phuocpham
26-09-2009, 04:09 PM
Securities company advisors no longer sit idle. The corporate clients are back, and the advisors are now busy competing fiercely for the right to serve them.
Securities companies have gotten more work these past three months, reports the financial paper Dau tu Chung khoan (Investment and Finance). The stock market has woken up after a long period of hibernation but even so, the competition has also become stiffer.
The head of a company which will soon put its shares on Vietnam’s market for unlisted public companies, UpCom, related that he received five offers of financial consultancy services. The low-bidding suitor offered a 10 million dong package of services and the highest a deluxe 50 million dong proposal.
After listening to the presentations, the director said, he chose the high bidder. He explained that he was swayed by that securities company’s promise to assist in managing the shareholders’ records and to support the enterprise’s PR in its first year on the UpCom.
A director of a big securities firm says that in a recent meetings with the top officers of potential clients, they told him right away that several other securities companies were offering ‘free consultancy.’
Unfazed, he asked the company officers to listen to his presentation first, and then – if they were convinced -- the two sides would negotiate about the consultancy fee. It turned out the final consultancy fees were nearly the same as the fees expected by the securities company.
Because Vietnam’s State Securities Commission has required all public companies with more than 100 investors to make their shares available on the UpCom, securities companies see plenty of opportunities to earn money. Small securities companies are offering low consultancy fees, while big companies are emphasizing service quality.
Saigon Securities Incorporated (SSI), Bao Viet Securities and Ban Viet Securities have been among the best known financial consultants among the 103 registered securities firms. These were securities companies that advised on big issues like the listing of Bao Viet Insurance group, Vietnam Industrial and Commercial Bank and Van Phat Hung Company.
However, some medium-sized securities companies are becoming better known after winning the business of big companies like Southern Rubber Industry Company and Nam Bay Bay Investment Company. In some cases, close relationships with capital contributors help small companies get important consultancy contracts. For example, Standard Securities Company got the consultancy contract on the listing of the Construction Investment and Development Company.
However, the values of the contracts different securities firms can get differ greatly. Some securities companies are essentially working for free, while a securities company has reportedly secured a 10 billion dong contract with a company that plans to list on the HCM City Stock Exchange in the fourth quarter of the year.
Only a few contracts have been announced recently for mergers and acquisition (M&A) consultancy services. Bao Viet is advising the merger of Hiep Quang Company into Dabaco, Ban Viet is advising Holcim Cement’s acquisition of Cotect and PVD Invest’s merger into PV Drilling.
In contrast to share listing services, M&A consultancy remains the playing field of big securities companies only. Ban Viet Securities Company is now charging a fee of one to three percent of its contracts’ value. Ban Viet can charge a premium because it has built a reputation for high quality services.
The head of a big securities company argues that there is nothing to gain by paring fees. Clients well understand, he says, that in consultancy, service quality is more important than the money. Besides, if companies cut fees now, they will find it difficult to raise them in the future.
Securities companies have gotten more work these past three months, reports the financial paper Dau tu Chung khoan (Investment and Finance). The stock market has woken up after a long period of hibernation but even so, the competition has also become stiffer.
The head of a company which will soon put its shares on Vietnam’s market for unlisted public companies, UpCom, related that he received five offers of financial consultancy services. The low-bidding suitor offered a 10 million dong package of services and the highest a deluxe 50 million dong proposal.
After listening to the presentations, the director said, he chose the high bidder. He explained that he was swayed by that securities company’s promise to assist in managing the shareholders’ records and to support the enterprise’s PR in its first year on the UpCom.
A director of a big securities firm says that in a recent meetings with the top officers of potential clients, they told him right away that several other securities companies were offering ‘free consultancy.’
Unfazed, he asked the company officers to listen to his presentation first, and then – if they were convinced -- the two sides would negotiate about the consultancy fee. It turned out the final consultancy fees were nearly the same as the fees expected by the securities company.
Because Vietnam’s State Securities Commission has required all public companies with more than 100 investors to make their shares available on the UpCom, securities companies see plenty of opportunities to earn money. Small securities companies are offering low consultancy fees, while big companies are emphasizing service quality.
Saigon Securities Incorporated (SSI), Bao Viet Securities and Ban Viet Securities have been among the best known financial consultants among the 103 registered securities firms. These were securities companies that advised on big issues like the listing of Bao Viet Insurance group, Vietnam Industrial and Commercial Bank and Van Phat Hung Company.
However, some medium-sized securities companies are becoming better known after winning the business of big companies like Southern Rubber Industry Company and Nam Bay Bay Investment Company. In some cases, close relationships with capital contributors help small companies get important consultancy contracts. For example, Standard Securities Company got the consultancy contract on the listing of the Construction Investment and Development Company.
However, the values of the contracts different securities firms can get differ greatly. Some securities companies are essentially working for free, while a securities company has reportedly secured a 10 billion dong contract with a company that plans to list on the HCM City Stock Exchange in the fourth quarter of the year.
Only a few contracts have been announced recently for mergers and acquisition (M&A) consultancy services. Bao Viet is advising the merger of Hiep Quang Company into Dabaco, Ban Viet is advising Holcim Cement’s acquisition of Cotect and PVD Invest’s merger into PV Drilling.
In contrast to share listing services, M&A consultancy remains the playing field of big securities companies only. Ban Viet Securities Company is now charging a fee of one to three percent of its contracts’ value. Ban Viet can charge a premium because it has built a reputation for high quality services.
The head of a big securities company argues that there is nothing to gain by paring fees. Clients well understand, he says, that in consultancy, service quality is more important than the money. Besides, if companies cut fees now, they will find it difficult to raise them in the future.