Market's margin debt hit new record-high
Market's margin debt hit new record-high
This surge in margin debt reflects a dynamic shift in the market's financial landscape.
Investors watch market's movement at a trading office of a securities firm in Hà Nội. — VNA/VNS Photo |
The overall margin debt across the market has reached a new milestone, with the emergence of three securities companies extending loans exceeding VNĐ20 trillion (US$798.2 million).
This surge in margin debt reflects a dynamic shift in the market's financial landscape.
By the end of 2024, the estimated total outstanding loan balance at securities companies was around VNĐ245 trillion (around $10 billion), marking a VNĐ13 trillion increase from the end of the third quarter and setting a new all-time high.
Notably, the margin debt comprises approximately VNĐ240 trillion, reflecting a VNĐ17 trillion increase from the end of the previous quarter, and also represents the highest figure in the history of the Vietnamese stock market.
Most top securities firms engaged in lending activities have noted an upsurge in debt compared to the previous quarter and previous year.
Many of these firms have set new lending records, such as Techcombank Securities (TCBS), Hồ Chí Minh City Securities (HSC), VPS Securities, Vietcap Securities, MB Securities, VPBankS, and KIS Vietnam, surpassing levels seen during the market trading peak around 1,500 points in late 2021 and early 2022.
The most substantial increase in debt in the last quarter of 2024 was recorded by SSI Securities.
As of December 31, this securities firm's loan outstanding stood at around VNĐ22 trillion, up VNĐ2.5 trillion from the end of the previous quarter.
Despite this growth, the amount remains significantly lower than the previous record of nearly VNĐ23.7 trillion achieved at the end of 2021.
Several securities firms have also reported a notable surge in debt (over a thousand trillion đồng) in the last quarter of 2024, including HSC, Vietcap, VPBankS and ACB Securities.
In this group, except VPBankS, the other securities companies have increased their charter capital over the past year.
By the end of 2024, the market witnessed eight securities firms with debts exceeding VNĐ10 trillion, with three leading companies each holding debts surpassing VNĐ20 trillion.
TCBS retains the top position in terms of lending debt, with close to VNĐ26 trillion, making it the only securities firm with debts exceeding $1 billion.
With the ongoing and upcoming capital increases within the securities industry, these firms will have additional resources for lending. It is plausible that Việt Nam may soon see more securities firms with billion-dollar debts.
The continuous surge in margin debt to new record levels amidst weakening market trading activities is a notable trend.
Trading values on the HoSE have consistently decreased to below VNĐ12 trillion last month. This figure has further declined sharply in the initial month of 2025 as the Tết holiday sentiment prevails.
The surge in margin debt is not solely driven by individual investors' leverage needs. A significant portion may come from prominent shareholders and business leaders seeking funds via deal financing amid challenging banking channels and corporate bonds.
Stock collateral's increasing use for loans over other assets indirectly fuels a rise in "banking" securities firms, akin to "shadow banking," with major players driving this trend more than retail investors.
This capital flow may not all enter the market, impacting liquidity dynamics beyond margin debt trends.
