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Mid-cap brokerages gobble up major market share
Thang Long Securities Company is proving to be something of a giant-killer in gaining market share from more heavily capitalised brokerages.
In a report on first-quarter brokerage market share issued on Wednesday by the Ha Noi Stock Exchange, Thang Long Securities outperformed 104 competitors to seize the leading market share, accounting for 11.94 percent of the brokerage services market.
The first-quarter report from the HCM City Stock Exchange also put Thang Long Securities in the spot as the leading brokerage, with a market share of 9.37 per cent. Saigon Securities Inc (SSI) was the runner-up, with a market share of 8.47 per cent.
With charter capital of VND300 billion (US$15.8 million), Thang Long is viewed as a mid-cap brokerage, yet it managed to beat out more heavily capitalised Goliaths like Kim Long Securities Company, Saigon Securities Inc, and Agribank Securities Comapny, each with up to VND1 trillion ($52.6 million) in capital.
FPT Securities Company and VNDirect Securities Company were also in the top ten, along with such other medium-capitalised companies as Viet Nam International Securities Company (VIS) and An Binh Securities Company, each capitalised at VND200-400 billion.
"Mid-cap securities companies began achieving significant market share in brokerage services provision in the middle of last year, when the market began to rally on the stronger participation of individual investors," said an independent securities analyst who asked to have his name withheld.
Many of these smaller-scale investors had previously complained of the poor services they had received from larger brokerages in 2007-08, prior to the financial crisis.
"This accidental advantage helped medium-d companies increase their market share in providing brokerage services once the market recovered," he added.
John Nolan, a market analyst with a HCM City-based fund management company, said that efforts of these companies to upgrade technology and improve service quality also paid off.
"Some securities firms which had had great potential in finance were lazy in reforming themselves," Nolan said. "They became stuck in old ways of doing things and fell behind."
Many of these neglected the retail brokerage market in favour of large institutional traders, which they saw as more profitable. "It they persist in this thinking, they'll soon be beaten," he said.
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