According to statistics from the credit rating company VIS Rating, 1/3 of the 30 largest securities companies have announced plans to raise new capital in the first 5 months of the year with a total value of about 38,000 trillion VND in the next 12 months.
This is a very significant capital increase plan and will help increase the total equity of the companies by about 20%. With additional capital, companies can boost their core businesses of investment and margin lending in 2024. “Higher profit growth from these businesses will help companies company strengthens its risk buffer,” VIS Rating said.
The capital increase plan largely comes from large-scale domestic securities companies and companies affiliated with banks.
The capital increase plan largely comes from large-scale domestic securities companies (HCM, SSI, VCI, VND), as well as companies affiliated with banks (ACBS, MBS, ORS, SHS). These companies have targeted 2024 year-over-year profit growth at an average of 30%, mainly driven by the expansion of core investment and margin lending activities along with the Industry business conditions improved.
Low interest rates and improved investor sentiment in the stock and corporate bond markets, according to VIS, will encourage investor trading activity.
Among the 10 companies mobilizing new capital for business growth, 4 securities companies have completed capital increases: ACBS, DNSE, HCM and KAFI.
ACBS is a 100% subsidiary of Asia Commercial Joint Stock Bank (ACB), and has become an important contributor to ACB’s business growth strategy. DNSE intends to use its new capital to enhance its IT infrastructure and develop its fintech capabilities.
In addition, VCI previously announced plans to expand its operations towards individual investors; while for HCM and MBS, the additional capital will allow them to continue expanding their business while keeping their margin loan balance below the regulatory limit of 200% of total equity.
For companies with large portfolios of investments in corporate bonds and/or stocks such as ORS, SHS, VIX and VND, additional capital will enhance the risk absorption capacity of these companies.
Meanwhile, VIS Rating noted that capital increases by foreign securities companies have slowed down over the past two years. In fact, their business growth has lagged behind that of domestic companies. Margin lending by foreign companies has increased by 18% per year over the past two years, much lower than the 35% of domestic companies.
Viet Linh