Local brokerages face fierce foreign competition
Local securities companies are facing stiff competition from their foreign rivals, especially in the race for capital.
In recent years, foreign-invested securities companies have working fiercely to develop and boost capital growth.
Mirae Asset Viet Nam Securities Company (MASVN) is leading the market in capital growth. The company raised its charter capital from VND700 billion (US$30 million) to VND2 trillion in 2017 and to VND4.300 trillion by the middle of this year. MASVN is now ranked under only Saigon Securities (SSI) among securities firms in terms of charter capital.
The strength in capital has helped MASVN boost its operations. By the end of June, MASVN had spent VND1.84 trillion on margin lending, up 2.3 times compared to the same period last year.
KIS Viet Nam Securities Company (KIS) has increased its chartered capital to nearly VND1.9 trillion, while Maybank Kim Eng Securities Limited has lifted its charter capital to VND1.05 trillion. Capital increase plans of KB Viet Nam and Yuanta Viet Nam have also been approved, to VND1.68 trillion and 1 trillion respectively. Shinhan Viet Nam has raised its charter capital to VND812 billion.
In the second quarter of 2018, MASVN was among the top 10 brokerages by market share on the HCM Stock Exchange. According to the company’s financial statement, MASVN’s revenue had soared 126 per cent and after-tax profit had doubled in the third quarter this year compared to the same period last year.
MASVN receives strong support from its South Korea owner, Mirae Asset. The group is present in Australia, Brazil, Canada, mainland China, Colombia, Hong Kong, India, South Korea, Taiwan, the UK and the US, managing more than $100 billion in assets globally.
Yuanta Viet Nam is aided by Yuanta Group, one of Taiwan’s leading financial-banking giants with total assets of over $100 billion. Yuanta Group has expanded its operations across nine Asian countries.
According to Le Minh Tam, CEO of Yuanta Viet Nam, the company targets becoming one of the market’s largest brokerages by charter capital.
"Yuanta Viet Nam is also determined to step deeper into the Vietnamese stock market," Tam told online newspaper nhipcaudautu.vn.
Local securities companies are also striving to secure their firm foothold in the market, including SSI, HCM City Securities Corporation (HSC), Viet Capital Securities Joint Stock Company (VCSC), VNDirect Securities Joint Stock Company (VNDirect), FPT Securities Company (FPTS) and Bao Viet Securities Company (BVSC).
According to Nguyen Duy Linh, deputy director of SSI’s securities services, the Vietnamese brokerage market still has much room for development compared to other regions in the world, with a moderate trading value of US$200-250 million per day.
“Viet Nam’s securities market is attracting attention from foreign investors,” Linh said. “But SSI isn’t worried about competition because healthy competition helps us improve the quality of our products and services, increase diversity and innovate.”
"SSI’s medium- and long-term strategy is to maintain its leading position in the securities market in Viet Nam and strive to expand internationally," he said.
The company will apply new technological solutions, invest in human resources, improve working environment and control expenses.
According to Johan Nyvene, CEO of HSC, the company is promoting investment banking.
“This approach helped HSC achieve its business goals without too much emphasis on financial services,” he said.