Vietnam Property Firms Struggle to Get Loans, Issue Bonds
(Bloomberg) -- Vietnam real estate companies are struggling to obtain loans and face difficulties issuing corporate bonds during the third quarter, Minister of Construction Nguyen Thanh Nghi told the National Assembly during its televised Thursday session.
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In an earlier written report to parliament, Nghi called for greater scrutiny of real estate enterprises’ fundraising activities on the stock market and with bonds issuances to deter speculation and price manipulation, VnExpress news website reported.
The central bank sees the need to control credit for the real estate sector, which poses potential risks, while it prioritizes lending for public housing, Governor of Vietnam’s State Bank Nguyen Thi Hong told the parliament. The regulator is focused on curbing inflation and preserving the safety of the nation’s credit system, she said.
Nghi’s comments follow the Oct. 8 detention of Truong My Lan, chairwoman of real estate conglomerate Van Thinh Phat Holdings Group, and other company officials in connection with an investigation into the issuance and trading of bonds of some companies where trillions of dong were allegedly appropriated in 2018 and 2019, according to the Public Security ministry.
The investigation triggered scores of customers rushing to branches of the nation’s fifth-largest bank, Saigon Commercial Bank, to pull out savings amid rumors the lender was tied to Van Thinh Phat.
Property companies mostly rely on bank loans and capital raised through bond offerings to fund development projects, Nghi said. The government needs to oversee real estate sector loans and issuance of corporate bonds to ensure access to capital that is in compliance with the law and does not interfere with legitimate projects, he said.
(Updates the story with central bank governor comments in the third paragraph.)
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