Government eyes corporate bond-to-GDP ratio of 20% by 2025

By Anh Minh April 13, 2022 | 12:27 a.m. PT

A worker counts Vietnamese banknotes at a bank in Hanoi. Photo by VnExpress/Giang Huy

The government wants to increase the size of the corporate bond market from 11.5% of GDP last year to at least 20% by 2025.

He also wants to achieve a total bond-to-GDP ratio (including government, municipal, and corporate bonds) of 47%, and market capitalization-to-GDP ratio of 85% by that year, a resolution that he posted on April 12. mentioned.

Bonds are seen as an efficient way for companies to raise funds, and issuances totaled some VND 682 trillion last year.

But some companies are said to have engaged in dubious practices, such as real estate developer Tan Hoang Minh, for example. Its VND 10 trillion bond issues were canceled for submitting false information.

The crackdown on the company and Prime Minister Pham Minh Chinh’s statement on strengthening surveillance of bond, real estate and stock markets demonstrate the government’s determination to reform the markets.

He also instructed the Ministry of Finance to come up with proposals to encourage venture capital and diversify financial institutions.

It has also set a target of having 1.5 million businesses in the country by 2025, with 45% of them being medium or large in size.

Sallie R. Loera