Corporate bonds draw individual investors because of high interest rates

The Ministry of Finance coordinated with the World Bank (WB) and the Vietnam Bond Market Association to hold a seminar to announce the annual report of the Vietnam bond market in 2019 and dialogue on solutions to develop the corporate bond market on November 9 in Ho Chi Minh City.

Mr. Nguyen Hoang Duong, Deputy Director of the Finance Department of Banking and Financial Institutions under the Ministry of Finance, said that by the end of September this year, the scale of the corporate bond market reached about 13 percent of gross domestic product (GDP) in 2019, up 2.15 percent from 10.85 percent of GDP at the end of 2019, surpassing the target.

However, Mr. Duong also said that in the context of strong growth in this field, from the end of 2019 to now, the Ministry of Finance has continuously given recommendations and warnings to all participants in the corporate bond market, especially individual investors, as capital flow from individual investors have increased sharply into this segment. Even some individual investors, who are retirees, also used their idle money to buy corporate bonds through private placements because of high-interest rates, and they did not care about the effectiveness of projects and issuers. Therefore, authorities have revised the regulations to manage and supervise the market to keep it from fluctuating too much and limit risks for investors.