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Upbeat securities firms to increase their charter capital

Update: March, 25/2015 - 08:14

KIS Vietnam Securities Corporation plans to raise its charter capital from the current VND263.6 billion (US$12.3 million) to VND1.113 trillion ($52 million) through a private share issue. — Photo Kis vietnam

HA NOI (VNS) — Many securities companies have recently announced plans to increase their charter capital, confident that the domestic stock market still has a lot of room for expansion in 2015.

According to many brokerages, stock indices on both exchanges in the country registered lower growth rates than expected by market participants and this lays a good foundation for stronger development this year.

The most impressive plan has come from KIS Vietnam Securities Corporation, which plans to raise its charter capital from the current VND263.6 billion (US$12.3 million) to VND1.113 trillion ($52 million) through a private share issue.

The Korean-invested company explained that it wanted to expand brokerage services to cover derivative products, which under the current regulation requires charter capital of securities companies be from VND900 billion ($42.1 million).

After the capital increase, KIS Vietnam will advance into the list of 10 largest securities companies in Viet Nam.

Early this week, the Vietnam Investment Securities Co (IVS) also approved a plan to raise its capital from VND161 billion ($7.5 million) to VND350 billion ($16.4 million) this year. In a document sent to shareholders, the company expressed confidence in the market outlook.

It said the market had room for development given the probable reduced inflow as a result of Circular 36, which limits lending for stock investments by commercial banks to 5 per cent of their (the banks') charter capital.

"Securities are a more attractive investment option at present compared to gold, foreign currency or real estate," it said.

However, the company also said it might not be easy to earn quick profits, and authorities needed to issue additional regulations to facilitate cash inflows, as well as introduce more investment products.

IB Securities Co (VIX) announced it would issue an additional 30 million shares to double its charter capital from VND300 billion ($14 million) to VND609 billion ($28.5 million). The shares would be offered to existing shareholders and its employees, the company said.

According to the company, stable economic development and accelerated equitisation of State-owned enterprises as well as their plans to divest from non-core businesses this year will release more quality products into the market, attracting both domestic and foreign investors.

Even a small brokerage firm like Royal Securities Corporation has announced its plan to hike its capital from VND35 billion ($1.6 million) to VND135 billion ($6.3 million). It plans to sell 10 million shares to shareholders at VND10,000 a share. — VNS

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