Margin picture in the first half of 2021: Securities companies pumped more billion USD in Q2, boosting lending thanks to bank capital and issuing more

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According to statistics as of June 30, the total margin lending value of 50 securities companies was about 126,344 billion VND, an increase of more than 26,000 billion VND in the second quarter. In which, the 20 securities companies that lend the most margin have outstanding loans of 112,518 billion dong.

Margin lending increased by more than $1.1 billion in the second quarter

Vietnam’s stock market traded explosively in the first half of 2021 when a large amount of money from the public poured in. In the first half of this year, the number of securities trading accounts in Vietnam increased by 623,230 accounts, 57.2% higher than the whole of 2020. This number of new accounts is also higher than what was achieved in the whole of 2019 and 2020.

Closing in June, VN-Index was at 1,408.35 points, up 27.6% compared to the end of 2020. The average trading value of the session reached 19,639 billion dong, up 198.44% compared to the liquidity in 2020. Worth mentioning, in May and June, trading sessions with matching value in the range of USD 1 – 1.5 billion became familiar to the market.

When the transaction value is pushed up, the demand for margin loans of investors also increases. According to the writer’s statistics, as of June 30, the total margin lending value of 50 securities companies is about VND 126,344 billion, an increase of more than VND 26,000 billion in the second quarter.

Margin lending at securities companies. Source: Compiled by HL.

In which, the 20 securities companies providing the most margin loans have outstanding loans of VND 112,518 billion. By comparison, the margin at these units increased by 20,600 billion dong in the second quarter, higher than the 15,424 billion dong in the first quarter.

Thus, since the Vietnamese stock market bottomed in early April 2020 and experienced a series of sublime trading days, the demand for margin loans has grown strongly. Particularly at the 20 largest companies, this value increased by about 66,400 billion VND (2.8 billion USD).

SSI Securities surpasses Mirae Asset for the largest margin lending in the market

Margin loans of securities companies as of June 30, 2021. Source: Compiled by HL.

Through observation, the amount of money injected for margin lending in the first half of this year was mainly from large securities companies. Statistics show that there are 14 units that increase margin lending value by trillion dong in the first 6 months of the year. The three strongest margin lending growth units in the market are all domestic companies, namely SSI (VND 6,527 billion), VNDirect (VND 4,230 billion) and TCBS (VND 4,110 billion).

In the group of foreign companies, Mirae Asset (Vietnam) and KIS Vietnam are two representatives in the Top 10 units with the strongest margin lending growth in the market. Quarterly lending value of Mirae Asset (Vietnam) and KIS Vietnam increased by VND 2,975 billion and VND 1,580 billion in the first 6 months of this year.

With the rapid disbursement in the second quarter, SSI Securities (Code: SSI) rose to become the largest margin lending unit in the market. As of June 30, the total value of SSI’s margin lending was VND 15,539 billion, a record of this company. Following that, Mirae Asset (Vietnam) has a margin balance of VND 13,336 billion.

The top 5 largest margin lending companies in the market also include HSC Securities (Tcode: HCM), VNDirect Securities (Ticket: VND) and Technological Securities (TCBS), with a value of 9,169 billion dong, 8,534 billion dong, respectively. VND and 8,137 billion VND.

Top 10 strongest margin lending growth companies in the first half of 2021. Source: HL compilation.

Monitoring margin lending activities of securities companies shows that companies promote lending through two sources of capital. The first is to mobilize capital from financial institutions, especially international sources. The second source is issuing shares to existing shareholders.

The group raised capital through funding from banks such as SSI, TCBS, and SHS. For example, in the first half of this year, Saigon – Hanoi Securities (Code: SHS) received an additional loan of nearly VND 1,500 billion from SHB. Similarly, TCBS also borrowed more than 2,800 billion dong from banks. In the case of SSI, the company mobilized through international organizations by the end of 2020.

In addition to loans, companies promote margin lending through raising capital by issuing shares to shareholders such as VNDirect or KIS Vietnam.

On the other hand, some companies showed signs of “running out of money” for margin loans when they reached the ceiling and ran out of room for loans. As a rule, companies are only allowed to make a margin loan worth twice the equity.

Meanwhile, on June 30, the margin lending to equity ratio at some companies exceeded 180% such as HSC, Yuanta Vietnam, Phu Hung, Mirae Asset (Vietnam). With the above limit, margin lending growth at some companies in the second quarter was lower than VND 300 billion such as HSC, Yuanta Vietnam.

Source: – Translated by