Speakers attending the seminar (Photo: nld.com.vn) The bond market is an important capital mobilisation channel for enterprises,contributing to the development of the whole economy. But recent violationsrelated to bond issuances have cast doubts among investors, creatinguncertainty in the market.
In order to develop the bond market sustainably, “we have proposed to theGovernment to settle and handle the cases soon to strengthen the confidence ofinvestors and issuers, including businesses,” Can Van Luc, member of theNational Advisory Council for Financial and Monetary Policies, said at aseminar on “Sustainably developing the corporate bond market” launched by the Labourer Newspaper on April 19.
These violations need to be solved as quickly as possible and the resultsshould be made transparent, he said.
Speaking at the event, Phung Xuan Minh, General Director of Saigon Ratings,stressed that the bond market is new compared to global markets.
“With 12 years of experience in surveying a number of international marketssuch as Japan, the Republic of Korea and Malaysia, we realise that what we havebeen through are also their mistakes 20-30 years ago, where they were stillprimary markets,” Minh said.
“The market itself is not guilty, we are the one who made the policy.”
At the moment, the corporate bond market requires three important factors,including state-oriented management, the transparency of information of creditrating agencies and the compliance of market participants such as issuers andrating agencies.
In particular, the Government needs to have a mechanism to create favourableconditions for market participants to develop and improve the credit ratingculture, Minh added.
Therefore, consultation on improving the quality and effectiveness ofbuilding a legislative framework would be key at the moment.
In addition, the investors’ quality also has to be improved. Many experts havereached a consensus that investors, especially retail ones, lack financialknowledge and tend to follow the flow, which is very risky.
“In my opinion, to develop a sustainable corporate bond market, it is necessaryto create powerful bond investors, which advanced countries have done,” said TranHuy Doan, Deputy Head of Investment Department of ACB Securities Ltd., Co.
It is necessary to clearly specify the debt to capital ratio, experts said.Enterprises with larger loans than equity would inevitably fail like manyhave in the international markets.
Experts also proposed to develop a credit rating service market to helpbondholders assess risks while making investment decisions. Currently, Vietnamhas only two enterprises in the field, which is too few compared to marketdemand.
“The private offerings by enterprises require the participation of creditrating agencies,” Nguyen Thanh Ha, Chairman of the Board of Directors of SBLAWLaw Firm, said at the event.
“When amending Decree 153 on bond issuance, it is mandatory to have theconclusion of the credit rating and evaluation organisations.
“The Vietnamese market currently has very few enterprises providing creditrating and assessment services, so in the near future, the decree should openthe door for experienced foreign organisations to participate.”
Moreover, post-inspection must be strengthened on the use of capital after aphenomenon that funds mobilised from bond issuances were not spent on the rightpurposes.
Concluding the seminar, To Dinh Tuan, Editor-in-Chief of the Labour Newspaper,said that it requires the participation of all units, statemanagement agencies and companies to build a sustainable bond market.
Enterprises also need to reflect on their activities in the past to adjust andimprove themselves, while press agencies and media accompanies need towork with authorities and businesses to raise alarms and contributeto detecting violations./.
VNA
