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Securities companies lower fees to retain clients
A lot of securities companies have announced they will cut service fees by half in order to overcome the current difficulties of the market.
ACB Securities (ACBS) was the pioneer in the movement when it announced it would cut its service fee by 50% to 0.2% at the same time the State Securities Commission slashed the daily trading band to 1% and 2%.
Bao Viet Securities BVSC) has also announced a 50% reduction in the service fees applied to foreign and domestic institutions and individuals.
The companies are considered the biggest ones now in the market. ACBS has 27,000 investor accounts, while BVSC has the more seniority than any other company in the market. Therefore, the decisions by the two companies have led to a wave of cutting fees.
On April 3 and 4, two other big securities companies, Vietcombank Securities (VCBS) and Saigon Securities Incorporated (SSI), also announced they would follow the move. The former announced a 50% reduction in service fees applied for the period between April 7 and May 7, while the latter cuts fees based on transaction value.
It is expected that other securities companies, which are now under pressure from fierce competition, will have to follow the move.
Analysts say that securities companies have to adjust service fees to be suitable to the new circumstances. From March 27 to April 4, the daily trading bands were 1% only for the HCM City Stock Exchange and 2% for Hanoi Securities Trading Centre, while the service fee was 0.4%, which meant lower profit for investors.
However, analysts say that the fee reduction has been putting big difficulties on securities companies, especially those whose main source of income is brokerage services.
Statistics show that the trading volume of stocks and fund certificates last week was VND150bil on average, while some trading sessions even saw the trading volume of only VND70bil. With the average service fee of 0.4%, 90 securities companies can get VND10mil per company per trading session. As the market now is being dominated by 10-15 top securities companies, the income of other companies proves to be low, and in some cases, the monthly income of the companies is lower than the daily earnings of big securities companies.
Now, as securities companies have decided to cut the service fee to 0.2%, they will have to face bigger difficulties, losses and even bankruptcy.
Nevertheless, it seems that securities companies do not have other choices than cutting fees.
Nguyen Thi Bich Lien, Director of VCBS, said that the company cut its service fees in order to share difficulties with its clients. Nguyen Ngoc Chung, Deputy General Director of ACBS, said that the fee cutting is the implementation of the State Securities Commission’s instruction on stabilising and developing the stock market.
Meanwhile, the director of a newly set up securities company said that the fee reduction would help retain investors in the market. However, he said that the 50% fee reduction should be the maximum level, adding that higher reductions would lead to unhealthy competition among securities companies.
VNN
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