M&A of securities companies to boom in 2011

The merger and acquisition activities of securities companies are expected to flourish in Vietnam thanks to the backing of state management agencies, the Dau Tu Newspaper reported on March 14.



Vincom Joint Stock Company (HOSE- listed VIC) has officially sold 19,490,000 shares of Vincom Securities JSC (VIX-HNX). VIC has made moves to withdraw capital in three phases: on March 2, 2011 – sold 18 percent; on Mach 3, 2011 – sold 18 percent and Mach 07, 2011 – sold 28.97 percent. To date, the number of VIX shares being held by Vincom Corporation have fallen sharply from 22.5 million (up 75 percent of capital) to 3,010,000 (10.03 percent of VIX’s stake).



However, in contrast to the withdrawal of several major securities firms, many abroad giants are very excited to redeem shares of domestic securities companies.



Nikko Cordial Securities Co. (Japan) has become a strategic shareholder of the Petroleum Securities Company (PSI) as the two sides signed a strategic cooperation recently. Nikko Cordial Securities Company has paid 133.7 billion dong to buy 14.9 percent stake in PSI with a cost of 15,000 dong per share, raising the charter capital of PSI from 509.25 billion dong to 598,413 billion dong.



Earlier, South Korea Investment and Securities Company purchased nearly 49 percent of the shares of Empower Securities Company (EPS). SBI Securities Co. (Japan) has been negotiating to buy 20 percent stake in FPT Securities Company. In addition, Morgan Stanley (Singapore) acquired 48.33 percent of HuongViet Securities Company; Golden Bridge Securities and Investment Company Limited (Korea) has bought 49 percent of shares of Click & Phone Stock Joint Company; RHB Bank (Malaysia) has become a strategic shareholder of Vietnam Securities Company.



Even, Kim Long Securities JSC (HNX – listed KLS), despite announcing plans to transform into a corporation with a completely new business field, Ha Hoai Nam, Chair of KLS is confirmed that Kim Long will return to stock trading at anytime.



Apart from the natural movement of the stock market, M&A activities of securities companies will have opportunities to develop more actively, by the backing of the state management agencies.

Accordingly, in 2011, the State Securities Commission has designed some directions to raise the efficiency in the operations of securities firms, including encouraging the restructuring towards the merger and acquisition of companies.



Nguyen Son, head of the Stock Market Development under the State Securities Commission (SSC), said the agency was studying the construction of the provisions relating to acquisition and sales of securities trading organisations.



In addition, this agency will also require securities companies to strengthen corporate governance, especially in risk management systems. Also, management agencies also strengthen management, inspection and monitoring activities of securities companies to ensure the sustainability of the activities of these companies.



The SSC is continuing to improve the legal framework such as adding, modifying regulations on organisation and operation of securities companies, to consider establishment guidelines, allowing the securities companies to introduce some new products for their professional activities; applicable norms of financial security and others.

Tags: Vietnam business news

Posted by Breastarrerty on Mar 15 2011. Filed under Enterprises. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry