Finance Minister Ho Duc Phoc said at a recent meeting on Vietnamese equity and corporate bond markets that the stock market has seen a period of sharp decline with investor confidence.
“We have made great efforts to create a capital market that effectively serves economic development. However, the cases of Tan Hoang Minh, FLC, An Dong and SCB discovered in 2022 affected the market,” Phoc said.
The government has launched demand stimulus packages to help businesses ease the pain and improve their resilience. “However, businesses are facing challenges with sharply declining productivity and activity. If the current situation cannot improve, things will be very difficult in the next period,” he said.
He said the stock market, which is considered the “thermometer” of the national economy, fell significantly. The VN-Index has lost 600 points, or 38%, compared to the start of 2022.
Many stocks have lost 70% of their value and liquidity is low. In addition, developments in the money and credit markets are complicated, with interest rates rising above the threshold of 10% per year.
As for the real estate market, after a period of strong growth, the bubble is in danger of bursting due to a lack of capital and a drop in market confidence.
According to VNDIRECT CEO, Nguyen Vu Long, the biggest hurdle currently in the bond market is corporate liquidity. All channels for raising corporate capital are blocked. Commercial banks ran out of credit limit in the middle of the second quarter and the beginning of the third quarter, while other channels such as the stock market are also struggling.
Meanwhile, in the fourth quarter of 2022, few companies can raise capital through the issuance of bonds. “It is necessary to regain investors’ confidence and make them understand that Tan Hoang Minh and FLC are only part of the market, and it does not represent the whole market,” Long said.
Le Quoc Binh, CEO of HCM City Infrastructure JSC, pointed out that issuers have the responsibility to pay debts when the bonds come due, and it is not the responsibility of the state. Although cash flow is limited, companies should try all possible means, including trading assets and lowering commodity prices to obtain cash to fulfill commitments they have made to bond investors. .