Unlocking capital flows in the final quarter

They have also called for the implementation of special support packages for small and medium-sized enterprises, as well as businesses facing export challenges.

This comes as the Ministry of Finance works on draft amendments to the Securities Law, which propose key changes that, if enacted, could significantly impact stock and capital markets and hinder corporate capital mobilisation. Bank leaders have reiterated the necessity of clearing capital flows in the corporate bond market.

The urgency is heightened as the year’s final quarter, a critical period for accelerating production and business activities to meet the demands of the festive season, draws near.

Luu Trung Thai, chairman of MBBank said, “There is a need for more stable solutions to unblock capital flows in the corporate bond market to ease the pressure on medium- and long-term credit capital within the banking system. In the last months of the year, ministries, departments, and local authorities should expedite the approval and adjustment of planning processes to support real estate businesses.”

For the corporate bond market to become a sustainable long-term channel for capital-raising and share the burden with the banking system, several areas still need improvement.

"While many legal regulations regarding bond issuance have become clearer, issuing companies continue to violate disclosure requirements. This affects the transparency of the issuance process and may prevent investors from fully accessing the information they need to make investment decisions. Under current regulations, the maximum penalty for such violations is $2,000 for individuals and over $4,000 for organisations, which is minimal compared to the total bond issuance value," said Do Bao Ngoc, deputy CEO of CSI Vietnam Construction Securities.

Ngoc suggested increasing the penalty to as much as $12,500 for individuals and $42,000 for organisations, or calculating it as a percentage of the total bond issuance value to ensure the penalty is sufficiently significant. This, he noted, would act as a strong deterrent for issuers to comply seriously with legal regulations.

Ho Hung Anh, chairman of Techcombank, presented three proposals to unblock capital flows in the final quarter at a conference between the government and commercial joint-stock banks focused on solutions to contribute to the country’s socioeconomic development.

Firstly, he stressed the need to unblock long-term capital sources for businesses to develop sustainably through the stock market.

“This will create better conditions for businesses to access investment capital from institutional and individual investors, thereby diversifying capital sources and establishing a stable base for investment in machinery, equipment, and for the recovery and expansion of production,” said Hung Anh.

Secondly, regarding support for business production, he proposed establishing support programmes and packages from the state budget, particularly credit guarantee programmes. These should target small- and medium-sized enterprises, businesses facing export challenges, or those impacted by natural disasters. “It is essential to help businesses access capital more easily and to extend or supplement corporate income tax and VAT reductions for the coming years. Additionally, simplifying paperwork to reduce costs related to production, such as transport and import-export costs, would help reduce the financial burden on businesses,” he added.

Finally, Hung Anh recommended stronger policies to encourage green transitions. He called for creating conditions for credit institutions to participate in the capital market and issue bonds for businesses implementing green projects, alongside offering tax incentives and green credit insurance mechanisms.

Full market recovery still out of reach for real estate Despite the real estate sector’s return to bond issuance in July with attractive interest rates after a three-month absence, a market recovery in the latter half of the year and 2025 is unlikely due to credit risks.

Lenders still most active in corporate bond issuance Vietnam’s corporate bond market is experiencing a resurgence, but delayed payments and other factors continue to make dents in the sector.

Strong remittance flows bring boost to the south Remittance flows to southern Vietnam in particular continue to grow strongly, with early implementation of the new Land Law expected to drive real estate growth towards 2025.