South Korean-invested securities companies operating in Vietnam are showing weaker-than-expected performances although the local stock market is among the best performers in the Asia-Pacific region.
According to the Korea Financial Investment Association, South Korean investment funds have been net buyers in the Vietnamese share market over the past six months. Funds such as KITMC, Mirae Asset and the investment vehicle of Samsung Securities are bullish on Vietnam and have boosted buying local shares.
However, South Korean-invested securities firms are facing harsh competition from local peers and striving to stay afloat.
Shinhan Securities Vietnam Co. (SSV), which was licensed to start operations in February this year, is still carrying out a reshuffle after Shinhan Investment Corp acquired Nam An Securities last year to make the firm a wholly South Korean-invested brokerage.
SSV had revenue of 2.2 billion dong ($98,500) in the first half of this year, of which 31 million dong (nearly $1,400) came from brokerage services. Thus, it posted a loss of 8.12 billion dong ($363,600), widening from 1.5 billion dong ($67,170) a year earlier.
Woori CBV Securities is another example of poor performance. The firm recorded an after-tax profit of $39,000 in the first six months of this year, a slight improvement from a loss of $44,000 in 2015 and a profit of $4,300 in 2014.
Golden Bridge Vietnam Securities, in which a South Korean firm holds a 49% stake, has had its operation license revoked due to chronic weaknesses.
Standing out from Korean-invested brokerage houses, KIS Vietnam Securities Corp is among large-sized securities firms in Vietnam with a registered capital of $49.8 million, in which KIS owns a stake of more than 98%.
The firm posted a pretax profit of $3.2 million on revenue of $7.7 million in 2015. It earned an after-tax profit of $900,000 in the first quarter this year.
The benchmark VN Index
has risen 14.2% so far this year and is headed for the fifth consecutive year of gains.
It is projected to reach a peak of 700 by the end of this year, compared to 661.45 at the break time on August 19, according to Yun Hang Jin, an analyst from KIS.