VietNamNet Bridge – There is a wave of foreign investors hunting for Vietnamese securities companies. Analysts believe that now is the right time to buy securities companies because the companies are cheap.
There are many factors that have prompted foreign investors to seek to purchase Vietnamese securities companies. The stock market is gloomy, which makes the stocks of companies, including securities companies, become cheaper. Besides, the prices of the companies have been going down, because from early 2012, Vietnam must allow 100 percent foreign invested securities companies to set up in Vietnam as per commitments Vietnam made when joining the World Trade Organization (WTO). This means that foreign investors will be able to easily establish securities companies of their own instead of having to take the “roundabout route” by purchasing Vietnamese enterprises.
Purchasing operational Vietnamese securities companies remains a good choice for foreign investors. If they do so, they will not have to spend time on following procedures to establish companies, while they can also take full advantage of the existing network. Besides, as operational securities companies have a certain numbers of clients already, it will be easier to expand the market share.
On February 24, Japanese Nikko Cordial Securities Company officially became a strategic shareholder of PetroVietnam Securities Incorporated PSI, when the two sides signed a strategic cooperation agreement. Nikko Cordial has paid 133.7 billion dong to buy 14.9 percent of PSI’s stakes at 15,000 dong per stake, raising the total chartered capital of PSI from 509.25 billion dong to 598.413 billion dong
Prior to that, ROK Securities and Investment Company purchased nearly 49 percent of stakes of Vietnamese Gia Quyen Securities Company EPS. When asked if this could be seen as the first step for the South Korean company to implement its plan to purchase the whole EPS, just some months before early 2012, when foreign investors will be allowed to set up 100 percent foreign invested securities companies, Le Quoc An, Chair of EPS, said that maybe this is the strategy of the foreign partner. An also said that whether to transfer all the stakes to the foreign partner will depend on shareholders’ decision.
Meanwhile, a lot of other affairs are under negotiation. Japanese SBI Securities is negotiating to purchase 20 percent of stakes of FPT Securities. A lot of other deals have been made, including cases in which Huong Viet Securities Company sold 48.33 percent of stakes to Singaporean Morgan Stanley, Click and Call sold 49 percent of stakes to South Korean Golden Bridge, Saigon Securities sold stakes to Japanese Daiwa Securities and ABZ Bank, Vietnam Securities Company sold 49 percent of stakes to Malaysian RHB Bank.
According to analysts the market of Vietnamese securities companies has become hot these days, because the moment when foreign investors can set up 100 percent foreign owned securities companies is nearing. Besides the 20 securities companies which earned profits in 2010 and are now facing many difficulties, the number of such companies tends to increase, since the VN Index keeps falling down. This allows foreign investors to easily negotiate with Vietnamese companies and to able to purchase companies at good prices.
According to the Director of the Market Development Department under the State Securities Commission Nguyen Son, the agency is considering building up regulations stipulating mergers and acquisitions and the trade of securities trading institutions. The management agency is encouraging restructure of companies and upgrading the quality of services for the stock market.
There are 105 operational securities companies, a relatively high number of securities companies, if noting that Vietnam remains a small fledgling market, with only one million accounts.