Securities companies plan to increase chartered capital as the stock market shows steady recovery.

Plans by securities companies to increase their chartered capital have been widely reported in Vietnamese media. Thang Long Securities Company is raising its capital to 650 billion dong, Kim Long has announced the company’s decision to increase capital to one trillion dong, and with Bao Viet plans to advance 722 billion dong.

Over the last three months, average share prices on both Vietnamese stock exchanges (HCM City and Hanoi) have increased by roughly 100 percent. This has helped securities companies earn more money from brokerage services and securities trading, creating conditions to increase chartered capital.

While the stock market was quiet, securities companies that needed to increase capital issued shares to strategic partners. Now as the market warms they are moving back towards issuing shares to existing shareholders.

Le Dinh Ngoc, general director of Thang Long Securities Company, said that the market recovery over the last few months is prompting securities companies to think of issuing shares to increase capital. Ngoc says Thang Long is striving to become a diversified financial institution, more like an investment bank. To this end the company must raise capital and this capital increase has been slated for 2010.

Ha Huy Toan, General Director of Agriseco, says his company has decided to issue 120 million more shares worth 1,200 billion dong at face value, to existing shareholders. This will double the company’s capital.

Kim Long Securities Company in the fourth quarter of 2009 will issue 23.1 million bonus shares to existing shareholders. Besides, it will also offer to sell 10.9 million new shares directly to less than 100 investors at a discount of 20 percent from the market price at time of purchase. Representatives of Kim Long say this is a very good time to increase capital and expand investment for businesses in general and securities companies in particular.

Bao Viet Securities is planning to raise its capital from 451.5 billion dong to 722.4 billion dong this year. Bao Viet Director Nguyen Quang VInh said that the company previously planned to raise capital in 2008, but had to delay due to bad market performance

Pham Hong Son, senior executive of State Securities Commission, has confirmed his commission has received applications for increasing capital from many securities companies.