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Brokerages seek strategic foreign partners
Competition among the nation's stock brokerages is heating up, prompting many firms to seek foreign strategic partners to help expand market share.
Gia Quyen Securities Company recently sold a 49-per-cent stake to Korea Investment and Securities Company, increasing its charter capital in the process to VND270 billion (US$14.2 million).
Earlier, Japan's Aizawa Securities Co., Ltd and Japan Asia Holding Co., Ltd, along with Hong Kong's Tanamark Investment Ltd, became strategic partners of Hoa Anh Dao Securities Company – now known as Japan Securities Inc (JSI) – with a combined holdings of 49 per cent of the firm's equity.
Last year, Bien Viet Securities Comapny changed its name into Woori CBV Securities Company after Woori Investment and Securities Co., Ltd bought a 49-per-cent stake in the local firm.
Seven other such deals have been recorded since 2008.
HCM City Securities Company General Director Johan Nyvene said foreign partners were eager to invest in a developing market such as Viet Nam, where the number of investor accounts represented just 1.5 per cent of the total population.
"While developed markets provide less room for expansion, leading foreign companies are targeting developing markets for a new development cycle," Nyvene said.
The Vietnamese stock market promised great business potential since the process of equitisating State-owned enterprises was being accelerated, he added.
Local brokerages also expected such strategic collaboration with foreign partners to help them enhance their financial capacity, meet increasing demand of corporate clients to list shares, and attract foreign investors.
"Japanese investors highly value the rapid development of the Vietnamese economy," said JSI general director Yokoyama Norio.
Foreign partners can also assist local companies in corporate governance and technology transfer as well as enhance the company's prestige on the market.
HCM City Securites Company, established in 2003, only secured its position among the top three securities companies in Viet Nam once its foreign strategic partner, Dragon Capital, increased its holding to 30 per cent and restructured the firm's management.
Kim Eng Vietnam Securities Company, established in 2008, advanced into the top 10 brokerage firms after only a year in operation. The firm's success was attributed to the support of its strategic partner, Singapore's Kim Eng Holding Ltd, in technology investment and risk management, a company representative said.
A number of foreign-invested securities companies, however, have not performed so well as expected. For instance, Thanh Cong Securities Company had to wait for its second shareholders meeting until its 2010 business plan was approved due to the difference in business cultures between the local company and its Thai strategic partner.
The director of a Ha Noi-based brokerage who asked to remain anonymous said partners should work out differences, particularly in corporate management styles, prior to entering into any strategic co-operation.
vietnamnews
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