The corporate bond market of Vietnam is showing signs of recovery after recent successful issues and a large number of local banks revealed their plans to issue more bonds from now through early next year.
Saigon Thuong Tin Commercial JS Bank (Sacombank) will sell VND3 trillion ($168.2 million) in bonds in the third quarter of this year, and Saigon Commercial JS Bank (SCB) plans to raise VND1 trillion from issue of convertible bonds in the first quarter of 2010.
Sacombank and the Bank for Investment and Development of Vietnam (BIDV) have recently sold VND2 trillion and VND1.362 trillion worth of 2-year and 10-year bonds, respectively.
Since the end of 2008, many large companies have sold corporate bonds, including VND1 trillion by Vinpearl Tourism and Trading JSC, VND3 trillion by Vietnam Shipbuilding Industry Corp. (Vinashin), VND3.5 trillion by Electricity of Vietnam Group (EVN) and VND700 billion by Kinh Bac City Development Share Holding Corp.
Analysts said banks should consider corporate bond as a good channel to raise more medium and long-term fund. ANZ, Citibank and Sacombank Securities will be good arrangers for these issues.
Banks and financial institutions are main buyers of corporate bonds, which can bring higher yields than governmental bonds, banker said.
The Asian Development Bank (ADB) statistics, however, showed Vietnam’s corporate bond market valued at only $500 million by the end of 2008, compared to the total value of circulated governmental bonds of $12.4 billion.
Monthly average trading value of corporate bonds reached VND200 billion - VND300 billion, compared to the total value of VND14 trillion in listed bonds, according to statistic of the Hochiminh Stock Exchange.
Vietnam’s Bond Market Association’s Vice Chairman Le Duc Tho attributed the low liquidity to the solvency of bond issuing enterprises. (VNA,
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