DNVN - From August 1, Circular 11/2024/TT-NHNN dated June 28, 2024 regulating the purchase and sale of bonds by banks will officially take effect. This opens up many dynamics for the bond market because banks are always the entities with the ability to strongly influence this market.
Circular 11 amends and supplements Circular 16/2021/TT-NHNN, including the addition of Clause 14 to Article 4 on the principles of buying and selling corporate bonds. The issuing enterprise must send the credit institution information about related persons as prescribed in the Law on Credit Institutions before the time the credit institution purchases corporate bonds.
The Circular also adds Clause 15 to Article 4, credit institutions must use non-cash payment services when making payments in the purchase and sale of corporate bonds in accordance with the provisions of law on non-cash payments. At the same time, Clause 1, Article 8 on the limit for purchasing corporate bonds is amended and supplemented.
Accordingly, the total balance of corporate bond purchases (including bonds issued by enterprises and related parties of that enterprise) is included in the total outstanding credit balance for a customer or related party according to the provisions of the Law on Credit Institutions and regulations of the State Bank of Vietnam.
In particular, the circular has abolished Clause 11, Article 4 of Circular No. 16 (which stipulates that within 12 months after selling unlisted corporate bonds, credit institutions are not allowed to buy back the sold bonds). This provision is considered to have caused the corporate bond market to stagnate for a period of time.
The entry into force of Circular 11/2024/TT-NHNN creates expectations for the corporate bond market as well as encourages more active participation of banks in the bond market. In particular, the current time is also the time when the demand of this group of subjects is also increasing.
According to Mr. Tran Le Minh - General Director of VIS Rating Company, the trend in 2024 is that banks will continue to issue bonds. This is a channel that investors can consider as an alternative to bank deposits.
Bank bonds can act as a catalyst to restore investor confidence in the corporate bond market, as this is still a safe asset class. In addition, from an investor perspective, banks are often the major influencers of the bond market.
According to the Ministry of Finance, in terms of investor structure in the bond market, institutional investors buying corporate bonds in the primary market account for 94.8% of the issuance volume. The largest proportion is concentrated in credit institutions (53.5%), far exceeding the second group, securities companies (21.9%).
Ha Anh
Source: https://doanhnghiepvn.vn/kinh-te/chung-khoan/thi-truong-trai-phieu-doanh-nghiep-co-them-dong-luc-moi/20240731090704970
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