FiinRatings Monthly Newsletter – January 2024

January 25, 2024

HIGHLIGHTS

On December 30th, 2023, FiinRatings has assigned a “BB+” credit rating and a “Stable” Rating Outlook to DIC Group, reflecting the company's “Satisfactory” business risk profile which has considered the asset scale and operating efficiency within the real estate industry. The “Stable” outlook reflects FiinRatings' viewpoint on the credit rating of DIC Group maintaining over the next 12 months. Read the full rating announcement HERE.

Hanoi, January 11th, 2024 - Mr. Nguyen Quang Thuan (Chairman of FiinGroup) participated in speaking and coordinating the Hanoi CFO Forum 2024 with the theme "Shaping the Future of Finance: Innovation, Application and Transformation". At this event, Mr. Thuan provided detailed assessments of growth drivers as well as the main risks and challenges for Vietnam on the path to economic recovery in 2024. Find more details and the presentation deck HERE.

Hanoi, January 12th, 2024 - FiinGroup, in collaboration with the Private Infrastructure Development Group (PIDG) based in London, UK, and the Australian Embassy and British Embassy, hosted a technical workshop on "Credit enhancement facility for private infrastructure development in Vietnam.”

The workshop aimed to assess the demand for capital and financial resources for Vietnam's sustainable infrastructure development and to discuss credit enhancement solutions proposed by PIDG to unlock the domestic capital sources for investments in sustainable infrastructure in the country. Find more details and the presentation deck HERE.

Besides providing credit rating services and in-depth analysis reports, FiinRatings also shares multi-dimensional perspectives on credit ratings from international and domestic practices as well as effective implementation in countries through RATING 101 SERIES. View our full series here.

MARKET UPDATES

As of January 2, 2024, the Vietnamese corporate bond market recorded 59 issuances with a total value of VND 46.25 trillion, increasing 28.61% compared to November and nearly three times higher than the same period last year. Of which, 90% of the issuance value comes from the Credit Institutions industry group. Leading this group is Vietnam Technological and Commercial Joint Stock Bank (TCB), with an issuance value equivalent to nearly 20% of the group's total value, followed by Tien Phong Commercial Joint Stock Bank (TPB) and Orient Commercial Joint Stock Bank (OCB) with rates reaching 18.39% and 15.7% respectively.

By the end of 2023, the market recorded 323 issuances with a total value of VND 314.2 trillion, increasing 8.64% compared to the previous year. The proportion of bonds issued to the public gradually accounts for a higher proportion of 8.62% in 2023, increasing by 1.27% over the same period last year. The issuance structure remained mostly unchanged, with Real Estate maintaining its position as the dominant industrial group, with a proportion increasing by 2%, reaching 54% of the total market size. The Credit Institution industry group also witnessed an increase with a rate of 28% of the entire market, increasing 5% compared to 2022.

Early redemption activities witnessed an increase with the total value in December reaching VND 32.69 trillion, an increase of nearly 3 times compared to the previous month and equivalent to 61.34% compared to the same period in 2022. Two-thirds of the acquisition scale belongs to the Credit Institutions industry group, coming from this cyclical activity of the bank at the end of the year.

In general, there were 771 early redemptions of private placement bonds with a total value of VND 239.59 trillion in 2023, increasing by 7.84% compared to 2022. This activity witnessed a decline, coming from non-financial sectors, but was actively implemented by banks and financial institutions last year, with an increase of 27.06%. In the decreasing interest rate environment of 2023, early redemption helps banks reduce capital costs. Furthermore, this activity also optimizes the bank's debt structure to adapt to the requirement that the short-term capital ratio for medium and long-term loans decrease from 34% to 30% from October 1, 2023, according to Circular 08.

LATEST RATING ACTIONS

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