The policy adjustment should aim to create a mechanism to develop a healthy market rather than strangling the market. Photo: Internet

Adjust policies to promote healthy growth

Dr. Can Van Luc, a member of the National Financial and Monetary Policy Advisory Council (NFMPAC), said with the amendment to Decree 153/2020 prescribing bond offering and trading of bonds, the Government should convey a message on making the corporate bond market healthier but still controlling risks, not tightening and strangling the market. This is consistent with the current trend of developing the business investment environment.

We should not tighten the market because of a few single cases. Agreeing with Mr. Luc, Lawyer Nguyen Thanh Ha, Chairman of the Board of Directors of SBLaw Law Firm, stated that the amendment to Decree 153 is to remove loopholes but must promote the sustainable development of the market but create more administrative procedures, hindering the issuance of corporate bonds.

Dr. Le Anh Tuan, Director of Investment Strategy Planning of Dragon Capital (DCVFM), said the rapid development of the corporate bond market in the last five years is a good thing because it helps to share the burden of medium and long-term capital for the banking system.

However, with the problems, we should loosen but review and supervise the market too closely, but we should create a mechanism for the market to self-regulate so that investors can understand the risks.

In a recent report, Vietnam's credit rating company FiinRatings said that we should group and handle questionable businesses instead of applying strict measures to the whole of the market.

This helps to avoid a negative impact of a “domino” effect on transparent and law-abiding issuers, and makes weak issuers with high risk actively publicize transparent information.

At the same time, it avoids negative effects on bank credit and spillover effects on the stock market as happened in China when this country applied the "3 red lines policy" to real estate developers.

Dr. Le Dat Chi, Ho Chi Minh City University of Economics, said that the amendment of legal regulations should pay attention to the risks of trading on the secondary market.

“If we let the primary debt market be as it is today and international investors buy corporate bonds, what happens when there is a risk of a reversal in capital markets? The crisis of Southeast Asian countries about capital withdrawal is a lesson. While our foreign exchange reserves are used for other more important purposes but not to stabilize the market if there is a risk of a capital reversal in the future. Therefore, this market must be rectified,” suggested Dr. Le Dat Chi.

Assoc. Prof. Dr. Dinh Trong Thinh, an economist, also said in countries around the world, the secondary corporate bond market is quite special because individual investors know the risks, but because of high interest rates, they still participate after balancing risk and interest rates.

But in Vietnam, the corporate bond market is still new, there are not many professional investors, so it is necessary to have regulations on the conditions for bond issuance. At the same time, it is necessary to focus on developing the over-the-counter (OTC) stock market, stipulating conditions for the initial offering of securities and regulations on buying and selling of securities of listed companies. This will help create better capital flow.

Create a credit rating mechanism

Credit rating is a controversial issue about whether there should be mandatory requirements or not. Speaking about this issue, Dr. Can Van Luc said in the Singapore and Korean markets, credit rating is not mandatory but encouraged before issuing corporate bonds.

Specifically, Singapore encourages credit ratings through economic incentives. For example, an enterprise that issues bonds with a credit rating will be supported at twice the cost of an enterprise without a credit rating.

We should classify enterprises and have regulations on which enterprises must have a credit rating and which ones should be encouraged. That is, those who do good, are open and transparent will only be encouraged, and others will be required for credit rating," said Mr. Luc.

However, he also wondered about the fact that if the credit rating is required, but the market has too few companies providing this service, it will not be able to meet the demand.

Therefore, it is necessary to allow the establishment of more companies and allow a few more foreign credit rating agencies to provide the service to create selective competition.

Procedures must also be simple to avoid losing opportunities and meeting the capital requirements of enterprises. In addition, there should also be regulations on the responsibilities of stakeholders, including credit rating agencies.

Dr. Le Dat Chi also said that the current regulations in Decree 153 are not enough, and do not uphold the roles, responsibilities, standards and ethics in the practice of credit rating.

Therefore, it is necessary to promulgate a law on credit rating so that investors can complain and sue the credit rating agency in case it does not comply with the standards.