VNDirect invests in bonds.

Besides increasing loans for investors to buy shares on the stock exchange, VNDirect's mobilized funds are showing signs of flowing strongly into the bond market.

Shareholders are constantly required to pay money.

Reaching a short-term peak of VND 25,250 per share on September 20, 2023, the VND stock of VNDirect Securities Joint Stock Company subsequently declined continuously, especially after a system failure that prevented investors from trading across the entire system at the end of March 2024 (lasting more than a week), leading to a sharp drop in price, reaching a short-term low of VND 18,900 per share on April 19, 2023, 25.1% lower than the peak on September 20, 2023.

However, recently, VND shares recovered to 21,900 VND/share on May 17th (closing price on May 22nd was 21,300 VND/share), attracting renewed investment as the company announced approval for a share offering and capital increase.

According to the capital increase plan recently approved by the State Securities Commission, VNDirect plans to offer nearly 244 million shares to existing shareholders at a ratio of 5:1, meaning shareholders owning 5 shares will have the right to purchase 1 new share, at an offering price of VND 10,000 per share. With this plan, the company estimates it will raise nearly VND 2,440 billion, which will be used to expand its margin lending capacity, capital market operations, and bond underwriting capabilities.

In addition, VNDirect has also been approved to pay dividends in shares at a rate of 5%, corresponding to the issuance of nearly 61 million additional shares. Thus, if both issuances are completed, the company's charter capital will be increased from VND 12,178 billion to nearly VND 15,223 billion.

VNDirect is one of the few securities companies that has consistently offered shares to raise capital from shareholders in recent years. From 2018 to March 31, 2024 alone, VNDirect's charter capital increased 6.86 times, from VND 1,549.98 billion to VND 12,178.4 billion, becoming one of the listed securities companies with the fastest charter capital growth rate on the stock exchange.

Investing in financial assets

In fact, from 2018 to 2022, after several capital increases and additional debt financing, VNDirect focused on allocating its raised capital to financial assets recognized through profit/loss (FVTPL), investments held to maturity (HTM), and loans. Among these, FVTPL and loans experienced rapid growth.

As of March 31, 2024, the three aforementioned items recorded VND 34,202.6 billion, accounting for 82.7% of VNDirect's total assets. Of this, FVTPL assets accounted for VND 16,445.1 billion, HTM assets VND 7,799.9 billion, and loans VND 9,957.6 billion.

Furthermore, in terms of asset portfolio allocation, besides increasing loans for investors to buy shares on the stock exchange, VNDirect's mobilized funds show signs of strongly flowing into the bond market. While at the end of 2019, the corporate bond portfolio only recorded VND 105.45 billion, by March 31, 2024, the value of unlisted bonds had reached VND 8,698.1 billion, an increase of 81.5 times. VNDirect did not provide detailed explanations of the bonds it holds.

However, in light of recent developments in the bond market, in her most recent statement at the 2023 Annual General Meeting of Shareholders, explaining the investment in Trung Nam bonds, Ms. Pham Minh Huong, Chairman of VNDirect, stated that the company chose Trung Nam because it is a representative enterprise in the energy sector, with the capacity to implement and develop projects and the ability to find investment projects. Although the transaction with Trung Nam was thoroughly researched, the company also faced difficulties similar to most companies issuing bonds in the past.

“Many investors are concerned that VND shares are linked to the story of Trung Nam, and this is true. However, VNDirect assesses that Trung Nam only faces temporary liquidity risks, not economic model risks. Of course, there are also some policy-related risks, but these were assessed by VNDirect before deciding to participate in the underwriting. The only risk that VNDirect did not foresee was the resale by investors, forcing the company to repurchase a large amount of bonds to protect investors and the market,” Ms. Huong emphasized.

The proprietary trading portfolio increased more than tenfold.

Returning to the topic of rapid capital raising, the continuous influx of funds from investors has significantly increased VNDirect's asset size from 2018 to the present. However, along with this asset growth, the company is expanding its portfolio of stocks and bonds too quickly, culminating in the expansion of its bond portfolio related to companies showing signs of cash flow difficulties in the real estate and renewable energy sectors.

Specifically, from 2018 to March 31, 2024, the total value of proprietary trading investments increased 10.1 times, equivalent to an increase of VND 14,968.8 billion, reaching VND 16,445.1 billion and accounting for 39.8% of total assets (compared to only 14% at the beginning of the period).

In addition, the system outage at the end of March 2024 raised many questions regarding the lack of investment and security in the system commensurate with the company's growth.

Reportedly, in 2024, VNDirect plans to focus on two main areas: capital market services and investment asset management; and securities trading services.

It can be seen that, along with increasing borrowing and raising capital from shareholders to expand its capital base, VNDirect is boosting its proprietary trading portfolio in stocks and bonds, while also increasing outstanding loans to individual investors.

Source: https://baodautu.vn/vndirect-do-von-vao-trai-phieu-d215896.html