Stock market in Q3-2021 and the first half of Q4 - VN-Index breaks out, securities companies in the margin race
Stock indexes on all 3 exchanges HOSE, HNX, UPCOM continuously increased after fluctuating in a narrow range for many weeks. The VN-Index officially surpassed the historical peak on October 27, 2021 and continuously set new peaks. The main growth drivers mainly come from domestic individual investors and money from margin lending.
The market capitalization of Vietnam's stock market by the end of October 2021 reached VND 7.46 million billion, up 41% YTD, equivalent to 118.6% of GDP.
The total transaction value of the whole market reached VND 4.98 million billion in 10M-2021, 3.8 times higher than 10M-2020. Especially, since the VN-Index surpassed the historic peak on October 27, 2021, the average trading value has reached more than 32 trillion VND/day.
The driving force for growth in trading size in the whole market came mainly from domestic individual investors and money from margin lending.
In 10M-2021, 1.09 million new securities trading accounts (STC) were opened. This amount is equivalent to >39% of the total securities depository funds acquired from the beginning of the Vietnam stock market to the end of 2020. In which, the number of securities trading accounts in Q3 and October-2021 has 467.4 thousand new accounts opened and 99.65% in This number comes from individual domestic investors.
The size of margin loans in the whole market continued to increase. By the end of Q3-2021, total margin loans of 42 securities companies as observed in Vietdata Update Report Q3-2021 reached VND 147.1 trillion, up 67.1% YTD and up 10% more compared to the end of Q2-2021.
Regarding margin lending and cash advance activities of securities companies in 3Q-2021. MBS, MASC, VDS, BST, HCM, Yuanta are securities companies that are always in a state of "margin tension" with the average loan balance/equity ratio > 1.8 and even approaching 2.
While SSI, TCBS and VND are securities companies with large loan balances (over 10 trillion in size), there are still many "rooms" for margin lending, with a ratio of outstanding loan/equity ≤ 1.5.
Up to now, many securities companies have completed their capital increase plan in 2021, in order to supplement capital for general operations as well as have more "room" for margin lending.
However, many securities companies are still in a state of "margin tension" even though they have completed the plan to increase charter capital. Therefore, in the last 2 months of the year, some companies plan to continue the "race" to raise capital, in order to increase the "margin lending room" to meet the growing needs of investors in the market.
Source: Extracted from Vietdata Securities Company Q3-2021 Update Report