The last few years have seen a decline in revenue across most businesses, especially those in real estate, where the pressure of corporate bonds maturing within this year has many enterprises fearing a state of insolvency.
The real estate market has become a hot topic in the economy recently. There is an existing paradox where large-scale companies report huge profits, but their debts are increasingly enlarging, becoming fragile in the event of financial turmoil.
Saigon Investment published an article on July 27, 2022 with the title "When securities companies and banks rush to broker corporate bonds", which highlighted facts of the corporate bonds market and the naivety of first-time bonds investors.
Over the last twenty-odd years, several real estate brands in Vietnam have lost their high credibility due to various unpredictable circumstances that have affected their reputation. Currently, too, many big brands are doing everything possible to fight the factors affecting their businesses and save and protect their brands in the current crisis situation.
At a meeting with Ho Chi Minh City on the task of socio-economic development, disbursement of public investment capital, and the progress of key projects, Prime Minister Pham Minh Chinh said that it is necessary to design a tool to control investment activities in corporate bonds.
From November 18, Saigon Commercial Joint Stock Bank (SCB) will officially establish a reception location to receive information related to the purchase and sale of corporate bonds, from 8:30 a.m. to 11:30 a.m. and from 1:00 p.m. to 4:30 p.m., from Monday to Friday, at 9th floor of SCB headquarter at No.242 Cong Quynh Street in Pham Ngu Lao Ward, District 1, HCMC.
The Ministry of Finance continued to make recommendations on the operation of the corporate bond market on November 14. Since 2019, this has been the 17th warning to corporate bond issuers, market participants, and individual investors.
Bank stocks are sold out strongly, despite good business results, due to pressure of corporate bonds nearing maturity. Many stocks even fell to the lowest range in last two years as investors feared cash flow risks.
The VN-Index continued to free fall in the trading session on October 25, losing 24 more points to near 960 points, then rebounded by nearly 12 points at the end of the trading session after the “Black Monday" when the VN-Index lost the 1,000-point mark and the market capitalization evaporated more than VND134.2 trillion.
From the end of this year onwards, real estate businesses will face a worrisome period due to cash flow shortages as corporate bonds will begin to mature. This will be in sharp contrast to the enthusiasm with which these businesses raced with each other to issue bonds in the years 2019 until 2021.
Authorities should quickly handle violated enterprises to fortify investors’ confidence. In addition, it is necessary to soon complete the legal corridor for the corporate bond market to develop sustainably, said experts.
The unfortunate case of the Tan Hoang Minh Group has caused much disrepute to the corporate bonds market, with the management agencies also tightening their grip. However, the contribution of corporate bonds must not be ignored or forgotten in the wake of just this incident.