Factors impact on profitability of securities companies listed on hose and hnx in vietnam

HỌC VIỆN NGÂN HÀNG KHOA TÀI CHÍNH Thesis graduation Topic: Factors impact on profitability of securities companies listed on HOSE and HNX in Vietnam Student: Trần Ngọc Bình Class: K21CLCC Course: 2018 – 2022 Student ID: 21A4010065 Instructor: Dr Trần Ngọc Mai Hanoi, May 2022 Tai ngay!!! Ban co the xoa dong chu nay!!! 17014126260801000000 HỌC VIỆN NGÂN HÀNG KHOA TÀI CHÍNH Thesis graduation Topic: Factors impact on profitability of securities companies listed on HOSE and HNX in Vietnam Student: Trần Ngọc Bình Class: K21CLCC Course: 2018 – 2022 Student ID: 21A4010065 Instructor: Dr Trần Ngọc Mai Hanoi, May 2022 Acknowledgement First, I would like to thank Dr Trần Ngọc Mai, who helped me complete this thesis under her guidance I am especially grateful for her confidence and the freedom she gave me to this work As an instructor, Dr Trần Ngọc Mai supported me in all stages of this word I am extremely thankful and indebted to her for sharing her expertise, and sincere and valuable guidance and encouragement extended to me I extend my sincere thanks to all members of the Faculty of Finance in Banking Academy and all those who contributed directly or indirectly my dissertation Thanks to all of my friends, my company for helping all the time However, because of limited professional knowledge and lack of practical experience, the limit of the content of the research is inevitable, I hope to receive comments and further advice from teachers i Declaration I declare that this dissertation has been composed solely by myself and that it has not been submitted, in whole or in part, in any previous application for a degree Except where states otherwise by reference or acknowledgment, the work presented is entirely my own Hanoi, May 2022 Trần Ngọc Bình ii Table of content Acknowledgement i Declaration ii Abbreviation v List of figures and tables vi Introduction Chapter I: Overview of the stock market, securities companies and main activities 1.1 Overview of stock market 1.1.1 Overview of Vietnamese economy 1.1.2 Overview of Vietnamese stock market 1.2 Overview of securities companies 10 1.2.1 Introduction to the activities of securities companies 10 1.2.2 Current status of Vietnamese securities companies 17 1.3 Main activities in Vietnamese securities companies 21 Chapter II: Literature review .24 2.1 Indicators to evaluate the profitability of securities companies .24 2.1.1 ROE 25 2.1.2 ROA 25 2.1.3 NIM 26 2.1.4 OPM 26 2.2 Factors affect profitability 26 2.2.1 Internal factors 28 2.2.2 External factor 30 Chapter III: Database and methodology 31 3.1 Definition of variables 31 3.2 Descriptive statistics .32 3.3 Research methodology 33 3.4 Hypothesis 34 3.5 Testing the selection of variables in the regression model .39 3.5.1 Correlation between the independent variables in the model 39 3.5.2 Checking for multicollinearity for pooled OLS model 40 3.6 Checking for suitable model selection for dependent variables .42 3.7 Checking for the Heteroskedasticity .44 3.8 Check for autocorrelation .45 3.9 Fix model 46 iii Chapter 4: Research results .47 4.1 Model result 47 4.2 Research results analyzation 48 4.2.1 Firm size 48 4.2.2 Company efficiency 48 4.2.3 Company leverage 49 4.2.4 Inflation rate .49 Chapter 5: Recommendation for securities companies .51 5.1 Increase firm size 51 5.2 Increase asset turnover 51 5.3 Increase leverage 52 5.4 Inflation rate 53 Conclusion .54 References 55 Appendix 57 Result of checking turnitin 74 iv Abbreviation Short form ROA ROE NIM OPM Pooled OLS FEM REM FGLS CPI GDP SBV VND Long form Return on assets Return on equity Net interest margin Operating margin Pooled ordinary least square Fixed effects regression model Random effects regression model Feasible generalized least square Consumer price index Gross domestic product State bank of Vietnam Vietnam Dong v List of figures and tables List of figures: Figure GDP growth rate in Vietnam in the period 2011-2020 (source: Tổng cục thống kê) Figure Total GDP growth and in each industry (source: Tổng cục Thống kê) Figure CPI in each quarter from 2018Q4 to 2021Q4 (Based year 2014) (Source: Synthetic private author) Figure Exchange rate USD/VND (Source: tradingview) Figure Number of new opening accounts per month from 01/2019 to 01/2020 (source: Trung tâm lưu ký Chứng khoán Việt Nam (VSD)) Figure Liquidity and index of VN-index over the period (source: trading view) Figure Total assets of securities companies from 2019Q1 to 2021Q4 Figure Total assets of 25 securities companies from 2019Q1 to 2021Q4 Figure Brokerage revenue of each securities company from 2019Q1 to 2021Q4 Figure 10.Brokerage cost of each securities company from 2019Q1 to 2021Q4 Figure 11.Brokerage profit of each securities company from 2019Q1 to 2021Q4 Figure 12 Margin loan profit of each securities company from 2019Q1 to 2021Q4 List of tables: Table Securities companies listed in Hose and Hnx Table Statistical table of variables Table Correlation matrix between independent variables in model Table Correlation matrix between independent variables in model Page Page Page Page Page Page 10 Page 20 Page 21 Page 21 Page 22 Page 22 Page 23 Page 20 Page 32 Page 39 Page 40 vi Table Multicollinearity test Table Multicollinearity test before eliminating variable Table Multicollinearity test after eliminating variable Table The results of the model selection test between the Pooled OLS model and the REM model in model Table The results of the model selection test between the Pooled OLS model and the REM model in model Table 10 The results of the model selection test between the FEM model and the REM model in model Table 11 The results of the model selection test between the FEM model and the REM model in model Table 12 Heteroskedasicity test for model Table 13 Heteroskedasicity test for model Table 14 Autocorrelation test Page 41 Page 41 Page 42 Page 43 Page 43 Page 44 Page 44 Page 45 Page 45 Page 45 vii Introduction Significant of the study The scale of Vietnam's stock market is getting bigger and bigger Especially, from 2019-2021, the booming of this market attracts a lot of people and organization to join in This is reflected in the liquidity and the number of new accounts opened which has increased a lot compared to the period before 2018 This has become an indispensable channel to attract investment and mobilize capital of companies and the economy This requires securities companies to operate more efficiently and play a big role in promoting the efficiency of this capital investment channel After over 20 years of operation, Vietnam's stock market has made important contributions to the economy, even being evaluated as one of the emerging markets with a rapidly growing market capitalization in the world The increasing participation of individual, institutional and foreign investors requires securities companies to make good use of available opportunities and resources to develop sustainably and strongly To find out the reasons and help make better use of available resources of securities companies, the author chooses the topic: “Factors impact on profitability of securities companies listed on HOSE and HNX in Vietnam” Objectives and scope of the study The goal of this research is to figure out the impact of some factors on two sectors of securities companies: broker and margin loan From this, the suggestion would be supposed to support securities companies in this two sectors Research questions include: How factors impact on profitability of securities companies in two sectors? The way to attract and utilize resource for two sectors? Targeted objects include the two sector of securities companies: broker and margin loan Factors are firm size, company efficiency, leverage level, capital adequacy, inflation Research scope: 25 securities companies listed on HOSE and HNX from 2019-2021