Transaction of bonds business still limited

January 27, 2011 | 17:22

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On the Hanoi Stock Exchange (HNX) as much as VND30 trillion ($1.5 billion) worth of bonds and convertible bonds were issued last year, according to data released from State Securities Commission.

Among the companies raising funds via bonds were the major ones like Vietcombank, Bank for Investment and Development of Vietnam (BIDV), Asia Commercial Bank (ACB) and Hoa Phat Group, yet only a few of these firms listed bonds after the issuance.

In fact, companies usually see bonds as a quite good way to lend capital as they do not have to bear strict supervision like lending from banks, as well as do not bear big dividend pressure, like issuing stocks.

However, instead of listing bonds to boost liquidity, companies are likely to let their bonds float freely as they do not want to perform complex listing procedures while bond’s maturity are short three to five years.

Some bonds actually do not meet required standards, which “are like debt notes rather than bonds,” said Nguyen Thi Hoang Lan, vice general director for HNX, which made issuers reluctant to list bonds.

Bond issuance is expected to increase in 2011, yet the fact that companies hesitate in listing their bonds is said to damage investors as making the bond much less liquid.

By Thanh Doan

vir.com.vn

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