Prime Minister Nguyen Xuan Phuc has approved a plan to develop Vietnam’s bond market in 2017-20 with a vision to 2030.
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 Vietnam’s bond market able to integrate with others and meet international standards.
Under the new plan, the Government hopes the value of Vietnam’s bond market will be equal to 45 per cent of the country’s gross domestic product (GDP) by 2020 and 65 per cent by 2030.
Of the total, the value of Government bonds, Government-backed bonds and local government bonds is hoped to be equal to 38 per cent of the GDP by 2020 and 45 per cent in the next 10 years.
In addition, the value of corporate bonds is expected to equate to 7 per cent of GDP by 2020, and increase to 20 per cent by 2030.
The plan also sets the average maturity term of Government bonds at six-seven years for 2017-20 and seven-eight years for the next 10-year period.
In the next 13 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 50 per cent of the total market in 2020 and 60 per cent in 2030.
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.
Photo: CBR Investment AG