The corporate bond market has gained new momentum.

DNVN - From August 1st, Circular 11/2024/TT-NHNN dated June 28, 2024, regulating the buying and selling of bonds by banks, will officially come into effect. This opens up many opportunities for the bond market because banks are always entities with the ability to strongly influence this market.

Circular 11 amends and supplements Circular 16/2021/TT-NHNN, which includes the addition of Clause 14 to Article 4 regarding the principles of buying and selling corporate bonds. The issuing enterprise must send information about related parties to the credit institution as stipulated in the Law on Credit Institutions before the credit institution purchases the corporate bonds.

The circular also adds Clause 15 to Article 4, requiring credit institutions to use cashless payment services when making payments in the purchase and sale of corporate bonds in accordance with the law on cashless payments. At the same time, it amends and supplements Clause 1 of Article 8 regarding the limit on the purchase of corporate bonds.

Accordingly, the total outstanding balance of corporate bond purchases (including bonds issued by the enterprise and its related parties) is included in the total outstanding credit balance granted to a customer or related party as stipulated in the Law on Credit Institutions and the regulations of the State Bank of Vietnam .

In particular, the circular repealed Clause 11, Article 4 of Circular No. 16 (which stipulated that within 12 months after selling unlisted corporate bonds, credit institutions were not allowed to repurchase those bonds). This clause was seen as causing a temporary slowdown in the corporate bond market.

Circular 11/2024/TT-NHNN, which regulates the purchase and sale of bonds by banks, officially came into effect on August 1st.

The entry into force of Circular 11/2024/TT-NHNN has created expectations for the corporate bond market and encouraged more active participation from banks in the bond market. In particular, the demand from this group is currently increasing.

According to Mr. Tran Le Minh, General Director of VIS Rating, the trend for 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 remains a safe asset class. Furthermore, from an investor's perspective, banks often have a significant influence on the bond market.

According to data from the Ministry of Finance , regarding the investor structure in the bond market, institutional investors purchasing corporate bonds in the primary market account for 94.8% of the issued volume. The largest proportion is concentrated in credit institutions (53.5%), significantly exceeding the second-ranked 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