Spend a lot of effort to bring the capital market to growth momentum

Spend a lot of effort to bring the capital market to growth momentum - Photo 1

Spend a lot of effort to bring the capital market to growth momentum - Photo 2

In 2023, capital channels from the stock market, corporate bond market and insurance market will still be clogged. What is the reason why capital flows in medium and long-term capital channels are still congested, and how has the development of these markets in the past year met capital needs, Minister?

In 2023, the global economy in general and the domestic economy in particular still face many difficulties and challenges. These unfavorable factors affect our country’s economy and society, including the insurance, stock, and corporate bond markets.

Regarding the insurance market, in 2023, the insurance market will grow positively with total assets increasing by 11.1%, investment back into the economy increasing by 12.8%, and insurance benefit payments increasing by 31.3%. %. In recent times, the distribution of life insurance products through banks has developed rapidly and contributed significantly to the total revenue of the Vietnamese insurance market. However, rapid development also leads to some inadequacies in managing the quality of insurance services through banking channels.

As of November 30, 2023, the total value of registration for stock and bond issuance through the State Securities Commission reached VND 103,697 billion, an increase of 59% compared to the registration level in the same period in 2022; The total actual value of issuance reached VND 77,362 billion, an increase of 13% over the same period in 2022. We believe that the room for capital mobilization of businesses through the stock market is still large, businesses have not taken advantage of it yet. full potential to mobilize capital on the stock market.

As for the corporate bond market, in the period from 2017 to 2022, the corporate bond market is developing rapidly with an average growth scale of about 33%/year, meeting the need for long-term capital mobilization. for the economy, developing a balance between the credit market and the bond market to reduce pressure on the banking system.

However, from the end of 2022 to early 2023, the domestic and foreign financial markets will encounter many fluctuations, with a number of law violations negatively impacting the corporate bond market and investor confidence. Investment declined, businesses limited issuance of special bonds in the first quarter of 2023. This is also the main reason why the corporate bond market has recently had difficulty in promoting its role in mobilizing medium and long-term capital for the economy.

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The capital market still has many fluctuations and congestion. In 2023, what solutions will the Ministry of Finance deploy to help markets overcome difficulties and pave the way to continue promoting its role as a medium- and long-term capital channel for businesses and the economy?

Financial markets continue to be consolidated, resolved and promptly resolved difficulties and obstacles to develop more healthily, openly and transparently.

For the corporate bond market, to support the market to have more time to adjust to difficulties in the financial and monetary markets, the Ministry of Finance submitted to the Government to promulgate Decree No. 08/2023/ND- The Government amends, supplements and suspends the implementation of a number of articles in the Decrees regulating the private offering and trading of corporate bonds in the domestic market and the offering of corporate bonds in the international market. takes effect from March 5, 2023.

In this decree, a number of regulations of Decree No. 65/2022/ND-CP on professional securities investors, credit ratings, and bond distribution time are temporarily suspended; At the same time, allowing businesses to negotiate with investors in the spirit of “harmonious benefits, shared difficulties”.

The policies in Decree No. 08 are highly appreciated by ministries, branches and associations, contributing to stabilizing investor psychology and reducing the pressure to repay mature bonds. This is also a legal document that serves as a basis for ministries and branches to continue to issue documents to overcome short-term difficulties in the financial market.

For the stock market, we continue to complete major projects on development strategies, restructuring the stock market, establishing a capital trading floor for innovative startups… At the same time, Actively working with market rating organizations such as FTSE Russell and MSCI to continue accelerating the process of upgrading Vietnam’s stock market.

In addition, the Ministry of Finance continues to strengthen the management, supervision, inspection and examination of public companies and securities trading organizations, detect and promptly handle violations, price manipulation… to ensure the healthy development of the market.

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To help these markets operate more transparently and effectively in the coming time, what solutions will the Ministry of Finance continue to implement, Minister?

To continue to stabilize and develop the corporate bond market, the Ministry of Finance reports to the Prime Minister to direct ministries and branches to synchronously deploy solutions on perfecting the law, management and supervision to both stabilize and develop the corporate bond market. determine and restore confidence in the corporate bond market, while correcting and strictly handling violations so that the market develops transparently and effectively.

The policies in Decree No. 08/2023/ND-CP issued by the Government contribute to stabilizing investor psychology and reducing the pressure to repay mature bonds. This is also a legal document that serves as a basis for ministries and branches to continue to issue documents to overcome short-term difficulties in the financial market. In addition, the Ministry of Finance also strengthens inspection and supervision, and promotes correction and strict handling of violations to healthy the market.

Propaganda work about the corporate bond market is also actively deployed by the Ministry of Finance on the mass media. Thanks to that, market participants increase legal compliance and are more transparent in their operations. These changes will contribute to developing the market in depth, ensuring the market develops more safely and effectively.

In the context of the economy starting to show signs of recovery, businesses increase their need to access capital for investment, developing the corporate bond market is essential to provide long-term capital, in addition to the channel bank credit.

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With drastic solutions from the Government and ministries and branches, the corporate bond market is currently initially recovering and achieving some positive results. In 2023, the total value of corporate bond issuance is recorded at VND 311,240 billion, including VND 37,071 billion in bonds issued to the public and VND 275,028 billion issued privately.

Enterprises actively allocate resources to pay off due corporate bonds and negotiate with investors as well as restructure and extend corporate bonds to reduce the pressure to pay principal and interest when bonds expire. maturing business. As of December 22, 2023, the total value of bonds bought back by businesses before maturity reached more than 231,000 billion VND, an increase of 8.5% over the same period in 2022; There are 103 businesses that are slow to pay principal and interest on bonds, accounting for nearly 19% of the total outstanding debt of the entire market, 70% of which are from real estate businesses.

In addition, to enhance the role of the stock market in mobilizing capital for the economy, the Ministry of Finance will continue to direct the State Securities Commission to review the overall legal framework on securities and markets. securities to create conditions for businesses to mobilize capital through the stock market. Strengthen inspection, examination, supervision, and strictly handle violations in the market. We are also coordinating with relevant units to continue to urgently deploy solutions to soon upgrade Vietnam’s stock market according to the set roadmap to support investor psychology and attract participation. participation of foreign investors.

To rectify the inadequacies of the insurance market, we have implemented many drastic solutions, focusing on perfecting mechanisms and policies and promoting inspection, examination and supervision. To date, the Law on Insurance Business No. 08/2022/QH15 dated June 16, 2022 and documents guiding its implementation are continuing to be completed synchronously, expected to create a legal basis for the insurance market. Stable development, transparency, towards better quality.

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VnEconomy March 12, 2024 16:00

The full content of the article was published in Vietnam Economic Journal No. 11-2024 published on March 11, 2024. Dear readers, we invite you to read here This:

https://postenp.phaha.vn/chi-tiet-toa-soan/tap-chi- Kinh-te-viet-nam

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