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Brokerages start to resume lending against shares
The recent rally in the stock market has prompted local brokerages to resume lending against shares.
Sacombank Securities Company, known as SBS, was the first brokerage to resume the service, allowing their clients to use shares to back their borrowing. SBS accepts 15 large caps on the Ho Chi Minh Stock Exchange and some unlisted stocks, including Eximbank, Military Bank, Habubank, furniture maker Hoang Anh Gia Lai and construction firm Vinaconex.
The HCMC-based brokerage offers a lending interest rate of 1.75-1.8 percent per month.
Figures from SBS show it lent VND50 billion (US$3 million) for lending against shares in one month after reoffering the service. The brokerage said it would raise the amount used for lending against shares by VND100 billion to VND300 billion.
Vincom Securities Company, known as VincomSC, has announced it will also resume lending against shares this month. With financial support from the Bank for Investment and Development of Vietnam, VincomSC plans to use VND25 billion for the service.
The Hanoi-based brokerage’s deputy director, Bach Nguyen Vu, said VincomSC would pick 20 stocks that investors can use to back their borrowings. The stocks, both listed and unlisted, will have to have high liquidity and healthy business operations. Vu said resuming lending against shares will not only improve the marketplace’s liquidity, but also generate profits for the firm.
But some brokerages remain cautious about resuming the service.
Dai Viet Securities Company general director Lam Minh Chanh said his firm will resume lending against shares in the near future, not now.
A director at another HCMC brokerage, who wished to remain unnamed, said despite the market rebound, he was still cautious because lending against shares carries a “high risk level.” Some other brokerages said they only allowed very important clients to use shares to back their lending.
An independent stock expert in the city, Huy Nam, said brokerages lending against shares should have adequate finances to do so. Therefore, “the resumption by local brokerages shows that the market is positive,” he added.
Thanhnien
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