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BIDV Securities plans to raise charter capital

Update: April, 11/2015 - 08:58
BSI plans to hike its charter capital from US$40.4 million to $46.7 million this year. — Photo

HA NOI (VNS) — The Bank for Investment & Development of Viet Nam's Securities Company (BSI) plans to hike its charter capital from VND865 billion (US$40.4 million) to VND1 trillion ($46.7 million) this year through an issue of additional 13.5 million shares.

The share issue is expected to be implemented in the second quarter of the year.

According to a document sent to shareholders before the annual shareholders' meeting on April 11, BSI said its current charter capital as well as long-term capital was quite modest compared with that of the top three brokerage companies in the market.

The capital hike also aimed to meet the criterion set in a legislative proposal that charter capital of securities companies must be no lower than VND1 trillion if they want to offer brokerage service for derivative products, the company said.

Viet Nam is making plans to develop a derivative market in the next two years.

BSI was the ninth largest brokerage firms in terms of stocks and bonds on the HCM Stock Exchange in the first quarter with 4.07 per cent of market share. Meanwhile, it ranked fifth on the Ha Noi Stock Exchange with market share of about 5.2 per cent.

The company's executives also believe bank lending to securities investment would fall in the future after Circular 36 took effect in February. This requires loans for stock business not to exceed five per cent of a bank's charter capital.

"The increase in charter capital is to offset the reduction in short-term loans by commercial banks in 2015," the document said.

It is planned to sell the shares to financial investors with a preference for foreign companies. The selling price will not be lower than VND10,000 (46US cents) a share.

For the longer term, BSI wants to lift its charter capital to VND1.5 trillion ($70 million) during 2019-20 and up to VND2 trillion ($93.5 million) by the end of 2020 - if market conditions are favourable.

Charter capital of big brokerage companies, including Saigon Securities Inc (SSI), HCM Securities Corp (HCM), ACB Securities Co and MB Securities Co, is between VND1.2 trillion ($56.1 million) to VND3.5 trillion ($163.6 million). Other mid-sized companies also have plans of growing their capital this year. — VNS

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