The recent financial market report of Saigon Securities Incorporation (SSI) stated that in September 2019, 25.516 trillion dong of corporate bonds were issued, in which, up to 21.071 trillion dong (equivalent to 82.6 percent) were banks’ bonds. Banks issued the most bonds in September were Vietnam Technological and Commercial Joint Stock Bank (TCB), Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank), Commercial Joint Stock Bank for Investment and Development of Vietnam (BDIV), Asia Commercial Joint Stock Bank (ACB), Orient Commercial Joint Stock Bank (OCB), etc.
In general, in the first nine banks of 2019, the total corporate bond issuance was 155.306 trillion dong (excluding the private placements in the first three months of the year as the Hanoi Stock Exchange (HNX) did not publish the data).
Banks remained the biggest issuers with total issuance value of more than 75.936 trillion dong (accounting for 49 percent), followed by real estate firms (47.372 trillion dong, accounting for 26.4 percent). The remaining value was issued by infrastructure development companies, securities companies and other businesses.
Considering the entire bond market in the first nine months of 2019, the average interest rate was 8.4 percent per annum and average term of 3.68 years, while the average interest rate and term were respectively 6.82 percent per annum and 3.82 years for the group of banks, and 1017 percent per annum and 3.42 years for the group of real estate companies.
September recorded the biggest issuance value of banks since the beginning of the year.
The average issuance interest rate of banks’ bonds in August and September was respectively 7.1 percent and seven percent per annum, higher than the previous months, as banks mostly issued bonds at longer terms.
Instead of just issuing two-year and three-year bonds as in previous months, in August and September 2019, commercial banks promoted the issuance of five-year, seven-year and 10-year bond. Banks issuing the most long-term bonds included VietinBank, BIDV, and Southeast Asia Commercial Joint Stock Bank (SeABank), according to SSI’s statistics.
In contrast, the average interest rate in September of real estate bonds sharply dropped to 8.1 percent per annum. However, the issuance in the month was only 1.797 trillion dong of four issuers including Phu <y Hung Development Company Limit, Nova Tan Gia Phat Company Limited, Gia Khanh Development and Management Joint Stock Company, and Sunshine Marina Nha Trang Joint Stock Company.
Except for the 460 billion bond issuance of Gia Khanh which offered floating rate in the first period at 10.5 percent per annum, the remaining bonds were issued at fairly low interest rates. Especially, the interest rate of the two issuances of Nova Tan Gia Phat was only six percent per annum, wholly purchased by domestic investors.
Only about 62 percent of the offer volume was purchased. Particularly, Phu My Hung only issued 800 billion dong out of the total of 1.7 trillion-dong offer, purchased by foreign investors.
