks of insolvency.
The Ministry of Finance also continued to give warnings of risks when there are signs of securities companies and banks asking individuals to buy bonds at all costs. The management agency said that investors should not buy bonds for their high interest rates, because there is a possibility that the investment cannot be recovered if the issuer encounters difficulties.
