Proprietary trading activities in thien viet securities joint stock company

TVSC Thien Viet Security Join Stock Company WTO World Trade Organization VND Viet Nam Dong OTC Over-the-counter... Proprietary trading activities is one of the most important activities

Table of Contents

Abbreviation 2

Preamble 3

Chapter I: 4

Introduction about Thien Viet Securities Join stock company 4

1.1 History, object and values 4

1.1.1 History 4

1.1.2 Objects of TVSC 5

1.1.3 TVSC values: 5

1.2 Organizational structure 6

1.3 Business Operation 9

1.4 Business environment 11

1.4.1 Stock market 11

1.4.2 Competitors 13

1.4.3 Customers 13

Chapter II: Proprietary Trading Activities in TVSCC 15

2.1 Overview of Proprietary Trading 15

2.1.1 Definition of Proprietary Trading Activities 15

2.1.2 Content of Proprietary Trading Activities 15

2.1.3 The requirements for securities firms in proprietary trading activites 16

2.1.4 The evaluation criteria for proprietary trading activities 17

2.2 Proprietary Trading Activities in TVSCC 18

2.2.1 Proprietary Trading team 18

2.2.2 The process of Proprietary Trading Activities in TVSCC 18

2.2.3 The result in Proprietary Trading Activities in TVSCC 19

Chapter III: The solutions to improve the efficiency on Proprietary Trading Activities in TVSC 23

3.1 Human Resouces 23

3.1.1 Training 23

3.1.2 Recruitment 23

3.1.3 Benefits for employees 24

3.2 Capital 24

3.3 Others 24

Conclusion 25

Reference 26

TVSC Thien Viet Security Join Stock Company

WTO World Trade Organization

VND Viet Nam Dong

OTC Over-the-counter

Proprietary trading activities is one of the most important activities of a securities company It has a major influent on the formation and development

of the securities market in general and the securities company in particular

In Vietnam, the official stock market came into being with the establishment of the Securities Trading Center in Ho Chi Minh on July, 20th,

2000 The market has started operations for nearly 10 years The securities companies in turn were also established to meet the needs of the market So far there have been more than 60 operating securities companies to serve the market’s demand.

Thien Viet Securities Joint Stock Company (TVSC) was born with the initial purposes, which are brokerage center and securities business, the company has become one of the securities companies, that a proprietary trading activities took a very high part in revenue However, while Vietnam are entering the first step on the path of integration with the world economy and especially after Vietnam officially joined the World Trade Organization (WTO), the appearance of securities companies, foreign economic organizations in Vietnam market will create a great number of opportunities and challenges for the domestic securities companies There is no exception

to TVSC Therefore, TVSC must continually improve its quality, expand and develop its activities in order to stay stable and competitive in the stock market.

From August 24th 2007, according to Articles 67/UBCK-GP TVSC intent toincrease charter capital from 43 billion VND to 86 billion VND in order to meetrequirement of expanding service to corporate finance advisory and equitizationadvisory.

From December 5th 2007 ,according to Articles 92/UBCK-GPĐCCTCKTVSC increased the capital from 86 billion VND to 430 billion VND TVSC strives

to become the first listed security corporate in security market Enhance capitalmobilization though security market Expand business by establish real estatecompany Intend to set up security investment fund next year

Profile:

Vietnamese name:

CÔNG TY CỔ PHẦN CHỨNG KHOÁN THIÊN VIỆT.

International name:

Thienviet Securities Joint Stock Company (TVSC)

Headquater: 535 Kim Ma, Ngoc Khanh, Ba Dinh, Ha noi

Telephone: (84.4)22203228 – Fax: (84.4)222.3227

E-mail: info@TVSC.vn

Ho Chi Minh brand: Suit 9, Vitek Building, 63 Võ Văn Tần street, District 3,

Ho Chi Minh city

Telephone: (84.8)62992099 – Fax: (84.8)62992088

E-mail: infohcm@TVSC.vn

1.1.2 The objects of TVSC

The company’s target is to become the leading investment banks in Vietnam,

we strictly comply with the standards and international regulations, in addition meetthe needs of customers is the motto of our leading

TVSC always research and find optimal solutions, the most effective for theircustomers In addition, they pioneered the development of new products andbecome a leading company in Vietnam is what they aim to

Economic activity in active development, they actively recruit talented peopleand always have excellent talent TVSC is always a choice of candidates inVietnam

1.1.3 TVSC values:

The core values that TVSC have defined are Integrity, Commitment to Excellence, Teamwork, Creativity, and Building up Valuesby hard work.

Integrity is the most important character for our business TVSC is committed

to maintaining the highest standards of professional ethics in everything it does

The company strive to deliver excellent services that are above its client’s

expectations TVSC constantly studies current product and service offering toidentify things that can be improved to serve its clients better At the same time,TVSC anticipates customers’ needs and respond with new products and services tomeet these needs

TVSC stresses on teamwork inside company Each of the team members has

unique perspective Since their backgrounds and skill sets compliment each other,they produce better results by working together as a team.

TVSC emphasizes on creativity and innovation in its work TVSC always

looks for better solutions for its customers and the company doesn’t accept “No” as

an answer to any problem

TVSC believe that values are built upby hard work So TVSC takes things

for granted The whole company work hard and work smart to accomplish itsmission

As it grows, these values will serve as its guidance for conducting business Itsvalues will also set the firm apart from others, define who TVSC is and what itaspires to be

1.2 Organizational structure

The below chart is to describe the organizational structure in TVSC:

The organizational structure in Ho Chi Minh brand is similar to theheadquarter in Ha Noi.

a The functional departments:

- Brokerage Department: this department are the representative of the

company trading at the Stock Exchange; the intermediary buying and sellingsecurities for the customers Brokerage Department is also in charge of supplyinginformation on financial terms, securities for customers; managing and receivingorders Not only developing and improving brokerage services but also offeringnew products for brokerage activities are its functions as well

- Investment Banking Department (abbreviation: IB)

o Consulting equitization

o Advisory and underwriting stocks and bonds

o Consulting M&A activities

o Consulting strategy for partners and other companies

o Registration for public company

- Principal Investment (abbreviation: PI).

o Investment in not-listed and listed company

o Doing proprietary trading that includes research and market analysis

on the market to give recommendations and proposal for proprietary trading;building a network of potential customers; implementation of proprietary tradingactivities according to proposals and process of proprietary trading activities Thisdepartment also aims to find new products related to proprietary trading activities

b The supportive departments:

- IT departments is responsible for advising, proposing and developing

solutions in information technology of management, administration and businessorganization It is also in charge of management, coordination and operation oftechnology systems in TVSC and doing research, developing software that meet therequirement of the business operations in TVSC

- Finance department do the job of accounting transactions, accounting and

management of deposit accounts, securities deposited by customers; securitiesdepository for clients and perform services for investors involved in the brokerageand securities custody

- Human Resources:

Public administration: is responsible for facilities, the work of archives, store

and seal management and coordinate with concerned departments held meetings,conference;

Staff organization and training: to arrange the division of labor among units

and departments in the company; plan staff training procedures for promotedofficers

Department of managing labor and wages: to advise the Director of the

company in the recruitment, signing or cancel labor contracts, reward, discipline,wage

- Open accounts and transactions online at www.TVSC.vn

- Communicate directly via phone: 84-4-220313 in transactions: 535 Kim Ma,Ngoc Khanh, Ba Dinh District, Hanoi

• For individual customers:

The company provides services and the following account:

- Account transactions generally (for securities listed and unlisted)

- OTC accounts for customers who use the securities depository services andsecurities trading OTC

- Co-ownership account for the couple

- Account investment club for a group of individual investors

- Separately managed accounts for clients with large investment capacity TVSC also offers cheaper brokerage services for independent customers - whoneeds only transactions and investment advisory services to support customers whoneed advice on investments The consultants will work with customers tounderstand the purpose of investment and the level of acceptable risk as well asidentifying areas of investment and withdrawal strategies, and then give the suitablestrategy for private customers

With close cooperation with commercial banks and finance companies,TVSC can provide our customers the variety of financial solutions such as repo andpledge of shares and mortgage, loan applications before the sale of securities, loansinsured 100% of the value of securities

• For client organizations:

The company supports customers in many professional organizations,including the discovery of investment opportunities, analyzing and evaluatinginvestment opportunities, trading strategy, the implementation of huge tradingbudget and evaluation of new shares issuance and transaction with the best price

Investment Banking Services (Investment Banking): With a various

network of partners are organizations and individuals in the international andnational; along with experts in the field of corporate finance and capital markets,TVSC provides investment banking services with international standards forcorporate customers and individuals

Investment banking services of TVSC include:

+ Consulting equitization

+ Advisory and underwriting stocks and bonds, including plans fordestruction of underwriting, issuing agents for customers; establishing andmaintaining relationships with potential issuance securities company; analysisingand, givng evaluation and implementation of proposed plans for the stockunderwriting to ensure the safety and effectiveness under the plan approved

+ Consulting M&A

+ Consulting and finding strategic partners and transfer of shares

+ Register for public companies

Investment (Investment Principal): By its capital TVSC also make

investments in businesses With strong capital market, TVSC will contribute to thesuccess of the businesses that invest TVSC Now, the company focuses oninvestments in unlisted enterprises (PE), listing, and bonds (we called thisproprietary trading) In the equity portfolio for unlisted company (PE), companyfocuses on private business growth in key sectors with the management team andexcellent reliability In the list of capital stock listed companies, TVSC towardsinvesting in value stocks and realize profits while achieving the expected profit hasbeen made previously The type of debt, government bonds, guaranteed governmentbonds, term deposits, and other financial instruments and the stock bridge forcustomers of the IB is the choices of the company

1.4.1.1 Ho Chi Minh securities trading center

There were only two kinds of stocks which are REE and SAM at the first session.They have their posted value at 270 billion dong In July, 2008, there were totally

154 kinds of stocks; 4 fund certificates and hundreds of kinds of bonds which werelisted at 66,014 billion dong, in which stocks gained 44,643 billion dong The totalmarket capitalization value of shares gained 170,217 billion dong, which accountedfor 20% GDP

Sources: http://market.hose.com.vn/Public/TechnicalAnalysis.aspx

1.4.1.2 Hanoi securities trading center

The secondary securities trading activity at Hanoi securities trading center(HASTC) has officially started since 14/7/2005 HASTC holds the trading session

of shares of business whose minimum charter capital is 5 billion dong; governmentbonds; bonds guaranteed by government; local government bonds; unlistedcorporate bonds Transaction activities are hold according to agreement method(applied from 14/07/2005) and price transaction with simultaneous agreement(applied from 2/11/2005)

Source: http://market.hose.com.vn

1.4.2 Competitors

There are now more than 60 securities companies in Vietnam stock market.They provide the similar services according to the regulations of SSC, including:brokerage service, self-entrepreneur service, securities issuing guarantee, securitiesinvestment consultation so there is a high competitions among those companies,especially in two fields which are brokerage service and business consultation Thecore elements which make this company different from others include: brand,service quality, value-added services and service fee

About business, the securities companies like Sacombank securitiescompany, Bao Viet Securities Joint Stock company or Vietcombank Securitiescompany have advantages over other

1.4.3 Customers

The participants who purchase securities now are individual investors ororganizational investors like banks, securities companies, insurance companies andother financial institutions

1.4.3.1 Individual investors.

Individual investors are the main human factor participating the market Theyaccount for more than 70% of the total in the securities market Along with thestrong development of the market, the number of securities accounts also riserapidly.

1.4.3.2 Asset management companies and investment fund.

There are now about 34 asset management companies licensed to operate inVietnam with the total estimated capital is 5,000 billion dong

1.4.3.3 Foreign investors.

Vietnam securities market does not only attract the domestic investors butthe foreign investors as well This is expressed by their share-holding percentage.This trend has been increased dramatically since 9/2005 when the foreign investorshad the right to buy at last 49% of the listed stocks of a listed company Now theforeign investors hold 49% of the shares of some securities: AGF; BMP; BT6;DMC; GMD; IFS; MCV; REE; RIC; ST8; TDH; TYA; VFI

Out of more than foreign accounts, there have been famous investment fundslike Dragon Capital, Vina Capital, PXP Asset Management, Indochina Capital Sothe foreign investments confirm that besides the short-term investment target, thereare also long-term vision and their strategy when considering opportunity wheninvesting in Vietnam securities market