Corporate bonds

Outstanding corporate bonds equal 3% of total outstanding loans

The State Bank reported that at the end of April 2022, credit for investment and securities trading accounted for about 0.5% of the economy’s total outstanding loans, of which 98% were loans. short-term, focusing primarily on outstanding loans to invest in government bonds.

In order to control the risks related to corporate securities and bonds and to ensure the security of the system of credit institutions, the State Bank is gradually completing a legal framework with stricter regulations to control risks in credit institution activities. bond investment by credit institutions while strengthening system security.

The State Bank will strengthen the inspection, examination and strict supervision of lending in the securities sector and investment in corporate bonds by credit institutions in order to quickly detect any potential hidden risks. and take appropriate action.

According to the State Bank, this agency ordered credit institutions to review and reassess the granting of credit, strengthen risk management measures and improve the efficiency of internal inspections.

Risks in the securities market mainly arise from the operations of companies listed on the market and bond issuers. Therefore, it is necessary to have comprehensive and synchronous coordination between relevant ministries and directorates to screen and consolidate the stock market as well as the corporate bond market.

Besides the positive results, the recent rapid growth in the stock and bond market has created potential risks such as the phenomenon of price manipulation in the stock market and risks in the corporate bond market, said Pham Hong Son. , vice chairman of the State Securities Commission during the seminar on capital market and real estate market development within the framework of the 4th Vietnam Economic Forum, held recently in Ho Chi Minh City.

He said many investors, especially individual investors, did not fully understand the law on investment and individual corporate bond transactions, adding that the quality of service providers had not been uniform.

This has imposed on the management agency, including the Ministry of Finance and the SSC, the obligation to further promote the management measures, supervision and make certain adjustments and modifications.

Son said the SSC will continue to maintain market management to ensure safe and transparent operations and protect the legitimate rights and interests of investors.

“First, SSC will continue to improve the legal framework of the market in the direction of greater transparency, stable and sustainable development,” he said.

In the immediate term, the SSC will actively work to put into practice new regulations and policies in the Securities Act and guidance documents while continuing to improve the legal framework, focusing on completing the stock market development strategy until 2030.

The SSC will also encourage the process of ownership and divestment of public companies.

For the government bond market, it will develop a standard market meeting the demand for raising capital for the state budget and supporting the restructuring of the budget and government debt in a safe and sustainable direction, ensuring the mobilization resources for plan socio-economic development and economic recovery.

For the corporate bond market, SSC focuses on developing a transparent secondary market, setting market standards, clearly separating bonds issued to the public from those issued privately.

Son added: “In the immediate term, the SSC is actively leading and coordinating with the exchanges and the Securities Depository Center the construction and commissioning of the trading floor for corporate bonds issued by the private sector; the promotion by the public of supervising the use of bond money mobilization and disclosure of information and trading of bonds on the information disclosure system of the Hanoi Stock Exchange.

The SSC will continue to restructure securities companies and fund management companies according to the project approved by the Prime Minister, review, classify, develop plans for each company to take appropriate measures, research and to digitize financial assets on the stock exchange, to apply financial technologies, to improve the quality and professional ethics of the team of securities specialists.

For auditing agencies, price assessment agencies, credit rating agencies, SSC will coordinate with units of the Ministry of Finance to improve the morality and quality of services of these agencies; encourage stock exchange service providers to set up fintech applications./.