Sai Gon Securities Inc (SSI) was the top brokerage by market share on the HCM Stock Exchange in the second quarter.

SSI ranked first with a market share of 15.35 per cent, followed by HCM City Securities (HSC), Viet Capital Securities (VCSC) and VNDirect Securities (VNDS) that had 9.38 per cent, 6.8 per cent and 6.74 per cent, respectively, of market share on the southern bourse.

The figures for those four companies in the first quarter of 2017 were 14.12 per cent, 10.59 per cent, 7.68 per cent and 6.79 per cent, respectively.

Those four brokerage firms also had the biggest market shares in the southern market in the first half of 2017.

The figures were 14.85 per cent for SSI, 9.87 per cent for HSC, 7.16 per cent for VCSC and 6.76 per cent for VNDS.

Bao Viet Securities (BVSC) and MB Securities (MBS) ranked fifth and sixth, respectively.

Those two firms recorded market share of 6.5 per cent and 6.46 per cent, respectively, for the second quarter, and 6.7 per cent and 6.25 per cent, respectively, for the first half.

The six brokerages’ shares have gained significantly since the beginning of 2017 as the stock market has recorded strong gains in the same period.

SSI share price rose 40 per cent, HSC share price surged 64 per cent, VNDS share price soared 68 per cent, BVSC share price increased by 33.5 per cent and MBS share price jumped 114 per cent.

Shares of VCSC started trading on the HCM City’s market yesterday, hitting the daily ceiling increase of 20 per cent.

The sharp rise in the share prices of brokerage companies has proved investor confidence is high.

The benchmark VN Index on the HCM Stock Exchange increased by 16.6 per cent to reach a closing level of 775.73 points on July 7.

Trading liquidity also rose to reach VND484.2 trillion (US$21.5 billion) for all securities products, a yearly increase of 65.7 per cent.

According to market analysts, the improvement of market trading liquidity is the key element that could drive companies’ earnings up in the second quarter.

In the second quarter, top brokerages such as SSI and HSC are forecast to announce their earnings increased by a yearly rate of 30-40 per cent.

One reason for the increased earnings is a new accounting mechanism used to develop financial statements.

The new accounting mechanism, which was issued in late 2016 and applied for brokerage companies at the start of 2017, allows securities firms to record financial assets (which are mostly stock investments) as financial liabilities at fair value through profit or loss (FVTPL).

The profit or loss of the financial assets is calculated based on the initial stock prices at which the company makes the purchase.

By doing so, VNDS recorded its profit in the first quarter at VND222.7 billion, a yearly eight-fold increase from last year’s number. The company’s first-quarter profit was contributed by a FVTPL value of VND238 billion and it expects its earnings in the second quarter will be positive.

According to SSI analysis director Nguyen Duc Hung Linh, securities firms’ earnings are expected to be high, boosting corporate earnings from share trading.

In addition, the stock market will be supported by a low level of saving interest rates that commercial banks are using, he said, adding that low saving rates would turn investors to seek for investment opportunities in other channels, including the stock market.

Linh said that other reasons that could drive the gains of both the stock market and brokerage firms included the coming derivatives market, which is expected to operate in August, high foreign investor confidence with a net buy value of VND9 trillion so far this year and large-cap State-owned enterprises and corporations, which will trade their shares on the stock market and organise initial public offerings soon. — VNS