Developing Vietnam Corporate Bond Market To Create
An Effective Rasing Capital Chanel

Manh Chien VU, PhD

Vietnam University of Commerce

vumanhchien@vcu.edu.vn; vmchien@yahoo.com

Abstract

This research analyse about the facts, pros and con, reasons, opportunities and threats of the Vietnamese corporate market. According to this, it encourages the corporations to increase their knowledge, change viewpoint and consider corporate market an effective raising capital channel beside borrowing from banks, share the level of risk from banking system to the bond market and balance the economy.

Key words: Vietnam, bond market

Introduction

The process of equitization leads to the dramatically increasing number of joint stock companies, the stock market makes organizations concern about raising capital through the stock market. However, they only care about issuing share but ignore the bond market even though this is also an effective raising medium and long-term capital tool.

After the economy crisis in 1997 in Asia, many experts researched and found out the root cause and experiences from the crisis and studied to share the burden of risks from banks to corporate bond market. Then, this market needs to be developed to improve the supplying capital function. Alternatively, the most popular trend of developed countries is raising capital through issuing bond while in Vietnam, there are only a few corporations such as Vinashin, EVN, BIDV participate in this market. With most companies, especially the small and medium sized ones, this concept is still new. The main reason is that the corporate market is not developed yet, the legal system is not completed, and there is low infrastructure and lack of the standard interest curve.

The Current Situation of Vietnam Finance Market

It could be said that, at the moment, Vietnam corporations have many chances to raise capital to run projects. The amount of investment break the record of estimated 20.3