Nâng cao năng lực cạnh tranh của các công ty chứng khoán việt nam astract

Vietnamese Securities Companies;

Chapter 1: RESEARCH OVERVIEW

1.1.

Proposing the solutions of enhancing the competitiveness competence for
Vietnamese Securities Companies, particularly in the context of stock market liberalization
under WTO participation commitment.

REASONS OF RESEARCH

Vietnam stock market has been changing dramatically since 2000, especially since
2005. The law and institutional framework have been established. As of 31/12/2014, there
were 672 listed companies and 160 registered trading companies on Vietnam stock market,
of which the market capitalization reached up to 1,128 trillion VND equivalent to 31.5%
GDP. Within 15 years of establishment and development, more than 100 securities
companies (SCs) have founded and operated in Vietnam.
With various organization models, number of domestic and foreign strategic partners
and unlimited support from long-standing financial organizations in Vietnam, the Vietnam
stock market have shown its increasing completion and effectiveness. This increasingly
mature market offers many convenient conditions and challenges for the SCs which are
effectively operating. As the entity on VSM, SCs have been contributing to the vibrancy and
effectiveness of the market, thus leveraging the operation effectiveness competence of SCs.
However, competitiveness of Vietnamese SCs has been considered low in comparison with
other competitors such as Foreign SCs. Under pressure of economics integration originating
from the participation of high level foreign SCs in Vietnam market, Vietnamese SCs are
hard to find themselves developing sustainably, taking their key responsibilities on VSM
without further pushing up their competitiveness competence.
Competitiveness and the analysis of enterprises’ competitiveness competence in
Vietnam are always at heart of attentions from various parties. It is safe to say that

numerous researches on competitiveness competence have been published continuously in
every business sectors during recent couples of years. As for finance – securities sector, the
number of researches on this matter for each enterprise, business organization has climbed
up to dozens, among those the counts of such researches on SBs are considered significant.
The research topics on competitiveness competence in Securities sector are also diversified
and varied.
As important financial intermediaries in the Stock market, SCs will keep the
incessant effort in enhacing the effectiveness competence in Stock market, in ensuring their
stable position and status for sustain development. With the increasing numbers of SCs and
their important roles in the securities trading in market, Vietnamese SCs haven’t carried out
yet the intensive researches on their competitiveness competence. This is the main reason
why the author decided to focus more on the research titled “Increasing the competiveness
competence of the Vietnamese Securities Companies”.

Objects and scope of Research
Research Objects
For the information transparency which is strictly applied for all listed enterprises in
Vietnamese Stock Market, the Securities Companies are also included. Hence, in order to
reach the aim of setting up and analyzing the transparent data to produce the best research
outcomes, author selected the research objects as Vietnamese Securities Companies,
particularly focusing on competiveness competences of Vietnamese Securities Companies.
Scope of Research
Geographical context: Covering all Vietnam territory with more focus on the large
financial and securities centers such as Hanoi Capital, Da Nang City and Ho Chi Minh City.
Timing Context: PhD candidate conducted survey, data collection during period from
2011 to 2014, in which some data had been analyzed based on data collected since the
establishment of Vietnamese Stock Market.
1.2.

RESEARCH OVERVIEW

Competiveness is the complicated and long-lasting economic – social phenomenon
with numerous researches, analysis reviews from different economists in many centuries.
The complexity of competitiveness is clearly explained by the existence of different
concepts and perspectives of competitiveness, based on various approaches and analysis of
competitiveness phenomenon.
Competitiveness competence is the concept attracting lots of attentions from various
parties in different sectors such as economists, industrial capitalist, politicians, journalists,
scholars in varied countries. It depends on context and degree, each approach will lead to
different definition of competitiveness competence.
The level of Competitiveness competence: the level of Competitiveness competence
is the category which achieves highest consensus among scholars in the world. Most of
theories, analysis on competitiveness competence all divide this concept into 03 different
levels: Competitiveness competence at national level, Competitiveness competence at sector
level, Competitiveness competence at enterprise level.
1.2.1 Researches on competitiveness competence

Research on the internal factors affecting the competitiveness competence of

Some outcomes of researches on competitiveness competence produced by scientists
such as: PhD in Economics Thesis Research “Some solutions to enhance the
competitiveness Competence of Vietnamese coffee” by author Tran Ngoc Hung in 2003;
PhD in Economics Thesis “Improving the competitiveness competence of Vietnam
Electronics Sector during global economic integration process” by author Hoan Thi Hoan

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The Research Objective

Systemizing the scientific theories on competitiveness competence, competitiveness
competence of Securities Companies;


in 2004; PhD in Economics Thesis “Improving the competitiveness competence and
integration of commercial banks until 2010” by author Trinh Quoc Trung in 2004;…

of Stock market would be proposed.

The reference books including “Improving the competitiveness of our economy
during regional and international integration process” by Prof. PhD Chu Van Cap, the
National Political publishing house (2003); “Improving the competitiveness competence of
SMEs” by Prof, PhD Pham Quan Trung, National Economic University Publishing House
(2006) …are some of works defining clearly a number of hypothesis on competitiveness
competence of enterprises.

Rationale, theoretical contribution

1.2.2. Researches on Securities Companies
PhD in Economics Thesis “Solutions to enhance the involvement of finance
intermediaries in process of building and developing Stock markets in Vietnam” by author
Trang Dang Kham (2002) did mention the financial intermediaries on stock markets; PhD in
Economics Thesis “Developing the operations of Vietnamese securities Companies” by
author Le Thi Huong Lan (2008) elaborated all the financial activities of a single securities
broker and analyze all the factors relating operation development of securities broker;…
1.3

This paper applies the assessment model of internal factors written by Thompson and
Strickland (2001) to identify 07 internal factors affecting the competitiveness competence of
Vietnamese Securities companies, including financial resource; intellectual capital; product

quality; technological level; service quality; trademark; reputation and promotion activities;
operating network.
Findings, recommendations from the research outcomes
(i)

Dissertation has set up and assessed the 07 internal factor model affecting the
competitiveness competence of Vietnam Securities companies, which 07 factors
prove their positive effect (+) on the competitiveness competence of Securities
companies.

(ii)

The dissertation has weighted the effect level of each internal factor toward the
competitiveness competence of Vietnamese Securities companies. From that, the
author has proposed the relevant solutions related to improvement of competitiveness
competence for Vietnamese Securities companies, especially in the context of
liberalization of the stock market

(iii)

Some centralized solutions:

Void for research

(i) Build up the complete set of rationales related to competitiveness competence of
Securities Companies; (ii) Build up and review the internal factors affecting the
competitiveness competence of Vietnamese Securities Companies (iii) Proposing solutions
to improve the competitiveness competence of Vietnamese Securities Companies in context
of liberalization of Stock markets.
1.4

1.6. NEW CONTRIBUTIONS OF THESIS

Set up organization model coherently, set up and develop the workforce,
identify criteria in attracting talents, research and develop products to concretize and
enhance the intellectual competence for Securities companies;

Research questions

(i) What are the rationales of competitiveness and competitiveness competence of
Securities Companies?; (ii) What are the internal and external factors affecting the
competitiveness competence of Securities Companies? (iii) How is the current status of
competitiveness competence of Vietnamese securities Companies? (iv) On the basis of
reviewing the internal factor group affecting the competitiveness competence of Securities
Companies, what are the necessary solutions to enhance the competitiveness competence for
Vietnamese Securities Companies, especially during the process of internal economic
integration under WTO participation commitment?
1.5 Research methodology
Analysis and synthesis are two methods applied throughout the research carry-out.
Intensive interview with experts, who are the managers in charge of Securities Companies
operation (CEO, Deputy CEO…), fellows would have the background to review the internal
factors affecting the competiveness competence of Securities Companies. From the
comprehensive analysis, fellow will build up the questionnaire for field survey, reviewing
for research outcome. From that, solutions for Vietnamese Securities Companies in
application of suitable internal factors affecting the competitiveness competence of
Securities Companies to improve the competitiveness competence under the liberalization
3

Set up requirements of overall technology for operation of Securities
companies, develop the criteria assessing the updating level of technology and

applying the new technology on service product, issues relating to online transactions
being ensured smooth 24/24…are concretized to sets of requirements to improve the
technological competence for the development of Securities companies.
1.7.

DISSERTATION STRUCTURE
Dissertation comprises of 05 chapters:
Chapter 1:

Research overview

Chapter 2:
Companies

Literature Review of Competitiveness Competence of Securities

Chapter 3: Current situation of Competitiveness Competence of Vietnam
Securities Companies
Chapter 4: Research into model of internal
Competitiveness Competence of Securities Companies
Chapter 5:

factors

affecting

Solutions of improving the Competitiveness Competence for
4

Vietnamese Securities Companies

characteristics and conditions of securities, appraise the stock market, analyze the financial
situation of the issuer to advise the investor on successful transactions of securities.
Securities portfolio management (investment trust): is the activity in which Securities
Company is entrusted to deal securities for clients.

Chapter 2: LITERATURE REVIEW OF COMPETITIVENESS COMPETENCE
OF SECURITIES COMPANIES

2.1

BASIC UNDERSTANDINGS OF SECURITIES COMPANIES

Concept and characteristic of Securities Companies
Concept: Securities Companies is defined as a financial intermediary institution
established by law, make a and/or some of activities on the stock market.
Characteristics of Securities companies
Characteristics including: (i) A Securities company is the intermediary institution on
transactions; A Securities company is the intermediary institution to provide information;
(ii) A Securities company is the capital intermediary institution between seller and buyer;
(iii) A securities company is the intermediary institution of risk; (iv) A securities company
is the intermediary of payment; (v) Conflicts of benefits between the securities companies
and clients; (vii) A securities company is a business institution with conditions, which
shown by: Capital condition; Condition on specialization and human resource; Conditions
on facility.
Roles of Securities companies
(i) Firstly, Securities companies create the mechanism of capital mobilization for
enterprises and economy; (ii) Secondly, securities companies contribute into the
stabilization of stocks on market; (iii) Thirdly, securities companies offer new product and

service on market; (iv) Fourthly, securities companies help the market control authorities
manage, supervise the activities on market most effectively; (v) Fifthly, securities
companies help to reduce the transaction fee, risks and improve the investment efficiency
for investors.

Issuer advisory (financial advisory): subject to Issuer’s purposes and requirements,
the Securities Company will conduct its advisory services related to finance or IPO…,
therefore, the contents of financial advisory services including: Corporate finance analysis,
consulting the valuation of corporate; IPO advisory; Re-capitalization advisory; M&A
advisory; listing advisory.
Securities depository is retention and protection of client’s securities and help clients
perform their rights for the securities depository
Perform client’s proprietorship: Depriving from the securities depository, Securities
Company is able to perform the client’s proprietorship rights of securities deposited.
Lending: is the operation in which Securities Company approves loan made to client
for purpose of securities purchasing and accepts the securities as the loan guarantee from
client. Besides depository loan, Securities Company also offers Securities loan to client for
short-selling.
Information provision: Securities Company is an information channel of market,
issuers, transactions and other legal issues for investors. In the meanwhile, Securities
Company also provides market information for market control authorities for their
management objectives.
2.2

LITERATURE REVIEW OF COMPETITIVENESS COMPETENCE

Concepts of competitiveness competence
Competitiveness competence is the enterprise’s strength and advantage over other
competitors in satisfying highest their client’s needs to obtain the increasingly higher
benefits.

Main business activities of Securities companies

Levels of competitiveness competence

In proprietary dealing: is business activity that securities company sell and buy securities
by their own capital for their own account, in the meanwhile suffering risks from that.

Competitiveness at nation level

Securities services
Brokerage: is operation bridging sellers and buyers of securities. By securities law,
securities brokerage means the operation of a securities company acting as an intermediary
to carry out securities buying or selling orders on behalf of the customers.
Underwriting: is operation in which Securities Company helps issuer complete the
procedures prior to securities offering, distribute the securities and stabilize the securities
price during the 1st phase after offering.

This content is usually analyzed on general overview, focusing on macro-economic
environment and reflecting the role of government. Because the economy entities herein are
national, they mainly deal with economic – social issues based on making use of all local
and international conditions. Most of international scholars have shared the same angle that
competitiveness competence at national level is national productivity, and resulting in the
life quality of people in that nation.
Competitiveness at sector level
At the industry level, competitiveness competence is the ability of companies in the
same sector achieving the certain success against other competitors without any protection

Securities investment advisory: is activity in which Securities Company defines the
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or support from government. As well as competiveness at national level, concepts and
measurements of competitiveness may vary but the final outcome is still the stable stand of
sector on market, based on such conditions as effectiveness in business and production,
application of advanced technology.
Competitiveness at product/ enterprise level
There exist many different concepts on competitiveness at product/ enterprise level,
yet all analyzing competitiveness at micro level. At enterprise level, concepts of
competitiveness are offered by different organizations, economists with heterogeneous
contents. Competitiveness at enterprise/ company level generally is any ability which helps
enterprise/ company grow and develop or at least maintain their position against other
competitors on market. Particularly, it’s considered as ability which helps enterprise/
company to exist, maintain or increase the market share, attract customers to use their
service or product to increase their asset value, market share, revenue and profit for
enterprise/ company.
Models of analyzing competitiveness

internal factors offered the method of assessing the competitiveness competence of a
company though matrix of internal factors evaluation.
Process of building this matrix consists of 05 steps. If total weighted scores of all
factors given in the matrix are 3.0 onwards, the absolute competitiveness of that company is
above average. In contrast, total weighted scores in matrix T < (T* = 3,0), the absolute
competitiveness of company is below average.
The internal factor evaluation model helps companies to assess their competitiveness
in relation with other competitors on the targeted market, thereof exploring the basic
advantages to promote their competiveness on market. This analysis method allows to
identify which competitiveness factor should remain, reinforce more and which factor

should be built, thereof producing the appropriate solution to enhance the competitiveness
competence of company.
The author has applied this model in researching and building the factor set to
evaluate the competitiveness competence of Vietnamese Securities companies.
2.3. THEORIES OF COMPETITIVENESS COMPETENCE OF SECURITIES
COMPANIES

Diamond model of M. Porter
This is the model of analyzing competitiveness which is applied and discussed the
most in academic world. M. Porter conducts research to understand why some companies in
certain countries can create and sustain the superior comparable advantages to other
strongest competitors in the world in some particular sectors. Therefore, he came to
conclusions on series of factors which have influence decision on this success, and grouped
those into 04 main groups arranged in diamond shape – it’s the existing famous and popular
diamond model. Four main criteria in diamond model consist of: Factor conditions of
production/ business (human resource factors, physical and metal factors), Factor conditions
of demand on size, structure and complexity level of local demand on products in certain
industry, the related and supporting industries, and most importantly – the enterprise
strategy, structure and rivalry.
Competition image model
Competition image model used to evaluate the competitiveness competence of a
specific company. This model allows the direct comparisons between analyzed company
and other competitors. The analysis process consists of 06 steps.
In order to apply this competition image model in competition evaluation, it’s
necessary to acquire the data of competitors. This work is not easy, especially in the
increasingly wide global integration, while competitors of Security companies are not just
Security companies themselves but also other Financial Institutions in Vietnam and other
foreign countries, refraining researchers from collecting information.

Concept of competitiveness competence of securities companies

Competitiveness of Securities Company is the expression of competence and
advantages of company over other competitors in best satisfying the customers’ inquiries for
increasingly higher benefits.
Application of Thompson – Strickland method to assess the overall competitiveness
for company, the author has researched and set up 07 internal factors for evaluation of
competitiveness of securities companies.
Internal factors deciding the competitiveness competence of Securities Company
The financial resources of Securities Company
The criteria to assess the financial resource of Securities Company includes: (i) the
capital size of Securities Company; (ii) the profitability of Securities Company; (iii) the
financial safety criteria for operation of Securities Company; (iv) the competence of capital
mobilization.
Intellectual capital resource of Securities Company
Some criteria showing the intellectual capital competence of Securities Company are:
(i) the structure of Securities Company is organized logically; (ii) the staffs are high
qualified; (iii) Talent attraction policy which Securities companies find interested; (iv)
Securities Company focusing on investment in research of product, market.
Product quality of Securities Company

Internal factor evaluation model
The competition model seems to be impossible without enough information of
competitors. To solve this issue, the Thompson and Strickland’s model of evaluating
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The product competence of Securities Company is shown by: (i) Securities Company
with variety of products; (ii) Securities Company often launches new product; (iii) Products
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of Securities Company often offer many utilities; (iv) Price (fee, interest rate) of Securities

company’s products is competitive.

expand production scale, contributing into the increase in supply of commodity on
Securities market.

Technological level of Securities Company

The development of Securities market

The technological level of Securities company is reflected by some factors such as:
(i) Securities company usually updates, applies new technology; (ii) The Securities online
transactions go smoothly and safely; (iii) The Securities services meet customer’s inquiries
24/24; (iv) Online products of Securities company are provided by core software.

This is the direct factor affecting the development of Securities company operation.
This involves commodity development on market and broad participation of investors. The
development of Securities Company does not only limit to national context but also
globally. Hence, the professional activities of Securities Company are likely to develop.

Service quality of Securities Company

Legal system and legal environment

The service quality of Securities Company is reflected by key factors including: (i)
Simple transaction procedure with customers; (ii) The Securities staff are friendly,
considerate and cheerful; (iii) Securities Staff shows professionalism dealing with
customers; (iv) Transaction duration is short; (v) Securities company has good customercare policy.

Legal system has its own decisive significance in limiting or promoting and
encouraging development in any sector. The legal system which adjusts the economic

relationships is not only the legal system in host country but also the international legal
system once the operation of Securities company do not stop at national boundaries. The
clear legal environment will allow enterprises in general and Securities Company, in
particular, develops their operation. The securities company is not just adjusted by relevant
laws but also comply with the professional regulations – Securities and stock market law.

Brand, reputation and promotion activities of Securities Company
Some factors to assess the brand, reputation and promotion activities of Securities
Company: (i) Memorable and recognizable Securities brand; (ii) Securities Company logo is
identifiable; (iii) Securities company slogan is memorable; (iv) Products of Securities
company are advertised widely on mass media; (v) Securities products are highly evaluated
by local customers; (vi) Customers can find information of securities services easily; (vii)
Securities company have impressive advertisement mediums; (viii) Securities company
promotion programs are suitable and valuable; (ix) Securities company has sponsor activity
for public; (x) Documentation of Securities services are eye-catching and impressive.
Securities company network are widespread
The factors dominating the development of Securities company network are shown
by: (i) The system of branches, transactions offices across the financial centers (Hanoi, Da
Nang, Ho Chi Minh) are convenient for customer’s transactions; (ii) The transaction
locations are convenient for customers; (iii) The business hour at Head quarter, branches
and transaction offices is convenient for customers; (iv) The branches and transaction
offices of Securities company are huge in size.
In all, the competitiveness competence of Securities Company is constituted by 07
abovementioned basic factors. However, these factors are inter-related and all build up into
the unified set of criteria rooting from Securities Company, suitable for characteristics of
each Securities company.

Competitiveness among Securities companies
Operating in market economy, all enterprises must accept competitiveness, so do
Securities companies. Though competition process, weak securities companies will be

eliminated or merged into other stronger companies. Securities companies must
acknowledge the level of competitiveness and identify their own position on market, thereof
employing the appropriate direction and solution.
Customers
Customers of Securities Company are entities involved in stock market, on behalf of
securities supply and demand source. The stock market complies with intermediary
principles, making customers of Securities Company who carry out transactions on market
go through Securities Company. Customers of Securities company are various and
diversified with demands. Hence, Securities company needs to sort out customers into
groups, regularly by 02 basic groups: Corporate – on behalf of securities supply and
investor – on behalf of securities demand.

Chapter 3: THE CURRENT STATUS OF COMPETITIVENESS COMPETENCE OF
VIETNAMESE SECURITIES COMPANY

External factors affecting the Competitiveness competence of Securities company
The stability of economy and politics

3.1. ESTABLISHMENT AND DEVELOPMENT OF VIETNAMESE SECURITIES
COMPANY

This is the foremost condition for any activity happening in the economy. The stable
political environment will create the assurance of investment for investors and assurance of
business and manufacturing for enterprises. The stability of economy helps enterprises

With the rapid increase of listed companies on both exchanges, the number of
Securities companies also developed dramatically in 2006. End of 2005, there are only 14
Securities companies, this number of securities companies licensed by State Committee for

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Securities was 41 within 01 year only (2006), bringing the total number of securities
companies to 55. In 2007, another 24 Securities companies were licensed and officially
operated, raising the total number of securities companies to 79. Until 2008, the stock
market employed total of 90 Securities companies, and until peak of 2010, 104 securities
companies, 103 of those were fully eligible for member of Stock exchanges. End of 2013,
there are only 91 Securities companies operating as member of Stock exchanges, some
licensed securities companies which were in process of dissolution or bankruptcy were not
eligible for member of Stock Exchange anymore. This number continued to drop to 89
members of Stock Exchange in 2014.
3.2.

BUSINESS RESULTS OF VIETNAMESE SECURITIES COMPANIES

Sales revenue, cost and profit of Securities companies during 03 years from 2011 to
2013 dropped continuously. The total sales revenue of 80 Securities companies in 2013
which reported in accordance with regulations prescribed in table reached 7,157.05 billion
VND, decreasing 29.03% compared to figure of 93 Securities companies which reported in
accordance with regulation prescribed in table in 2012. The total cost of Securities
companies during 03 years from 2011 to 2013 showed the significant downtrend. The total
cost in 2013 of 80 Securities companies which reported in accordance with regulations
prescribed in table was 5,092.51 billion VND, decreasing 43.45% less than figure of 93
securities companies which reported in accordance with regulations in table in 2012. The
total net profit after tax of securities companies during 03 years from 2011 to 2013
increased significantly. The total net profit after tax in 2013 of 80 securities companies
which reported in accordance with regulations in table reached 2,105.57 billion VND,
increasing 74.67% compared to figures acquired from 93 securities companies which

reported in accordance with regulations in table in 2012.

recovery of economy from bottom. The revenue allocation is especially important in other
revenue sector, in which revenue generated from lending for securities investment had high
proportion, revenue generated from financial consultancy was still not effective. The result
of revenue allocation proved that IB sector of Securities companies shows much potential
and develops irrelevantly with other operations.
Profitability: From 2011 to 2014, the growth rate of profitability changed due to the
effects of difficulties of common economy on the securities companies. Compared to 2011
in which the Securities companies has negative overall profit margin of approximately
VND1000 billion, this profitability in 2012 changed dramatically, reaching VND 946
billion and increasing to VND1,115 billion in 2013. 2014 marked the big jump in
profitability at VND2,056 billion. In the profitability growth trend over the years, there are
some securities companies possessing the satisfactory results, especially reflected by the
positive profitability in 2011, and the higher profit margin compared to median profitability
of other securities companies being listed on stock market.
ROA, ROE of Securities companies: Compared to the negative figure of returns on
asset (ROA) in 2012, this figure increased dramatically in 2013 and 2014, reflecting the
uptrend of securities companies in the context which market escapes from bottom line and
goes up. Corresponding to ROA is ROE of market; the ROE of overall market in 2012 is
relatively high, estimating above 8%.
The indicator of financial security of Securities companies in 2013

Financial resources

Most of Securities companies employ the available fund ratio above 180%, meaning
the very high level of security, are not subject to reporting, monitoring or specially
controlling. If ORS only, this ratio is above 179%, meaning still at the safety level.
Compared to other group of Securities companies, most of Securities companies have
healthy financial status because these entities are “checked up” during evaluation process

before listing. Besides, these companies also have to follow strictly the reporting and
management mechanism for the listed enterprises.

Charter capital situation

Fund mobilization ability of Securities companies

There exists around 85% of Securities Companies with charter capital which
implemented fully operation on Vietnamese Stock market. In which, 06 Securities
companies accounting for 30% of total number of Vietnamese securities companies (Saigon
Securities Incorporation, Agriculture Securities Company, Kim Long Securities,
VNDIRECT Securities Corporation, Ho Chi Minh Securities Corporation and SHS
Securities Corporation) are those with capital of more than VND1000 billion. These are
securities companies showing their leading operation results, management competence
among other Vietnamese Securities companies.

The assessment of fund mobilization ability of Securities companies is reflected by
the increased level of capital volume from the initial capital amount as well as the times of
capital mobilization, in which the mobilized capital is 2 times as high as the previous capital
(meaning double the current available capital). Possibly assessing, the leading securities
companies employ the very quick growth speed of capital scale, good mobilization of
capital on stock market to increase the capital potential, in which SSI, with their initial
capital of VND 6 billion, is successful to increase to more than VND 3,500 billion after 12
years of capitalizing activities.

Analysis of profitability of the Vietnam Securities

Competence of governance – quality of human resource

Revenue: From 2011 to 2013, the growth rate of revenue declined due to the

difficulties that Vietnamese securities companies had been affected from common economy.
Until 2014, securities companies gained much better growth rate of revenue due to the

The Securities companies with stability of C-level manpower system are the ones
leading the stock market at the moment. The period from 2011 to 2014, which saw lots of
changes in stock market, affects dramatically the business activities of the Securities

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3.3
ANALYSIS OF CURRENT STATUS OF VIETNAMESE SECURITIES
COMPANIES


companies.
In this business management, the quality of human resource of the securities
companies indeed plays an important role on their outcome of business. This represents the
growth of leading securities companies with their highly qualified human resource (mostly
university graduates) and number of relevant staffs for business activities of securities
companies.
Competence of product development – Price policy – Technological competence
The products of Securities sector are homologous and extremely competitive in term
of all product related policies such as price, possibility of online transaction, possibility of
online management and transaction.
Reality shows that the Securities companies with excellent core software system
especially provided by oversea vendors or applied the oversea management system will
employ the great advantage of competing their service products in Securities brokerage
sector.

The Securities Companies list public their transaction fees of each service for
customer; however, customers are always entitled some incentives for their deal with
Securities companies when approaching and dealing with Securities companies. This is one
of huge advantages of securities companies which meet fully demands of various customers
in the current extremely competitive environment.

change in general bond market share on market. In addition to market share, the numbers of
securities accounts which are opened at securities companies as well as number of financial
consultancy contracts performed by Securities companies are the important elements to
assess the competence of service quality and trademark reputation of Securities companies.
3.4 GENERAL EVALUATION
Two assumptions: firstly, author builds ranking scores for each internal factors
affecting competitiveness competence of securities companies; secondly, author assumes
level of importance of factors affecting competitiveness competence of securities
companies.
Based on data collected from current situation of securities companies in Vietnam,
author draw a conclusion about ranking securities companies under five main groups, in
which a group having the highest competitiveness competence is group 5 and group having
the lowest competitiveness competence is group 1. The analysis is for research and
reference; author gives personal opinion and takes responsibility for it.

Chapter 4: RESEARCH INTO MODEL OF INTERNAL FACTORS AFFECTING
COMPETITIVENESS COMPETENCE OF SECURITIES COMPANIES

4.1.

Network development of Securities companies
Among the current Vietnamese Securities companies, around 10-20% of the
securities companies have established the marketing department for their operations
performing. The small Securities companies often combine their operation division to

reduce cost. However, the delivery of customer services, service product policies is often
originated from independent management division which is marketing department. The
leading securities companies always deploy a network wide system, especially focusing on
03 financial centers of the country including Hanoi, Da Nang, Ho Chi Minh city.
Service quality – trademark reputation
The element performing the competence of service quality as well as trademark of
Securities companies is shown as market share of Securities companies in brokerage sector
(including stock brokerage – fund certificates and bond brokerage) at stock market in Hanoi
and Ho Chi Minh. The leading Securities companies always stay in group of those which
are listed as top 10 market share owner as mentioned above, no matter what market
conditions change. Besides the market share of stock brokerage and fund certificates, the
market share of bond brokerage also contributes importantly to the assessment of
competitiveness competence of Securities companies.

RESEARCH PROCESS

Periods of Research:
The research process of the thesis consists of three periods: (i) preliminary study; (ii)
pilot study; (iii) official study.
Research Procedure:
Including 06 steps: (i) Overview research; (ii) Qualitative research with expert
interview; (iii) Develop questionnaire and send to the suitable interviewees; (iv) The official
research conducted by quantitative methods; (v) Synthesis of research findings on the basis
of results of testing the model; (vi) Conclusion and solutions.
4.2.

QUESTIONNAIRE DESIGN

The questionnaire consists of 72 questions divided into two parts as follows: (i) Part
one: survey focused on demographic variables and the respondents’ experience of using the

services of securities companies. (ii) Part two: survey focused on the views of the
participants interviewed about the factors affecting the competitiveness of securities
companies.
4.3.

SURVEY SAMPLING METHOD

A highlight relating the bond market share is the involvement of financial
institutions, including the local and oversea Commercial banks which are allowed to have
direct bond transaction once meeting all requirements from authorities, resulting in the huge

Overall research subject: the staff and customers of securities companies in Ha Noi, Ho
Chi Minh City and Da Nang.

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The research sample: 500 questionnaires sent, usable 221 answers sheets received.


Sampling Method: The sample was selected by Convenience sampling method in
combination with Stratified sampling method. Author selected and interviewed those who
are using the services of securities companies on Hanoi, Ho Chi Minh City and Danang.
Besides, stratified sampling method was based on the criteria of age, education level,
income and experience on the use of the services of securities companies.

Over 50 years old

1.4%

High school diploma

4.5%

College/Associate’s degree

0.9%

Bachelor’s degree

73.3%

Advanced degree

21.3%

Under VND 10 mil

52.9%

VND 10 – 20 mil

26.7%

VND 20 – 30 mil

10.9%

Primary data collecting method:

VND 30 – 40 mil

6.3%

To determine the orientation and focus of research, the authors consulted the views
of many experts and scientists in scientific meetings. Primary data of the study were
collected through quantitative research interviewing with structured questionnaire. This
helps the author to focus the interviewees on research issues.

Over VND 40 mil

3.2%

4.4.

Education

DATA COLLECTING METHOD

Secondary data collecting method:
Secondary data of the study includes information, views, theory system and data
relating to the field of securities market. The majority of secondary data that thesis using
sources from the articles, journals, research papers, thesis, dissertations stored in the library
of National Economics University, Vietnam National Library and on the Internet. To
guarantee the validity and accuracy of the data, the authors use the method of synthesizing,
analyzing, comparing and contrasting to filter out the most reliable data.

4.5.

DATA PROCESSING

To collect survey data for quantitative research, the researcher must use a variety of
different measurement scales. However, due to the complexity of the economic and social
phenomenon, quantifying study concepts requires a scale that has tools and test of
reliability. So before conducting operations and statistical analysis, researchers will conduct
the test of reliability of the scale (Cronbach's alpha coefficient) used in the questionnaire.
The author uses SPSS 18 statistical software for data analysis.
4.6.

In the sample of 221 observations:

Gender

Age

Criteria

Time of using services Under 1 year
of securities companies
1 – 3 years

43%
21.3%

3 – 5 years

11.3%

Over 5 years

24.4%

Factors affecting competitiveness competence of securities companies
Test of the reliability of the scale
According to a test of the reliability of the scale (Cronbach’s Alpha coefficient),
observations with Cronbach’s Alpha coefficient higher than general Cronbach’s alpha
coefficient of the scale and Corrected Item - Total Correlation is less than 0.4 so Product
Scale is unreliable. Official scales will be developed and restructured based on the reliable
observed variables.

SURVEY RESULT

Type

Income

Result

Male

52.9%

Product Scale

Female

47.1%

Under 20 years old

18.1%

20 – 30 years old

40.3%

30 – 40 years old

35.3%

General Cronbach's alpha coefficient of the scale is the 0.881 greater than 0.7, which
suggests that the scale has high reliability. Corrected Item - Total Correlation is greater than
0.4,so Product Scale is a reliable scale. In four observed variables, SP4 variable has result of
Cronbach's Alpha if Item Deleted 0.887, higher than 0.881 so this variable had been
excluded from the research results. The remaining observed variables are consistent with the
reliability of the Product Scale.

40 – 50 years old

5%

Service Scale
General Cronbach's alpha coefficient of the scale is the 0.885 greater than 0.7, which
15

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suggests that the scale has high reliability. Corrected Item - Total Correlation is greater than

0.4, so Service Scale is a reliable scale. All five observed variables have results of
Cronbach's Alpha if Item Deleted lower than 0.885 so all the observed variables are
consistent with the reliability of the Service Scale.

result of Cronbach's Alpha if Item Deleted 0.912, higher than 0.875 so this variable had
been excluded from the research results. The remaining observed variables are consistent
with the reliability of the Competition Scale.

Networking Scale

After testing the reliability (Cronbach's Alpha) of all scales, research obtained 8
scales with high reliability. These observed variables and scales will continue to be used in
the next step of the research – factor analysis procedures. Calculated figures showed
Cronbach's Alpha's coefficient of all variables are greater than 0.7, so all variables are
reliable and can be used for models (Nunnally, J, 1978).

General Cronbach's alpha coefficient of the scale is the 0.870 greater than 0.7, which
suggests that the scale has high reliability. Corrected Item - Total Correlation is greater than
0.4, so Networking Scale is a reliable scale. All four observed variables have results of
Cronbach's Alpha if Item Deleted lower than 0.870 so all the observed variables are
consistent with the reliability of the Networking Scale.
Brand name Scale

Overview about the reliability coefficient (Cronbach's alpha) of the scales

Regression Analysis
The result of regression model on SPSS18 as follows:

General Cronbach's alpha coefficient of the scale is the 0.920 greater than 0.7, which
suggests that the scale has high reliability. Corrected Item - Total Correlation is greater than

0.4, so Brand name Scale is a reliable scale. All ten observed variables have results of
Cronbach's Alpha if Item Deleted lower than 0.920 so all the observed variables are
consistent with the reliability of the Brand name Scale.
Finance Scale
General Cronbach's alpha coefficient of the scale is the 0.939 greater than 0.7, which
suggests that the scale has high reliability. Corrected Item - Total Correlation is greater than
0.4, so Finance Scale is a reliable scale. All ten observed variables have results of
Cronbach's Alpha if Item Deleted lower than 0.939 so all the observed variables are
consistent with the reliability of the Finance Scale.
Intelligence Scale
General Cronbach's alpha coefficient of the scale is the 0.895 greater than 0.7, which
suggests that the scale has high reliability. Corrected Item - Total Correlation is greater than
0.4, so Intelligence Scale is a reliable scale. All four observed variables have results of
Cronbach's Alpha if Item Deleted lower than 0.895 so all the observed variables are
consistent with the reliability of the Intelligence Scale.

Competitiveness
Competence

=

-0.125 + β1*0.036 + β2*0.160 + β3*0.167 + β4*0.120 + β5*0.002
+ β6*0.300 + β7*0.274 + ε

Conclusion:
Based on survey results, all 8 hypotheses given in the model were accepted. In all
these hypotheses, the factor whose β coefficient is the biggest has the most impact on
dependent variables. As multiple regression model mentioned above, the factors of
intellectual quality with β = 0.300 coefficient is the largest, followed by the factor of
technology with β = 0274. The next important factors are the factors of service quality,

network and brand name of securities companies, with the corresponding β = 0160, 0167
and 0120. Factors of financial strength, product quality play a minor role with β = 0.002 and
0036.

Chapter 5: SOLUTIONS OF IMPROVING THE COMPETITIVENESS
COMPETENCE FOR VIETNAMESE SECURITIES COMPANIES

5.1. ORIENTATION OF DEVELOPMENT OF VIETNAM'S SECURITIES
MARKET

Technology Scale
General Cronbach's alpha coefficient of the scale is the 0.888 greater than 0.7, which
suggests that the scale has high reliability. Corrected Item - Total Correlation is greater than
0.4, so Technology Scale is a reliable scale. All four observed variables have results of
Cronbach's Alpha if Item Deleted lower than 0.888 so all the observed variables are
consistent with the reliability of the Technology Scale.

General Cronbach's alpha coefficient of the scale is the 0.875 greater than 0.7, which
suggests that the scale has high reliability. Corrected Item - Total Correlation is greater than
0.4, so Competition Scale is a reliable scale. In three observed variables, CT3 variable has

(i) Develop the securities market consistently with the development of economy and
society; (ii) Expand listed securities market and downsize the OTC market, focus especially
on the quality and the safety of the market, approach step by step with the international
practices and standards; (iii) Link the development of securities market with the reform and
acquisitions of SOE sector to motivate the growth of enterprises in both financial capacity
and corporate governance; (iv) Execute State management by legal instrument and
supporting policy to facilitate the stable and strong development of market; promote the role
of organizations and associations in order to ensure the legitimate rights and interests and
encourage actors to join the market.

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Competition Scale


5.2. POLICY ABOUT RESTRUCTURING BUSINESS ORGANIZATIONS IN
THE SECURITIES MARKET

Stable executive leadership team; (vi) Special promotion to recruit valuable human
resource.

a)
Classify the business organizations in the securities market with four (04) groups
based on the level of risk for the market to take appropriate solutions

Investment for Research and Development (R&D)

b)
Type of solutions: (i) Solution for effective business organizations; (ii) Solution for
normal business organizations; (iii) Solution for business organizations under control; (iv)
Solution for business organizations under special control.
c)
Other supporting solution: the tax exemption; facilitation for foreign organizations in
the field of M&A; licensing regulation; supporting policies for financial groups and State
corporations which are not in the field of securities market.
d)
Renovating activities of business organizations in the securities market, enhancing

financial capacity, risk management according to international practice and competitiveness.
e)
Enhancing the capacity and efficiency of management and supervision of business
organizations in the securities market.

Some of the criteria required in this work include: (i) Establishment of R&D
department/division; (ii) Financial investment for the operation of R&D
department/division; (iii) Preparation of infrastructure for testing and completing products
before launching; (iv) Building the evaluating system for products and services for planning
to develop products consistent with the development of the market, customer needs while
ensuring compliance with the provisions of law.
Develop technology system in depth
Including the following factors:
Securities Company has core software to provide securities products and services for
customers

Based on study results, with the results obtained, the authors divided basic solutions
for the securities in order to improve competitiveness into 03 groups including:

This is a fundamental factor, which help securities companies provide advanced
securities products with high performance as well as good risk management. The core
software meets requirements like compatibility in case of changes in authorities’ structure,
ability to connect with banks, parameterization, ability to supply products for customers,
ability to calculate and set up level of supervision, speed of processing transaction.

Direct solutions:

Securities Company regularly upgrades, applies new technology:

Improve intellectual capacity in securities company

The author proposes four groups of solutions for improving intellectual capacity in
securities company including:

(i) The company announces information about upgrading and applying new
technology to customers; (ii) the company updates guidelines for updating information
technology applications to customers; (iii) the company has staff to guide customers; (iv)
the company has technological application updates on product at the request of authorities.

Reasonable operation structure of securities company:

Online transactions of Securities Company proceed smoothly and safely

A reasonable operation structure shows the vision and strategic governance of highlevel managers of a securities company. A good operation structure helps to increase the
efficiency of this company. Combined with the legal regulations about risk management in
the securities market, the author proposes solutions to create a model of risk management
including 03 defensive measures.

(i) System of Securities Company can support the integration of online features; (ii)
The system can

5.3. SOLUTIONS TO IMPROVE
SECURITIES COMPANIES

COMPETITIVENESS

OF

VIETNAM

Qualified human resource:

Staff qualifications expressed in the basic criteria: (i) Educational degree; (ii) Ability
to control the process and implement jobs; (iii) Ability to compile, adjust or review
procedure; (iv) Ability to co-operate internally and externally; (v) Language skills; (vi) The
ability to work independently or teamwork.
Attractive recruitment policy:
Some requirements to develop an attractive recruitment policy include: (i) Consistent
criteria for staff evaluation; (ii) Recruitment quotas for each operational division; (iii)
Annual recruitment plan; (iv) Policies on training and development of human resources; (v)
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Support customers to change and customize online application; (iii) for the web
interface, the system must have solutions to support popular browsers like Internet Explorer,
Firefox, Google Chrome, Safari, etc ...; (iv) the system has to integrate securities solutions
of third party in order to ensure safety of customers while using products and services; (v)
the system has to support tools or encryption of third party to provide services with the best
security for customers.
Products of Securities Company have to meet demand of customers during 24/24
The author offers some solutions for systems to meet 24/24 trading demand of
customers: support customers in upgrading real systems; integrating new products and
services self-developed or purchased in the future to help customers understand and be
familiar with new products and services; 24/24 customer support
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Group of indirect solutions
Providing appropriate products, services for each group of customers
The nature of securities products and services is similarity in general. Therefore,
competition among securities companies will be formed by providing suitable products,
services for each group of customers, which relates to services’ quality, innovation culture,
and marketing documents for potential customers.

Building proper network
To provide products and services promptly, securities companies need to build a
long-term plan to expand the scope of operations in all three regions, which focuses on
financial centers in Hanoi, HoChiMinh and Danang. It is essential that securities companies
need to develop based on their advantages in each region in order to reduce operational cost
and increase business efficiency.

operations, revenue/profit segment in securities companies need allocating reasonably for
three sectors: proprietary trading, brokerage and finance advisory for stable development of
securities companies. In general, activities of securities companies should be maintained
and developed well, deeply.
Forecasting and Business planning
According to suggestions above, leaders of companies have to make detailed
business plans to boost business, which should be overall and include all fields like
customers, products and services, marketing, sales and trading, research, human resources,
technology investment, cost and others. Business plan should be implemented within a
corporate mission framework as well as a code of conduct as many leading companies in
other countries have done.
5.4 RECOMMENDATION FOR STATE SECURITIES COMMISSION – MINISTRY
OF FINANCE
Need to develop mechanism ensuring quality of recruitment at securities companies

Build up brand for securities companies
Securities companies which have and develop brand identity soon will enhance their
effect and position in securities market. Research results showed the degree of brand’s
impact to competitiveness competence of securities companies, therefore securities
companies need to establish and build up a brand development division, which is an
important contribution to the success of securities companies at present and especially in the
future.
Other group of solutions

Provide high quality products to customers
Model of full service is intrigued by benefits like revenue diversification, high profit
margin, reputation and brand enhancement through providing high-class services such as
IPO and M&A, which helps to realize potential companies before IPO and have time to
strengthen customers’ relationship. Some domestic securities companies can specialize on
area of Small and medium enterprises (SME), in some cases they can cooperate with foreign
securities companies to consult for SME about good practices on business management
analysis and risk management or introduce foreign investors.

The mechanism required for highly qualified human resources to ensure operations
quality of securities companies; detailed requirements about professional segments with the
assessment process and required certificates, consistent with the development trend of
securities market, especially human resources with foreign language skills as well as
professional skills consistent with the international development trend.
Technology requirements when establishing securities companies
Technology requirements are needed when establishing securities companies. State
Securities Commission or through the Stock Exchange should have requirements about
common standards for technological connection. Domestics and Foreign securities
companies which want to establish and run business on Vietnam stock market must meet the
connection standards, encryption standards of products and product governance. It ensures
transparency, fair, competition among securities companies joining Vietnam's stock market.

Build a route of fiscal autonomy for the development of market
Risk management in full system, especially financial safety indicator: it is essential to
running business together with ensure financial safety indicators. Regular, continuous
review and adjustment at securities companies in short term and long term is needed.
Raising capitals effectively: the companies need to have plan on raising capitals in order to
ensure adequate capitals for business activities, development plan and allowance for losses.
The companies need to determine that source of capitals is from existing shareholders or
new ones, confirm funding and commitment of new shareholders. Boost revenue/profit

structure properly in product and services sectors: based on realistic assessment of
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CONCLUSION

Providing securities services and products are activities that bring high profits but
also contain high risks. Meanwhile, the strong growth of the securities market and the
increasing number as well as quality of securities companies in the market have made the
competitiveness within Vietnam stock market become more tense. Securities companies
will face issues of losing market shares, customers and business efficiency if they don’t
have enough intrinsic competitiveness nor find ways to improve that competitiveness.
Therefore, how to enhance the competitiveness of securities companies during this critical
time is one of the important issues of securities companies on the Vietnam Stock Exchange
today.
Based on the urgent needs of the research, findings and offering solutions to improve
the competitiveness of securities companies, the author has done a fairly complete system of
theories on the competition and competitiveness of securities companies. Based on the
integrated analysis of competitiveness research methods at the related level, the author has
developed the internal factors that have direct impacts to the competitiveness of securities
companies, also has evaluated and recommended solutions to improve competitiveness in
general and in securities business in particular.
From the basis of the reasoning, the author has focused on analyzing the current
status of the Vietnam’s securities companies’ operations; evaluate objectively internal
factors affecting the competitiveness of securities companies. Combining theoretical and
practical basis, also from the results of the research model, the author proposes a number of
direct as well as indirect measures, and in the long term for Vietnamese securities
companies to enhance its competitiveness in order to ensure the sustainable development of

Vietnam stock market.
This research was conducted profoundly and broadly on the issue of competitiveness
for Vietnamese securities companies with in hope of offering useful solutions for enhance
competitiveness of Vietnam securities companies in the context of liberalization of financial
markets, including the stock market. Due to the lack of time and to the limit of technical
ability of the author, errors in this thesis are inevitable. Look forward to the sincere advice
of scientists, teachers and readers quarter to complete this thesis.

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