Quick Link
Benefits of investing in bonds
-
Safe investment
Safe investment channels help preserve principal capital.
-
Diverse and abundant choices.
A diverse bond portfolio with numerous options
-
High liquidity.
Flexible investment terms, with various durations available
- Investor demographics
Investors must be professional stock investors.
-
Increasing returns.
Higher returns than savings accounts.
Returns on investment increase according to the investment term
Frequently asked questions about
Frequently Asked Questions about Bonds
Bonds are securities that confirm the legal rights and interests of bondholders regarding the debt of the issuing entity. The issuing organization is responsible for fulfilling commitments to pay periodic interest, and upon maturity, returning the initial amount to investors. Bonds are issued in the form of certificates or ledger entries. Corporate bonds are divided into two types:
Listed bonds: These are bonds officially registered and centralized in the Vietnam Securities Depository (VSD). Additionally, they are allowed to trade on centralized trading floors such as HSX and HNX. All trading processes must comply with the regulations proposed by the Stock Exchange. Unlisted corporate bonds (also known as OTC bonds): In contrast to listed bonds, unlisted bonds are bonds not registered with the VSD. They only trade on the OTC market based on individual agreements between investors.
- What are the characteristics of corporate bonds?
+ Bond Term: The term of bonds issued by enterprises depends on the capital needs of the enterprise.
+ Quantity of Issuance: Enterprises are free to determine the quantity of bonds issued based on capital usage needs and fundraising abilities corresponding to each period.
+ Currency of Issuance and Bond Payment: For the domestic market, the currency of issuance is the Vietnamese Dong (VND). For foreign markets, the currency of issuance follows the regulations of the respective market. In cases of periodic interest payments and principal repayment, the currency will correspond to the type issued.
+ Bond Par Value: For the domestic market, the bond par value is VND 100,000,000 or multiples of VND 100,000,000. For foreign markets, the par value follows the regulations of the respective market.
+ Issuance Form: Ledger entries, certificates, or electronic data, depending on the issuer's decision at the time of issuance.
+ Coupon Interest Rate: This is the annual percentage interest rate calculated on the bond's par value that the issuer must pay to bondholders at the scheduled interest payment dates according to the bond's conditions and terms.
- What are the benefits of investing in corporate bonds? The corporate bond investment market has experienced remarkable growth in recent times. This signifies the tremendous attractiveness of this investment channel. Trading in corporate bonds offers several advantages to investors, including:
+ Lower risk compared to stock investment, as bondholders are prioritized in debt repayment in the event of bankruptcy or liquidation.
+ Higher interest rates than savings deposit rates.
+ High liquidity, allowing securities investors to flexibly buy and sell.
+ The ability to reinvest periodic interest payments.
- Who can purchase individual corporate bonds? According to Article 8, Clause 1 of Decree 153/2020/ND-CP (amended by Decree 65/2022/ND-CP), the following entities can purchase bonds:
+ For non-convertible bonds without warrants: Securities investors as regulated by securities laws.
+ For convertible bonds and bonds with warrants: Professional securities investors, strategic investors, with the number of strategic investors being less than 100.
- Bond Term: The term of the bond is determined by the issuing enterprise for each offering, based on the company's capital utilization needs.
- Issuance Quantity: The enterprise is free to decide the quantity of bonds to be issued, based on its capital utilization needs and the market's fundraising capacity at different times.
- Currency for Issuance and Payment: For the domestic market, the issuance currency is stipulated as VND. For foreign markets, the issuance currency is applied according to local market regulations. For periodic interest payments and principal repayment, the payment currency will correspond to the issuance currency.
- Bond Face Value: For the domestic market, the bond face value is 100,000,000 VND or multiples of 100,000,000 VND. For foreign markets, the bond face value is applied according to local market regulations.
- Issuance Form: The form of issuance can be by debit entry, certificate, or electronic data, depending on the enterprise's decision at the time of issuance.
- Nominal Interest Rate of the Bond (Coupon): This is the annual percentage (%) interest rate based on the bond's face value that the issuer must pay to the bondholder on interest payment dates according to the bond's terms and conditions.
The corporate bond investment market has seen remarkable growth recently. This signifies the immense attractiveness of this investment channel, with corporate bond transactions offering investors several benefits, including:
- Lower Risk: Compared to investing in stocks, corporate bonds carry lower risk as bondholders are prioritized for debt repayment in the event of bankruptcy or dissolution of the company;
- Higher Interest Rates: Corporate bonds typically offer higher interest rates than bank deposits;
- High Liquidity: Corporate bonds are highly liquid, allowing professional investors to flexibly buy and sell;
- Reinvestment Opportunity: The periodic interest income can be used for reinvestment.
According to Article 8, Clause 1 of Decree No. 153/2020/ND-CP (amended by Decree No. 65/2022/ND-CP), the eligible purchasers of corporate bonds include:
- For non-convertible bonds without warrants: Professional securities investors as defined by securities laws.
- For convertible bonds and bonds with warrants: Professional securities investors and strategic investors, with the number of strategic investors not exceeding 100.
Investing in any product carries inherent risks, so investors should thoroughly understand the investment product to avoid unwarranted risks:
- Researching Information about the Issuing Company: Besides interest rates and profits, the company's business performance is a crucial measure of bond quality. A company with strong operations and robust development is likely to issue high-quality bonds. Therefore, factors indicating a well-developed company include effective management, a strong market position, solid finances, promising industry prospects, and transparent information.
- Assessing the Risk-Return Relationship: High interest rates are attractive but come with significant risks. Investors should calmly assess this relationship in the broader market context to make informed decisions.
- Terms and Conditions of the Bond: Consider conditions such as asset backing of the bond package.
- Bond Maturity: The bond's maturity is a critical factor affecting the ability to recover capital quickly or slowly, directly impacting future investment plans.
EVS - Guide to Depositing Funds into Individual Corporate Bond Trading Account
Customers can visit the trading counter at the bank to deposit cash or transfer funds from their bank account to the individual corporate bond trading account opened at EVS using the following information:
- Account Holder Name: Everest Securities Corporation
- Account Number: 1042039590 at Vietcombank (VCB)
- Description/Note: Bond trading deposit + [(Account Number) + (Account Holder's Name)]
Example: If the customer's account at EVS is 040C123456 for bond trading:
- Deposit Description: Bond trading deposit 040C123456 Nguyen Van A
Our Partners
With its experience and expertise, EVS is honored to be a strategic partner, providing premier securities services to large domestic and international enterprises.
