Market’s margin trading balance reaches nearly VND66. trillion

24-Oct-2020 Intellasia | BizLIVE | 6:02 AM Print This Post

The margin balance of the 20 largest securities companies in the market at the end of the third quarter (Q3) reached 57.612 trillion dong, up by about 15 trillion dong, equivalent to an increase of 33 percent compared to the end of Q1 when the market reached the bottom of 660 points.

Domestic cash flows including Margin balances the continuous selling force of foreign investors.

At the end of the last trading session in September 2020, the VN Index stopped at 905.21 points, up by 9.71 percent in Q3, although the second Covid-19 outbreak in late July 2020 with the focus on Da Nang has much affected the production and business activities of businesses.

With this recovery momentum, the VN Index recorded the best global growth in Q3, in contrary to large markets in the world. Compared to the beginning of the year, the VN Index was only five percent lower.

Along with the recovery in points, the market liquidity also rose significantly. The average matching value on the HoSE in Q3 was 4.535 trillion dong per session, up by four percent compared to Q2, and up by 56 percent compared to the same period of last year. This is also the highest liquidity level since the market boomed in Q1 2018 until now.

Contributing to the liquidity and the increase of the VN Index was margin lending balance. According to statistics, the outstanding loans (mainly margin loans) of the entire market by the end of Q3 2020 reached about 60 trillion dong (approximately 2.8 billion US dollars). This is a record high level in the Vietnam’s stock market since its establishment.

Considering the 20 largest securities companies in the market, the total outstanding margin by the end of Q3 reached 57.612 trillion dong, up by about15 trillion dong (up by 33%) compared to the end of Q1 when the market bottom out at 660 points, and increased by 19 percent compared to Q2 2020.

The margin cash flows from domestic investors have made an important contribution to help the market stand firm under the strong net selling pressure of foreign investors. In Q3, foreign investors net sold 2.1 trillion dong on the HoSE and if excluding the VHM put through transactions, foreign investors actually net sold more than seven trillion dong via order matching channel. Normally, whenever foreign investors boost net selling, the market movements will be negative. However, in the recent quarter, domestic cash flows (including margin) have balanced this selling force.

The outstanding loans of securities mostly grew in Q3 2020, such as HSC (42%, reaching 6.022 trillion dong), VPS (up by 57 percent to 3.172 trillion dong), VCSC (up by 49%, to 3.010 trillion dong, VDSC (up by 31 percent to 1.729 trillion dong, etc.

Mirae Asset, a representative from South Korea, has continued to take the leading position in outstanding margin loans with a growth of up to 13 percent in Q3, reaching 9.670 trillion dong. This is also a new record in outstanding loans of the Vietnam stock market. The outstanding loans of Mirae Asset by the end of Q3 2020 were approximately equal to the total outstanding loans of HSC (6.022 trillion dong) and KIS (3.854 trillion dong).

For the group of securities companies with outstanding loans of less than one trillion dong, Pinetree is a notable name when continuously recording sharp rise of 59 percent in outstanding loans by the end of Q3, reaching 251 billion dong. It is the securities company with the highest outstanding loans in the market.

The presence of foreign securities companies, including securities companies from South Korea, has created a great pressure for domestic securities companies in terms of market share and margin interest rates. in 2019, the top securities companies saw very major changes in charter capital, outstanding margin loans to market share, due to South Korean securities companies.

Specifically, in 2019, Mirae Asset completed the increase of capital to nearly 5.5 trillion dong and surpassed Saigon Securities Incorporation (SSI) to have the largest charter capital in Vietnam. In addition to Mirae Asset, in the top 10 securities companies with the largest charter capital in Vietnam, there is also the presence of KIS, KB Securities with charter capital of respectively 1.897 trillion dong and 1.675 trillion dong.

In Q3, three foreign securities companies were in the top 10 outstanding loans and all are South Korean companies, including Mirae Asset, KIS and KB Securities.

 

Category: Stocks, Vietnam

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