Capital through the bond channel continues to flow strongly into real estate

17,200 billion “poured” into real estate businesses through the bond channel in the first 3 months of the year

According to statistics of the Vietnam Bond Market Association (VBMA), in March, there were two public bond issuances of VNDirect Securities Joint Stock Company worth 1,000 billion VND and TNS Holdings Trading and Service Joint Stock Company valued at VND 1,000 billion. price of nearly 500 billion dong and 10 separate bond issuances with a value of 2,130 billion dong.

In which, real estate and securities businesses are currently the two groups that issue the largest bond volume with the value of VND 1,691 billion and VND 1,000 billion, respectively. Leading the way is Hano-vid Real Estate Joint Stock Company with the largest issuance value of VND 1,000 billion through two separate issuances of 7-year bonds.

In total, in the first quarter of 2022, there were 48 separate issuances of corporate bonds with a total value of about VND 30,998 billion and 9 issuances to the public with a value of VND 8,696 billion.

The total value of bond issuance to the public increased by nearly 14% over the same period last year and the value of private bond issuance decreased by more than 24%, reaching VND 30,998 billion.

The real estate group still leads in issuance value with a total issuance volume of 17,211 billion dong, accounting for more than 43%. Term from 1 to 3 years accounted for the majority of the issuance value in this group with VND 10,004 billion, equivalent to more than 58%. Construction group ranked second with 8,280 billion dong, accounting for 20.86% of total issuance value.

Previously, in 2021, real estate businesses were also the biggest issuers group, totaling 318.2 trillion VND – accounting for 44% of the total amount of corporate bonds issued and increasing by 66.3% compared to 2020. Issued real estate businesses increased from 141 businesses in 2020 to 193 businesses in 2021.

Many businesses take advantage of banks’ backing to issue bonds

Dr. Le Xuan Nghia – Economist said that corporate bonds play an extremely important role for production and business enterprises in general, especially real estate enterprises, especially when banks is tightening credit in the real estate sector. However, corporate bonds are currently strictly controlled by the Government with 3 objectives: corporate finance, collateral, purpose of use…

According to Mr. Nghia, the control of corporate finance is correct and in line with national practices because “every country can do it”. However, in terms of collateral and capital use purposes, according to this expert, it is not necessary.

About checking the purpose of use can only be done by banks, because it is related to the disbursement of the banks themselves. Meanwhile, the inspection of collateral should only be applied to large enterprises, and small businesses “where to get assets to secure”.

Therefore, in order for the market to develop in the long term, for businesses to have capital for project development, the bond market is very important, so it is necessary to accelerate the rating of bonds.

Dr. Le Xuan Nghia also pointed out a negative problem that exists in the market that is that many businesses take advantage of banks to back them up to issue bonds and they do not use that money to develop projects. available to buy and collect land.

“Going to buy land, gathering land, gathering resources, that’s the self-evolution and self-transformation of businesses. It is said that the war for land is like the last generation of this economy, so you have to buy it. Taxation of land is therefore very important, in order to prevent long-term resource speculation,” he added.