NATIONAL ECONOMICS UNIVERSITY

ADVANCED EDUCATION PROGRAMS

-***

TEAM WORK
COURES: SECURITIES MARKET 2
TOPIC
Securities companies in the Vietnam stock market

Name: Group 8
Class: Corporate Finance 63E
Teacher: Vu Thi Thuy Van

Ha Noi – 10/2023
TABLE OF CONTENT
LIST OF FIGURES, TABLES 3
INTRODUCTION 4
1. OVERVIEW OF SECURITIES COMPANIES IN VIETNAM 5
1.1. Overall 5
1.2. Securities Operations 5
a. Stock Brokerage 5
b. Proprietary trading 7
c. Underwriting 8
d. Investment consulting 8
1.3. Analyse 8
2. BUSINESS ACTIVITIES OF SOME SECURITIES COMPANIES 10
2.1. Introduction of some selected securities companies 10
2.2. Evaluation criteria for business activities of some securities companies 11
2.2.1. Criterion of efficiency evaluation 12
2.2.2. Criterion of profit evaluation 18
2.2.3. Criterion of liquidity evaluation: 19
3. OPPORTUNITIES AND CHALLENGES OF VIETNAMESE SECURITIES
COMPANIES 21
3.1. Opportunities of Vietnamese securities companies 21
3.2. Challenges of Vietnamese securities companies 22
4. RECOMMENDATIONS FOR THE CHALLENGES OF VIETNAMESE SECURITIES
COMPANIES 23
4.1. Recommendations for policymakers 24
4.2. Recommendations for securities companies: 24
CONCLUSION 26
REFERENCES 27

LIST OF FIGURES, TABLES

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Figure 1: The market share of companies on the HNX in the past 4 quarters
Figure 2: The market share of companies on the HOSE in the past 4 quarters
Figure 3: The capital that securities companies raised from 2021 to the 2nd quarter of 2023
Figure 4: Proportion of revenue from SSI for the period 2020-2022
Figure 5: Proportion of revenue from HSC for the period 2020-2022
Figure 6: Proportion of revenue from VNDIRECT for the period 2020-2022
Figure 7: Proportion of revenue from VCI for the period 2020-2022
Table 1: Compare capitalization of some securities companies in Vietnam
Table 2: The degree of change in net revenue of securities companies in 2020-2022
Table 3: Operating expense ratio of securities companies in 2020-2022
Table 4: Proportion of revenue from securities company operations
Table 5: Degree of change in capital of securities companies in the period 2020-2022
Table 6: The profitability indicators of securities companies in the period 2020-2022
Table 7: Capital adequacy ratio of securities companies in the period 2020-2022
Table 8: Debt index and payment index of securities companies in the period 2020-2022

3
 INTRODUCTION
In recent years, the Vietnam stock market has witnessed dynamic growth and
transformation, playing a pivotal role in the country's economic development. Central to this
financial landscape are the securities companies that facilitate the trading of stocks and other
financial instruments. Securities companies in the Vietnam stock market have emerged as key
players, contributing significantly to market liquidity, investment opportunities, and the overall
financial ecosystem of the nation.
This essay explores the multifaceted role of securities companies within the Vietnam
stock market, shedding light on their operations, impact on the broader economy, regulatory
environment, and the challenges they face in this rapidly evolving financial landscape. By
delving into the functions, performance, and prospects of these companies, we gain valuable
insights into the dynamics of the Vietnam stock market and its role in the country's economic
growth.

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1. OVERVIEW OF SECURITIES COMPANIES IN VIETNAM
1.1. Overall
Based on the list of securities companies licensed by the state securities commission to
operate as securities brokerage and securities investment consultants (as of November 15, 2022),
there are a total of 81 companies licensed to operate as securities brokerage and securities
investment consultants in Vietnam. There are a total of 27 listed security companies. Among
them are specifically 12 securities companies listed on the Ho Chi Minh Stock Exchange (HSX),
13 companies listed on the HaNoi Stock Exchange (HNX), and 2 companies listed on the
UPCoM.
1.2. Securities Operations
Based on Article 72 of the Securities Law of 2019, securities companies are licensed to
carry out one, some, or all of the following business activities: Securities Brokerage, Proprietary
trading, Underwriting, Investment consulting.
a. Stock Brokerage
Based on Article 29, Clause 4 of the Securities Law 2019, "stock brokerage is an
intermediary activity for executing the purchase and sale of securities for clients." According to
Article 175 of Decree 155/2020/ND-CP, the minimum charter capital requirements for Stock
Brokerage is 25 billion VND.
Figure 1: The market share of companies on the HNX in the past 4 quarters

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 Source: Financial report, VNDIRECT RESEARCH
On the HaNoi Stock Exchange, in the first half of 2023, 10 securities companies held a
total market share of 69.25% for brokering listed stocks on the HNX. Here's the market share
distribution of these companies: VPS Securities takes 25.77% market share (leading the
ranking), VNDirect Securities takes 9.26% market share, SSI Securities takes 8% market share.
Figure 2: The market share of companies on the HOSE in the past 4 quarters

Source: Financial report, VNDIRECT RESEARCH

On the Ho Chi Minh Stock Exchange (HSX), with a 3.04% market share, Vietcombank
Securities has secured a spot in the Top 10 brokerage firms with the largest market share on the
HSX. VPS Securities continues to lead with a 19.92% market share, representing a 0.91%
increase from the previous quarter. Following behind are SSI Securities (with 10.59%, up
0.37%), VNDirect Securities (with 7.21%, down 0.06%), and TCBS Securities (with 6.8%, up
1.33%). MB Securities has risen to the Top 5 position with a 0.24% increase, reaching a 5.09%
market share. This has pushed Mirae Asset Vietnam Securities down to the 7th position (with
4.71%, a decrease of 0.45% compared to the previous quarter).

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 On the UPCoM Stock exchange (UPCoM), VPS Securities still leads the list in the first
half of 2023, holding a 25.23% market share. Following behind are VNDirect Securities
(7.63%) and SSI Securities (7.06%). Kỹ Thương Securities and DSC Securities are ranked
fourth and fifth, with market shares of 4.96% and 4.76%, respectively.
b. Proprietary trading
According to Article 30, Clause 4 of the Securities Law 2019: "Proprietary trading of
securities is the activity of a securities company buying and selling securities for its own
account.” According to Article 175 of Decree 155/2020/ND-CP, the minimum charter capital
requirements for Proprietary Trading of Securities: 50 billion VND.
The business results for the second quarter show that in proprietary trading, the whole
securities companies have had a strong quarter. The profits of 76 securities companies
(according to VietstockFinance data) reached over 4.9 trillion VND. This result represents a
64% recovery compared to the previous quarter and nearly 160% compared to the same period
last year.
In the second quarter, the proprietary trading segment of securities companies made a
strong recovery with total proprietary trading profits reaching nearly 3.5 trillion VND, a 50%
increase compared to the previous quarter and a significant improvement over the nearly 1.4
trillion VND loss in the previous year. Most securities companies reported profits. SSI
Securities, VNDIRECT Securities (VND), VIX Securities, and VPBank Securities (VPBanksc)
are among the companies with the largest profits in this segment.
The VN-Index increased by more than 5% in the second quarter, reaching 1,120 points.
Specifically, from the end of April to the end of the quarter, this index increased by 7%. In terms
of liquidity, the trading value on the HOSE and HNX exchanges returned to around 15 trillion
VND per session in the second quarter. In June alone, the average liquidity reached nearly 22.5
trillion VND.
Favorable business conditions have helped most securities companies improve their
profits compared to the previous quarter. Among them, SSI secured the top position in terms of
profit with after-tax profit reaching 565.5 billion VND. VND and Mirae Asset Securities made

7
significant profit improvements compared to the previous quarter, with after-tax profit
increasing several times.
c. Underwriting
According to Section 31, Article 4 of the Securities Law of 2019, underwriting of
securities is a commitment to buy a portion or the entire issue of securities from the issuing
organization for resale or to purchase the remaining undistributed securities or to make the best
effort to distribute the securities to be issued by the issuing organization. According to Article
175 of Decree 155/2020/ND-CP, the minimum charter capital requirements for Underwriting
Securities Issuance: 165 billion VND.
In recent years, underwriting has not been fully utilized to its potential, and its role in the
market remains limited. The underwriting market has not generated significant revenue or
successfully facilitated capital flows for businesses. The underwriting is primarily concentrated
in larger companies, such as Vietcombank Securities (VCBS) and Techcombank Securities
(TCBS). These companies engage in underwriting activities that often go against the overall
market trend.
d. Investment consulting
In accordance with Article 4, Section 32 of the Securities Law of 2019, it is stipulated as
follows: Securities investment advisory is the provision of clients with the results of analysis,
analytical reports, and recommendations related to the purchase, sale, or holding of securities.
According to Article 175 of Decree 155/2020/ND-CP, the minimum charter capital requirements
for Securities Investment Advisory: 10 billion VND.
Regarding the investment themes to watch in 2023, CTCK BSC has provided
recommendations. They advise that the Information Technology, Industrial Zones, Retail, Oil
and Gas, Banking, and Airline Services sectors are not assessed positively in 2023.
1.3. Analyse
The Vietnamese stock market has gone through more than 22 years of formation and
development, with various phases and crucial events. Two noteworthy events during this period
include the financial crisis in 2008 when the VNIndex hit a low of 235 points on February 24,
2009, and the subsequent event, the COVID-19 pandemic. Turning to 2023, the stock market in
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Vietnam was impressive, with the VN-Index rising by 4.4% to 1,051.4 points. The HNX-Index
increased by 2.6% to 210.6 points, while the Upcom-Index rose by 1.5% to 72.7 points.
Figure 3: The capital that securities companies raised from 2021 to the 2nd quarter of 2023

Source: Financial report, VNDIRECT RESEARCH

Many securities companies have taken advantage of the booming market during the
2021-2022 period to improve their capital (in billion dong). They have capitalized on the
booming market to improve their capital, for example, SSI currently holds the top position with
over 15,011 billion VND (increasing by 2.5 times compared to 2020). Furthermore, since May,
the market has entered a period of resurgence. The Q2-2023 business results for many securities
companies have shown improved performance. In the long term, the market is considered to
have a lot of potential.
An expert has assessed that over the past two years, many securities companies have
increased their capital rapidly and significantly to compete for market share, but there is a
relative differentiation, and each company has its own story. For instance, VNDirect has internal
issues, and they need to increase capital to compensate for the "dead" capital tied up in a large
amount of bonds. Capital helps companies supplement their lending and stock investments.

9
According to regulations, the total margin trading limit for a customer cannot exceed 3% of the
equity of that securities company.
After a tumultuous year in 2022, securities companies are gradually announcing their
business plans for 2023. There is a divergence in the business plans for 2023 among the
securities companies that have made their announcements. While some companies are
forecasting a decline in profits, there are still others with ambitious revenue and profit growth
expectations.
Viet Capital Securities Corporation (VCSC, HOSE: VCI) has released materials for its
2023 Annual General Meeting of Shareholders, outlining its business plan for the year. The
company aims to achieve operating revenue of VND 3,246 billion and pre-tax profits of VND
1,000 billion in 2023. Compared to the previous year's results, the revenue target represents a
12% decrease, while the profit target is a 6% decrease.
On the other hand, Vietnam Construction Securities Joint Stock Company (UPCoM: CSI)
predicts that the controlled spread of Covid-19 in neighboring countries will stimulate foreign
capital inflow – a market segment that CSI is targeting. This is expected to bring in new
customers for the company. The company will continue to focus on core business areas such as
brokerage and margin lending. Additionally, they plan to maintain and develop investment
advisory services and explore the growth of asset management services.
For 2023, the leadership of FPT Securities (FPTS) anticipates that the securities market
will be less attractive due to reduced liquidity. This is expected to occur in the context of an
economy facing challenges and difficulties, with limited new product offerings and a minimal
number of new stock listings or initial public offerings (IPOs). Furthermore, there will be
intensified competition among securities companies regarding trading fees. Therefore, FPTS has
adopted a cautious approach to its business plan, targeting total operating revenue and financial
revenue of VND 770 billion, representing a 26.5% decrease from 2022.

2. BUSINESS ACTIVITIES OF SOME SECURITIES COMPANIES

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2.1. Introduction of some selected securities companies
According to Table 1, the research selects 4 companies with the highest capitalization,
respectively: SSI Securities Corporation (SSI), Ho Chi Minh City Securities Corporation
(HSC), VNDIRECT Securities Corporation (VNDIRECT) and Vietcap Securities Joint Stock
Company (VCI). This facilitates the comparisons between companies of the same size and
scope, thereby distinguishing the distinctive characteristics of each company and carrying out
suitable comparative analysis.
Table 1: Compare capitalization of some securities companies in Vietnam
Unit: million USD
Name Capitalization
VNDIRECT Securities Corporation 1,023
Ho Chi Minh City Securities Corporation 545
SSI Securities Corporation 1,782
Vietcap Securities Joint Stock Company 739
Viet Nam Bank For Industry & Trade Securities JSC 151
MB Securities JSC 314
Viet Dragon Securities Corporation 133
Thien Viet Securities Joint Stock Company 142
Baoviet Securities Company 74
BIDV Securities Joint Stock Company 260
Saigon - Hanoi Securities JSC 516
Source: BLOOMBERG (2023)
Because these 4 securities companies both listed early on HSX, they benefit from greater
investor awareness and have an organizational structure and operating mechanism that complies
with governance regulations for listed companies, thereby requiring higher standards of fairness,
openness, and transparency than unlisted companies.

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2.2. Evaluation criteria for business activities of some securities companies
In the period of 2020-2022, the Covid-19 pandemic and international geopolitical
instability, most notably the Russia-Ukraine War (2022), had a negative impact on the
Vietnamese economy and the Vietnamese financial market. Prior to 2020, in the context of a
global economy exhibiting signs of sluggish development, the emergence of the COVID-19
pandemic caused significant fluctuations on the global financial market (Zhang et al., 2020).
Due to its extensive openness and extensive international integration, Vietnam's economy was
impacted in nearly all socioeconomic domains. Entering 2021, due to the emergence of the Delta
variant, the COVID-19 pandemic continuously spreaded and persisted. In the context of global
inflation in 2022 and adversity on the stock market, real estate market, and domestic bond
market, the Vietnamese economy faced great pressure to stabilize the market and simultaneously
achieved the goals of price stability and economic growth.

2.2.1. Criterion of efficiency evaluation

- Criterion of change in revenue
Table 2: The degree of change in net revenue of securities companies in 2020-2022

Unit: Billion VND

SSI HSC VND VCI

2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022

Net revenue 4,367 7,443 6,336 2,248 4,460 3,901 2,135 6,039 6,829 1,730 3,707 3,156

Degree of change in 182,8 114.2

70.44 -14.87 98.40 -12.53 13,08 -14.86
revenue (%) 6 8

Source: Financial statements for the period 2020-2022

According to Table 2, the revenue of securities companies increased significantly in

2021. Meanwhile, VNDIRECT increased the most, rising by 3,904 billion VND, or 182.86%.
This could be explained by the fact that during the Covid-19 quarantine period, remote
investment instruments such as stock investments were favored. Entering 2022, the Vietnamese
stock market was impacted by negative domestic and international information, as well as global
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inflation. Consequently, the majority of securities firms were experiencing a decline in revenue,
with SSI experiencing the greatest decline at 14.87%. In contrast, VNDIRECT continued to
increase its revenue, albeit at a slower rate than last year, 13.08%.
- Criterion of operating expense ratio
Table 3: Operating expense ratio of securities companies in 2020-2022
Unit: Billion VND

SSI HSC VND VCI

2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022

Operating expense 1,902 3,155 2,705 1,373 2,735 2,486 543 2,325 3,826 522 1,326 1,399

Net revenue 4,367 7,443 6,336 2,248 4,460 3,901 2,135 6,039 6,829 1,730 3,707 3,156

Operating expense
43.55 42.39 42.69 61.08 61.32 63.73 25.43 38.50 56.03 30.17 35.77 44.33
ratio (%)
Source: Financial statements for the period 2020-2022
It can be evident that securities companies have regulated operating expenses, resulting in
relatively modest expenses in 2020. Of which, VCI's operating expenses recorded 522 billion
VND, accounting for 30.17%. However, these numbers increased again in 2021. Besides,
although HSC's revenue was relatively positive, operating expenses were too high, accounting
for a large proportion
- Criterion of revenue for each operation
The table 4 selected securities companies are all allowed by the State Securities
Commission of Viet Nam to fully perform the functions and operations of securities companies.
All the operations are important to securities companies, which directly contribute to the
company's revenue every year.
Table 4: Proportion of revenue from securities company operations
Unit: Billion VND

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 Source: Financial statements for the period 2020-2022
In general, stock brokerage and proprietary trading operations account for a large
percentage of the total revenue of the 4 securities companies mentioned above. Specifically:
Figure 4: Proportion of revenue from SSI for the period 2020-2022

Source: Financial statements of SSI

It can be clearly seen that SSI's revenue structure in the period 2020 - 2022 focuses on 3
main industries: stock brokerage, proprietary trading and some other activities. SSI's stock
brokerage segment made a strong impression when it reached 797.33 billion in 2020 and
reached 1,706 billion in 2022. With this achievement, SSI has won the "Best Securities House in
Vietnam" award 5 times. Regarding other operating revenue, the majority is mainly due to
interest from dividends and losses from loans that SSI takes out, receivables from five countries.
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 Figure 5: Proportion of revenue from HSC for the period 2020-2022

Source: Financial statements of HSC

Just like SSI, HSC's revenue structure mainly comes from 3 segments: stock brokerage,
proprietary trading and some other activities. Proprietary trading activities continue to play a
major role with approximately 40%. Other operations operated inefficiently, bringing low
revenue, especially underwriting operations.

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 Figure 6: Proportion of revenue from VNDIRECT for the period 2020-2022

Source: Financial statements of VNDIRECT

For VNDIRECT, the business efficiency of proprietary trading is most obvious when
reaching approximately 50% of total revenue in all 3 years, reaching 1212.4 billion in 2020 and
tripling after 2 years. Contrast are the decline in stock brokerage operations and the weakness of
financial consulting revenue accounted for only 0.01 - 0.09%.

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 Figure 7: Proportion of revenue from VCI for the period 2020-2022

Source: Financial statements of VCI

VCI's revenue ratio is not clearly different from the above 3 companies as revenue from
proprietary trading continues to account for a large proportion (approximately 50%), reaching
1962.2 billion in 2021. Next is the securities brokerage business. The remaining activities such
as underwriting or securities depository have not had any notable changes.
- Criterion of degree of change in capital
Table 5: Degree of change in capital of securities companies in the period 2020-2022
Unit: Billion VND

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 SSI HSC VND VCI

2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022

35,77 50,79 52,22 12,48 24,36 15,44 14,97 37,09 38,87 8,38 16,63 14,24
Capital 0 3 6 9 9 7 6 5 1 2 6 3

Degree of change in 147.7

capital (%) 42.00 2.82 95.12 -36.61 0 4.79 98.47 -14.38

Source: Financial statements for the period 2020-2022

According to Table 5, in 2021, the capital of securities companies increased significantly,
with VNDIRECT exhibiting a sharp increase of 22,119 billion VND, or 147.7%. This was due
to the fact that the market was flourishing in 2021 and proprietary trading activities generated
substantial profits for securities firms. Meanwhile, securities companies had a stagnant cash
flow in the bond segment, prompting securities firms to massively increase capital in order to
have sufficient funds for business. As 2022 approaches, capital resources showed signs of
deceleration, with sluggish growth of capital at SSI, VNDIRECT and even declines at HSC,
VCI. In particular, HSC's capital decreased the most, by 8,922 billion VND, or 36.61%. The
reason is that the market was challenging in 2022, resulting in the poor performance of
proprietary trading activities.
2.2.2. Criterion of profit evaluation
Table 6: The profitability indicators of securities companies in the period 2020-2022
Unit: %
SSI HSC VND VCI
2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022
ROS 27.45 34.6 26.05 33.29 34.06 29.85 32.46 39.46 17.86 44.28 40.15 27.22
ROA 3.51 5.3 3.25 5.3 6.2 4.3 5.0 9.0 3.0 9.8 12.0 5.6
ROE 12.8 19.0 7.6 12.1 23.8 11.2 20 35 10 17.9 27.1 13.3
Source: Financial statements in the period from 2020 to 2022
With the Return on Sales (ROS), this metric indicates how much profit will be generated
for every one unit of net revenue from sales and services. We can observe that SSI and HSC

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both conducted their businesses quite efficiently, with net profits accounting for 34.6% and
34.06% of their respective revenues in 2021. Although this ratio experienced a slight decrease in
2022 due to market dynamics, it remained fundamentally strong. In 2022, VND and VCI
experienced significant profit reductions, leading to a sharp decline in ROS, accounting for
17.86% and 27.22%, respectively.
ROA (Return on Assets) and ROE (Return on Equity) are important financial metrics
used to assess the performance and profitability of a company. ROA (Return on Assets) and
ROE (Return on Equity) are important financial metrics used to assess the performance and
profitability of a company. It evaluates how efficiently a company uses its assets to generate
earnings. ROE is a financial metric that measures a company's profitability in relation to its
shareholders' equity. It evaluates how effectively a company is using its equity capital to
generate returns for its shareholders. According to statistical data from Stockbiz, the industry's
average Return on Assets (ROA) stands at 3.72%, and the industry's average Return on Equity
(ROE) stands at 6.02%. It is evident that both HSC and VCI surpass the industry averages in
both ROA and ROE. This demonstrates that these two brokerage firms have effectively utilized
their assets and shareholders' equity, showcasing superior efficiency compared to their industry
peers.
2.2.3. Criterion of liquidity evaluation:
Table 7: Capital adequacy ratio of securities companies in the period 2020-2022
Unit: Billion VND
Source: Report on available capital ratio of securities companies in 2020-2022
SSI HSC VND VCI
202 202 202 202 202 202
Year 2021 2022 2020 2021 2022 2022
0 0 1 2 0 1
Available 8,20 11,0 4,10 6,34 7,23 13,16 4,43 5,19
0,220 2,997 4,202 6,388
capital 0 83 1 5 0 3 2 6

Value of 2,65 3,09 0,60 1,21 1,11 1,44 1,17

0,062 0,968 1,256 3,643 1,540
risk 3 6 4 9 6 0 9

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 Capital
309 354.3 678 520 648 309.4 334.5 361.3 405 441
adequacy 358% 415%
% % % % % % % % % %
ratio

Through statistical data on the available capital ratio of securities companies, we can
see that securities companies strictly comply with this safety ratio of more than 180%. From
2020 to 2022, HSC's capital adequacy ratio will always be about 600%. In the group of 4
selected securities companies, SSI has a fairly modest growth rate compared to the other 3
companies with 309.01% in 2020 and reaching 354.33% in 2022.

Table 8: Debt index and payment index of securities companies in the period 2020-2022

SSI HSC VND VCI

2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022
Total debt/
54.1 64.4 69.9 48.9 73.5 62.6 46.0 54.3
Total 72.4 72 74.5 60.68
4 5 4 1 2 6 6 9
assets(%)
Total equity/
42.8 35.5 30.0 51.0 36.0 37.3 53.9 45.6
Total 27.6 28 25.5 39.32
6 5 5 9 1 4 3 0
assets(%)
Long-term
debt/ Equity 0.74 0.66 0.24 - - - 3.06 9.27 5.69 2.80 7.32 2.73
(%)
Short-term
261. 256. 133. 181. 232. 289. 268. 162. 146.9 115.
debt/ Equity 95.7 82.6
5 5 1 2 7 1 4 1 7 3
(%)
Short-term
1.12 1.28 1.64 1.53 1.42 2.02 1.2 1.39 1.64 2.22 1.72 1.89
payment

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 ratio
Quick payout
0.01 0.03 0.05 0.03 0.42 0.75 0.09 0.1 0.11 0.17 0.12 0.48
ratio
Cash
payment 0.01 0.03 0.05 0.03 0.42 0.75 0.09 0.1 0.11 0.17 0.12 0.48
ratio

Source: Financial statements of securities company for the period 2020-2022

According to Table 8, in general, both Short-term ratio and quick ratio of all four
securities companies remain quite stable, able to handle due debts. Particularly for the cash
payout ratio due to the characteristics of the fast turnover of securities companies in most of the
four securities companies considered, this shows that the ability to use cash to repay debt has
clearly improved and grown.

3. OPPORTUNITIES AND CHALLENGES OF VIETNAMESE SECURITIES

COMPANIES
3.1. Opportunities of Vietnamese securities companies
Vietnamese securities companies are currently experiencing a plethora of opportunities in
the financial market. With the country's robust economic growth, increasing foreign direct
investment, there is a rising demand for financial services and investment products. This
presents an excellent opportunity for securities companies to expand their operations and cater
to the needs of both individual and institutional investors.
First, the Vietnamese government has been implementing many measures to attract
investment capital from abroad and encourage the participation of domestic investors. This
creates many opportunities for securities companies to provide services and investment advice to
investors in participating in the Vietnamese stock market. According to the latest published data
of the Direct Foreign Investment (FDI) (MINISTRY OF PLANNING AND INVESTMENT) on
September 20, the total foreign investment capital in the Vietnamese market has reached 20.2

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billion USD , up to 7.7% over the same period last year. This shows that foreign investors
continue to choose Vietnam as a place to invest and do business and a bright spot in the region.
This resulted in the market recovering quite well in the second and third quarters of 2023 when
the VN INDEX index was close to 1,250 points.
Second, as more Vietnamese individuals become financially literate and seek investment
opportunities beyond traditional assets like real estate or savings accounts, there is growing
interest in investing in stocks, mutual funds, and other financial instruments. For the entire year
of 2022, domestic individual investors opened nearly 2.6 million new securities accounts. This is
a record number in the 22 years of operation of the Vietnamese stock market. This number even
surpasses the total number of new accounts opened in the 6 years from 2016 to 2021 combined.
By the end of 2022, the number of domestic individual investor accounts has exceeded 6.8
million accounts, equivalent to about 6.8% of the population.. Securities companies can tap into
this demand by offering educational resources, personalized investment advice, and
user-friendly trading platforms.
Third, Vietnam's integration into global capital markets through free trade agreements
opens up new avenues for securities companies' expansion beyond domestic borders. They can
explore partnerships with international counterparts or establish branches overseas to tap into
foreign markets while also attracting foreign investors looking for exposure to Vietnam's
dynamic economy and it also helps Vietnamese securities companies grow stronger in serving
national and international customers. Recently, on September 19 - 21, 2023, the WFE General
Council voted unanimously to admit the Vietnam Stock Exchange as an official member of the
WFE. This event is an important step in the integration process of the Vietnam Stock Exchange,
contributing to promoting and attracting foreign investment capital into the Vietnam stock
market. Subsidiaries of the Vietnam Stock Exchange will also receive the same benefits as
official members.
In conclusion, Vietnamese securities companies have a wide range of opportunities ahead
of them. In conclusion, Vietnamese securities companies have a wide range of opportunities
ahead of them. By capitalizing on the country's economic growth, technological advancements
and global integration efforts; they can position themselves as key players in Vietnam's financial

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industry. With the right strategies and innovative approaches to meet evolving investor demands,
these firms can thrive in an increasingly competitive landscape while contributing to the
development of Vietnam's capital markets.
3.2. Challenges of Vietnamese securities companies
Securities companies have many methods of operating their business. The securities
industry is a multifaceted field, requiring extensive knowledge of financial principles,
shareholder rights and related laws. Below are some formulas that this type of document
commonly encounters:
First, the high volatility of securities markets which require securities companies to daily
monitor and analyze due to the change of many external factors such as politics, global
economy, news, events and market trends to forecast price trends and make smart trading
decisions. Notable among them are the high boom of central banks adjusting to increase interest
rates, the "zero Covid-19" strategy in China, creating an energy crisis that causes raw material
and fuel prices to increase sharply, breaking the savings chain. supply,... has caused most global
stock markets to fluctuate strongly due to the risk of global economic decline.
Second, securities companies must comply with the regulations and control of the State
Securities Commission (SSC) and the Stock Exchange (HOSE, HNX). This requires them to
maintain compliance with rules, standards and financial reporting. The regulatory issues that
Vietnamese securities businesses confront might also have an impact on their business
operations. Due to the complexity and regular changes to the legal framework governing
securities trading, it is difficult for businesses to maintain compliance with all regulations.
Foreign participants have less access to finance and knowledge because of restrictions on
foreign ownership in Vietnamese securities firms.
Third, over the past many years, securities companies have begun to pay attention to
corporate governance issues, especially paying attention to strengthening risk management and
restructuring to ensure company operations comply with current legal regulations and improve
competitiveness. However, most securities companies are young and operate in a field that
contains many risks, including both objective and subjective risks, so corporate governance
activities at securities companies are still lacking many shortcomings.
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 Finally, for Vietnamese securities companies, technological improvements present both
benefits and difficulties. Trading has become more accessible and efficient thanks to technology,
but it also necessitates large infrastructure and cybersecurity investments. Due to limited funds
or outdated technology, many smaller businesses may find it difficult to keep up with current
technological improvements.
To overcome these challenges, Vietnamese securities companies need to have flexible
business strategies, effective risk management and investment in technology and human
resources.

4. RECOMMENDATIONS FOR THE CHALLENGES OF VIETNAMESE

SECURITIES COMPANIES
Vietnam’s economy in general and the stock market in particular, in 2023, still faces
many difficulties and challenges. In order to ensure the continuous, smooth, stable and
transparent operation of the stock market, while promoting market development towards
sustainability, security and transparency, protecting the rights and legitimate interests of
investors, policymakers and securities companies need to continue to implement synchronous
solutions.
4.1. Recommendations for policymakers
Inasmuch as policymakers are the most influential individuals in determining whether
stock markets improve or decline, their importance is indisputable. In order for securities firms
and investors to operate effectively, policymakers must implement the appropriate policies.
First, policymakers must complete the legal system governing business operations and
develop the role of the State Securities Commission in order to have sufficient authority to
perform state regulatory functions of the securities market and address issues pertaining to
securities and securities transactions. In addition, the legal framework governing business
operations is complete in order to prevent market manipulation.
Second, information channels and technology are crucial to the growth of stock markets,
so the policymakers should expand information channels and technology infrastructure for

24
investors and invest, so that investors can organize, manage their portfolio effectively while still
ensuring security and cybersecurity.
Third, foreign institutions are also large potential investors, so policymakers must
facilitate them by fostering domestic and foreign capital supply channels to markets, expanding
the system of investors – particularly institutional investors; developing a full range of
intermediary institutions, diversifying services, and ensuring a complete set of elements that
comprise a capital market in the region; constructing legal regulations to develop the type of
monetary market funds; and dividing the market into segments.
4.2. Recommendations for securities companies:
Besides policymakers, securities companies also need to take actions to overcome
existing challenges. The following are some recommendations for securities companies.
First, the source of capital, the capital markets should be developed in a modern,
structurally complete direction (including centralized stock, OTC regulated markets, bond
markets operating in accordance with best international practices that are likely to be linked to
regional and international markets). If companies want to raise their capital, they should carry
out all the operations of the securities company, ensure business capability and profitability in
ways such as merging small companies and inviting more investors, including foreign investors.
Second, improving the quality of human resources to meet the demand for sustainable
stock market development. Strengthened training of management, oversight and organization of
the stock market; focused training of participants in the securities activity, investors so that they
have the necessary competence, management level as well as operations in the equity market.
Improve the political quality and professional ethics of the Securities sector, on that basis
contributing to the healthy development of the stock market.
Final is the solution to various types of business in the stock market. With regard to
private business, we need to improve the business capacity of securities companies, review
investment items, and take advantage of information in order to enhance the quality of
investment operations. Next, the securities companies need to provide adequate and timely
information, have an appropriate policy on brokering costs and open up value-added services.
And then there's the key part that any stock company needs to improve, which is the stock
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investment consultancy. Every securities company should build a team of high-quality
consultants, so that they can provide their customers full, accurate and timely information.
In the other word, the synchronous development of the Vietnamese stock market,
consistent in the overall development of the financial market, in line with the process of
international integration of Vietnam is an inevitable trend. To this goal, it is necessary to
synchronize the proposed measures.

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 CONCLUSION
In the context of the rapidly evolving and dynamic Vietnamese stock market, securities
firms have played a crucial role in supporting the development of the national economy and the
domestic stock market. The fundamental objectives of this thesis have been accomplished,
yielding the following contributions:
First and foremost, this thesis conducted a comprehensive overview of securities
companies in Vietnam.
Second, the thesis analyzed the business operations of four securities firms in Vietnam
based on three criteria: efficiency evaluation, profit evaluation and liquidation evaluation.
Furthermore, in conjunction with an analysis of the economic environment and policy
framework, the thesis presented a comprehensive overview of the advantages and challenges
faced by securities firms in Vietnam. It also proposed a range of solutions to contribute to the
development of these firms in the country.
These solutions can be categorized into two groups:
(1) Solutions pertaining to the policymakers, policymakers need to enhance the legal framework,
expand information technology infrastructure, and facilitate foreign investors in order to
strengthen the stock market and ensure its growth and stability.
(2) Solutions aimed at individual securities firms. In summary, securities companies should
focus on capital market development, enhance the quality of their human resources, and improve
various aspects of their business operations to contribute to the overall development and
integration of the Vietnamese stock market.
The findings and recommendations presented in this thesis serve as a resource for
policymakers, regulators, and securities firms as they work together to navigate the complexities
of the evolving Vietnamese securities industry.

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