The trading value on the Ho Chi Minh Stock Exchange (HOSE) exceeded VND2,000 billion a session on average in August but the figure amounted to VND3,500 billion plus in September. As a result, brokerage revenues of securities surged.
While the market share of foreigner brokering is still dominated by long-standing brokerage houses, the market share of domestic brokering was picked by dynamic brokers in August.
Domestic brokerage: Laureate for dynamic entities
According to the notice from HOSE, the main stock exchange in Vietnam, there was a change in the leader position in brokerage market share (based on stock brokerage value) in August. Thang Long Securities Joint Stock Company (TSC) took the lead in the domestic brokerage pie.
The progress of TSC was respectable because it was ranked the ninth in the first quarter of 2009 with 3.53 per cent of the market share. At present, TSC only attracted more than 18,000 accounts, ranking the 14th among securities brokerage houses in the country.
However, TSC is the best performer in brokering services. Sacombank Securities Company (SBS) and Saigon Securities Inc (SSI) took the second and third places. The fourth place was kept by KimEng Securities (KEVS), which has operated for one year and a half. Ho Chi Minh City Securities Corp (HSC) held the fifth place.
There are two reasons for the changes in brokerage market shares, with significant progress of TSC, SBS and KEVS.
Firstly, brokering activities are professional in progressive companies.
Secondly, many securities companies advantageously have capital supports from their parent companies. Many companies can supply many flexible service packages, enabling investors to use financial leverages to increase the possibility of taking “double” profits when the stock market rallies.
Long-standing brokerage houses like BIDV Securities Company (BSC), ACB Securities Company (ACBS) and Vietcombank Securities Company (VCBS), which had the biggest numbers of customers, are dragging backwards because prudence prevails in their operations.
The Top Ten also had two newcomers, namely FPT Securities Joint Stock Company (FPTS) and Trang An Securities Joint Stock Company (TAS), which started operations about two years ago.
Foreign brokerage: Old faces
Unlike domestic brokerage, old companies mainly served foreign investors. As of August 2009, SSI was the top broker house for foreigners with 28.5 per cent of the market share and 25 per cent of total foreign accounts in the country.
The runner-up was HSC with over 20 per cent of foreign brokerage market share. According to statistics from HSC, the company might account for 33 per cent of foreign brokerage market share.
Bao Viet Securities Company (BVSC) and ACB Securities Company (ACBS), which made presence at the foundation of the Vietnamese stock market, kept the third and fourth positions. The Big Four occupied more than 80 per cent of foreign brokerage market share in August!
Completion concerns
Four out of five securities companies with the largest domestic brokerage market shares have upgraded their operating professionalism by grouping its customers and assigning customer management to brokers.
Research activities are expanded to serve specific groups of customers, especially big ones. This helps increases the capital turnover of investors.
This is the reason why Group 2 securities companies (with less than 30,000 accounts) are holding the top positions. The progress of smaller brokerage houses will possibly lead bigger ones to upgrade their activities.
A director of a middle-size securities broker said his company has actively negotiated with several banks to seek capital sources to support its customers. Providing financial leverage services for investors is a method for several securities companies to increase market shares, keep existing investors and attract new ones. However, this is not simple.
Firstly, direct credit sources for hot investment channels like the stock market have reached the limit and are always tightly controlled.
Secondly, most banks have their own securities companies or invest in securities companies; thus, other securities brokers will hardly access their capital sources.
Margin trading, which allows investors to buy securities with cash borrowed from a broker, is long expected by investor and securities brokerage houses. Authorities are considering this method of trading.
In fact, many securities companies allow their investors to perform margin trading, a way to boost market shares quickly. If authorities give a green light, the competition for market shares by securities companies will be heated up.
While waiting the final decision from authorities, several securities companies continue encouraging investors to use financial leverages. (Investment Securities)
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