Bond market is no longer active, focusing on banking group
MBS Research's bond market research report shows that from June 1 to 20, 2024, the total value of successfully issued corporate bonds was VND 20.4 trillion, down 37% year-on-year. This shows that the capital market from corporate bond issuance is slowing down.
In addition, the issuance volume recorded up to 94% of the total issuance value belonging to the banking group. Real estate bonds issued in the past month were almost completely absent.
The amount of newly issued bonds is mainly focused on the banking sector (Photo TL)
Since the beginning of 2024, the total value of corporate bonds issued has reached VND93.8 trillion, up 165% year-on-year. The average interest rate of bonds issued in the first 6 months of the year reached 7.8%, lower than the 8.3% in the same period last year.
In terms of industry groups, Banking is the group with the highest amount of bonds issued with 53.8 trillion VND, equivalent to a proportion of 57%. The amount of bank bonds issued has increased by 147% compared to 2023.
Real estate bonds decrease in quantity but interest rates are high, risks increase
Notably, real estate bonds, which are leading the mobilization volume in 2023, have decreased by 23%. Specifically, the amount of bonds issued in this group in the first half of 2024 only reached VND 25.3 trillion, equivalent to a proportion of 27%.
Despite the decrease in issuance volume, the average interest rate of real estate bonds is the highest in the market, ranging from 11 - 12.5%. Meanwhile, the interest rate of bank bonds is only from 4.7 - 7.4%. This shows the relative risk of real estate bonds compared to other sectors.
Explaining the slowdown in real estate bonds, many economic experts said that the real estate market in general has not yet recovered. The ability to repay debt is still weak, forcing many real estate businesses to reduce their plans to mobilize capital through bonds.
The pressure to repay maturing debts of the real estate group is also on the rise. As of June 20, 2024, the total value of overdue corporate bonds was VND 197.1 trillion, equivalent to 19.6% of outstanding bonds in the whole market. Real estate enterprises accounted for 70% of the overdue amount. The number of real estate enterprises that were late in paying interest and principal on bonds has reached 111 enterprises.
Meanwhile, the banking industry is undergoing changes in its capital structure. Banks have had to increase the issuance of long-term bonds to supplement capital sources and ensure compliance with state capital safety regulations.
The low interest rate environment also encouraged banks to buy back debt and issue bonds with lower interest rates. This has had an impact, pushing up the amount of corporate bonds issued by banks in the first half of 2024.
Source: https://www.congluan.vn/94000-ty-dong-trai-phieu-do-don-ve-nhom-ngan-hang-bat-dong-san-nua-dau-nam-post300668.html
Comment (0)