Need for private debt participation

Can Van Luc said that Vietnam needs to let private investors participate in the debt trading market instead of only VAMC, DATC and AMCs.

At the seminar on developing the debt trading market on the morning of November 15, in Hanoi, BIDV Chief Economist, Can Van Luc assessed that debt trading was being carried out on 4 VAMC subjects. , DATC, AMC and credit institutions. Meanwhile, AMC companies and banks only focus on handling their own debts and have not engaged in trading with other organizations. Debt handling progress in Vietnam is slow and prolonged.

Instead, the debt trading market needs to be expanded for private participation. Experience from countries around the world such as the US, South Korea, China, and Thailand shows that participants are diverse, such as investment banks, investment funds, commercial banks, insurance companies, funds. retirement … to individual investors and professional valuation companies and valuation societies.

In Vietnam, the debt trading market in Vietnam lacks brokers, professional consultants, independent asset valuators (insurance companies, investment funds, pension funds, securities companies). The debt purchase and sale without the participation of reputable credit rating agencies, secondary markets and derivatives is not available.

At the workshop, Mr. Can Van Luc proposed that Vietnam should soon allow the establishment of a national credit rating company. Vietnam has about 10 valuation companies, including one under the Ministry of Finance. However, these companies operate in a way that lacks independence and weak capacity.

In the case of BIDV, Agribank, Mr. Luc said, so far, banks have encountered many difficulties in asset valuation. “In some cases, BIDV has failed to bid 6 times because the valuation company offered the initial price that is not suitable to the market. We have to reduce it gradually in installments because the current regulations only allow adjust 5-10% in one auction, “he said.

Similarly, asset pricing, especially with land, is one of the biggest obstacles to the equitization of the Bank for Agriculture and Rural Development (Agribank).

The problems related to enterprise valuation have actually been mentioned by Mr. Dang Quyet Tien, Director of the Department of Enterprise Finance, Ministry of Finance as a cause of slow equitization.

In addition, in order to develop the debt trading market, BIDV experts also proposed that the traded goods may include corporate bonds, corporate debt at banks (good debt and bad debt). Personal debt such as credit cards, home loans, cars … also brought to the debt trading market with the condition of a package. It is also important that the debt is transparent so that the buyer and seller have enough transaction information.

At the event, many experts agreed with the proposal that Vietnam should have a separate decree on the debt trading market like developed countries. Currently, the legal framework has a part (there are a number of relevant provisions such as Resolution 42, Decree 53, Decree 69 …) but needs to be supplemented and completed