More securities firms go public

With many listed securities firms, 2021 was a successful year for stock issuance plans

In late 2021, two securities firms – Stanley Brothers (SBSI) and An Binh (ABS) – had completed procedures to become public companies.

SBSI’s CEO Nguyen Quang Anh closed the shareholders' list with stock registration procedures with the Vietnam Securities Depository (VSD) and registered for listing on UPCoM right on the day the State Securities Commission approved the procedure.

Meanwhile, ABS has yet to make a new move after finalising the registration procedure to become a public company from December 30.

However, at its 2021 general shareholders meeting in mid-April, the shareholders had approved the listing proposal and roadmap and authorised the board of management to decide on what bourse to offload the share as well as setting concrete time for listing.

Less than half of the securities firms (34/73) have come onboard Vietnam’s stock market, many of whom are founded by banks.

The stock market’s strong growth in the past two years has been the factor driving many securities firms’ to the bourse.

In early December, Vietnam Construction Securities JSC submitted procedures for listing on the Ho Chi Minh Stock Exchange (HSX).

The company’s ticker CSI had been traded on UPCoM for nearly three years, and in mid-August CSI weighed over the plan on shifting the stock to HSX. Since then, the company’s ticker saw a constant growth despite the fact that the company’s business results in the first three quarters were retreating and the stock’s net income in the four recent quarters just fetched around 2.1 US cents apiece.

The constant price hike would fuel pressure in the future unless CSI made radical changes to generate profit in a more sustainable manner. From another angle, the heat attests to the appeal of securities firms’ tickers in the eyes of investors, as well as the opportunities from turning into public companies and going on the bourse.

Besides listing, many securities firms have decided to replenish their capital sources to best avail of market opportunities.

Last year also marked the success of most securities firms in share issuances to enrich capital sources.

Before turning into a public company, ABS successfully raised its charter capital through stock issuance for the shareholders from $26.2 million to more than $43.4 million.

In July, VNDirect also doubled its capital scope to nearly $189 million through stock issuance.

The company continued offering stocks to existing shareholders with a ratio of 1:1, using available equity capital to enact nearly 348 million stocks, following a 10:8 ratio. After the move, its equity is expected to reach $565 million.

Along with VNDirect, SSI and SHS have also announced their capital hike plans. SSI envisages raising its charter capital to approximately $652 million, equal to the scope of a medium-size bank, whereas SHS is awaiting shareholders’ approval to issue 325.3 million shares at a ratio of 1:1 to raise its charter capital to $283 million. Once successful, SHS would rise into the third-largest securities firm in charter capital, behind SSI and VNDirect.

On a smaller scale, many securities firms also mull over plans to raise charter capital. For instance, APG is simultaneously distributing stocks to existing shareholders at a 1:1 ratio, and enacting more than 73.1 million shares through private placements to scale up its capital sources from $31.8 million to more than $121.7 million.