Ho Chi Minh City, the economic hub of Vietnam, has become a forward base for "K-securities," with major Korean financial companies operating subsidiaries and branches. Since Mirae Asset Securities became the first Korean securities firm to enter in 2007, Korea Investment & Securities Co., Shinhan Investment & Securities, and KB Securities have expanded their presence by establishing local subsidiaries in Ho Chi Minh City and Hanoi.
The reason Korean securities firms are focusing on the Vietnamese market is clear. Beyond the saturated domestic retail market, they aim to preempt Vietnam's "young capital," backed by a vast domestic market of 100 million people and annual growth of 6% to 7%, to create new revenue sources.
Asset managers are also actively entering. Korea Investment Management opened a Vietnam office in 2006, the first among domestic managers, and converted it into a local subsidiary in 2020. In addition, KB Asset Management, Mirae Asset Global Investments, and Kiwoom Asset Management have successively stepped into the Vietnamese market.
If securities firms are laying the groundwork for direct investment, managers share the strategic goal of distributing indirect investment products such as funds and ETFs in line with Vietnam's steep asset growth rate to draw capital from local institutions and high-net-worth individuals.
◇ Mirae Asset Securities pushes a retail strategy led by a local CEO
Mirae Asset Securities' Vietnam subsidiary ranks No. 1 in market share among foreign full-service securities firms. As of the third quarter of last year, its market share was 2.93%, ranking eighth among all securities firms. Excluding seven local securities firms such as VP Securities (VPS) and Saigon Securities (SSI) that dominate about 60% of the market, it holds the most distinctive position among foreign players.
Observers say attracting VIP clients and upgrading its mobile trading system (MTS) were key to Mirae Asset Securities securing share. The subsidiary's net income last year is estimated at about 42.6 billion won, up 17% from the previous year's 36.3 billion won.
Recently, to respond to intensifying competition in the securities industry, Mirae Asset appointed a local head for its Vietnam operation, the first among Korean securities firms in Vietnam. New head Nguyen Hoang Yen joined as an early member at the founding of Mirae Asset Global Investments in 2006 and has been with the group for about 20 years.
Nguyen said, "A leader who deeply understands the local market and culture is the key to long-term success," adding, "Appointing a local chief executive officer (CEO) is a strategic choice, not a formality."
This year, the Vietnam subsidiary will diversify revenue by moving beyond a retail business centered on margin lending to retail securities that split high-grade corporate bonds for sale. It plans to focus on discovering quality bonds in sustainable infrastructure industries, particularly energy, water supply, education, healthcare, and large foreign direct investment (FDI) corporations.
Nguyen said, "Mirae Asset Securities Vietnam has established a leading position through green bond transactions from 2024 to last year," adding, "In particular, the green bond issuance for the Xuan Mai water treatment plant in Hanoi was the first in Vietnam to achieve a 20-year maturity, an international credit rating of AA, and a domestic rating of AAA, and it was selected as one of IJGlobal's outstanding projects of 2024."
On medium- to long-term business direction, Nguyen said, "We will define our business around core areas such as investment banking (IB), capital-raising advisory, mergers and acquisitions (M&A), and bond trading," adding, "We will actively pursue risk management and technology and talent development to become a full-service financial company that does not rely on a single revenue source."
◇ Targeting coins and gold… KIM prepares "new asset" ETFs
Korea Investment Management, which launched Korea's first Vietnam investment fund in 2006, established a local subsidiary (KIM Fund Vietnam) in 2020 and began full-fledged operations. Locally, it has built its footing by successively launching financial sector investment ETFs and dividend growth stock funds.
Hyun Dong-sik, head of the Vietnam subsidiary, is Korea's first Vietnam fund manager. Hyun said, "Vietnam's retail fund market is at a stage similar to Korea's 20 years ago," adding, "In Korea, as systematic investment funds emerged, the perception that 'it's better to leave it to professionals' took hold, and the fund market grew after that. Vietnam is just before that stage." Hyun predicted that, as domestic investors shifted interest from direct investment to ETFs, Vietnamese investors would show the same trajectory as they gain investment experience.
This year, KIM Fund Vietnam is preparing to launch bond, initial public offering (IPO) subscription, and mixed funds. Hyun said, "In the past, IPO funds were structured to sell state-owned enterprises held by the government to foreign-centered investors, but now it has become possible to meet corporations and major shareholders directly and buy equity in companies set to list," adding, "Since the Vietnamese government has said it will actively push listings from this year and speed up reviews, we are preparing in advance based on local experience."
Hyun is also interested in virtual asset ETFs. According to Blockchain analytics firm Chainalysis, Vietnam ranked third in Asia for virtual asset investment in the first half of last year. The investment ratio per capita was 21.2%, higher than Korea's 20.5%. Hyun said, "Vietnam does not strongly distinguish between investing in stocks and virtual assets," and expected a variety of ETF products could emerge under the "gold-finance convergence" model (combining traditional finance and virtual assets).
Another opportunity is that the Vietnamese government has released a series of pilot projects and plans to establish cryptocurrency and gold exchanges. Since Korea Investment Management is successfully managing the ACE KRX Gold Spot ETF with net worth of 4 trillion won in Korea, the company believes it can gain an edge in launching gold ETFs locally as well.
Hyun said, "While expanding traditional asset products such as stocks, bonds, and private equity funds, we will also introduce innovative financial products that will seize the title of Vietnam's 'first,'" signaling an aggressive approach in step with market growth.