1 INTRODUCTION 1 Rationale Recently, in front of the background of not only the focus of the government on developing the national economy and increasing industrialization modernization but also the t[.]
1 INTRODUCTION Rationale Recently, in front of the background of not only the focus of the government on developing the national economy and increasing industrialization modernization but also the trend of rapidly developing and integrating economy, Vietnamese conglomerates are both having abundant opportunities and facing with numerous challenges Specifically, the national economy has innumerable difficulties because of the instability of international economy and politics In addition, the manufacturing and business of conglomerates also face many challenges Vietnamese enterprises not only must focus on innovating manufacturing, developing administering skills and improving cutting-edge technologies but also have to address financial problems which are one of factors contributing to addressing their difficulties Companies providing the services of financial consultancy have been born with the aim of supporting enterprises to tackle financial issues However, financial consultancy in Vietnam in recent years has still not met the demands and the needs of enterprises, the challenges of the contemporary economy as well as not satisfy the expectation of the leaders and owners of consulting firms This reality requires us to have to have solutions to improve and develop financial consultancy for conglomerates and corporations in the period of expansion and integration with international economies Through evaluating the possibility of catering for the services of financial consultancy in the professional and comprehensive way, in comparison with other types, we find that stock companies are the type which has the most significant capacities for accessing and addressing issues which enterprises are facing with At the present time, Vietnamese stock firms are having an abundance of intractable difficulties in applying the financial consultancy for their own firms The first rationale is the swift rocketing of the number of stock corporations besides the rapid development of Vietnamese stock market Up to the day December 31 st 2014, stock capital in all Vietnamese market was 1,128 thousand billion dong, accounting for 31.5% of GDP The number of stock companies in Vietnamese market were in the year 2000, soaring to 105 firms established in 2009 and then declining to 83 firms through the re-structure progress The increasing number of stock companies had a part in making the stock market more dynamically, consolidating the stock market more strongly and bringing about more products and choices of inventors However, increasing the number of stock companies is one of root causes making a contribution to raise difficulties for stock firms through narrowing market share Secondly, following the route of joining WHO, since January 11 st 2012, stock companies having 100% capital from foreign countries have been established in Vietnam Although domestic stock companies have had a long period to build their trade names, expand the customer net and improve the quality of human resources, they still have to face numerous challenges because foreign conglomerates possess copious advantages about experience and funds Compare to the achievement of international stock companies, the results which domestic stock companies achieved are still negligible To be one of seven stock companies established earliest in Vietnam, VietinBankSc have affirmed their positon in the field of financial consultancy more sustainably with every passing day In recent years, VietinBankSc have focused on the financial consultancy of enterprises and consider that this activity is their core activity and top-ranking advantage Nevertheless, in front of many difficulties of business environment, VietinBankSc really need solutions in order to develop the activities of enterprise financial consultancy Therefore, I chose this topic to conduct my research for my master degree with the name: “ Improving the effectiveness of enterprise financial cosultancy activities in Vietinbank Securities Company ” Research objectives - To systematize theoretical matters about the enterprise financial consultancy of stock companies - To evaluate the reality of enterprise financial consultancy in VietinBankSc and bring about a comprehensive view of enterprise financial consultancy in recent years - To propose several solutions and recommendations in order to develop activities about enterprise financial consultancy in VietinBankSc The scope of research - The object of this research is the activities of enterprise financial consultancy of stock companies - The scale of this research is the reality of enterprise financial consultancy in VietinBankSc during the period 2014 – 2016 Research methodology This research utilized the method of dialectical materialism, combining with others including analyzing method, statistics, summary and comparison In addition, illustrational model was made use of with the aim of bringing about some reasonable analysis and suggestions, guaranteeing the scientific quality, reality and objectiveness of topics of this research The structure of this research Besides some parts including the beginning, the conclusion, contents, tables of abbreviating letters, this thesis embrace chapters: Chapter1:Overall theory about the activities of enterprise financial consultancy of stock companies Chapter2:The reality of activities of enterprise financial consultancy in VietinBankSc Chapter 3: Solutions and recommendations in order to developing the activity of enterprise financial consultancy in VietinBankSc CHAPTER 1.OVERALL THEORY ABOUT THE ACTIVITIES OF ENTERPRISE FINANCIAL CONSULTANCY OF STOCK COMPANIES 1.1 The overview of stock companies 1.1.1 The definition of stock companies Stock markets is the places where stock is traded and switched There are abundant objects involving stock markets but there are negligible individuals having capacity of analyzing and specifying the price of stock Hence, during the process of taking shape and developing of stock markets, intermediary has become the specific and basic operating principle in stock markets and step by step, all trade in stock markets is conducted through intermediary financial organizations, most through stock companies Following The Stock Law number 70/2006/QH11 (reforming from The law number 62/2012/QH12), stock companies are joint-stock companies, limited liability companies which are established basing on the Vietnamese rules in order to conduct trade following licenses issued by the State Security Commission of Vietnam Stock companies have permission to some following trade: - To mediate stock - Privately trading stock - To issue stock - To advise stock investment 1.1.2 The roles of stock companies Up to date, the taking shape and development of Vietnamese stock market have made a significant contribution to perfecting the system of financial market in Vietnam These achievements are obtained thanks to the considerable contributions of stock companies in supporting stock market to develop sustainably, becoming an effective channel in mobilizing capital and aid to trade stock more quickly and easily To comprehend the essence of stock companies for stock markets, we have to understand the roles of stock company with respect to each individual subject in stock markets 1.1.3.1 For stock markets To contribute to take shape and regulate markets The price of stock is built by markets However, to have the final price, the purchasers and sellers must trade through stock companies because both of them not involve the stock trade Furthermore, stock companies also play a role in advising investment, therefore they always have a capacity for purveying information about markets and stock price to investors Specifically, in respect of the activities of stock trade, stock companies are consultative organizations playing a role in advancing the beginning price for investors to make bid, thereby supporting them to make decisions to trade stock To contribute to increasethe mobility of financial property Stock markets play a role in increasing the mobility of financial property and this role of stock markets can be performed through stock companies In primary market, by means of doing activities like consultancy to releasing and bidding, stock companies not only assist organizations to mobilize capital to expand manufacturing and trading activities but also increase the mobility of financial property of investors through mediating trade in OTC markets In secondary markets, stock companies aid investors to conduct trade, thereby assisting them to change stock into money back and forth in an easy way Therefore, all aforementioned activities of stock companies help to increase the mobility of financial property 1.1.3.2 For releasing organizations Releasing organizations participate in stock markets with a view to mobilizing capital through release stock Accordingly, through several activities like consultancy to releasing, releasing agents, stock companies play a role in aiding releasing organizations to mobilize capital successfully in stock markets Stock companies is the intermediary organizations supporting to rotate capital from people/companies possessing capital (investors) to those demanding capital (releasing organizations) 1.1.3.3 For investors Through activities like mediating, investing consultancy, managing investing lists, stock companies play a role in decreasing the price and time of trade, thereby improving the effectiveness of investing capital For common merchandise, purchasing and selling through intermediaries are able to increase the expenditure for purchasers and sellers Nevertheless, for stock markets, the flexibility of stock price, as well as high risk can be able to make investors to pay more expense, effort and time to cull information before making an investing decision Nonetheless, through stock companies, highly professional ability can help investors to invest their capital in an effective way 1.1.3.4 For market managing agencies Stock companies make a contribution towards purveying information about stock markets to market managing agencies and this role is showed through the fact that stock companies build impressions or papers of announcing information, handbills when they perform activities like releasing consultancy, bidding consultancy for releasing organizations As a result, investors and managing agencies can have accurate and trustful information and comments about stock reality and manufacturing activities of releasing organizations, thereby being able to make decisions In addition, stock companies are the intermediaries performing stock trade in stock market, hence stock companies are the organizations providing information about investors and their business Owing to this information, market managing agencies can be able to control and suppress the sway and monopoly of markets It seems that for subjects in stock markets, stock companies have a significant part in creating the mechanism of capital mobilization, being market building organizations, making the mobility of stock and contributing to controlling the stabilization of markets, thereby having a part in promoting the development of stock markets in particular and the economy in general 1.1.3 Operating models of stock companies There are two kinds of models of stock companies, including multifunctional bank company model and specialized stock company model 1.1.3.1 Multifunctional bank company model Commercial banks operate like subjects trading stock, insurance and money This model is showed through forms: - Total multifunctional model: one bank can directly participate in all activities of trading money, stock, insurance as well as other financial services without any individuals It is also called Germanic-like bank model + One of the advantages of this model is that banks can combine with others in abundant fields of business, thereby declining the risks in trade activities by diversifying investment Furthermore, increasing the withstanding ability of banks in front of the volatility of stock markets is another advantage of this model Moreover, banks can exploit their advantages in trading money with large capital, cutting-edged facilities, thereby comprehending their customers as well as enterprises when they their professionals of granting credit and sponsoring projects + On the other hand, this model has some drawbacks Firstly, one disadvantage is that banks bear responsibilities for both arranging credit and arranging business, therefore the ability of specialization is not as deep as specialized stock companies In addition, because there are difficulties in distinguishing between bank activities and stock trade activities in the unhealthy law environment, banks easily engender the situation of capturing markets and then the varies of stock markets have substantial effects on money trade and the economy Because aforesaid drawbacks, after the slump of stock market in the 1929 – 1933 period, most countries utilize specialized stock company model, negligible countries still apply this model - Partial multifunctional model: banks having requirementsof stock trade and insurance have to establish subsidiaries operating apart from money trade This model is called British-like bank model 1.1.3.2 Specialized stock company model Activities of stock trade are the responsibilities of specialized independent companies in stock field and banks not involve in stock trade The benefit of this model is to be able to constrain the risks for bank system, bringing about advantages for stock companies to specialize in the stock field to enhance the development of stock markets This model is applied quite ubiquitously in the United States, Japan, Korea, Thailand and so on Nonetheless, because of the growing tendency of establishment of financial octopuses, some markets allow companies to not only trade currency, stock, insurance but also establish both conglomerates and subsidiary companies They closely manage each other and also operate independently 1.1.4 Specialist skills of stock companies Depending on specialist skills of stock companies possessing different levels of capital, the Decree 58/2012/NĐ-CP stipulated the capital for trading specialist skills of stock companies in Vietnam, including: - Mediating stock: 25 billion vietnamdong; - Privately trading stock: 100 billion vietnamdong; - Guaranteeing to releasestock: 165 billion vietnamdong; - Advisingstock investment: 10 billion vietnamdong If organizations want to have licenses for many trading specialist skills, the total capital is the summary of capital 1.1.4.1 Mediating stock Mediating stock is the intermediary activity of selling and buying stock for customers Mediating stock is the direct activity which creates the image and trade name for companies, therefore stock companies extremely focus on this activity This is an activity of trading stock which stock companies are intermediaries for selling and buying stock Stock companies represent customers in the process of commercial transaction Through mediating stock, stock companies purvey many services like consulting investment, loans with the aim of supporting investors to conduct trade easily with the lowest expenditure 1.1.4.2 Privately trading stock Privately trading stock is an activity of selling and buying stock for themselves This activity of stock companies is done through the trading mechanism in trading floor or OTC markets The aim of this activity is to have profits for selfstock companies through trading stock in the markets This skill of stock company parallels the skill of mediating, therefore in the process of doing this skill, there is conflicts about benefits between customers and stock companies Accordingly, the rules of countries stipulate that there arerequirements about discriminating between mediating stock and privately trading stock When doing privately trading stock, stock companies have permission to this skill through one stock account which was registered with Trading Stock Department and this department will supervisor the trading activities in a strict way Moreover, stock companies must prioritize the requirements of customers over privately trading stock With respect to the skill of mediating stock, stock companies only play an intermediary role in trading stock for customers with the aim of receiving the expenditure of mediating stock By contrast, in respect of privately trading stock, stock companies utilize huge capital in order to build up the market Hence, in order to perform the skill of privately trading stock demands effectively, stock companies have to possess high-quality personnel to make appropriate decisions in investment 10 1.1.4.3 Guaranteeing to release stock Guaranteeing to release stock is the activity that stock companies undertake with the releasing organization to perform procedures before selling stock, purchasing a part or all stock of releasing stock companies to resell or buy the remains of stock which not distribute or support the releasing organization in distributing stock to the public Guaranteeing to release stock is a skill which is complicated and risky for stock companies hence the cost for guaranteeing to release stock is usually exorbitant When an organization wants to release stock connected with guaranteeing, this organization will send requests to stock companies Stock companies will conclude a contract about consultancy and guaranteeing to release stock with the releasing organization in order to advise the kind of stock released, the amount of stock released, the price of stock, the way to distribution, the range and the cost of guaranteeing 1.1.4.4 Advising stock investment Advising stock investment is the activity that stock companies supply investors with the results of analysis, reports of analysis and recommendations in relation to stock - The content of advising stock investment has to be appropriate and suitable, based on logical and trustful information Recommendations in advising stock investment have to be relevant and suitable for the content of stock and stock market analyzed The analyzing reports about stock and stock markets and investment recommendations must cite quotations and data, having the name of individuals who bear the responsibility for the reports and recommendations - Stock companies advising investment for customers have to guarantee that their customers make decisions based on suitable and sufficient information including both the content and risks of products and the following services ... business, thereby declining the risks in trade activities by diversifying investment Furthermore, increasing the withstanding ability of banks in front of the volatility of stock markets is another... research is the activities of enterprise financial consultancy of stock companies - The scale of this research is the reality of enterprise financial consultancy in VietinBankSc during the period... with the name: “ Improving the effectiveness of enterprise financial cosultancy activities in Vietinbank Securities Company ” Research objectives - To systematize theoretical matters about the enterprise