Vietnam’s bond market continues to show key structural weaknesses, according to the Asia Bond Monitor June 2025→view source.
The market remains highly concentrated, with limited corporate issuance and a small sustainable bond segment.
Key points:
- Corporate bond issuance: Fell 84.2 percent quarter-on-quarter in Q1 2025, with issuance dominated by banks; non-financial corporate activity remains low.
- Investor concentration: Banks and insurance firms hold 98.9 percent of government bonds — the most concentrated investor base in emerging East Asia.
- Sustainable bonds: Market remains small (US$1.1 billion), with short average maturities (2.7 years) and reliance on foreign currency.
- Market growth: Local currency bond market expanded 1.9 percent in Q1, down from 5 percent in Q4 2024, amid a contraction in central bank securities.
- Government borrowing: Government bond issuance rose 88.1 percent in Q1, supporting fiscal targets.
These structural constraints are not new but rather reflect a system designed to maintain state control over Vietnam’s financial sector, with limited space for a deeper, more market-driven bond market to develop.
This could be a problem as the government pursues greater debt-driven growth.