Competition heats up among stock brokers

Throughout 2022, the brokerage revenue of 10 leading securities firms on the Ho Chi Minh City Stock Exchange (HSX) saw a 19.4 per cent plunge compared to one year ago.

VPS, which secures the number-one position for brokerage services in the market, saw its slice sink to 14.81 per cent in the last quarter of 2022, down from 18.71 per cent in the third quarter and 17.12 per cent in the same period of 2021.

For the whole of 2022, VPS’s revenue from brokerage services shed more than 9 per cent on-year.

The stock market saw great volatility in Q4 last year

Meanwhile, the brokerage revenue of SSI, which ranks second among top performers in stock transaction value, took a dip of nearly 60 per cent in Q4 last year alone and witnessed a 32.2 per cent plunge over the whole of 2022.

The company’s market slice slipped from 11.05 to 9.84 per cent.

This does not only affect the two top performers, the brokerage revenue of most other securities firms fell amidst an unfavourable market.

Faltering capital flows have not only directly affected the brokerage revenue of securities firms but also significantly diminished margin loan usage as financial leverage over customers.

In Q4/2022 alone, the margin loan surplus at VPS approximated $268.2 million, down $191 million compared to the start of the year.

Several other securities firms have incurred the same losses.

In the final quarter of last year, Techcombank Securities’ margin loan value shed $284 million from its January figure. The same data at SSI was also down $196 million and Mirae Asset Vietnam decreased by $108 million.

The VN-Index closed the final session in 2022 at 1,007.09 points, down nearly a third compared to the end of 2021.

With the dip in the figures, cash flows in the stock market were stagnant in many sessions as investors chose to adopt a watch-and-see approach.

On the HSX, the average transaction value in each session fell to about $739 million, down 21.2 per cent compared to 2021’s average.

However, experts believe that for a nation with a comparatively young population like Vietnam, the investment ratio is often higher than fixed-interest investment channels.

Even though a vast number of investors have left the market in recent years due to the challenging outlook, individuals with business acumen are likely to soon come back and will have better choices for where to place their accounts thanks to effective measures to withstand competition from other market players.

Local retail market share battle heats up The rapid expansion and domination of foreign brands in the Vietnamese retail market are acting as a driving force for domestic retailers to implement restructuring and expansion strategies to regain market share.

Brokers stay upbeat Local and foreign securities companies are beefing up their presence in Vietnam, with increasing enthusiasm in the nation’s equity market as they are capitalising on the resilient growth economy.

New code of conduct for brokers, securities firms A new code of conduct will be introduced in 2020 to improve the ethical standards of brokerage firms and brokers, according to the Vietnam Association of Securities Businesses (VASB).