Cash reserves in stock accounts at six-quarter low amid margin rise

Investors at a trading office of a securities firm in Hà Nội. — VNA/VNS Photo

The deposit balances held in investor accounts at Vietnamese securities firms have declined to around VNĐ73 trillion (US$2.9 billion) as of December 31, 2024, marking the lowest level in six quarters.

The amount decreased about VNĐ18 trillion from the end of the second quarter of 2024. These funds are readily available in investor accounts, but remained undeployed as of the year-end.

VPS Securities continues to lead with the highest customer deposit balance, totalling over VNĐ17.1 trillion by the end of December 2024.

However, this figure reflects a significant reduction of nearly VNĐ5.7 trillion from the previous quarter.

VPS maintains its position as the top brokerage firm across the Hồ Chí Minh Stock Exchange (HoSE), Hà Nội Stock Exchange (HNX), UpCOM and derivatives markets, which explains its substantial investor deposit base.

Notably, the gap between VPS and its competitors has been narrowing in recent quarters.

Techcom Securities (TCBS) reported over VNĐ10 trillion in client deposits, ranking second in the industry, with an increase of more than VNĐ2 trillion within a single quarter.

TCBS is among the few firms that experienced an uptick in investor deposits during the final quarter of 2024.

Other prominent firms, such as SSI Securities and VNDirect Securities, reported investor deposit balances of VNĐ5.4 trillion and VNĐ4.9 trillion, respectively.

Mirae Asset Securities and VCB Securities each held over VNĐ3 trillion in client deposits.

In contrast to the decline in cash reserves, lending activities at securities companies have reached new heights.

By the end of the fourth quarter, total outstanding loans stood at approximately VNĐ245 trillion (around $10 billion), an increase of VNĐ13 trillion from the previous quarter.

Margin lending accounted for an estimated VNĐ240 trillion, up by VNĐ17 trillion from the end of the third quarter, setting a new record in Vietnamese stock market history.

The number of domestic investor accounts has also been on the rise.

As of December 2024, retail domestic investors held over 9.2 million accounts, representing about 9 per cent of the population.

This marks an increase of 2 million accounts over the year, achieving the target ahead of the 2025 schedule and setting sights on 11 million accounts by 2030.

However, the surge in new accounts may not accurately reflect the influx of new investors, as inpiduals can easily open multiple accounts across different brokerage firms.

The fluctuating benchmark VN-Index has likely deterred fresh capital inflows, with the market lacking strong catalysts to establish a short-term upward trend.

This environment has impacted investor sentiment, leading some to withdraw funds from their accounts, contributing to the observed decrease in cash reserves.

In the final quarter of 2024, the stock market remained subdued, with average matching liquidity falling below VNĐ13 trillion per session on the HoSE. This downward trend continued into January 2025, as the market entered the traditional Tết holiday lull.

Additionally, the stock market faces intensified competition from other investment channels, such as gold and real estate, which have seen significant price increases, as well as safer options like savings deposits.

Data from the State Bank of Việt Nam (SBV) showed that as of October 2024, deposits from both economic organisations and residents have grown, reaching record levels.

Particularly, the savings of households in banks reached nearly VNĐ7 trillion, showing an increase of VNĐ20.4 trillion from September and a rise of around 6.5 per cent since the start of the year.

On the other hand, deposits from businesses and economic entities (referred to collectively as enterprises) reached a record high of VNĐ7.1 trillion by the end of October 2024, up 4.63 per cent from the end of 2023.