The capital scale of securities companies has grown robustly in the past two years. In the context of the current sharp decline in market liquidity, this resource is somewhat redundant, and the race to attract customers is heating up.
The Ministry of Finance yesterday said that in the first seven months of 2022, businesses issued individual bonds worth VND262,250 billion, down 10.9 percent compared to the same period in 2021, of which 52.3 percent of the issuance volume has collaterals.
Because commercial banks have tightened control over real estate loans, property firms and developers have to seek alternative ways to raise their capital, and many of them have decided to issue bonds to fund their business.
A recent trend of borrowing foreign unsecured loans for businesses and investment activities of securities companies has become quite popular as it allows cheap capital to flow freely. This has also become an important capital source which is contributing to more growth of liquidity in the domestic stock market.
Many individual investors lost their money when the stock market dropped sharply in April this year. This has led to an analysis of the workings of securities companies, and ways to bring about more transparency in their dealings.
Regarding the incident in which nine private bond offerings of the group of companies under Tan Hoang Minh Group were canceled by the State Securities Commission (SSC), some related banks and securities companies have simultaneously informed about it.
In the trading session on January 20, Vietnam stock market rebounded. Along with the brilliant growth of the Vietnamese stock market in 2021, a series of securities companies have announced huge profits.
The Ministry of Finance (MoF), on the evening of January 10, informed that it had assigned relevant agencies to urgently clarify the temporary instability of the Gateway system - the system that returns market information to securities companies - at the Ho Chi Minh City Stock Exchange (HOSE).
The market did not witness a mobilization race between banks this year, although capital mobilization increased slowly. The main reason is due to redirection of capital mobilization through bonds, as most bonds issued by commercial banks were purchased in full by securities companies.
In the first two quarters of 2021, real estate companies are the winners of corporate bond issuance, with an issuance value of up to VND92.3 billion and an average interest rate of 10.36 percent per annum. In the context that interest rates on bank deposits stand at an extremely low level, corporate bonds remain attractive, especially for individual investors. On the other hand, many investors have been circumventing regulations over the past time.
Currently, VN-Index has declined by about 12 percent from the peak of 1,420 points on July 2. However, experts assessed the fluctuations of the stock market in July this year to be short-term. The stock market still has many development opportunities in the long term, continuing to affirm its role as an important capital mobilization channel.
The Ministry of Finance, on July 13, informed that after six months of implementing the new legal framework on corporate bonds, the volume of corporate bonds issued through private placement was above VND168.7 trillion, up 3.2 percent over the same period last year. The volume of corporate bonds issued through public offering was more than VND15.37 trillion, equivalent to 50.3 percent of bond issuance volume in 2020, accounting for 8.3 percent of total corporate bond issuance volume.
After some securities companies reopened the order editing and canceling feature in the previous trading session, on June 10, the Ho Chi Minh City Stock Exchange (HoSE) sent an official dispatch, requesting securities companies to manage the amendment and cancellation of orders during peak hours to avoid putting pressure on the trading system of the HoSE.
Vietnam’s stock market in the first quarter of this year saw a breakthrough of the indexes with the VN-Index jumping by nearly 8 percent compared to the beginning of the year, making securities companies in the market in Q1 record huge profits compared to the same period last year.