Securities firms seek margin lending funds

Checking and supervising of electronic bond bidding at the Hanoi Stock Exchange. (Source: VNA) Hanoi (VNA) – Manysecurities companies have opted to issue corporate bonds to raise capital tofinance their margin lending service, following upbeat forecasts for the marketin 2018.Vietnam’s benchmark VN-Index closed 2017at over 984 points, a rise of 48 percent over the end of 2016. The localsecurities market value reached about 3.36 quadrillion VND (147.4 billion USD),equivalent to more than 74 percent of the country’s gross domestic product(GDP).The boom on the securities market hashelped brokerage companies expand their margin lending, but also illustratesthat their capital growth has not caught up with investors’ borrowing demand.To finance their lending expansion, manycompanies have decided to issue bonds.Saigon Securities Inc is seekingshareholders’ approval for the issuing of a maximum 1.2 million convertiblebonds worth total 1.2 trillion VND in 2018 at the rate of 4 percent per year.The bonds will likely be offered to less than 100 investors, excluding professionalinvestors, with priority given to foreign financial institutions.According to the company, this issue isaimed at raising capital for its operation.In late December, HCM Securities JSC issued800 billion VND bonds to seven investors in a private placement. These one-yearnon-convertible and non-warranty bonds were sold at the coupon rate of 9 percentper year.Earlier in October, Tan Viet Securities Inc(TVSI) also offered corporate bonds worth 150 billion VND to investors with anattractive interest rate of 9 percent per year for the first three months. Therates for the following terms were equal to the 12-month saving rate ofVietcombank…

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