Dearth of brokers hits home

Vietnam's hot stock market has lured scores of students away from school time and onto the bourse with a dream of getting rich, writes Trung Hung.

Wearing a smart black suit, white glasses and brandishing an expensive Nokia phone while working on a laptop at a wi-fi internet cafe in Hanoi, the teenager Cuong seems more like a company manager, than a student.

“I have just finished arranging a deal of 7,000 Hoa Phat Group (HPG) shares. It is really exciting for me,” smiled Cuong, who studies at Hanoi University of Commerce.

HPG now trades at around VND105,000-110,000 per share, or 10-11 times higher than its face value, at the over-the-counter (OTC) market. With this deal, Cuong earned around VND4 million ($250) in commission - a good sum of money for any college student.

Cuong said he started working as a stockbroker a year ago. As a student, he had plenty of free time and often joined groups of “unlicensed” stockbrokers on the OTC market.

 Finding and matching stock sellers with buyers on the OTC market seemed easy for any young and dynamic student. He could arrange several unlisted stock brokerage deals each month, thanks to good relations with partners at securities companies and other student stock brokers.

“My stock broker business earned me a living and changed my life,” said Cuong.

A recent World Bank report said Vietnam’s stock market capitalisation is now at around $24.4 billion, surging from less than $500 million in December 2005, thanks to the increasing participation of domestic and foreign investors. Trade volumes of unlisted stocks are, however, estimated exceeding those on the official Ho Chi Minh Securities Trading Centre (HoSTC) and Hanoi Securities Trading Centre (HaSTC).

Under the current regulations, Cuong has to obtain three certificates from the State Securities Commission (SSC) to be allowed to work as a qualified broker.

“I only find someone to buy and someone to sell on the OTC market. I do nothing wrong. If you have an offer, let me know,” he said, adding that he would later like to become a licensed stockbroker.

Many securities companies have admitted they are desperate for skilled staff. Some firms are trying to lure staff away from competitors with more attractive salaries, while others use more traditional methods of advertising.

Each securities company must have at least 100 securities staff. However, only around 46 students have graduated from the Hanoi-based Academy of Finance alone, since it opened four years ago, according to Phan Dieu Huong, a stock lecturer.

The number of graduates has done little to meet the desperate demand for brokers.

 According to the SSC, the country’s stock market regulator, Vietnam has approximately 300 certified brokers, a number which falls short of market demand.

As an example, the leading securities firm Saigon Securities Incorporation does not have enough staff despite advertising for months and offering an attractive salary with a generous bonus scheme.

In order to address the shortage of qualified stock brokers, SSC recently organised securities training courses.

SSC has levied an administrative fine at several stockbrokers who lack proper qualifications. Some were fined for violating regulations on the management of deposits.

“It is not easy finding qualified brokers, so securities companies use unqualified employees to carry the work,” said a SSI manager.

A stockbroker in Vietnam can earn VND9-VND10 million ($563-$625) a month, a healthy salary compared to other industries.

 Barry Clark, a former US-based stockbroker, said: “The demand for brokers in Vietnam is very high now. I would advise some of my friends to come here and work as brokers if the government allowed them.”

Vietnam Investment Review