Investment apps pose transparency issues

According to the State Securities Commission (SSC), investment management operators have recently launched trading websites and applications, including Passion Investment, Finhay, Tikop, Infina, Savenow, and BUFF, among others, to promote their services to investors. They come in the guise of business collaboration agreements, demonstrate fund management operations, and manage stock portfolios without official licences or supervision from the SSC in line with the Law on Securities.

Trading apps and websites have emerged that may not be fully licensed

“When a disagreement arises without the securities legislation safeguarding investors’ rights and interests, investors may be in danger,” the SSC noted in a statement

The SSC also warned investors to be cautious while trading using these apps since the app developers are not liable for any losses that may occur.

Finhay – a Hanoi-based wealth management platform that helps millennials micro-invest in mutual funds – automates techniques that best fit the investment appetite of users. Finhay’s investments could consist of a portfolio of stocks, bonds, and other securities, in which users can start from just VND50,000 ($2.20).

During the fundraising journey, Finhay received investment from Thien Viet Securities and Nguyen Hoang Giang, chairman of Dai Nam Securities. In June, it acquired Vina Securities JSC, a securities company established in 2006.

Finhay stated in May that its performance is annually reviewed by accountants EY and its assets are managed by Thien Viet Asset Management JSC. CMC Cyber Security, a subsidiary of CMC Group, is accountable for executing security assessment, quality assurance, and safety assurance for technological products.

Meanwhile, Infina, formerly known as RealStake, is a diversified investment wallet for retail investors in Vietnam. It began with fractional real estate investment and recently expanded to savings, mutual funds, and certificate of deposit investments.

In February, Infina announced it has bagged $4 million for its seed funding, along with the $2 million from 2021. Investors include Sequoia Capital India’s Surge programme, Y Combinator, Saison Capital, Starling Ventures, Alpha JWC, and AppWorks, and existing backers such as 1982 Ventures, Nextrans, and 500 Startups Vietnam, among others.

Elsewhere, Passion Investment offers solutions for business partnerships with individual investors, starting at VND300 million ($13,000), or VND50 billion ($2.2 million) for high-net-worth clients and organisational clients.

The annual rate of return on investments held by Passion Investment is 40 per cent, while the average annual profit rate for business collaboration items during the six-year period from 2016 to the end of 2021 reached 52.92 per cent annually.

Tikop, a micro-investment app developed by Techlab Technology JSC, allows users to make a deposit with as little as $2.20 and choose an investment package. Their money is distributed among some financial investment funds in Vietnam in accordance with the user-specified ratio.

Meanwhile, Tan Viet Fund Management JSC serves as the asset management unit for the BUFF app, which was developed by BUFF Fintech in 2021 and allows users to make deposits and allocate these to products like stocks, bonds, ETFs, open-ended fund certificates, and treasury bills.

The Ministry of Finance’s data revealed that from the secondary market, the proportion of corporate bonds held by individuals is up to 32.6 per cent, mainly because of intermediary purchases with securities companies.

“It can be seen that there is a phenomenon of brokers enticing non-professional investors to invest in corporate bonds as a form of high-interest savings deposit,” Fiingroup said.

According to Decree No.65/2022/ND-CP on private placement of bonds, individual investors must satisfy a number of standards to purchase corporate bonds. Qualified investors need to ensure that their portfolio of listed and registered securities must reach an average value of at least $84,000 for a minimum period of six consecutive months, excluding the value of margin loans and securities repurchases.