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Citi announced on Friday that it has acquired a 9.9% stake in Vietnam’s Horizon Securities, subject to regulatory approval. Financial terms of the deal were undisclosed.
With this investment, Citi is one of the first foreign financial institutions to partner with a local Vietnamese securities firm. ANZ also has a 10% stake in a leading Vietnamese stockbroker — Saigon Securities.
According to Citi bankers in Vietnam, the American bank took its time searching for the “right fit” — and a securities house that Citi felt was built on a solid foundation. There are accusations to be levelled against some of the securities houses in Vietnam that they play fast and loose with the regulations, and other peoples’ money.
Citi bankers said Horizon Securities stood out as an exception in Vietnam. Founded in 2006, Horizon Securities is a privately held Vietnamese firm headquartered in Ho Chi Minh City that provides brokerage and corporate finance services. Horizon Securities operates as a subsidiary of Horizon Capital Group.
“Our partnership with Horizon Securities further extends our markets platform and gives us the ability to offer our clients better access to the Vietnamese capital markets through best-in-class equity brokerage execution,” said Brett Krause, Citi country officer for Vietnam.
“The Citi-Horizon Securities partnership demonstrates that the Vietnam economy as a whole, and the Vietnamese stock market in particular, remains attractive to top-tier foreign investors with a mid- to long-term vision for Vietnam,” said Kham Manh Doan, chairman of Horizon Capital Group.
He further added that: “This investment will help us become a leader in the secondary market and allow us to increase our market share of institutional investor equity flows as the Vietnamese market resumes strong growth and depth of liquidity.”
Expansion in Asia
“Our expansion in Vietnam is consistent with our broader goal of growing our franchise in the Asean market,” according to Rodrigo Zorrilla, head of markets Asia-Pacific at Citi. “We will continue to invest in our markets business to help our regional and global clients who are increasingly looking to invest in Asian equities given the region’s growth prospects.”
Asia-Pacific is one of the most important growth markets for Citi globally. During the past three years, Citi has generated close to $45 billion of revenues and $15 billion in net income in the region.
But it’s China, of course, where the action has really heated up. Earlier in June, Citi also entered into an agreement with China’s Orient Securities to set up of an investment banking venture.
But others are already up and running. In May, RBS and Guolian Securities launched Huaying Securities. And Morgan Stanley paired up with the Chinese securities’ firm China Fortune Securities, better known as Huaxin Securities. And at the end of June, J.P. Morgan and First Capital Securities received the final business permit that will allow them to start operations at their securities joint venture in China.
