Vietnam Faces Bond Maturity Crunch in Late 2025: Property Sector Under Intensifying Pressure

Economic

Summary:

Over VND 150 trillion in corporate bonds will mature in the second half of 2025, with more than half tied to the real estate sector—raising significant concerns about defaults and liquidity stress amid tightening financial regulations...

Surging Bond Maturities and Sectoral Vulnerability

According to Vietnam’s Investment Credit Rating Agency (VIS), a total of 474 corporate bond lots valued at VND 150 trillion are scheduled for maturity in the latter half of 2025. More than 50% of this figure—approximately VND 79.8 trillion—is attributed to the real estate sector, making it the most exposed to rollover risks. The property industry is already facing growing challenges in liquidity, declining collateral values, and weakened creditworthiness, leading to increased default probability.

Notably, 26 bond lots worth VND 19 trillion issued by 15 property developers are now under first-time delay warnings. This development signals broader strain across the sector, with many firms confronting mounting cash flow obstacles and asset devaluation, resulting in impaired ability to service debt. The cumulative picture shows that credit risk is not only persisting but gradually spreading. This is evidenced by the fact that 148 bond lots worth VND 25.8 trillion have already entered a state of delayed repayment, highlighting a fragile credit environment that continues to deteriorate.

Contrasting Trends in Primary Market Activity

Despite the looming maturity burden, Vietnam’s primary bond market has witnessed a sharp recovery in new issuances. In May 2025 alone, private placements reached VND 66 trillion, up 35% from April. Over the first five months of the year, total issuance amounted to VND 137 trillion, marking a 79% surge compared to the same period in 2024. This rebound has been driven largely by commercial banks, which accounted for approximately VND 100 trillion in new bonds—an increase of 193% year-on-year.

Banks have shown a clear preference for issuing standard (non-convertible, unsecured) bonds with 2–3 year maturities and interest rates ranging from 5.1% to 6.0% annually. Major issuance plans for 2025 include MB Bank’s VND 30 trillion target and ACB’s VND 20 trillion target. Meanwhile, property developer Nam Long (NLG) plans to raise VND 660 billion via asset-backed, non-convertible bonds with a 3-year term and a high coupon rate of 11% for the first two periods—underscoring the premium that real estate firms now must offer to attract capital amid investor caution.

Regulatory Tightening and Risk Mitigation Efforts

Amid these market pressures, Vietnam’s National Assembly has approved amendments to the Enterprise Law in a bid to strengthen market integrity. A key provision now restricts non-public companies from issuing private bonds if their total liabilities exceed five times their equity. This condition aims to curtail reckless borrowing and enhance transparency in bond offerings. The reform is particularly timely as the bond market grapples with potential systemic risks triggered by real estate-linked defaults.

The new regulation is also expected to promote better financial discipline among issuers, improving the risk-reward balance for investors. In this context, the banking sector is likely to remain the dominant source of issuance in the coming months, as their balance sheets and compliance profiles are comparatively stronger. VIS projects that the total bond issuance by banks in the second half of 2025 could reach VND 200 trillion, reinforcing their leadership in capital market mobilization while potentially easing the strain on credit expansion limits amid rising loan-to-deposit ratios.

Shifting Advantage Toward Financial Institutions

This dynamic has led to a situation where the balance of power in the bond market appears to be shifting from high-risk sectors like real estate toward better-capitalized financial institutions. While property developers continue to face investor skepticism and high borrowing costs, banks are able to raise funds more efficiently and at lower rates. This evolving trend may create uneven liquidity access across industries, further widening the gap between creditworthy and vulnerable borrowers.

Vietnam’s corporate bond market in the second half of 2025 is poised at a critical juncture. The maturity wall of over VND 150 trillion—dominated by real estate debt—presents a formidable test of market resilience. While the recovery in new bond issuance and policy reforms offer a stabilizing counterbalance, the underlying risks remain heavily concentrated. The success of these regulatory and market responses will hinge on investor confidence, issuer discipline, and the continued flow of institutional capital—particularly from the banking sector. As liquidity tightens and credit quality becomes more polarized, the real estate sector may remain under pressure, serving as both a litmus test and a potential fault line for Vietnam’s financial stability.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Gerik

Economic

Declining Consumer Enthusiasm Despite Extended Campaigns

The 618 shopping festival, once a highly anticipated e-commerce event in China, concluded in 2025 with notably less consumer excitement than in previous years. Initially established by JD.com to mark its founding on June 18, the event has evolved into a multi-platform, multi-week retail campaign. This year, presales launched as early as May 13 across JD.com and Alibaba platforms, turning the event into a month-long effort to boost spending. Yet, the extension appears to have diluted its appeal, transforming what was once a focused surge of consumer activity into a more routine affair.

This shift in consumer sentiment reflects a broader evolution in shopping behavior. Many shoppers now view discounts as omnipresent, not exclusive to promotional periods. The quote from a Beijing-based consumer, who noted no need to shop specifically during 618 because comparable discounts are always available, illustrates how year-round promotions may be cannibalizing interest in concentrated shopping events.

Macroeconomic Conditions Weigh on Spending Confidence

The tepid response to 618 is intertwined with deeper concerns in China’s macroeconomic environment. Ongoing uncertainty in employment stability, a sluggish property market, and stagnant wage growth have created a climate of financial conservatism among consumers. This broader context has diminished the marginal impact of promotional campaigns, no matter how aggressive the discounts.

Rather than spurring new demand, these extended sales periods appear to be shifting the timing of already planned purchases. Retailers and policymakers hoped that lengthening the campaign window and applying subsidies might reverse weak consumption patterns. However, as Rachel Lee from Worldpanel China points out, when consumer budgets are constrained, discount-driven strategies are less effective, and shoppers tend to prioritize affordability and necessity over promotional hype.

Sales Volume and Brand Performance: Mixed Signals

While e-commerce platforms have not published total sales figures for 2025, some indicators provide insight. JD.com reported over 2.2 billion orders across its platforms, more than doubling the user participation rate compared to the previous year. Alibaba noted that 453 brands crossed the 100 million yuan threshold in gross merchandise volume (GMV), with top performers like Apple, Huawei, L’Oréal, and Lululemon surpassing 1 billion yuan.

However, these figures must be contextualized. Last year, total 618 sales fell by 7% to 742.8 billion yuan, according to Syntun, marking the first decline in the festival’s history. While individual brands may continue to perform well, the broader environment suggests a flattening trend in overall festival growth.

Policy Support and Subsidy-Driven Consumption

One notable bright spot has been the partial recovery of retail activity in May, when sales exceeded expectations with a 6.4% year-on-year increase, the highest since December 2023. Analysts partially attribute this to the early start of the 618 event and the government's consumer subsidy programs. These initiatives focused on incentivizing purchases of high-ticket items such as home appliances and smartphones.

Jacob Cooke from WPIC noted that the prolonged festival helped smooth consumer demand throughout the month, supporting a steadier sales pattern instead of a sudden spike. Yet, the effectiveness of this strategy may be short-lived. HSBC analysts warned that regional pauses in subsidies—due to depleted central government allocations—could drag down both 618 outcomes and broader June retail performance. If fiscal support is not renewed promptly in July, retailers may struggle to maintain momentum.

A Shift from Stockpiling to Selective Consumption

The overall picture suggests a fundamental change in how Chinese consumers engage with large-scale promotions. Shoppers are becoming more selective, focusing on necessities rather than impulse-driven bulk buying. This shift is evident in the testimony of consumers like Eve Wang, who once enthusiastically participated in shopping festivals but now refrains from unnecessary purchases.

This behavioral trend indicates a reduced psychological pull of major sales events, particularly as economic prudence becomes ingrained in household decision-making. The declining reliance on promotional calendars reflects a long-term transformation in consumption culture, signaling challenges ahead for e-commerce platforms hoping to use events like 618 to drive predictable spikes in sales.

The 2025 edition of China’s 618 shopping festival underscores a clear disconnect between retail marketing strategies and the evolving realities of consumer behavior. While headline figures from leading platforms may still impress, the deeper trend suggests that prolonged campaigns and discounts are becoming less effective in igniting widespread enthusiasm. As household financial caution deepens and government stimulus efforts fluctuate, China's retail ecosystem may need to rethink how it engages a more measured, value-driven consumer base.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Heightened Economic Uncertainty and Structural Risks

In its 2025 Financial Stability Report, the Swiss National Bank (SNB) emphasizes that the global economic and financial environment remains deeply uncertain. This uncertainty is closely associated with increasing trade frictions and geopolitical instability. While the report does not suggest immediate turbulence, it underscores that the prevailing global context creates a fertile ground for adverse developments that could escalate in scale and impact.

One major structural factor contributing to this uncertainty is the surge in global public debt, which has reached levels close to historical records. At the same time, asset prices across multiple markets—including residential real estate worldwide, global corporate bonds, and the U.S. equity market—remain elevated. These conditions suggest that financial markets are vulnerable to external shocks, and the probability of price corrections cannot be ignored. While these trends do not necessarily signal an imminent downturn, their simultaneous presence tends to reinforce the sensitivity of financial systems to external triggers.

Stress Testing Assumptions Reflect Fragile Global Landscape

In response to these evolving risks, the SNB reported adjustments to the design of its stress test models. These are now calibrated to simulate highly adverse scenarios that may be improbable but are plausible enough to warrant preparation. This approach reflects an implicit recognition that global financial conditions are increasingly shaped by low-probability, high-impact events. Although the report stops short of predicting a specific financial crisis, its forward-looking measures suggest an expectation that severe downside scenarios, if realized, could be amplified by the current macro-financial fragility.

Despite the broader economic risks, Swiss banks have demonstrated improved financial performance over the past year. The SNB noted that profitability across the sector rose in 2024, with UBS playing a dominant role in this rebound. This improvement was achieved without compromising financial buffers. Capital ratios remained steady, and banks continued to maintain strong liquidity reserves, which ensured their operational flexibility in times of stress.

Importantly, the sector’s capital buffers were assessed as having robust loss-absorbing capacity. This means that even under adverse macroeconomic developments, Swiss banks would likely retain the ability to maintain core lending functions. The SNB's positive assessment of Swiss banks' internal health contrasts with its more guarded tone on global market stability, suggesting a disconnect between domestic resilience and external vulnerability.

Interplay Between Global Pressures and Domestic Preparedness

The analysis in the SNB report highlights how external financial and political pressures interact with national banking systems. While the Swiss financial sector appears stable for now, this outcome cannot be entirely disentangled from global trends. For example, the combination of high public debt and inflated asset valuations increases the likelihood of sharp corrections abroad, which could in turn influence capital flows, interest rates, and investor sentiment in Switzerland. Though not a direct trigger, these international developments are capable of shaping the risk environment within which Swiss banks operate.

By reinforcing stress test models and maintaining regulatory vigilance, the SNB demonstrates its intent to shield the domestic financial system from such potential spillovers. However, the degree to which this domestic buffer can absorb prolonged or systemic global shocks remains an open question.

The 2025 Financial Stability Report underscores a cautious yet proactive stance by the Swiss National Bank. It acknowledges that while Swiss banks are currently in a strong position, this strength must be preserved through continued awareness of and response to global economic dynamics. The coexistence of domestic financial stability and global uncertainty suggests that while Switzerland may be insulated for now, it is not immune to risks originating beyond its borders.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Michelle

Economic

The Swiss National Bank said on Thursday the economic and financial outlook is highly uncertain, particularly due to trade and geopolitical tensions, though it noted profitability for Swiss banks improved in 2024, driven by UBS.

"Several risk factors could amplify the impact of potential negative shocks on global economic and financial conditions," the SNB said in its 2025 Financial Stability Report.

The risks include public debt having climbed to near historical peaks globally, and valuations in global residential real estate, global corporate bonds and the U.S. stock market still appearing stretched.

The SNB takes account of these risk factors when designing its stress tests, assuming highly unfavourable developments that are unlikely but possible, the report said.

Profitability for the Swiss banking sector improved year on year in 2024, powered by UBS, it noted.

Capital ratios remained broadly stable, available capital buffers reflected significant loss-absorbing and lending capacity, and banks held substantial liquidity buffers, which contributed to their resilience, the report said.

Source: Yahoo Finance

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Stagflation Risks Back on the Table Despite Steady U.S. Data

The U.S. Federal Reserve held interest rates steady at 4.25%-4.5% on Wednesday, consistent with market expectations. However, rising inflation projections and slower growth estimates signaled an uneasy policy outlook for the second half of 2025. While recent indicators, such as job gains and consumer sentiment, were encouraging, Fed Chair Jerome Powell warned that stagflation — a toxic mix of high inflation and weak growth — may loom ahead.

The Fed’s updated personal consumption expenditures (PCE) inflation forecast for 2025 rose to above 3%, up from the previous 2.8%, while GDP growth expectations were cut to 1.4%, down from 1.7%. These shifts reflect deeper concerns about the delayed impact of tariffs and potential energy price shocks due to Middle East instability.

Powell: Tariffs Set to Drive Prices Higher

At the post-meeting press conference, Powell repeatedly emphasized the inflationary risks from tariffs, noting that most analysts forecast a meaningful rise in consumer prices over the next few months. He explained that the inflationary effects of tariffs are delayed, as current retail goods were likely imported before the levies took effect.

“Everyone that I know is forecasting a meaningful increase in inflation… because someone has to pay for the tariffs,” Powell said, adding that end consumers will bear a significant share of the burden.

Although CPI inflation in May rose just 0.1%, the Fed sees that as a temporary calm before the storm, with Powell noting that recent upbeat economic data — such as the 139,000 jobs added in May and improving consumer confidence — may not be sustainable as tariffs trickle through supply chains.

Trump's Influence and Military Tensions Complicate Policy

President Donald Trump continues to apply pressure on the Fed to cut rates, arguing they should be at least two percentage points lower. On Wednesday, he once again criticized Powell, calling him “stupid” and urging faster easing to support economic activity amid growing fiscal burdens and rising interest costs on the national debt.

At the same time, Trump has not ruled out a military strike on Iran, amid escalating tensions in the Middle East. According to JPMorgan, a regime change in Iran due to U.S. or Israeli action could have a “profound impact” on global oil markets, far more disruptive than the recent moderate spike in oil prices. While Brent crude remained stable midweek, markets remain alert to potential supply shocks that could accelerate inflation and complicate the Fed’s path.

Markets Hold Flat, But Risks Are Growing

Markets showed little reaction to the Fed’s latest announcements. The S&P 500 dropped slightly by 0.03%, the Dow Jones Industrial Average fell by 0.1%, while the Nasdaq Composite ticked up 0.13%. Oil prices were similarly flat, though lingering near recent highs. Europe’s Stoxx 600 dipped 0.36%, as the global outlook grew murkier.

The FTSE 100 edged higher by 0.11%, buoyed by U.K. inflation coming in at an expected 3.4% — further fueling the global narrative of persistent inflation.

Tariff Talks with EU Face Deadline

On the trade front, the U.S. and European Union are under pressure to finalize a deal before July 9, when a mutual suspension of tariffs expires. Without resolution, reciprocal 50% import duties could be reimposed, straining a trade relationship worth €1.68 trillion ($1.93 trillion) in 2024.

Trump expressed skepticism about current EU offers, stating: “We’re talking, but I don’t feel that they’re offering a fair deal yet.” Failure to reach an agreement could significantly affect transatlantic trade, further tighten supply chains, and stoke inflation, particularly in import-sensitive sectors.

The Fed’s June stance highlights a tense balancing act between delayed inflation pressures from tariffs, slowing economic growth, and geopolitical unpredictability. While the committee still signals two cuts by year-end, the tone is far more cautious, with Powell making it clear that uncertainty remains high and stagflation is no longer a theoretical risk — it's a looming concern. Markets may remain calm for now, but behind the scenes, policymakers are preparing for turbulent months ahead.

Source: CNBC

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Glendon

Forex

Economic

BOJ's Gloomy Projections Suggest No Rate Hike This Year, Ex-top Economist Says_1

The Bank of Japan is likely to hold off raising interest rates this year unless a dramatic, positive turn of events in U.S. tariffs allows it to overhaul gloomy projections made in May, its former top economist Seisaku Kameda said.

In a quarterly outlook report released on May 1, the BOJ cut its price forecasts and said underlying inflation will stagnate for some time as uncertainty on U.S. trade policy weighs on the export-reliant economy.

The BOJ also cut its growth forecasts for both fiscal 2025 and 2026, a sign it sees the damage from U.S. tariffs to intensify later this year and last through most of next year.

"I was surprised at how dovish the BOJ's May outlook report was," said Kameda, who is well-informed in how the central bank crafts the report and the interpretation of its language.

"Having said so clearly that underlying inflation will stagnate, it would take a very positive turn of events in U.S. tariff talks for the BOJ to justify raising rates any time soon," he told Reuters in an interview on Wednesday.

Japan's exports fell in May for the first time in eight months as automakers like Toyota were hit by sweeping U.S. tariffs. Tokyo's failure so far to clinch a trade deal with Washington will likely put more pressure on a fragile economic recovery.

Given the lack of progress in trade talks and a dearth of data to gauge the impact of U.S. tariffs, the BOJ is unlikely to make substantial revisions to its growth and price forecasts at the next outlook report due on July 31, Kameda said.

"If there's a very big, positive change in U.S. tariff developments, the BOJ would take that into account in its July report," Kameda said.

"If not, the BOJ might find it hard to revise up its gloomy inflation forecast for fiscal 2026, which is key to the next rate-hike timing," he said.

Under the current projections made on May 1, the BOJ expects core consumer inflation to hit 2.2% in the year ending in March 2026 before slowing to 1.7% the following year.

For the BOJ, the key would be whether corporate capital expenditure will hold up as the bank currently projects, Kameda said.

"The BOJ will also probably want to wait for clues on whether firms will remain keen to keep hiking wages next year, Kameda said. "That means any rate hike would have to wait until January or March next year."

The BOJ ended a decade-long, massive stimulus last year and raised short-term rates to 0.5% in January on the view Japan was on the cusp of sustainably achieving its 2% inflation target.

Source: Yahoo Finance

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Market Context and Policy Shift

In response to growing market unease and volatile bond auctions, the Japanese government is poised to revise its fiscal 2025 bond issuance strategy by reducing super-long bond sales by approximately 10%. The move, outlined in a draft seen by Reuters, is designed to ease pressure on the bond market, where yields on long-dated Japanese Government Bonds (JGBs) have recently surged to record highs, triggered by poor auction results and global bond selloffs.

This is an unusual mid-year shift for Japan, which traditionally adheres to its fiscal bond plans. The decision reflects not only domestic financial considerations but also Japan’s sensitivity to global bond market dynamics and the need to prevent a widening supply-demand mismatch.

Breakdown of Changes: Super-Long Bonds Slashed, Short-Term Debt Rises

Under the revised plan, sales of the following super-long bonds will be reduced:

20-year JGBs: Reduced by 900 billion yen to 11.1 trillion yen

30-year JGBs: Cut by 900 billion yen to 8.7 trillion yen

40-year JGBs: Decreased by 500 billion yen to 2.5 trillion yen

These cuts imply that beginning next month, each of these maturities will see their auction amounts reduced by 100 billion yen. To compensate for this reduction and to maintain overall financing capacity, the Ministry of Finance will ramp up issuance of shorter-term notes and retail-oriented JGBs:

Two-year debt: Increased by 600 billion yen

Treasury discount bills (1-year and 6-month): Each raised by 600 billion yen

Principal-guaranteed household bonds: Uplifted by 500 billion yen

Overall, the annual JGB issuance for FY2025 will be revised down by 500 billion yen to 171.8 trillion yen.

Strategic Considerations and Market Impact

This adjustment is a strategic compromise. While increasing short-term issuance allows for quicker absorption by the market, it also raises refinancing risks — particularly if interest rates climb or volatility spikes. The shift away from long-term debt suggests an evolving investor profile, especially as Japanese life insurers scale back long-term purchases after meeting regulatory requirements related to solvency reforms.

In parallel, the Bank of Japan’s (BOJ) announcement to slow the pace of quantitative tightening (QT) starting next fiscal year reinforces a cautious policy stance. It suggests that despite a gradual move toward normalization, the BOJ remains sensitive to bond market fragility and does not wish to trigger further yield spikes.

There is also discussion within the government of buying back older, low-coupon super-long JGBs from the market. This would help ease the inventory glut and may offer better price support at auctions.

Global and Domestic Pressures Converge

Japan's bond market is increasingly influenced by global dynamics. The selloff in global bonds last month, triggered by concerns over U.S. debt sustainability and rising geopolitical tensions, also impacted JGBs — particularly at the super-long end, which tends to be more illiquid and sensitive to shifts in demand.

As major economies face ballooning fiscal deficits and higher interest costs, investors are scrutinizing sovereign debt sustainability more closely. Japan, with the highest public debt-to-GDP ratio among developed nations, is now recalibrating its strategy to align with market realities without compromising fiscal credibility.

Japan’s move to reduce super-long bond issuance represents a prudent, market-calming measure as the government balances fiscal flexibility with bond market stability. The rare revision shows that Tokyo is paying close attention to bond demand dynamics and is willing to adapt issuance patterns to support smoother market functioning. However, the shift toward shorter-term debt also introduces rollover risk, suggesting that Japan’s debt management strategy must remain agile amid rising domestic and global financial headwinds.