Investors put the most money into securities companies
Data from financial reports of securities companies (SCs) show that the total balance of customer deposits by the end of 2023 reached VND83,000 billion (equivalent to about USD3.3 billion).
Deposits at securities companies increased for the third consecutive quarter, reaching the highest level in nearly two years, up about VND20,000 billion compared to the end of 2022.
In the past, the amount of money available in large securities companies (compared to the market size) often brought positive signals to the stock market. However, in reality, although deposits in securities companies are very high, transactions on the stock market are still quite quiet and stock prices increase slowly.
The question is, why has the amount of money deposited at securities companies increased so sharply? Who are the depositors and what is the expected impact of this money flow on the stock market in the coming time?
According to financial reports, it can be seen that deposits are mainly concentrated in a number of securities companies such as VPS Securities, VnDirect, Techcombank Securities (TCBS), SSI Securities, BSC, VCBS...
At VPS, customer deposits reached VND 16,555 billion by the end of 2023. Meanwhile, VnDirect (VND) recorded VND 6,400 billion and TCBS VND 5,800 billion. SSI Securities also had customer deposits reaching nearly VND 5,300 billion.
Most securities companies have deposit balances of several thousand billion VND such as: BSC, SHS, VCBS...
It can be seen that the amount of deposits at securities companies is very large. Deposits at VPS Securities are even equal to 70% of the capital mobilized by a small bank like Saigon Bank for Industry and Trade - Saigonbank (SGB). By the end of the fourth quarter of 2023, Saigonbank had customer deposits of just over VND 23.5 trillion.
The movement of such large cash flows into an investment channel can partly reflect fluctuations in the financial market as well as the situation and prospects of the economy.
The cash flow into the stock market is believed to have many causes. It takes place in the context of a sharp decline in bank deposit interest rates, while the banking system is pushing to pump capital into the economy. The real estate market has not yet recovered, while this is a channel that attracts a large amount of money in the economy.
Billions of dollars in stock accounts: Where does the money come from?
Mr. Le Quang Tri - Brokerage Director of Nhat Viet Securities JSC - said that the amount of money investors keep in their securities accounts has increased sharply, possibly because they see opportunities in the stock market and are preparing to return to this investment channel.
However, according to Mr. Tri, many investors have not yet increased disbursement due to expectations that the market will adjust to more reasonable prices.
Many organizations also gave positive forecasts for the stock market after Tet, when businesses simultaneously announced their business results for the fourth quarter of 2023 and prepared plans for the general meeting of shareholders season, taking place from March to April 2024.
There are many factors expected to support the stock market, such as a solid macro foundation, low interest rates, efforts to boost credit growth, and the Government's promotion of public investment.
The corporate bond market has come out of its worst phase. The real estate market is expected to gradually improve when the Land Law (amended) is passed.
The Law on Credit Institutions (amended) is also expected to help stabilize the banking system, reduce cross-ownership, backyard lending, and credit lending that is too concentrated on a few interest groups...
The global economic situation is also positive. According to HSBC, the Asian economic region will grow more solidly. The US economy will have a soft landing. The US Federal Reserve (Fed) will cut interest rates in June 2024. Corporate income will recover.
In the first 3 weeks of the new year 2024, the stock market has not broken out but has also moved up. Liquidity is not high but may explode. Notably, most forecasts are positive for the stock market. While other investment channels are still quite obscure, it is clear that the stock market is the place of interest.
In fact, deposit interest rates at banks are currently very low. Short-term deposits are at 3-5%/year, and deposits of 12 months or more are mostly at 5-6%/year.
It can be seen that savings interest rates are only about 40-50% compared to the peak period in the second half of 2022.
With the current low interest rates, just buying the right stocks within 3 sessions can earn many times more profit. The attractiveness of the stock market is clearly much higher than the savings channel and the stagnation of the real estate channel.
Besides, many securities companies have recently circumvented the law to mobilize deposits from investors.
Normally, deposits at securities companies consist of two parts. One is the money waiting for the opportunity to disburse to buy stocks, when in the account of the securities companies, they will receive a low interest rate of about 0.3%/year. The second is the amount of money for mobilized deposit products, which the securities companies pay a much higher interest rate, from 3-5%/year, even up to over 8%/year.
Recently, the State Securities Commission has issued an official dispatch requesting securities companies not to carry out activities that make customers/investors understand that securities companies have the function of receiving deposits like credit institutions.
However, some securities companies have not stopped this service. Previously, investors could see this type of service in some companies such as ISave of TCBS, or names such as Money Market (MM) service of VPS; S-Savings service of SSI...
The strong cash flow waiting in securities accounts is a good sign, proving that the stock market has the potential to attract the attention of investors.
But, from another perspective, it also shows the absence and lack of attractiveness of other investment channels and the poor absorption of capital in the economy. The slow turnover of cash flow in any investment channel as well as the economy in general is not good.
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