The bond market is gradually "warming up"
Information in the Bond Market Report for the third quarter of 2023 published by VNDirect shows that in the third quarter of 2023, there were 88 successful domestic corporate bond issuances with a total issuance value of about VND 100,163 billion, nearly 2.6 times higher than the previous quarter and up 50% over the same period.
Including 80 private issuances with a total issuance value of VND 88,715 billion, accounting for 88.6% of the total issuance value. And 8 public issuances with an issuance value of VND 11,447 billion, accounting for 11.4% of the total issuance value.
Of which, real estate is the industry group with the second largest proportion of individual corporate bond issuance in the third quarter of 2023 with a total issuance value of about VND 29,593 billion, accounting for 33.4% of the total issuance value.
Looking back at the most difficult period of the bond market, in April 2022, this capital mobilization channel hit "bottom" when no bond issuances were recorded from real estate businesses.
However, statistics on the Hanoi Stock Exchange (HNX) show that in August 2023, there were 9 issuances from 7 real estate enterprises with a total issuance value reaching 23,000 billion VND - this figure accounts for about 1/3 of the total issuance value of the real estate group in the first 6 months of 2023 (62,512 billion VND).
September 2023 continued to witness 4 more issuances by businesses in this industry. It can be seen that capital mobilization activities of real estate businesses are showing signs of becoming active again after a long period of silence.
The real estate enterprises that issued the most individual corporate bonds in the third quarter of 2023 include: CAPITALAND TOWER LLC issued 4 tranches with a total value of more than VND 12,200 billion with an interest rate of 1%/year for a term of 60 months, Lan Viet Real Estate LLC issued VND 4,100 billion with an interest rate of 13.3%/year for a term of 15 months, BIM Real Estate JSC issued VND 2,333 billion with an interest rate of 10.4%/year for a term of 84 months...
In the same development, Ho Chi Minh City Infrastructure Investment Joint Stock Company (HoSE: CII) recently announced the public offering of more than 28.4 million bonds to existing shareholders.
The company expects to collect more than VND2,840 billion if the issuance is successful, the proceeds will be used to invest in bonds of subsidiaries.
After requesting to extend the maturity date for some of the company's bonds, Khai Hoan Land Group Corporation (HoSE: KHG) also shared its plan to issue more bonds in the near future to mobilize a maximum of VND840 billion.
Thereby increasing the enterprise's capital to contribute capital to a number of projects that the enterprise is implementing and the remaining capital is added to serve the company's business operations.
Stocks - a potential capital channel for real estate
Not only the bond channel, in the third quarter of 2023, many real estate businesses have made moves to offer individual shares, thereby expecting to mobilize capital of up to thousands of billions of VND.
In parallel with raising money from bonds, Khai Hoan Land also proposed a private offering of up to 180 million shares to professional securities investors, equivalent to 40% of outstanding shares.
The expected implementation period is from the fourth quarter of 2023 to the first quarter of 2024. The offering price is set at VND 10,000/share, higher than the real value of the stock on the market (closing price on October 11 at VND 6,300/share).
According to the plan, the expected VND 1,800 billion will be contributed by Khai Hoan Land to provide capital to member companies to implement real estate projects and supplement working capital. If the offering is successful, Khai Hoan Land's charter capital will increase from VND 4,494 billion to VND 6,294 billion.
Real estate companies plan to raise trillions of dong from stocks.
At Dat Xanh Group Corporation (HoSE: DXG) , this real estate giant also shared its plan to privately offer 57 million shares to foreign investors at an offering price of VND15,000/share.
If completed, Dat Xanh expects to collect VND855 billion from foreign investors. The entire amount will be used to increase the ownership ratio at Dat Xanh Services (HoSE: DXS) - a subsidiary of the enterprise specializing in brokerage services and real estate market research.
Or Licogi 13 JSC (HoSE: LIG) also plans to privately offer more than 22.5 million shares to professional securities investors. The offering price is 10,000 VND/share, the total expected revenue is 225 billion VND.
The company plans to use the proceeds to contribute capital to its subsidiaries and supplement its working capital to repay bank loans, loan contracts and other payments.
Capital flow signals recovery of real estate market?
Speaking with Nguoi Dua Tin , Dr. Nguyen Van Dinh - Chairman of the Vietnam Association of Real Estate Brokers (VARS) said that the difficulty in accessing capital is one of the reasons why real estate businesses are in such a difficult situation today.
Mr. Dinh said that real estate businesses are facing extremely difficult cash flow situations as main capital mobilization channels such as bank credit, bond issuance or mobilization on the stock market are becoming increasingly difficult.
Although the State has issued many Circulars and Decrees to support real estate businesses in clearing capital sources, according to Mr. Dinh, these mechanisms have not yet had an immediate effect in bringing cash flow back to real estate, and the market still needs more time to "absorb" the policy.
Comparing real estate enterprises to patients, citing a report on the real estate market conducted by VARS, enterprises are currently assessed as not being provided with “medicine”, only being given some “functional foods”, so in essence the “disease” cannot be cured. It is only “holding on and prolonging life as long as possible”.
“What businesses currently need is early-approved projects, real money, to restore production, investment, and business activities. Not just transferring “bad debt” from one time to another,” said Mr. Dinh.
Dr. Le Xuan Nghia said that the general economy is still very difficult.
Regarding the capital market showing many signs of revival, Dr. Le Xuan Nghia - Member of the National Financial and Monetary Policy Advisory Council, said that capital flowing into real estate is only "creeping, stirring, and tentatively" recovering.
The actions of many businesses in recent times show that the Government's efforts have had a certain impact on the market as well as on businesses, helping the real estate capital market gradually thaw.
But the expert also noted that compared to expectations, the capital market has only recovered about 30% because the general economy is still in a very difficult context.
According to Mr. Nghia's analysis, although the cash flow turnover has returned, it is very little, partly because the cash flow has not yet completed one rotation in a year, so these movements are not a sign that real estate has recovered or is recovering.
Therefore, Mr. Nghia expressed his opinion that it will be at the earliest in the second quarter of 2024 that real estate can gradually overcome difficulties thanks to the drastic intervention of competent authorities .
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