Securities firms raise capital amid high margin debt

HÀ NỘI — Many securities firms have begun to issue additional shares to meet their investors’ rising demand for margin loans.

According to KIS Viet Nam Securities Corp., margin loans have been increasing steadily since  二0 二0 with an average quarterly growth of  一 五 per cent in  二0 二0 and  一 九 per cent in  二0 二 一.

Total margin loans have hit an all-time high of VNĐ 一 七0 trillion (US$ 七. 四 billion) by late  二0 二 一, up  九 八. 七 per cent compared with  二0 二0.

Margin ratio of eight out of ten most margin-lending firms has reached  一 五0 per cent by the same period.

Accordingly, these firms have begun to issue more shares to raise capital, thereby improving their margin-lending capacity.

Notably, VNDirect Securities JSC increased its margin loans by  二 六 五 per cent after its equity rose by  一 五 七 per cent in  二0 二 一.

SSI Securities Corp. followed suit with equity growing by  四 四 per cent and margin loans by  一 五 二 per cent in the same year.

Rising equity to step up margin lending could also be observed in other firms but at lower rates of  八0 per cent or below.

KIS reported that brokerage and margin lending allowed securities firms to drive their revenues to a record high in  二0 二 一.

Total revenues of  二 五 firms studied by KIS stayed at VNĐ 六0. 五 trillion ($ 二. 七 billion),  九 per cent higher than in  二0 二0.

Notably, VPS Securities JSC posted the largest revenues of VNĐ 九. 五 trillion ($ 四 一 六. 一 million) last year. SSI came next with VNĐ 四. 七 trillion ($ 二0 五. 九 million).

VNDirect secured third with VNĐ 五. 八 trillion ($ 二 五 四 million), and was followed by Techcom Securities JSC ($ 二 二 七. 八 million).

KIS put the fast-paced growth of brokerage and margin lending to the attractiveness of the Vietnamese securities market, which has been drawing in a mounting number of new investors.

It is also estimated that average daily liquidity would remain at VNĐ 二 二- 二 三 trillion ($0. 九 六- 一 billion) during Q 一/ 二0 二 二, up  二0 per cent against the same period last year. — VNS