Vietnam's corporate bond trading platform to go live in July

The Ministry of Finance (MoF) is responsible for expediting the establishment and operation of the corporate bond trading platform right this month, seen as a means to kick-start the bond market, said Deputy Prime Minister Le Minh Khai at a meeting held on July 13 to discuss the state of the financial sector in the first half of the year.

Deputy Prime Minister Le Minh Khai at the conference. Photo: Quang Thuong

MoF data showed that the average trading size in the bond market fell by nearly 24% in the first half to VND5.9 trillion (US$249.3 million) per session. To address the challenges faced by enterprises in issuing bonds and paying bond interest, the Government issued Decree No.08/2013 in March to protect the interests of bondholders.

However, Deputy Prime Minister Le Minh Khai stressed the urgent need for relevant agencies to address problems in the corporate bond and securities markets. He stressed the importance of launching the corporate bond trading platform in July.

"The early establishment of a dedicated corporate bond trading floor is seen as one of the measures to stimulate the market and facilitate enterprises to raise medium and long-term capital," Khai said.

He noted that the move aligns with the draft decree proposed by the Ministry of Planning and Investment. This decree aims to address challenges in production and business and streamline administrative procedures.

After two years of significant growth (2020-2021), the corporate bond market experienced a slowdown in 2022 due to the arrests of individuals related to the misuse of capital raised through bond issuance by some large real estate companies.

The introduction of the trading floor is seen as an initiative to revive the market.

In June, the MoF announced plans for the Vietnam Securities Depository (VSD) and the Hanoi Stock Exchange (HNX) to set up a trading platform to synchronize information and investor accounts for individual bond trading on the HNX and to facilitate registration, deposit, and payment of bond transactions through the VSD.

These measures are aimed at improving administration and compliance and ensuring that investors involved in retail bond trading meet the required criteria.

HNX later announced that the construction of Phase 1 for the corporate bond trading platform has been completed, meeting all technical requirements for official operation.

A corporate bond trading platform is seen as a solution to revitalize the local bond market. Photo: The Hanoi Times

More support for businesses

Also at the conference, Deputy Prime Minister Le Minh Khai urged the MoF to take measures to support the economy and alleviate the challenges faced by businesses and the general public. In view of the expected difficulties arising from the international environment, inflationary pressures, risks of natural disasters, and climate change in the coming months, he stressed the importance of continuing fiscal support policies while ensuring the safety of public debt, government debt, national external debt, and efficient use of capital.

He also acknowledged the financial sector's efforts in accelerating VAT refunds, streamlining administrative procedures, and simplifying specialized inspections to create favorable conditions for businesses and individuals.

In the first half of the year, budget revenues amounted to VND875.8 trillion ($37 billion), equivalent to 54% of the estimate and down nearly 8% from the same period in 2022.

Budget expenditures reached VND804.6 trillion ($34 billion), about 39% of the estimate, with notable growth in capital expenditures and a higher capital disbursement rate compared to the corresponding period in 2022.

Acknowledging the challenges facing this year's budget revenues and expenditures, the Deputy Prime Minister highlighted the MoF's efforts to achieve an expenditure balance. He also urged the ministry to propose additional policies and solutions that support fiscal measures while ensuring the safety of the public, government, and external debt while effectively utilizing available capital.