Big hitters square up

Local securities firms are being courted after catching foreign banks’ eyes

“We have received applications from these two global banks to set up securities joint ventures here,” said State Securities Commission chairman Vu Bang.
Bang, however, did not reveal which domestic partners the banks were courting.
“If any news breaks we’re able to talk,” said Prakash Krishnan, Merrill Lynch’s Marketing and Communications Department. Goldman Sachs declined to comment.
The announcement comes as competition between local securities companies heats up with some firms sharply reducing stock transaction fees, even to zero, to attract investors amids the gloomy performance of the stock market, which has undergone corrections.
While big players such as Saigon Securities Inc and Bao Viet Securities were set to prosper, newly established firms could be casualties of the market shakeout.
“China licenced thousands of securities firms, but now they have just around 100 and Vietnam will be no exception. Not all securities firms will be able to survive,” said Le Hai Tra, deputy director of the Ho Chi Minh Stock Exchange (HoSE).
Due to the fiercer competition, several domestic securities companies might seek cooperation with foreign partners as a way for survival. “We can seek foreign cooperation in the near future,” said Nguyen Ngoc Thanh, VnDirect Securities Company’s managing director.
“Tie-ups with foreign firms are a possibility for Thien Viet Securities,” said Spencer White, Thien Viet Securities chief strategic officer, adding that there were ongoing discussions with overseas institutions.
Bang said the market regulator granted licences to four new securities companies in the first six months of this year, bringing the total to 59. An additional 60 applications were on the market regulator’s table.
However, 100 per cent, foreign-run securities companies in Vietnam will not be allowed until 2012 following WTO accession commitments. The country’s first securities joint venture between Vietnam’s State Capital Investment Corporation and Morgan Stanley, a leading global financial services firm, is expected to be operational in the fourth quarter of this year. No financial details or terms of the joint venture were disclosed.