OK for new bond market plan

OK for new bond market plan

Prime Minister Nguyễn Xuân Phúc has approved a plan to develop Việt Nam’s bond market in  二0 一 七- 二0 with a vision to  二0 三0.— Photo cafef.vn

HÀ NỘI — Prime Minister Nguyễn Xuân Phúc has approved a plan to develop Việt Nam’s bond market in  二0 一 七- 二0 with a vision to  二0 三0.

The target of the plan, which was published on local media on Monday, is to create a stable, well-structured and balanced bond market that is more open to investors.

The Government also aims to increase the scale and the quality of the market, diversify products and services, and ensure trading activities are transparent, public and efficient, making Việt Nam’s bond market able to integrate with others and meet international standards.

Under the new plan, the Government hopes the value of Việt Nam’s bond market will be equal to  四 五 per cent of the country’s gross domestic product (GDP) by  二0 二0 and  六 五 per cent by  二0 三0.

Of the total, the value of Government bonds, Government-backed bonds and local government bonds is hoped to be equal to  三 八 per cent of the GDP by  二0 二0 and  四 五 per cent in the next  一0 years.

In addition, the value of corporate bonds is expected to equate to  七 per cent of GDP by  二0 二0, and increase to  二0 per cent by  二0 三0.

The plan also sets the average maturity term of Government bonds at six-seven years for  二0 一 七- 二0 and seven-eight years for the next  一0-year period.

In the next  一 三 years, the Government expects to see the amount and value of Government bonds held by insurance and social insurance firms, pension funds and other non-bank financial institutions to increase to  五0 per cent of the total market in  二0 二0 and  六0 per cent in  二0 三0.

There are also a number of moves that aim to help the bond market reach its targets.

Firstly, the Government will improve and complete its legal framework to develop both secondary and primary bond markets.

For the primary bond market, the Government will diversify Government bonds, Government-backed bonds and local government bonds to meet the demand of investors and issue those products via bidding to ensure trading activities are transparent.

For the secondary market, the Government will improve the trading market and system for Government bonds, Government-backed bonds and local government bonds at the two stock exchanges, enhance the accountability and capability of market members, and develop a portal to provide information about corporate bonds for investors.

Under the new plan, relevant government agencies are required to develop bond derivatives products to meet the development of the market and demand of investors. — VNS