Securities market sees capital hikes

Securities market sees capital hikes, illustration photo

In mid-August, Taiwan-backed Yuanta Vietnam Securities JSC issued a resolution of the company’s Management Board approving Yuanta Securities Asia Financial Services Ltd.’s plan to buy more than 34.46 million shares of Yuanta Vietnam’s stock that Yuanta Securities (Hong Kong) Ltd. and one individual shareholder refused to buy at their recent stock issuance to existing shareholders, at the ticker face value of VND10,000 ($0.44) apiece. If the plan gets the nod from the State Securities Commission, Yuanta Vietnam will finalise tripling its charter capital to VND1 trillion ($44.24 million) from the current VND300 billion ($13.27 million).

Currently, Vietnam has 17 securities firms with charter capital exceeding VND1 trillion ($44.2 million).

Last year, Hong Kong-backed Mirae Asset Vietnam’s charter capital was trebled to VND2 trillion ($88.9 million) through extensive capital injections by its parent company Mirae Asset Securities Ltd. (Hong Kong), turning the former into the fourth-largest securities firm in terms of charter capital in Vietnam’s stock market. The parent company, however, was reported to have approved a plan to further scale up its Vietnamese subsidiary’s charter capital to VND4.6 trillion ($203.5 million). If the plan was realised, Mirae Asset Vietnam would only trail Ho Chi Minh City-based Saigon Securities Incorporation (SSI), whose charter capital surpassed VND5 trillion ($221 million).

Earlier, South Korea’s KIS Vietnam Securities Corporation added VND784 billion ($34.6 million) to its charter capital, which now exceeds VND1.897 trillion ($83.9 million). Late last year, Shinhan Vietnam Securities also increased its charter capital by VND666.6 billion ($29.4 billion) to VND812 billion ($35.9 million).

While foreign securities firms are aggressive in their capital hike plans, their local peers prove cautious about such a move, despite facing rising pressure to grow their capital sources in the wake of the ever-growing market size.

Last year, Saigon-Hanoi Securities JSC (SHS) raised its charter capital from VND1 trillion ($44.2 million) to VND1.05 trillion ($46.5 million) through a stock swap to unite with another securities firm belonging to the same parent company, Saigon-Hanoi Bank (SHB). Currently, SHS has yet to realise its commitment to a second-phase capital hike plan to boost its charter capital to over VND2 trillion ($88.4 million).

Local securities firms are currently holding dominant shares in the broker segment. Leading players such as SSI, MBS, VCSC or BVSC are doing a smart job in this field. However, as the capital scope of local firms is small compared to the market cap, their foreign peers may make up the difference in the near future.