Securities companies’ race heats up amid low market liquidity

VNDirect Securities has recently launched the DSTOCK app for securities trading customers, besides the current VND app for multi-asset trading including stocks, bonds, assets, to provide in-depth information and data.

An investor registers for a new trading account at an office of SSI Securities Corporation in HCM City.- Photo ssi.com.vn

Nguyen Vu Long, Acting General Director of VNDIRECT, said that the company had designed product packages meeting different investment goals of customers. With the asset accumulation model, each month investors can deduct from VND5 to 7 million (US$213 to 298) to accumulate stocks for long-term asset growth.

In early August, this company applied a preferential loan interest rate from 8.9 per cent per year for the top 50 stocks with good fundamentals and the highest liquidity in the market.

Mirae Asset Vietnam has just launched Margin T+, offering interest free for the first 5 working days for the loan, then interest rate remaining 15.6 per cent per year. Maximum loan limit is VND3 billion with loan term of 90 days.

SSI Securities Inc, the securities company with the largest charter capital in the market, also has a 7-day interest-free package for customers who need to use margin for no more than 30 days. From T+8 trading day, the applicable interest rate is 14.5 per cent per year.

Taking advantage of the robust stock market, securities companies have raised their capital in the past 2 years. At the end of 2021, the total charter capital of all securities companies was VND108 trillion, by the end of the second quarter of 2022, it reached more than VND133 trillion, equivalent to an increase of 23 per cent.

This figure does not include securities companies that have just completed raising capital since July 2022. For example, SSI has increased its capital to nearly VND14.9 trillion, an increase of nearly VND5 trillion compared to June 30, 2022. Techcombank Securities Co (TCBS) also recently announced to increase its capital from VND1.13 trillion to more than VND9 trillion.

With new resources mobilised from the end of 2021 up to now, many securities companies possess abundant capital. As of December 31, 2021, the outstanding loan balance of the securities companies was more than VND197 trillion, but as of June 30, 2022, it decreased to VND153.8 trillion, equivalent to a reduction of more than VND43 trillion, while the total charter capital of the companies increased by more than VND27 trillion.

The trend of digitisation has become the dominant trend in 2020, when the COVID-19 pandemic hit strongly. Many securities companies have applied eKYC to attract customers and at the present stage, they are gradually applying synchronous digitisation, investing in more upgraded interfaces and features. Viet Capital Securities, the company with the largest market share for institutional customers, is also aiming to increase its individual brokerage market share further by restructuring the brokerage division, focusing more on the needs of target customers.

Viet Nam is a stable growing economy and is witnessing an increasing middle class and an increasing number of individual investors. Statistics from the Viet Nam Securities Depository show that, by the end of July, there were 6.3 million securities accounts, of which 97 per cent were personal accounts. This figure is only close to 6 per cent of the total population of more than 100 million people, while in Thailand it is 9 per cent, and in Taiwan 90 per cent.

According to experts from Maybank Securities Company, with Viet Nam continuing to rise to an emerging market position, it is expected that the total trading volume of the Vietnamese stock market will be equivalent to that of other countries in the region such as Thailand. Viet Nam's stock market has significant growth potential when the trading value only reached $1 billion per day, compared to about $3 billion in Thailand.