Securities firms enjoy rosy performance in Q1

VNDirect Securities Corporation (ticker VND) raked in $57.7 million in total operating revenue in Q1 of this year, up 7.3 per cent on-year, while its post-tax profit reached $25.7 million, equal to a 4.4-fold increase.

Saigon-Hanoi Securities JSC (SHS) saw its post-tax profit soar by 8.7-fold on-year to $14.8 million, but revenue slid 17 per cent on-year to $23.5 million.

VIX Securities saw a 32.6 per cent jump in its revenue to touch $15 million, and its post-tax profit climbed to $6.75 million, equal to a 15.6-fold increase on-year.

The stock market rally in Q1, and the company’s efforts for self-trading during the period, brought sweet gains, reaching $4.2 million in pre-tax profit compared to the $916,600 losses it counted from self-trading in the same period last year.

Similarly, FPT Securities JSC (ticker FTS) witnessed a 68 per cent jump in its revenue to reach $12.45 million, and a 93 per cent spike in pre-tax profit to $7.96 million, setting a record since early 2022. With these Q1 results, the company has fulfilled over 45 per cent of its full-year profit target.

Bao Viet Securities JSC (BVS) also eyed remarkable growth in its core business areas in Q1, counting $9.83 million in revenue, equal to a 71 per cent jump on-year, and $2.28 million in post-tax profit, double compared to one year ago.

A robust stock market in Q1, with an average transaction volume approximating $969 million per session, helped securities firms replenish their income sources and count profit in diverse business segments.

Margin lending is currently the key income source for securities firms, as this segment often accounts for 25-40 per cent of their operating revenues, even contributing the biggest share of income at some companies.

As for profit, interest from lending and receivables contributed more than half of pre-tax profits of securities firms in Q1.

According to statistics from major financial data provider FiinGroup, by the end of March, the total margin lending balance of 48 leading securities firms, which represent 93 per cent of total equity capital of the whole sector, saw the fifth consecutive hike since late 2022, coming to nearly $8 billion, hitting a historical mark.

FiinGroup said that despite this record margin lending balance, the current margin over total equity capital ratio of the 48 firms was around 0.55-fold, compared to the regulated ceiling level of 2-fold, still showing huge room to boost margin lending.

Experts at Vietnam Investors Service and Credit Rating Agency JSC (VIS Rating) said that the business prospects for securities firms in 2024 are upbeat if they can leverage bolstered transaction volume and improved market sentiment in a low-interest environment which stimulates margin lending.

Supportive factors to securities tickers have become increasingly apparent. These include the positive Q1 business results, as well as the commitment and progress made to upgrade the domestic stock market status from ‘frontier’ to ‘emerging’, which will facilitate securities firms’ business growth.

The new state-of-the-art stock trading system KRX, provided by the Korean Exchange (KRX), is set to soon go live soon, and will act as a catalyst to boost market liquidity and help securities tickers charm even more money flow.

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