HSC increases capital.

HSC's extraordinary general meeting voted to approve a plan to offer nearly 360 million shares to existing shareholders, whereby shareholders owning 2 shares are entitled to purchase 1 additional new share.

HSC voted to approve the plan to offer nearly 360 million shares.

At the extraordinary shareholders' meeting held this afternoon (December 4th), Mr. Trinh Hoai Giang, General Director of Ho Chi Minh City Securities Corporation (HSC), stated that the reason HSC convened the extraordinary shareholders' meeting this December instead of waiting until April 2025 to seek approval for the capital increase share issuance plan is because this is an urgent matter for HSC.

"HSC has lent at a debt-to-equity ratio of nearly 2 times, almost reaching the legal limit, and although the market is not strong, the demand for loans from investors is very high, and if there is an upcoming market surge, HSC must be ready to provide the capital," Mr. Giang said.

The second reason, according to Mr. Giang, is to increase capital to provide margin trading services for foreign investors. Currently, no investors have violated payment terms, but HSC needs room so that if, for any technical reason, a foreign investor is late in making a payment, the company has sufficient capacity to handle it.

Regarding the market outlook, Mr. Giang stated that the average transaction value will be low, not as high as before, because foreign investors have sold a net amount of nearly $4 billion, the highest ever.

Next year, liquidity is expected to decrease to around VND 15,000 billion per session compared to VND 20,000 billion per session this year. Margin lending demand is not expected to surge but remains high. HSC is ready to provide margin loans even when demand is weak or strong because its clients are highly professional and unafraid of significant market volatility. If, for any reason, the market experiences a sharp decline, clients can sell their derivative contracts to hedge against risk instead of selling the underlying securities.

Responding to a shareholder's concern about the lengthy capital increase process at HSC due to procedural difficulties with the state-owned shareholder, the Ho Chi Minh City State Financial Investment Company (HFIC), Mr. Johan Nyvene, Chairman of the Board of Directors of HSC, said: “The recent capital increase at HSC took one year, which is half the time compared to the previous one. Although one year is still a long time, the members of the HSC Board of Directors, including the representative from HFIC, have experience in the necessary procedures. We are ready to seek advice from the relevant agencies to carry out the necessary procedures, and we have the support of the HFIC leadership as well as the People's Committee of Ho Chi Minh City, so we hope that the upcoming capital increase will be even faster.”

HSC's extraordinary general meeting voted to approve a plan to offer nearly 360 million shares to existing shareholders, whereby shareholders owning 2 shares are entitled to purchase 1 additional new share. Thus, HSC will raise 3,600 billion VND, increasing its charter capital to 10,800 billion VND.

The funds raised are expected to be allocated to margin lending and proprietary trading activities. Specifically, approximately 70% (equivalent to VND 2,500 billion) will be used to expand margin lending operations, and the remaining 30% (equivalent to VND 1,100 billion) will be used to supplement proprietary trading activities.

According to statistics, HSC is the securities company with the highest debt-to-equity ratio in the market, close to the 200% equity limit.

As of September 30th, HSC's outstanding margin lending balance reached VND 19,286 billion, a sharp increase of 60% compared to the beginning of the year, on equity capital of over VND 10,056 billion.

In previous years, HSC's brokerage market share on the HoSE continuously declined from over 12% in 2016 to 6.7% in 2021 and continued to fall in 2022 due to capital shortages and banks cutting credit limits. In 2023, after a successful capital increase, HSC continuously increased its market share. By the end of Q4/2024, HSC expects its market share to reach 7% on the HoSE, compared to 6% in Q3.

Source: https://baodautu.vn/hsc-bieu-quyet-thong-qua-ke-hoach-chao-ban-gan-360-trieu-co-phieu-d231697.html