HÀ NỘI — Việt Nam’s stock market is witnessing an extraordinary surge in margin lending, with total outstanding loans soaring to an all-time high of VNĐ280 trillion (nearly US$11 billion) by the end of the first quarter of 2025.

This sharp increase, VNĐ35 trillion higher than the previous quarter, marks a historic milestone, with VNĐ33 trillion of that rise attributed solely to margin lending.

The unprecedented scale of this leverage highlights a renewed wave of investor optimism, but also raises concerns about market fragility in the face of external shocks.

At the centre of this lending boom are Việt Nam’s largest brokerage firms, which are aggressively expanding their credit lines to retail and institutional investors.

Techcom Securities (TCBS) made headlines by becoming the first brokerage firm in the country to exceed VNĐ30 trillion in outstanding loans. Other powerhouses, such as SSI Securities, VPS Securities and VPBankS, have also reported strong growth in their lending portfolios.

VPS alone saw an explosive expansion of VNĐ5.8 trillion in margin loans during Q1, accounting for nearly one-sixth of the market-wide increase.

This dramatic rise in margin lending reflects a broader structural trend in Việt Nam’s capital markets. Brokerages are increasingly capitalised and are leveraging their growing financial resources to meet heightened investor appetite for leveraged trading.

By the end of March, the total equity of securities companies reached VNĐ275 trillion, up VNĐ10 trillion from the end of 2024. This capital accumulation stems from both retained earnings and aggressive capital raising strategies.

Notably, SSI Securities is pushing to elevate its charter capital to VNĐ20.8 trillion via a private placement, with the goal of fortifying its margin capacity and expanding its service offerings.

Similarly, Hồ Chí Minh City Securities (HSC) aims to raise VNĐ3.6 trillion to increase its total capital beyond VNĐ10.8 trillion, signalling a clear intent among major firms to stay ahead of investor demand while preparing for regulatory and market shifts.

Despite the high margin lending figures, brokerage firms still retain considerable headroom to extend further credit.

As of the end of Q1, the industry-wide margin-to-equity ratio stood near 100 per cent, the highest in 12 quarters. While elevated, this figure remains below the legal ceiling, which permits margin lending up to twice a firm’s equity. On paper, this gives firms an additional theoretical lending room of approximately VNĐ277 trillion.

However, the rise in margin lending has coincided with significant volatility in the Vietnamese stock market.

In early April, the VN-Index experienced a sharp correction, tumbling over 220 points to dip below the 1,100-point threshold. The abrupt sell-off triggered widespread margin calls and forced liquidations, sending several highly leveraged stocks to their floor prices.

Though the market has since rebounded, it serves as a cautionary tale about the risks of excessive leverage, especially in a market that remains susceptible to capital flight and global macroeconomic shifts.

Still, the longer-term outlook for Việt Nam’s equity market appears robust. Securities firms are not only scaling their capital but also adapting to evolving regulations that promise to attract greater foreign participation.

In particular, Circular 68/2024/TT-BTC, which took effect on November 2, 2024, represents a pivotal shift in the regulatory landscape. Under the new rule, foreign institutional investors can place buy orders without the requirement of full pre-funding, provided they meet strict internal control and risk management standards.

This adjustment is widely seen as part of Việt Nam’s ongoing efforts to modernise its capital markets and meet the criteria for an upgrade from frontier to emerging market status in global indices such as MSCI and FTSE Russell.

An upgrade would significantly increase capital inflows from large institutional funds and broaden market participation, further fuelling the momentum behind the current expansion in margin lending. — BIZHUB/VNS