Invest in corporate bonds issued by reputable companies.

DNHN - Bonds issued by reputable companies with transparent issuance, stable business strategies, and effective operations must be considered and selected by investors; investors should never listen to rumors that could affect investment performance.

According to experts, it will no longer be simple to invest in corporate bonds in the current environment. Bonds issued by reputable companies with transparent issuance, stable business strategies, and effective operations must be considered and selected by investors; investors should never listen to rumors that could affect investment performance.

After several violations were addressed and the repercussions were overcome, the bond capital market continued to be consolidated and opened effective and sustainable long-term capital channels for the economy. This demonstrates that the Government, the Ministry of Finance, and the authorities "say what they mean" and deal with violations resolutely to make the bond market more transparent and secure.

Specifically, the government has implemented a series of support measures, such as issuing Decree 65/2022/ND-CP and amending Decree 153/2020/ND-CP, which regulates the offering and trading of corporate bonds. Then there is Decree 08/2023/ND-CP amending and supplementing regulations on offering and trading corporate bonds in Decree 153, extending until the end of this year. In addition, the construction of an individual corporate bond trading system under the direction of the Prime Minister contributes to increasing transparency, limiting risks, and building investor confidence in corporate bond transactions, particularly at present, while simultaneously assisting businesses in good financial standing to continue to mobilize effective medium- and long-term capital from the market and reducing pressure on bank credit.

According to the Vietnam Bond Market Association (VBMA), the total recorded value of corporate bond issuance since the beginning of the year is nearly 132,400 billion VND. 17 public issuances totaling VND 16,500 billion represent 12.4% of the total issuance value, while 101 private issuances totaling nearly VND 116,000 billion represent 87.6%. These numbers indicate that the bond market will gradually become more valid, safer, and sustainable, providing investors and businesses with opportunities to mobilize capital.

In its Asian Bond Monitoring Report published in August 2023, the Asian Development Bank (ADB) concluded that the operation of individual bond exchanges beginning at the end of July 2023 "will inject new vitality" into the corporate bond market by enhancing liquidity, transparency, and capital access.

ADB also commends the State Bank of Vietnam for issuing a new circular regarding the restructuring of debt payment terms and the repurchase of bonds by banks. Circular 02 aims to alleviate the burden of debt repayment for borrowers by permitting new credit or refinancing for qualified customers. Circular 03 suspends the effectiveness of Clause 11, Article 4 of Circular 16 (November 10, 2021) from April 24, 2023, to December 31, 2023, allowing credit institutions and banks to buy back unlisted bonds with the highest internal credit ratings without having to wait a year to sell.

"Circular 03 aims to stabilize market sentiment among issuers and investors, increase liquidity, and enhance the recovery of the corporate bond market," the ADB said.

The consolidation of regulations and market support policies has been successful in reopening the most significant medium- and long-term capital mobilization channel, which also serves as the basis for investors' wagers. belief in the market's safety and openness.

In the current environment, when stock investments are susceptible to price fluctuations and deposit interest rates tend to fall to low levels, bond investments are advantageous due to their greater capital preservation capacity. and more consistent earnings. In terms of liquidity, the advantages and benefits of this investment channel are augmented by the secondary trading floor that focuses on the already-existent corporate bond market.

However, according to experts, choosing to invest in corporate bonds during the current period will be more difficult than it was before 2021. Investors must evaluate and select bonds issued by reputable companies with transparent issuance, a stable business strategy, and efficient operations. Speculations that could affect investment performance should never be entertained.

At the same time, it is important to clearly distinguish and select bonds distributed by banks and securities companies that guarantee bond payment, as the guarantor will pay the principal and interest to the bondholder if the issuer fails to meet this obligation on time. This is the most prestigious and advantageous type of guarantee available to investors today. In addition, there are commercial banks and securities firms that only distribute corporate bonds and receive service fees from the issuing businesses. In this case, the purchase of bonds is neither guaranteed nor guaranteed by these units.

Representatives of Techcom Securities Joint Stock Company (TCBS) advised that investors will be safer with issuers than with higher credit ratings. These issuers' interest rates maybe 0.5% to 1% lower than those of issuers with a low credit rating, but it will be safe for investors to purchase and hold.

Currently, securities firms offer customers a variety of flexible investment options. Investors may purchase and hold bonds from the date of initial issuance until maturity (typically 12 to 36 months). If you do not wish to hold until maturity or if you need to make a payment, you may trade with other investors by the bond agreement of the securities company from which you purchased the bonds.

When principal interest payments are delayed, investors can proactively negotiate a payment plan with businesses and service providers, thereby protecting the rights of both investors and developers. The onion.

Developing the bond channel helps businesses mobilize capital from a variety of sources, thereby reducing their reliance on traditional credit. On the other hand, it creates more attractive investment channels to attract idle funds from individuals and organizations, thereby enhancing economic efficiency.

PD