VietNamNet Bridge - Mergers between securities have become stronger as it is the only choice for small securities companies. It is expected that at least three merger & acquisition (M&A) deals will wrap up this year.

 

According to the chair of the State Securities Commission (SSC) Vu Bang, there are 85 operational securities companies, a reduction of 25 percent in marketing restructuring.

Bang said the market restructuring will continue in the time to come, when many companies will merge with each other.

“I think three deals would be made this year,” Bang said, adding that the restructuring is necessary to help the stock market develop in a sustainable way and avoid the turmoil that is happening in China.

The Hai Phong Securities JSC (HPC) may kick off this year’s merger movement. At the 2015 shareholders’ meeting, the company’s shareholders approved the plan to merge with AAS.

HPC’s board of directors explained to shareholders that the competition in the market is getting stiffer. Only very strong companies can exist, while weak ones will be dissolved, or put under the watchdog agency’s special control. 

Therefore, merging with AAS is the best solution to protect shareholders’ benefits.

HPC is reportedly making hectic preparations to implement the merger deal in 2015.

Sacombank Securities Company's(SBS) board of directors is also planning to consult with shareholders about the plan to merge with another securities company. If the merger succeeds, the company can escape from the loss and increase capital. 

Prior to that, ORS got the shareholders’ approval for a plan to merge with another company to expand its network and improve capability. However, no further information about the merger has been released. The company is still looking for partners.

Meanwhile, APS planned to merge with another company in 2012, but no further progress has been made so far.

As such, the securities company M&A movement is believed to explode in 2015 in which weak companies would have to leave the market, thus making it more favorable for the State to regulate the market and create new products. This is also the prerequisite for unified securities companies to join the derivatives market that Vietnam plans to open next year.

In order to be eligible for trading derivatives, securities companies must get SSC’s certificates on meeting requirements for business. The companies also have to satisfy other requirements on financial capability, including stockholder equity. They need VND600 billion at least to trade derivatives and VND800 billion to provide brokerage services.

SSC estimates that about 20-25 securities companies can meet the requirements to join the market. The country's first derivatives market will be established at the Hanoi Stock Exchange.

VNE