Securities firms see large jump in margin lending

Illustrative photo (Source: vneconomy.vn)

Vietnam Economic Times cited its statistics as showing that the combined margin lending of the 18 firms rose by 18.4 per cent against the beginning of this year and 143 per cent compared with 2015’s figure.

The 2016-17 period saw the margin lending of the reviewed stock brokerage firms jump by 63 per cent, the peak level seen in the past five years. This was matched by impressive growth in market capitalization during the five-year stint.

SSI Securities Corporation recorded the highest margin lending with VND6.256 trillion (US$269 million) by late June, up 6 per cent since the beginning of this year and 76 per cent against 2015.

Of note, four foreign-invested securities firms were named among the top five that reaped the highest profit from their lending and receivable accounts during the first half of this year. These companies also led margin lending activities throughout the past five years.

Mirae Asset Securities Vietnam LLC topped the list. By June, the firm saw its margin lending skyrocket by 63 times to VND4.861 trillion (US$209 million) against the 2015 figure.

It was followed by Yuanta Securities Vietnam Joint Stock Company whose margin lending reached VND1.684 trillion (US$72.41 million) by June, a 22-fold increase in comparison with the 2015 figure.

Elsewhere, KB Securities Vietnam JSC enjoyed a four-fold increase in its margin lending to VND1.951 trillion (US$83.89 million) as of June, a rise from VND436 billion (US$18.74 million) in 2015.

A limited space exists for small-cap securities firms who struggle to gain a larger market share from big players, especially foreign-invested ones. Major foreign-invested securities firms have constantly pumped capital into the market through increasing margin lending activities as a means of enlarging their client network and gaining higher profits.