Vietnam's property equity index has experienced a significant decline of around a half since January, according to a recent report on East Asian bond markets released by the Asian Development Bank (ADB).
The report also reveals that government bond yields across all maturities decreased between March 1 and June 2, as the State Bank of Vietnam adopted a more accommodative monetary policy to support economic growth and ensure financial stability – with a specific focus on the real estate sector.
The report further cites data provider FiinRatings, which disclosed that as of early April, 43 property companies had encountered payment delays on both interest and bond debts, totalling a value of VND78.9 trillion ($3.36 billion).
Within the real estate sector, the bad debt ratio was reported to be over 20 per cent, ranking second only to the energy sector. Additionally, the real estate sector accounted for the largest proportion of outstanding bonds, representing 33.8 per cent of the total.
The ADB also notes that bond yields in East Asian markets experienced a decline from March to May, primarily due to easing inflationary pressures in the region and a loosening of monetary policies in the United States.
Despite persistent uncertainties surrounding the monetary stance of the US Federal Reserve and ongoing risks in the banking sectors of major advanced economies, financial conditions in the region remained relatively stable.
During the period from March 1 to June 2, equity markets faced declines, local currencies slightly weakened against the US dollar, and risk premiums narrowed, as highlighted in the ADB report.
ADB Chief Economist Albert Park believes that most central banks in the region have slowed down their rate hikes, and the turmoil in the banking sectors of the US and Europe has had limited impact on regional financial markets thus far.
However, concerns over financial stability and inflation in the US have created uncertainties surrounding the Federal Reserve's monetary policies, which may continue to affect financial conditions in the region.
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