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Summary

14 OP EDS 38 INVESTMENT

NEWLY-REGISTERED ENTERPRISES PCI 2021
INCREASE SHARPLY IN APRIL QUALITY OF PROVINCIAL ECONOMIC
GOVERNANCE CONTINUES TO IMPROVE
Thanks to the positive impact of the government’s socio-economic
recovery and development program and the strong entrepreneurial The Provincial Competitiveness Index (PCI) 2021
spirit of the local business community, the number of newly- report from the Vietnam Chamber of Commerce
and Industry (VCCI) in cooperation with the US
established enterprises rose sharply in April. Figures from the
Business Registration Management Agency at the Ministry of Agency for International Development (USAID)
Planning and Investment (MPI) show that there were 15,001 newly- shows that the quality of economic governance at
registered enterprises in the month - a new record - while 7,034 the provincial level continues to improve. The
enterprises returned to operations. According to Mr. Bui Anh Tuan, Index is based on feedback from 11,312
enterprises, of which 10,127 are private
Director of the Business Registration Management Agency, an
improving investment environment and more business opportunities enterprises in Vietnam’s 63 cities and provinces
are behind the record number of enterprises being registered. and 1,185 are foreign-invested enterprises (FIEs)
operating in 22 localities in the country. Quang
Ninh, Hai Phong, Dong Thap, Da Nang, and
32 BANKING - FINANCE Vinh Phuc posted the highest quality of economic
management. The PCI 2021 report shows that
DIVERSITY OF INVESTORS IN CORPORATE policies to help businesses recover and develop
BOND MARKET WOULD LESSEN RISKS post-pandemic need to be designed to meet the
needs and development capabilities of each group
of business in order to be as effective as expected.
According to a FiinRatings’ report, the proportion of individual The report recommends that governments at all
investors fell sharply in 2021 compared to 2020, from 13 per cent to levels need to timely, substantively, and more
4.6 per cent, mainly due to regulations that only professional investors effectively deploy programs to support businesses.
can participate in buying private placement bonds. To minimize the
risks facing individual investors, the fifth draft of Decree No. 153
contains a new point: a professional investor must invest, hold, and
maintain an investment in listed securities with a minimum value of
VND2 billion ($87,000) for two consecutive years. Analysts have said
that, instead of “tightening” regulations in the corporate bond market, 48 DIGITAL BIZ
it is instead necessary to diversify market participants. The most
important thing is to include participants such as insurance funds, DELIVERY TO GROW WITH BOOM
bond funds, and pension funds, and create a favorable mechanism for IN ONLINE BUSINESS
the formation of private placement bond investment funds.
The growth of e-commerce in recent years stands
at some 30-35 per cent. With a push from the
Covid-19 pandemic, the change seen in user
habits, consumption behavior, and shopping has
created new driving forces for the market to
continue to grow in Vietnam. To adapt and
develop in the “new normal”, many businesses and
individuals have improved their activities in the
34 BANKING - FINANCE online environment. This creates an opportunity
for the explosive development of delivery services,
CORPORATE BONDS: ARE CREDIT RATINGS with higher requirements now seen, especially in
AS IMPORTANT AS COLLATERAL? cost and speed.

Credit ratings help investors choose whether an investment in bonds
is suitable but is only valid at the time of issuance. With a new market
like Vietnam, when it comes to privately-issued corporate bonds,
collateral is still more important. Collateral is a key factor in investors
having more confidence. If there is no collateral, there must be a credit
rating, but if there is collateral, the credit rating can be slightly reduced.
The Ministry of Finance, which is the direct management agency of
credit rating agencies, has set out a development roadmap, with a plan
to license up to five new agencies by 2030.

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