A VNDirect employee talking to a customer. (Source: VNA) The Board of Directors of SSI Securities Corporation (SSI) has just issued aresolution to submit to the General Meeting of Shareholders a plan to increasecharter capital to nearly 15 trillion VND (661.4 million USD) through shareofferings to existing shareholders.
Accordingly, the securities firm plans to offer about 497.4 million new sharesto existing shareholders, with a ratio of 2:1 and offering price of 15,000 VND pershare. The total offering value at maximum par value is approximately 4.97trillion VND. Existing shareholders have the right to transfer their rights tobuy shares to others within a specified time.
In September, SSI issued nearly 218.3 million shares to increase capital fromowner's equity and offered more than 109.55 million shares to existing shareholders.Thereby, the company’s charter capital rose to nearly 9.85 trillion VND.
With the new resolution, if the issuance is completed, its charter capital willreach nearly 15 trillion VND, continuing to maintain SSI's position as thelargest securities company in Vietnam.
A representative of SSI said that the rise in charter capital is to supplementbusiness capital, improve underwriting capacity, investment capacity and marginlending capacity. During the time when there are no margin lending transactions,the money will be used to invest in bonds and certificates of deposit to ensureefficient use of capital.
Also during the period, Yuanta Securities Vietnam Company Limited (YSVN) hasjust been approved by the State Securities Commission (SSC) to increase itscharter capital from 1.5 trillion VND to 2 trillion VND.
Nguyen Thanh Tung, general director of YSVN, said that higher charter capitalwill help YSVN increase its capacity to provide more margin loans. It will alsoincrease investment in technology, upgrade systems, improve processes, hiremore employees, conduct domestic and foreign training and develop new productsto bring the best experience to customers.
The document expected to be submitted to the 2021 Extraordinary General Meetingof Shareholders next month of VNDirect Securities Corporation also said thatits Board of Directors will submit to the General Meeting of Shareholders forapproval an offering plan of nearly 435 million shares to existing shareholderswith a ratio of 1:1 and the offering price equal to the par value of 10,000 VNDshare.
According to the plan, VNDirect will use 40 percent of the fund to supplementcapital for margin lending activities, while the rest is for investment invaluable papers, underwriting securities activities, supplementing capital forissuance and distribution of covered warrants.
VNDirect's Board of Directors will also submit a plan to issue nearly 348million shares to increase capital from equity sources (bonus shares) with theexpected rate of 80 percent, meaning shareholders with 100 shares will beentitled to receive 80 new shares.
With these two issuances, the charter capital of VNDirect can edge to more than12 trillion VND. The execution time is in 2021 or 2022.
Many other securities companies also have significant capital increase plans atthis time.
Preliminary statistics showed that more than 30 securities companies have plansto raise capital in 2021, mainly through forms like paying dividends, purchaserights, and private offerings.
YSVN said that the stock market is witnessing a historic boom in both liquidityand trading value, becoming the most wanted investment channel. Just in thefirst ten months of 2021, there were more than one million new brokerageaccounts opened, which was the highest figure in history.
The rapid increase in the number of accounts and positive movements of themarket has boosted demand for margin loans.
However, due to tight capital sources and regulations on the ceiling ofoutstanding loans for the activity, many securities companies have not beenable to meet investors' demand.
Therefore, YSVN believes that these raising charter capital plans are made atthe right time, helping companies to increase margin lending, serving therising capital demand.
Abundant capital will also improve the profit outlook of securities companies.
In the first nine months of this year, income from margin lending, brokerageand proprietary trading of securities companies climbed dramatically comparedto the same period last year, helping many securities companies reach theirprofit plans for the whole year of 2021 three months ahead of scheduled./.
VNA
