Margin lending in Vietnam’s stock market hits record, but not worrisome

Despite margin debt in Vietnam’s stock market surging sharply, experts believe that current margin pressure is not yet a major concern as top securities firms have significantly strengthened their capital buffers.

According to statistics, total margin lending by securities companies reached approximately VND370 trillion ($14 billion) by the end of Q3/2025, an increase of VND78 trillion compared to the end of Q2. This is also the highest margin debt level in Vietnam’s stock market history.

There are currently 13 securities companies with margin loans exceeding VND10 trillion ($379.64 million). These firms collectively hold VND262.78 trillion ($9.98 billion) in margin debt, accounting for 71% of the total market.

Most of these companies have seen a sharp increase in margin lending since the beginning of the year. Several new entrants to the list include ACBS, VIX, VPBankS, KIS Vietnam, and Kafi.

The sharp increase in margin lending has been a major driver of the benchmark VN-Index’s strong performance in Q3, which surged by about 21%. Along with this rally, market liquidity was high, with many trading sessions exceeding $1 billion in value.

As a result, following the sharp market correction on October 20, concerns arose about excessive margin levels. However, the margin-to-equity ratio of securities companies remains within a manageable range.

According to regulations, total margin lending by a securities firm must not exceed 200% of its equity capital. As of the end of Q2/2025, the total equity of all securities companies was around VND287 trillion ($10.9 billion), resulting in a market-wide margin-to-equity ratio exceeding 100%. By the end of Q3/2025, this ratio had increased to around 120%, suggesting that there is still room for further lending.

Based on data from firms with margin balances over VND10 trillion ($379.64 million), only MBS, HSC, Mirae Asset, and KIS Vietnam have margin-to-equity ratios above 180%. Among them, MBS tops the list with a margin-to-equity ratio of 207%.

TCBS, the firm with the largest margin debt, surprised the market with a margin-to-equity ratio of just 96%, slightly lower than earlier this year (97%). This decline was due to a 1.6x increase in equity, driven by private placements and IPO activity.

Other major players have manageable ratios as well, such as SSI (128%), VPBankS (132%), and VPS (158%). Even companies with fast-growing margin loans, such as VIX (80%) and VNDirect (70%), remain at sub-100% levels.

Securities firms racing to raise capital

To meet rising capital demands in the new growth phase, securities companies are aggressively increasing their capital.

VPS, the top brokerage on the HoSE exchange, completed the issuance of 710 million shares to existing shareholders on October 10, increasing its outstanding shares to 1.28 billion units, or VND12.8 trillion ($485.94 million) in charter capital.

VPS is also conducting an IPO of 203.3 million shares at a starting price of VND60,000 ($2.28) per share and will follow up with a private placement of 161.85 million shares to professional investors. Upon completion of all three offerings, the firm is expected to raise its charter capital to over VND16.44 trillion ($624.12 million), along with a significant share premium.

Similarly, VPBankS is in the process of IPO-ing up to 375 million shares, equivalent to 25% of its charter capital, at a price of VND33,900 ($1.29) per share. The company is expected to raise more than VND12.71 trillion ($482.52 million).

Previously, TCBS completed the sale of 231.1 million IPO shares at VND46,800 ($1.78) each, increasing its charter capital to over VND23.13 trillion ($878.1 million). The company is expected to raise nearly VND10.82 trillion, with 70% allocated for proprietary trading (stocks and bonds) and 30% for margin lending.

In September, SSI successfully sold 100% of its offering to 18 investors, including 38.14 million shares to domestic investors and 65.89 million to foreign investors at VND31,300 ($1.19) per share, raising close to VND3.26 trillion ($123.76 million).

Earlier that month, SSI announced a plan to issue 415.5 million shares to existing shareholders, aiming to raise its charter capital from VND20.78 trillion to nearly VND25 trillion ($949.1 million), the highest in the sector.

At a selling price of VND15,000 ($0.57) per share, the company expects to raise about VND6.2 trillion ($235.37 million), which will be used to expand margin lending and invest in bonds and certificates of deposit.

Recently, Vietcap Securities proposed to issue up to 127.5 million shares at a price no lower than the company’s book value as of December 31, 2024 (VND18,026 per share). Based on this price, the firm would increase its charter capital to about VND8.5 trillion ($322.7 million).

In addition to the aforementioned names, other securities firms like HSC, Kafi, TPS, and MBS are also planning to issue hundreds of millions of shares in the near future.

Given Vietnam's stable macroeconomic conditions and positive earnings outlook for listed companies, analysts believe that new capital inflows from margin lending will continue to be a key driver pushing the VN-Index higher in the final months of 2025.

The VN-Index, representing the Ho Chi Minh Stock Exchange (HoSE), closed Tuesday at 1,663.43 points, up 27 points, or 1.65%, after experiencing the sharpest decline in its 25-year history on Monday, down by 94.76 points, or 5.47%, to 1,636.43.