Vietnam should establish a national-level credit rating agency in order to help entrepreneurs mobilize capital via bonds, said Jyoti Gupta, financial expert at the World Bank.
Such an agency will be a channel to issue ISO certificates whereby orienting prices of bonds ahead of listing on the stock market, said Gupta.
“I first came to Vietnam some ten years ago. Now when I returned to Vietnam, I see no actual development of the stock and bond markets,” said Gupta.
Vietnam’s stock market remains infant and “so does the bond market”. “The scope of the bond market is still very modest, totaling some $2.5 billion, mainly government bonds while only a limited volume of corporate bonds is traded,” said Gupta.
Gupta explained that is because Vietnam has not had a national credit rating agency while the market is actually in need of a standard rating amidst international integration. Some experts translated this credit rating as an “ISO” certificate for bonds.
Addressing at a recent forum on investment into WTO-post Vietnam, investors and experts mentioned credit rating as an important basis for their investment decisions.
The bond issuance to the international market in October 2005 could be demonstrated the value of the aforementioned certificate. That is, a credit rating organization in the world upgraded Vietnam’s credit rating thereby partially contributing a great deal to the success of the bond issue.
In the near future when the Electricity of Vietnam (EVN) or Vietnam Oil and Gas Corporation (PetroVietnam) and others list their bonds abroad or businesses issue bonds domestically, “ISO” certificates will play an important role in supporting rating and directing investors to make decisions.
According to finance deputy minister Le Thi Bang Tam, the Ministry of Finance also encourages businesses to access and utilize credit ratings of prestigious international agencies. In the near future, the ministry will also establish credit rating centers, added Tam.
The Credit Information Center (CIC) under the State Bank of Vietnam which specializes in providing information related to financial status, capacity of businesses, domestic and foreign partners, is mulling a credit rating company whose main clients will be entrepreneurs wanting to issue bonds.
However the CIC has not identified a specific time or plans for such a credit rating company.
Ashok Sud, general director of the British Standard Chartered Bank in Vietnam, Laos and Cambodia, said “Vietnam should consult and obtain support from international organizations. Many organizations like Standard Chartered will also be ready to support Vietnam in this issue.”
Presently, the country has some corporate credit rating centers. Vietnam is hoping for a national-level credit rating agency in the near future.
VnEconomy
Vietnamese
