Domestic capital “heats up” the race between securities companies

Securities Company inside: Change owner, change fortune

Perhaps many investors will be surprised to know that the Vietnamese market has more than 70 securities companies. It is also hard to blame investors for not knowing about the remaining companies when the top 10 securities companies such as SSI, VPS, VNDirect, HSC, MBS… have accounted for 65.78% of the market share. The remaining dozens of companies share a small slice of the pie.

So why are there still so many companies struggling to survive in such a cramped business space with low efficiency?

The answer for most securities companies that are operating as dormant is to wait to sell themselves. Currently, the license to establish a new securities company is not granted, for new players who want to join the stock market, they are left with the only option that is to buy back the licenses of operating securities companies and Participation fees are getting more and more expensive.

According to some market participants, the price of a license purchase between companies about two years ago ranged from VND 20 to 30 billion, but from 2021 when the stock market develops strongly. In terms of scale, this number also increased rapidly. Even a reliable source said there were recent deals worth up to 100-200 billion dong.

After changing owners, securities companies also had strong capital raising moves such as DSC (formerly Da Nang Securities) increasing capital from 60 billion VND to 1,000 billion VND, Phuong Dong Securities after becoming Tien Securities. Phong also increased its charter capital to VND 2,000 billion. Or like DNSE securities (formerly Dai Nam) is preparing for a plan to increase capital to 3,000 billion dong in April and is expected to list HOSE in this second quarter.

Despite being latecomers, the new companies have also prepared weapons to compete with the old ones with financial potential, technology and fees.

More than 2 years of COVID-19 are also 2 years of sublimation of the stock market, liquidity increased by 5-7 times proportionally along with the profits of securities companies also increased gallopingly. After the change of ownership is the name change, capital increase, restructuring to welcome the golden phase of the market.

Like Dai Nam Securities Company, after being acquired and renamed DNSE Securities Company, it also has a completely new look. Profit after tax in 2021 increased 25 times compared to 2020 before changing hands, the number of opened accounts increased 10 times in 1 year.

Technology is seen as effective competitive tools of new securities companies. Some representatives of the new class of securities firms are now neo-brokers (no brokers) that will develop the technology to the level of a mobile application that is essentially a broker, educating clients about securities, understand investment, collect data to help investors know how to cut losses and take profits.

Mr. Do Thai Hung, Director of FINPROS Investment JSC said: “Technology and computers are more precise and principled than humans. It doesn’t panic too much, doesn’t get caught up in trends, and thus takes control. better risk. Thanks to technology and databases we can test investment methods clearly rather than following uncertain methods.”

In addition to technology, free transactions are also an important “weapon” to gain market share, a typical successful case is VPS.

“The VPS brokerage team is now very crowded, the market share is No. 1, but before 1-2 years no one knew who the VPS was, but the price is expensive when the brokerage costs are high, the business efficiency can be seen on the report. not equal to SSI or VND”, said Mr. Nguyen Minh Hoang, Senior Analyst – Nhat Viet Securities Joint Stock Company.

Banks and real estate companies “like” to have securities companies

According to the 2021 report, VPS reported a profit after tax of more than VND 796 billion in 2021, too modest compared to a revenue of more than VND 9,500 billion. But it can be seen that this is the price many new securities companies are willing to pay to achieve their goals in terms of market share, customer base and scale. Notably, the acquirer does not just stop at individuals and organizations in the securities industry which is expanding to banks and real estate corporations.

Vietnam Gateway Securities Company has just changed its name to KS Securities Company (KS Securities), moving its headquarters to the Sunshine Center Hanoi building. Experts believe that maybe Sunshine Group or related parties have become the controlling shareholders of these financial institutions.

Or, VPBank once divested from VPS securities, but recently bought ASC securities and changed its name to VPBank Securities.

So what is the deep goal of real estate giants and banks when acquiring securities companies?

Recently, domestic capital has joined the race to acquire small securities companies with a series of deals. Illustration.

Mr. Nguyen Minh Hoang – senior analyst, Nhat Viet Securities Joint Stock Company said: “We see that there are large real estate corporations that buy financial institutions and securities companies, it is related to the channel. If they arrange capital, they will not have to pay interest on loans to banks or pay interest on loans issued by corporate bonds, the cost of which is very high 11-12%/year.

“The products of commercial banks will gradually mature (deposit, lend…), but as the financial market develops, there will be more complex products in the investment banking segment and as the banking industry grows. When trade expands, they also have more opportunities to supplement their business capacity”, said Mr. Nguyen Hoang Giang – Chairman of DNSE Securities Company.

Mr. Do Thai Hung, Director of FINPROS Investment JSC commented: “The domestic acquisition has taken place very strongly in the past time and will continue in the coming time, gradually diversifying. Units with technological advantages combine The set of existing customers will have a strong advantage. That is the bank with a very large customer file, in addition, the ability to connect personal money between the bank and the bank’s securities company.”

The race between old and new securities companies is forecasted to be more and more exciting and equally fierce. The beneficiaries above all are investors when using services with higher quality and more diversified.

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