Securities firms betting on future growth prospects through replenishing capital sources

August 21, 2021 | 18:13
Securities firms have reported robust growth on the back of a boom in stock market transaction values and many are now mulling over plans to boost capital sources to seize development opportunities in the months ahead.
Securities firms betting on future growth prospects through replenishing capital sources
Booming transactions in the stock market has brought a sharp rise in the liquidity in recent months

Early this month, the State Securities Commission simultaneously approved and granted certificates on stock sale to the public for two securities firms, Saigon Securities Incorporated (SSI) and Saigon-Hanoi Securities JSC (SHS).

While the regulations provide 90 days for stock distribution, SHS has quickly set August 24 as the final deadline for stock purchase registration for shareholders with a 2:1 ratio, while announcing plans to pay cash dividend of 12 per cent and bonus share payment of 5 per cent.

Meanwhile, SSI has chosen September 9 to draw up the list of shareholders for a record stock issuance in the company’s history.

Analysts at Sacombank Securities JSC assumed that Vietnam’s stock market will retain robust transaction with high liquidity level until the end of 2021.

Accordingly, SSI aims to distribute 219.1 million bonus shares with a 6:2 ratio and sell 109.55 million stocks to existing shareholders with a 6:1 ratio. If successful, the company’s charter capital would jump to VND9.860trillion ($428.7 million) from the current VND6.573 trillion ($285.8 million).

With the offered unit price of VND10,000 (43 US cents), SSI is expected to raise VND1.095 trillion ($47.6 million), while SHS aims to collect VND1.4 trillion ($60.87 million) at the offered price of VND13,500 (59 US cents).

Earlier, VNDirect successfully raised VND3.113 trillion ($135.35 million) through distributing 214.5 million new stocks with an issuance ratio at 1:1 in July 2021. In the first half of 2021, 15 securities firms in the sector raised charter capital with a total additional stock value reaching VND7.370 trillion ($320.4 million).

Of these 15 securities firms, some used available capital sources, such as Ban Viet Securities (VCSC) which offered shareholders bonus chares at a 1:1 ratio.

Most other units raised funds mostly from existing shareholders. These included ACB Securities (ACBS), MB Securities (MBS), Maybank Kim Eng Securities (MBKE), and KIS Vietnam, among others.

The revenue of these securities firms rose 2-5-fold in H1 compared to one year ago, with profit figures also shooting up.

For example, the stock market’s booming development in H1 brought the revenue of Hanoi-based Tan Viet Securities (TVSI) to VND1.433 trillion ($62.3 million), up 207 per cent on-year, exceeding the projection for the full year.

Similarly, the company raked in VND273.5 billion ($11.9 million) in pre-tax profit, a 162 per cent jump on-year and surpassing the full-year plan by 16 per cent.

TVSI also raised its charter capital by 1.5 times from VND1.08 trillion ($46.9 million) to VND2.639 trillion ($114.74 million) in H1.

Booming stock transactions have brought a sharp rise in liquidity. In the Ho Chi Minh City Stock Exhange (HSX), transaction value for trading session in H1 averaged VND18.554 trillion ($806.7 million) compared to the 2020 average of VND4.693 trillion ($204 million).

Statistics at more than 70 securities firms show that their total revenue in H1/2021 approximated VND34.390 trillion ($1.5 billion), 2.2 times as much as one year ago. Their pre-tax profit rose 2.79-fold from VND4.845 trillion ($210.6 million) to VND13.523 trillion ($588 million).

Meanwhile, of the group of securities firms raising charter capital, their revenue and profit rose 2.87-fold and 3.15-fold, respectively.

Analysts at Sacombank Securities JSC forecast that Vietnam’s stock market will continue to see robust transactions with high levels of liquidity until the end of 2021.

By Song Thuy

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