Báo cáo thực tập tiếng anh INTERNSHIP COMPANY VIET DRAGON SECURITIES JOINT STOCK COMPANY

VIETNAM NATIONAL UNIVERSITY, HANOIINTERNATIONAL SCHOOL *** GRADUATE INTERNSHIP REPORT INTERNSHIP COMPANY: VIET DRAGON SECURITIES JOINT STOCK COMPANY Address : 2C Thai Phien stress, Le

VIETNAM NATIONAL UNIVERSITY, HANOI

INTERNATIONAL SCHOOL

***

GRADUATE INTERNSHIP REPORT

INTERNSHIP COMPANY: VIET DRAGON SECURITIES JOINT STOCK COMPANY

Address : 2C Thai Phien stress,

Le Dai Hanh Ward, Hai Ba Trung Dictric, Hanoi

Supervisor : Mr Doan Anh TuanStudent’s full name: Dinh Thi Phuong ThaoStudent’s ID : 11071299

Major : International Business Class : IB2012C

Hanoi, March 1 st 2016

in completing this graduate internship report Special thanks go to the teachers in

my faculty for their useful education and continuous support

I wish to thank all members at Brokerage Department of Viet Dragon SecuritiesJoint Stock Company - Hanoi Branch with their expertise and precious time Iwould like to send a special thanks to Ms Dieu Linh, my supervisor for his detailedguidance, helpful suggestions and most of all patience over the past few months Inaddition, I am really thankful to Ms.Thu Ha for her help of data collection during

Table of Contents

LIST OF ABBREVIATION 5

LIST OF TABLES AND CHARTS 6

A OVERVIEW OF VIET DRAGON SECURITIES JOINT STOCK COMPANY 7

1 General information about the company 7 2 Overview / Main landmark historical activities 7

3 Mission, Vision and Core Values 9

4 Oranization Structure 9

5 The product, market, target customers 13 B REPORT ON THE BUSINESS OPERATION ON PLACE OF VDSC 14

The general business operations of the company in recent years 14

1 The securities brokerage activities 16

2 The underwriting activity and the issuance of securities dealers 19

3 The proprietary trading activities 19

4 The securities investment advisory activities 21

5 The securities depository activities 22

6 The other activities 22

C INTERNSHIP TARGET, THE ASSIGNED TASKS AND IMPLEMENTATION METHODOLOGY 25

I INTERSHI TARGET 25

II.WORKCONTENT 26

1 The process of opening new accounts 31

2 The processes of looking and taking care of customers 32

III METHODS OF IMPLEMENTATION 33

IV.RESULTS OBTAINED THROUGH THE GRADUATE INTERNSHIP 34

1.Knowledge review 34

2.Result 34

3.Experience Learned 35

4.Identify methods of settlement in the future to enhance the operational efficiency of the brokerage employee 36

REFERENCES 37

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LIST OF ABBREVIATION

VDSC Viet Dragon Securities Joint Stock

Company

LIST OF TABLES AND CHARTS

Table 2.1 The business operations of the VDSC in recent years 10Chart 2.1 The VDSC’s revenue of the securities brokerage activities 15Chart 2.2 The density of revenue from the brokerage securities activities

A OVERVIEW OF VIET DRAGON SECURITIES JOINT STOCK COMPANY

1 General information about the company

Name : Viet Dragon Securities Joint Stock Company

Abbreviated name: VDSC

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Logo :

Type : Joint-stock company

Chairman : Mr Tran Le Nguyen

Address : + Headquarter address: Floor 1-2-3-4, Building Viet Dragon, 141Nguyen Du Street, Ben Thanh Ward, 1 District, Ho Chi Minh City

+ Hanoi Branch address: 2C Thai Phien Stress, Le Dai Hanh Ward, Hai Ba TrungDistrict, Hanoi

2 Overview / Main landmark historical activities

Viet Dragon Securities Joint Stock Company was founded in accordance withthe License number 32/UBCK- GPHDKD issued by on December 21st 2016 with itschartered capital of 100 billion VND VDSC is making its best efforts to assert itsposition in Top 10 of Securities Companies in Vietnam with its vision to becomeone of the best Securities the State Security Commission of Vietnam Company lead

in the brokerage market in both Hanoi Stock Exchange (HNX) and HCM StockExchange (HOSE) As of 31st December 2015, VDSC’s total chapter capital reachedVND 700 billion Then, the table below shows the main landmark historicalactivities of VDSC

Table1.1: The main landmark historical activities

(Viet Dragon Securities Jont Stock Company, 2015)

Order-receiving agent launched in Binh Duong.

Saigon Order-receiving Agent launched

Launched Ha Noi branch

Chartered capital increased to VND 330 billion2009

06-2009 Became one of first 10 companies to register for trading on

Received "Best Annual Report" Award of 2012

Received Certificate of Top 100 Competitive Products and

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Services for WTO integration.

Received "Best Annual Report Award" of 2013

Launched the Corporate Finance Journal2014

07-2014 Launched goDragon online trading application for mobile

phones running on iOS and Android

Received "Best Annual Report Award" of 2014

Received "Best Annual Report Award" of 2015

3 Mission, Vision and Core Values

 Mission:

+ Make a continuous effort to create the greatest value for customers, shareholdersand employees, as well as contribute to the development of Vietnam's stock market+ To aim at sharing responsibility in building community and society in developingthe country

• The Machinery of Departments includes:

- The machinery of functional divisions within the company including Head,Deputy Head and professional staff

- Head and Deputy Head are set by General Director's recruitment, appointment anddismissing or resignation after the Board of Director agreement

- The experts, professional staff recruited by the General Director, are appointed,dismissed resolved according to work demands and proposals of the Head

- Deputy Head is Head assistants in executive management by the assignment ofHead Office

- The expert, professional staff performs tasks are assigned by the He

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The diagram 1.2: The organization structure of the VDSC

(Viet Dragon Securities Jont Stock Company, 2015)

5 The product, market, target customers

RongViet provides a wide range of financial and securities-related productsand services Its products and services are customized to the needs of each andevery client With intensive understandings of the market and clients, a dedicated,innovative and professional team of experts and a wide-reaching network, itsproducts and services are out to best serve the demand of all types of investors fromindividuals to organizations and financial institutions

The product of the VDSC includes:

- Brokerage and Investment Advisory

- Securities Services

- Research Services

- Financial Services

- Investment Banking

B REPORT ON THE BUSINESS OPERATION ON PLACE OF VDSC: The general business operations of the company in recent years:

The activities of VDSC base on the change of the Vietnam's stock market sothe result of its business depends on the volatility of the market

The return on asset (ROA):

Return on assets (ROA) is an indicator of how profitable a company is relative to itstotal assets ROA gives an idea as to how efficient management is at using its assets

to generate earnings Calculated by dividing a company's annual earnings by itstotal assets, ROA is displayed as a percentage Sometimes this is referred to as

"return on investment" (Investopia , n.d.)

The return on equity (ROE):

Return on equity (ROE) is the amount of net income returned as a percentage ofshareholders equity Return on equity measures a corporation's profitability byrevealing how much profit a company generates with the money shareholders haveinvested The ROE is useful for comparing the profitability of a company to that ofother firms in the same industry (Investopia.com, n.d.)

Table 2.1: The business operations of the VDSC in recent years

(s.cafef.v, n.d.) Unit: VND billions

- 2011 and 2012: ROA of VDSC in 2011 and 2012 was negative, which means thecompany makes losses, the expense and investment were larger than the income,and this leads the negative profit after tax.

- 2013: ROA = 0.24% On average, 100 units of assets generated 0.24 units of profitafter tax ROE = 6.5%, which means that 100 units of the shareholder's equity wasused to generate a profit of 6.5 units In 2013, the situation of business hadimproved, it began to record profits, but the figure was still very modest

- 2014: ROA = 11.79% On average, 100 units of assets generated 11.79 units ofprofit after tax ROE = 36.31%, which means that 100 units of the shareholder'sequity was used to generate a profit of 36.31 units.This was a remarkable resultdemonstrating the effectiveness of business of the company

As we can see the anomaly of the stock market in 2011, 2012 and 2013 weresignificantly affected in the picture of the securities companies in general andVDSC in particular Furthermore, the rising of unemployment rates that alsoinfluenced significantly in the general operation of the Vietnam economy.Especially, the stock market always reflected the volatility of the economy.According to the data of the Vietnam State Security Commission, in these years, themore than 40 securities companies were unprofitable, and almost securitiescompanies uncompleted the business plan In addition, the trends of the marketwere contrary to the expectations of the company stock, analysts and investors.However, in 2014, the economy showed signs of recovery then the stock marketalso achieved many positive results Although Vietnam's stock market in 2014 wasaffected by a number of events such as "the South China Sea and the rig" (05/2014)and "oil prices" (11/2014), the Vietnam's stock market at the end of the year alsohad a successful year The HSX was at 545.63 points (it increased 41 points,respectively 8.12% compared with 2013) and the HNX reached at 82.97 points (itgrew 22.3 points respectively 15.13%) At the end of fiscal 2014, the revenue ofVDSC reached VND 228.608 billion, its profit after tax was over VND 105.232billion, its ROA and ROE were also relatively high

In this report, I would like to introduce more details about the results ofVDSC business operations from 2011 to 2014 through the following specificactivities such as the securities brokerage activities, the proprietary tradingactivities, the underwriting activity, the securities investment advisory activities, thesecurities depository activities and other activities.

1. The securities brokerage activities:

The securities brokerage activities are one of the business operations ofsecurities companies which represent for customers to buy or sell shares in order tocreate the profit for customer but customers still take responsibility for all ofdecision The securities brokerage activities have proven to be an important activity

of VDSC because of bringing the high turnover for company

Chart 2.1: THE VDSC’S REVENUE OF THE SECURITIES BROKERAGE

ACTIVITIES (s.cafef.v, n.d.)

Unit: VND Billions

The revenue from the brokerage activities of VCSD generally increased overthe years In 2011, the revenue of these activities was VND 16.071 billion whichaccounted for 9.95% of total revenue of the company In 2012, it proliferated to

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VND 29.436 billion which equaled 83.2% of total revenue, larger than last year wasVND 13.365 billion In 2013, the revenue had declined slightly to VND 26.99billion due to the situation of the overall market However, in 2014, it changedsignificantly when the revenue was VND 63.66 billion and accounted for about30% of total revenue that exceeded VND 30 billion compared to the plan This was

a great success of the company, which is not only because of the positive change ofthe stock markets but also because of the effort of the internal environment ofVDSC

(HCM Stock Exchange, n.d.)

In 2014, it was a successful year of brokerage activities because of theimpressive growth in both number of transactions and revenues from brokeragefees At the end of the year, VDSC had 59200 accounts of customers, whichincludes 1733 of the new account There were 23 accounts of the domesticorganizations The accounts of foreign organizations were two The foreignpersonal accounts were six In addition, there were 1702 accounts of the domesticpersonal The new accounts decreased 32% compared with the new accounts in

2013 (2519 accounts), then it only reached 58% of the target plan (3000 accounts).The closing accounts in 2014 were 52 accounts, including 51 of the domesticpersonal accounts and 1 of the domestic organizational accounts The closingaccounts in 2014 were higher than that numbers in 2013 that were about 11

accounts Besides, the personal accounts were majority in the total number ofaccounts in 2014 (58904 account) The rest were 166 accounts of the domesticorganizations, about 120 accounts of the foreign personal and 10 accounts of theforeign organizations However, the numbers of active accounts were 4501accounts, an increase of 399 accounts compared to 2013, and equivalent to 9.7%.The proportion of total active accounts over the number of accounts increased from7% in 2013 to 8% in 2014 The number of the active account per month increasedfrom 1,463 in 2013 to 1,784 accounts in 2014 (about 22%) The proportion of thenumber of the new customers ' transactions increased from 13% to 27%.

According to statistics, VDSC had the largest market share of the brokerageactivities in the top 10 of the largest Vietnam securities companies in 2012.However, in 2013 and 2014 the market share decreased Significantly, in 2013, itdecreased to 2.46% of the whole market, including HOSE was 2.87%; HAS was1.14% and Upcom was 4.99% It continued to fall in 2014 (1.46%) which included1.61% of HOSE, equivalent to 56.2% to compare with in 2013; 1.06% of HAS andUpcom reached 1.3%, equivalent to 26.1% to compare with 2013 The market share

of bonds was very low, so there is no statistics

Table 2.2: THE MARKET SHARE OF THE BROKERAGE ACTIVITIES OF

To comparewith the plan(%)

2. The underwriting activity and the issuance of securities dealers:

The underwriting activity is frequently done in investment banking,insurance and commercial banking Generally, the underwriting means receiving

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payment for the willingness to cover a potential contingent risk (www.intopedia.com, n.d.)

The underwriting activity of VDSC was underdeveloped in the past In 2011and 2013, there was no revenue from these activities However, in 2012, therevenue from these activities was VND 390 million that accounted for 0.38% of thetotal revenue The stock market in recent years was not stable so these activitieswere not remarkable However, in 2014, the underwriting activities of VDSCconsiderably developed; it reached to the highest proportion of the total revenue.Specifically, VDSC has signed a contract to underwriting stocks with Bao LongInsurance Joint Stock Company and the contract to underwriting corporate bondswith Him Lam Joint Stock Company As a result, the revenue of the underwritingactivities was VND 7.77 billions that was larger than the plan (VND 4.6billions)and rose 8.32% to compare with 2013 This was a landmark decision of VDSC Itexpected these activities would continue to develop and bring stable revenues in thefuture

3. The proprietary trading activities:

The proprietary trading activities are the required condition for the securitiescompany to be allowed to engage in the underwriting activities

Chart 2.3: THE REVENUE OF PROPRIETARY TRADING ACTIVITIES

OF VDSC FORM 2011 TO 2014 (Unit: VND Billion)

(s.cafef.v, n.d.)