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COVER STORY

Evolutionary around $40 billion. This disparity, however,
underscores the substantial potential for
development within the country’s market.
process and Financial Institution Division at the
According to a report from the Banking
Ministry of Finance (MoF), the total value
of corporate bonds with credit ratings
stood at nearly VND27 trillion ($1.06 bil-
The long-anticipated credit ratings landscape
lion) in 2023, representing a ten-fold
in Vietnam has been slowly taking shape. increase compared to 2022. However,
Vietnam’s credit rating market is still in
its infancy, and this figure accounts for
By ANH TUYET
only some 9 per cent of the total volume
of corporate bond issuances last year.

redit rating activities in Vietnam Ratings” seminar organized by Vietnam Nascent
have been undergoing significant Economic Times / VnEconomy / Tap chi development
C changes in line with the new eco- Kinh te Viet Nam in collaboration with When compared to the target of achiev-
nomic cycle. Within this cycle, the coun- Moody’s Ratings and VIS Rating on May ing a corporate bond market size of at
try’s corporate bond market is currently 17 in Hanoi, Mr. Duong Duc Hieu, Director, least 25 per cent of GDP by 2030 and
experiencing unprecedented events related Senior Analyst, Rating and Research team, when viewed against other markets in
to credit ratings, such as various upgrades VIS Rating emphasized the early onset of the region, it is quite clear that Vietnam’s
and downgrades. These actions serve to credit rating activities in corporate bond market remains relatively modest. The
clearly classify the quality of products markets across the Asia-Pacific region. overall debt in its entire corporate bond
within the market, distinguishing between The involvement of credit rating activities market amounts to approximately 10 per
premium “brand-name” offerings and has been accompanied by a substantial cent of GDP, whereas neighboring coun-
those that are more commonplace. This increase in a country’s market scale, char- tries like Malaysia, Singapore, and Thai-
differentiation enhances market liquidity acterized by exponential growth. land see rates of 56 per cent, 38 per cent,
and attracts greater participation from He pointed out that while corporate and 25 per cent. Credit rating agencies in
institutional investors. bond markets in Asia have sizes ranging Vietnam therefore stand to benefit greatly
At the “Developing the Corporate Bond from hundreds of billions to trillions of from the market’s potential and from the
Market by 2030: A Perspective from Credit USD, Vietnam’s market currently stands at government’s recent regulatory measures

18 Vietnam Economic Times May 27, 2024 en.vneconomy.vn