OPPORTUNITIES FOR FOREIGN SECURITIES COMPANIES

The Vietnamese stock market entered the second half of the year with many positive developments. The chance of being upgraded by FTSE Russell is stimulating investor confidence more than ever and this also attracts great interests from foreign securities companies.

However, it is not easy for foreign securities companies to join, stand firm and increase their competitive advantages in the Vietnamese market. So, what will they do to affirm their positions there?

Market magnet

Vietnam's stock market is becoming a leading light in the region as its size increased by nearly 11% to reach VND3,900 trillion (US$170 billion) in 2018, equivalent to 70.2% of the country's gross domestic product (GDP). The average daily trading value also climbed 29% to VND6,500 billion. Meanwhile, the derivatives market expanded 6 times in liquidity and 2.7 times in open positions.

The prospect of being upgraded to an emerging market, economic growth momentums and support and incentive policies for foreign investors are motivating many foreign securities companies to make inroads into Vietnam. In fact, in 2019, many companies appeared on the market and gradually encroached on domestic firms. To increase their competitiveness and gain the market share, foreigners did not hesitate to pour funds to hike their authorized capital to edge up the competitive advantage and overwhelm domestic rivals.

Typically, Mirae Asset Securities (MAS) increased its registered capital from VND2,000 billion in late 2017 to VND4,300 billion, becoming the second largest broker by authorized capital value in Vietnam.

By law, a brokerage house must have the registered capital of VND600 billion to trade derivatives and VND800 billion to broker derivatives. Thus, with its latest capital hike, Mirae Asset will power up its financial capacity and increase its attraction to investors.

The South Korean corporation, which has long-term operating experience in major markets in the region and in the world, is making great efforts to bring more products to investors in Vietnam. Technologically, Mirae Asset also continually renovates its order-placing system by utilizing its own system in South Korea or mobile ordering applications, which are currently by Mirae Asset in Vietnam.

Mirae Asset is currently boosting securities brokerage business and providing financial products through its operations in Vietnam to diversify financial products, help investors with more choices of effective financial investment. With a global network, Mirae Asset is looking for opportunities from high quality global assets to deliver attractive products to customers.

International experience and struggle for market share

In July 2019, the market continued to strengthen the investor confidence and many investors returned to the market on positive macroeconomic information in the world. Accordingly, the United States Federal Reserve (Fed) signaled to reduce interest rates in July and U.S. - China trade tension showed signs of cooling down. Investors strongly focused on large-cap stocks, especially banks, oil and gas stocks.

According to experts, the market will rebound when liquidity is gradually improved. Combined with external positive information - the U.S. and China may reach a trade agreement and the FED continues to pursue a cautious interest rate policy - and positive domestic macro factors, the market will stage an upward trend in the second half of 2019.

The market growth is appealing securities companies. The presence of foreign firms not only diversifies the market and offers more choices to investors but also brings international operation and governance experience and advanced technology. This will place pressures on domestic securities companies to invest in their system reconstruction.

Taking part in Vietnam's stock market, Mirae Asset launched many incentive programs for VIP customers and loyal customers. These customer care programs are fruitful in South Korea.

Thus, in addition to the diversity of securities types, the good absorption of the market is generating many advantages for Vietnam’s stock market. The struggle for market share, joined by foreign rivals, will bring a wealth of opportunities to investors.

Source: VCCI