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Samples of corporate bonds issued by companies. — Photo vneconomy.vn Commercial banks that underwrite and sell corporate bonds have to buy them back if investors so demand, the central bank has said. It followed a meeting with voters (members of the public) the State Bank of Viet Nam (SBV) held in HCM City amid the ongoing bond market troubles. Besides asking for underwriting banks to take responsibility for redeeming bonds, the voters also urged the SBV to tighten inspection of credit institutions to ensure they comply with regulations while investing in bonds. The SBV recently raided 11 banks and fined a number of them for violating regulations related to bond purchases. Under current regulations, banks must have an internal credit rating system and can only buy bonds if their bad debts ratio is below 3 per cent. For bonds sold in the domestic market, when issuers cannot pay in full and on time the bond principal and interest, they must negotiate with bondholders … [Read more...] about Banks underwriting bonds should buy back bonds: central bank

Illustrative image (Photo: VNA) Hanoi (VNS/VNA) - Commercial banks that underwrite and sell corporate bonds have to buy them back if investors so demand, the central bank has said. It followed a meeting with voters (members of the public) the State Bank of Vietnam (SBV) held in Ho Chi Minh City amid the ongoing bond market troubles. Besides asking for underwriting banks to take responsibility for redeeming bonds, the voters also urged the SBV to tighten inspection of credit institutions to ensure they comply with regulations while investing in bonds. The SBV recently raided 11 banks and fined a number of them for violating regulations related to bond purchases. Under current regulations, banks must have an internal credit rating system and can only buy bonds if their bad debts ratio is below 3%. For bonds sold in the domestic market, when issuers cannot pay in full and on time the bond principal and interest, they must negotiate with bondholders for extending the term … [Read more...] about Banks underwriting bonds should buy back bonds: Central bank

Many bond issuers begged regulatory authorities to assist them. In response, the government issued Decree No.08/2023/ND-CP on private corporate bonds on March 5 to alleviate the pressure on bond issuers this year. Bui Thi Thu Nga Banking and finance, Account manager BowerGroupAsia Vietnam Decree 08 postpones a number of new standards until January 2024, giving the market time to adjust and opening space for bondholders and bond issuers to negotiate. It amends Decree No.153/2020/ND-CP from December 2020, and Decree No.65/2022/ND-CP from September last year. After assessing the former and the case of Tan Hoang Minh, the government endorsed the latter to impose stricter management mechanisms on the trading of private bonds. Decree 65 set higher qualifications for individual investors, compulsory credit ratings in some circumstances, a shorter period for distributing bonds, and prohibitions extending the term of bonds issued before September 15, 2022. Most of the … [Read more...] about Clearing up the liquidity issue through amendments

Clients waiting outside a branch of the Silicon Valley Bank in Santa Clara, California on March 13. (Photo: XINHUA/VNA) HCM City (VNS/VNA) - The Silicon Valley Bank (SVB) collapse by itself will end up being neutral for Vietnam’s stock market and economy, Michael Kokalari, chief economist at investment fund VinaCapital , has said in a report. “Furthermore, we see no substantial risk that the dynamics which negatively impacted SVB and certain other regional US banks could significantly impact the profitability and/or solvency of banks in Vietnam.” It was widely reported that latent losses on SVB’s securities portfolio coupled with a drop in deposits at the bank were the main factors that led to its rapid insolvency, it said. Vietnamese banks also held Government bonds on their balance sheets, and the prices of 10-year Vietnam Government bonds (VGBs) had dropped by around 15% since mid-2021 and yields surged. However, VGB holdings only accounted for around 6% of listed … [Read more...] about Silicon Valley Bank collapse not to impact VN: VinaCapital

The Silicon Valley Bank (SVB) collapse by itself will end up being neutral for Vietnam’s stock market and economy, Michael Kokalari, chief economist at investment fund VinaCapital, has said in a report. Clients waiting outside a branch of the Silicon Valley Bank in Santa Clara, California. — AFP/VNA Photo “Furthermore, we see no substantial risk that the dynamics which negatively impacted SVB and certain other regional US banks could significantly impact the profitability and/or solvency of banks in Vietnam.” It was widely reported that latent losses on SVB’s securities portfolio coupled with a drop in deposits at the bank were the main factors that led to its rapid insolvency, it said. Vietnamese banks also held Government bonds on their balance sheets, and the prices of 10-year Vietnam Government bonds (VGBs) had dropped by around 15 per cent since mid-2021 and yields surged. However, VGB holdings only accounted for around 6 per cent of listed banks’ … [Read more...] about Silicon Valley Bank collapse not to impact Vietnam: VinaCapital

Senior executives from 52 US firms are taking part in the biggest business mission ever organised by the US-ASEAN Business Council (USABC) to Vietnam this week as the two countries mark the 10-year anniversary of their Comprehensive Partnership (2013-2023). Ted Osius, president and CEO of the USABC, noted US firms have an increasing interest in ASEAN, especially in Vietnam, amid global economic difficulties, adding this is a vibrant and growing area. “American companies are seeing strong trends in the expansion of a global manufacturing hub and supply chain in Vietnam in such industries as semiconductors, fast-moving consumer goods, agriculture, the digital economy, finance, and healthcare. The US business community is also seeing renewed interest to cooperate in the aerospace, defence, and security sectors,” said Osius. Among them, Elon Musk's SpaceX is looking for opportunities to develop the satellite internet service market in Vietnam and the region in general. … [Read more...] about Largest-ever US trade delegation seeks more trade and investment

A property project umder construction in downtown Ha Noi. — VNA/VNS Danh Lam There have been positive signs for the property market's recovery, said industry experts and economists. In an earlier development, for the first time in the last two years, the central bank decided to cut interest rates by 1 per cent, bringing the discount rate from 4.5 per cent to 3.5 per cent, overnight rate for inter-bank from 7 per cent to 6 per cent annually. According to the central bank, average inter-bank overnight rates have fallen by as much as 0.8 per cent, to 2.7 per cent on March 20, marking the first dip under 3 per cent since the end of August last year. Economist Can Van Luc, a member of the national finance and monetary council, said a dip in interest rates would likely result in much-needed improvements in the property market. Luc said it might translate into lower prices as investors gained access to lower-interest loans while giving them a financial boost to finish ongoing … [Read more...] about Property market stay hopeful as interest rates dip

In an earlier development, for the first time in the last two years, the central bank decided to cut policy interest rates by 1 percentage point, bringing the discount rate from 4.5% to 3.5%, overnight rate for inter-bank from 7% to 6% annually. According to the central bank, average inter-bank overnight rates have fallen by as much as 0.8%, to 2.7% on March 20, marking the first dip under 3% since the end of August last year. Economist Can Van Luc, a member of the national finance and monetary council, said a dip in interest rates would likely result in much-needed improvements in the property market. Luc said it might translate into lower prices as investors gained access to lower-interest loans while giving them a financial boost to finish ongoing projects or start new projects. In addition, a lower rate might give buyers more confidence to make purchases and improve market attitude in general as many potential buyers were sitting on the fence waiting for prices to drop … [Read more...] about Property market stays hopeful as interest rates dip

Its currency deposit and issuer ratings were lowered from Ba2 to Ba3, the same level as several other banks in Vietnam. Its outlook is down from stable to negative. "The downgrade of Techcombank's ratings and assessments reflects Moody's expectations that the stress faced by Vietnam's real estate sector will negatively impact the bank's standalone credit strength, given its high exposure to the sector," the ratings agency said in a release. The downgrade is not related to recent U.S. bank failures and events at Credit Suisse Group AG, it claimed. As of the end of December loans to the property and construction sectors represented 29% of Techcombank's gross loans. The bank also had exposure to the sectors in the form of corporate bonds, which made up 6% of its total assets. Some of its exposure to the property sector were of significant size relative to its tangible common equity and could bring volatility to its profitability and capital should they become problem assets. … [Read more...] about Moody’s lowers Techcombank ratings

The Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs after the recent collapse of two U.S. banks. Fed Chair Jerome Powell sought to reassure investors about the soundness of the banking system, saying that the management of Silicon Valley Bank "failed badly," but that the bank's collapse did not indicate wider weaknesses in the banking system. "These are not weaknesses that are running broadly through the banking system," he said, adding that the takeover of Credit Suisse seemed to have been a positive outcome. The Federal Open Market Committee policy statement also said the U.S. banking system is "sound and resilient." Even so, Wall Street ended sharply lower after Powell told a news conference that officials were still intent on fighting inflation while also eying the extent to which recent bank failures had cooled demand and slowed lending. The … [Read more...] about U.S. Fed delivers small rate hike amid global banking turmoil