Brokerage market gets more fragmented

Data released Tuesday by the Ho Chi Minh Stock Exchange, Vietnam’s main bourse, showed that the top five market share brokerages in 2019 were domestic firms, which held 44.27 percent.

Saigon Securities Inc. (SSI) and Ho Chi Minh City Securities Company (HSC) continued to retain their top two positions with respective market shares of 13.96 percent and 10.54 percent, while Ban Viet Securities Company (VCSC) dislodged VNDirect Securities Company (VNDS) to take third place with 8.19 percent.

VNDS stood fourth with 6.81 percent, followed by MB Securities Company (MBS), the finance arm of state-owned Military Bank, with 4.77 percent.

The top ten saw two new entrants this year, Mirae Asset Securities Vietnam (MAS) and KIS Vietnam Securities (KIS), both local subsidiaries of South Korean firms, in sixth and tenth position respectively.

Domestic brokerage giants have been facing increasing competition from South Korean securities firms who have been active in raising their charter capital and carrying out a series of mergers and acquisitions in 2019, trying to tap a young but potential market.

MAS, the first large Korean securities company to enter the Vietnamese market, has been aggressive in expanding its business since acquiring a license to trade in derivative products at the end of 2018.

In mid-December, the subsidiary of South Korean finance giant Mirae Asset Financial Group announced it had successfully raised its charter capital to VND5.46 trillion ($235.5 million), becoming the broker with the largest charter capital in Vietnam market.

Between 2016 to 2018, Mirae Asset had continuously pumped capital into MAS, raising its charter capital from VND300 billion ($12.9 million) to VND4.3 trillion ($185.4 million).

Several other South Korean-owned securities companies in Vietnam have also increased their charter capital in the last two years.

KIS Vietnam, owned by Korea Investment & Securities Co., Ltd, raised its charter capital by VND784 billion ($33.8 million) to nearly VND1.9 trillion ($81.93 million) in mid-2018, while Shinhan Vietnam, owned by Seoul -headquartered Shinhan Bank raised it by VND145.4 billion ($6.27 million) to VND812 billion ($35 million).

Another firm, KB Securities Vietnam (KBSV), set up in early 2018 after South Korean KB Financial Group acquired domestic Maritime Securities for $33.2 million, had its charter capital raised to VND1.1 trillion ($47.4 million) in December 2018, and to VND1.67 trillion ($72 million) in the first quarter of 2019.

According to the HoSE, shares of most leading securities companies this year on the stock exchange lost value because of the rising competition from several South Korean securities companies entering Vietnam this year. SSI shares of Saigon Securities Inc. fell the most with a 29 percent drop through the course of last year.

There are six Korean-invested securities companies operating in Vietnam at present.