91pct of Vietnam Corporate Bonds in 2011 Flow to Property and Securities
Vietnam’s companies issued VND17.35 trillion corporate bonds in 2011, down 70 percent from that in 2010 and as many as 91 percent of the value flew to property and secuities compannies.
Vietnam’s companies issued VND17.35 trillion corporate bonds in 2011, down 70 percent from that in 2010 and as many as 91 percent of the value flew to property and secuities compannies, local news provider CafeF reported citing the National Financial Supervisory Commission (NFSC)
The NFSC said these bond investments were actually banks’ credit to companies to avoid the regulation of 16 percent loan cap for non-production sector. Other loans were rolled over.
Corporate bonds have higher risks than banks’ loans because it is more difficult to supervise how businesses use the funds.
These bonds are increasingly doubtful as a series of companies post losses or go bankruptcy.
Category: Stocks
