Title Youtube Chứng khoán CAT Economics Update_HSC_2024-10-10.pdf ✅

www.hsc.com.vn Powered by FactSet RMS Partners Page 1 Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Macroeconomics | Vietnam Economics Update Macro Focus 09 October 2024 Rising corporate bond maturity pressure seen in 4Q ▪ Corporate bond (CB) issuances in September fell 61% m/m & 43% y/y to VND24tn, due to a significant fall in bank issuances (VND17tn, down 67% m/m & 39% y/y). ▪ We estimate VND83.6tn of CBs will mature in 4Q24 (up 70% q/q), with VND46tn due in December; real estate (RE) will face the most pressure (VND38.5tn, accounting for 46% of the total). ▪ The CB market total size fell by 1% m/m to VND1,290tn in September (up 6.5% y/y and 2% YTD), equivalent to 11.8% of our 2024F GDP. ▪ Avg. daily liquidity in the secondary market for private placement bonds rebounded to VND4.6tn in September (up 40% m/m), after two consecutive months of decline. Banks remained dominant issuers in 3Q24 New CB issuances in September dropped sharply by 61% m/m & 43% y/y to VND24tn, due to a significant fall in bank issuances (VND17tn, 72% of total). Leading issuers from banks included OCB (Add, TP VND13,800) (VND3.5tn), CTG (Buy, TP VND41,000) (VND2.8tn), and HDB (Add, TP VND27,700) (VND2.5tn). September also saw two issuances from the RE sector, Truong Loc (VND1.9tn) and Phat Dat (VND3.5tn) (both Unlisted) (formerly under Vinhomes), both offering the highest interest rate in the month at 12%, which contributed to the average September interest rate across all issuances rising to 9.5%. The September results took 3Q24 issuances up 0.4% q/q & 3% y/y to nearly VND126tn (VND103.5tn from banks, 82% of the total). 3Q24 repurchases improved 15% q/q driven by bank issuers Total repurchases in September fell 26% m/m but grew 12% y/y to VND11.8tn, with banks accounting for 83% of total repurchased value. BID (Add, TP VND52,800) (VND3.5tn) and OCB (VND3.2tn) were the two banks with highest repurchase values, while RE saw only VND1.3tn in repurchases. In 3Q24, CB repurchase activity saw an improvement, with total value rising 15% q/q & 9% y/y to VND61tn. Banks repurchased VND51tn in 3Q24 (up 16% q/q), while RE repurchases fell 3% q/q to VND3.6tn. RE faces VND38.5tn in CB maturity in 4Q24 In September, VND23tn of CBs matured (up 40% m/m but down 40% y/y), of which VND15.6tn came from RE companies. Meanwhile, we estimate that VND83.6tn of CBs will mature in 4Q24, with VND46tn expected in December. The RE sector will face the most pressure in 4Q24, with VND38.5tn in bonds coming due (46% of total) (SDI Corp: VND6.6tn in the next 3M; ticker: SID, Not Rated). Looking ahead to 2025, we anticipate CB maturities will rise 11% y/y to VND263.5tn, vs. estimated VND238tn for this year. Value of late payments decreased 9% q/q in 3Q24 In September, new problematic CBs (defined as those with new late payments and/or amended terms) totaled VND12tn (80% from RE). Hung Thinh Land (Unlisted) delayed repurchase of seven bond series (VND2.1tn total), until late this year. NVL (Sell, TP VND8,500) reported one bond with delayed principal & interest payments while it successfully extended three others (VND570bn in total) to 2025. Nguyen Binh & Hoang Long Company (both Unlisted) each withdrew and replaced the collateral for bond series. Positively, late payments value has fallen for two consecutive quarters. Figure 1: Vietnam’s corporate bond market outstanding value: Sep-19 to Sep-24 period Corp. bond outstanding increased to VND1,290tn, which remains significantly below the government target of 20% of GDP by 2025 Note: Our report data was retrieved from HNX and VBMA portals on 30 September. Source: VBMA, HNX, HSC Research Pham Vu Thang Long Senior Director, Head of Macroeconomics [email protected] +84 24 3933 4693 Ext. 4805 Nguyen Bao Chau Junior Analyst, Macroeconomics [email protected] +84 24 3933 4693 Ext. 4876 Vu Viet Linh Manager, Macroeconomics [email protected] +84 24 3933 4693 Ext. 4870 0 1,000 2,000 Sep-19 Sep-20 Sep-21 Sep-22 Sep-23 Sep-24 Banks Real estates Others Total Outstanding value (VNDtn) Document downloaded by Tai P (HSC)
Macro Focus 09 October 2024 www.hsc.com.vn Page 2 Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Corporate bond market update for September In September, corporate bond issuance value dropped sharply by 61% m/m and 43% y/y, to nearly VND24tn, mainly due to a significant decline in bank issuances. Total repurchases in September fell 26% m/m but increased 12% y/y to VND11.8tn. We estimate that VND83.6tn of corporate bonds will mature in 4Q24, with VND46tn expected in December. The RE sector will face the most pressure in 4Q24 (VND38.5tn in bonds coming due, 46% of the total). On a positive note, the value of late payments has decreased for two consecutive quarters. Market size expanded amid a declining share of professional individual investors The CB market size slightly decreased by 1% m/m to VND1,290tn in September (up 6.5% y/y and 2% YTD), equivalent to 11.8% of the estimated 2024 GDP (Figures 1- 2). This decline is attributed to a sharp decline in new issuance value, which contrasts with the increase in the value of matured bonds during the month, as will be analyzed in the next part of this report. Private placements remained dominant, making up 89% of total outstanding bond value. The outstanding value of bank CBs rose 12% YTD, accounting for 42.4% of the total, as banks increased bond issuance to supplement Tier 2 capital for medium and long- term loans. On the other hand, the share of non-banking sector bonds has declined by 4% YTD. Regarding investor structure, since the reactivation of certain provisions in ‘Decree 65/2022’ at the beginning of 2024 – including stricter regulations on professional investors purchasing private bonds – the proportion of individual investors has fallen to 24% as of 1H24, compared to 30% at the end of 2023 (for details, see Figure 15 in Appendices). Figure 2: Monthly outstanding bond: private vs. public offering: Sep-22 to Sep-24 Private placement dominates the total outstanding bond value, whereas corporate bond issued via public offering only accounting for 11% of the total Source: HNX, VBMA, HSC Research Banks remained dominant issuers in 3Q24 In September, corporate bond issuance value dropped sharply by 61% m/m and 43% y/y, to nearly VND24tn, mainly due to a significant decline in bank issuances, which fell to VND17tn (down 67% m/m and 39% y/y) (for details, see Figure 16 in the Appendices). That said, in the first nine months of 2024, total corporate bond issuance increased by 48% y/y to VND280tn. On a quarterly basis, total issuance in 3Q24 saw a slight rise of 0.4% q/q and 3% y/y to nearly VND126tn. Notably, bank issuances jumped by 14% q/q to VND103.5tn, while non-bank issuances fell nearly 36% q/q to VND22.3tn. The top bond issuers in 3Q24 were MBB (Buy, TP VND29,500) (VND14tn), HDB (VND11.9tn), and OCB (VND11.6tn). In terms of issuer structure, though bank issuances plummeted in September, banks still remained the dominant issuers, accounting for 72% of total issuance during the - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Private placement Public offering Total Outstanding value (VNDtn) Document downloaded by Tai P (HSC)