Bond becomes an attractive investment class as the stock market shows no signs of recovery and bank interest rate remain on a rise. Most bond issuances last year were successful, with around business bonds worth around VND47 trillion (US$2.4 billion) sold out. Of the amount, state utility Electricity of Vietnam, known as EVN, sold out bonds worth VND2 trillion ($100 million), construction giant Vinaconex VND2 trillion, Song Da Group VND1.5 trillion and property group Vincom VND1 trillion. Analysts said high bank interest rate made bond more attractive as businesses issuing bonds only repaid the loans in the maturity time and paid coupons in accordance with six-month or one-year terms. Banks, meanwhile, offer loans based on mortgaged properties, so only borrowers who have good business performance will be able to access loans, the analysts said. Stock investors have also struggled to borrow money from banks since the State Bank of Vietnam raised the risk coefficient rate of stocks and property loans to 250 percent. The central bank instructed commercial banks to strictly restrict loans on non-productive sectors including property and stock market this year in an effort to battle accelerating inflation. Most business bonds are in short terms, with a coupon… Read full this story
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