Proprietary Trading Revenue Accounts for a Significant Portion of Total Revenue

Selected Local Securities Firms

USD mn USD mn
2018 2017
42.8%
39.5% 51.6%
80.0

36.0% 45. 0% 80.0

47.6% 60. 0%

39.7%
40. 0%
70.0 70.0

50. 0%

35. 0%

31.9%
60.0 60.0

50.0
20.8% 17.8%
30. 0%

50.0
27.9% 40. 0%

40.0
17.2% 25. 0%

40.0 30. 0%

30.0
67.5 20. 0%

15. 0%
30.0

60.7 11.2% 20. 0%

20.0

39.8 10. 0%
20.0

24.0 16.7 18.9 21.7 24.6 21.6

10. 0%

13.4
10.0 10.0
5.0 %

-
8.0 0.0 % -
4.1 0.0 %

SSI HCM VND TCBS VCI MBS SSI HCM VND TCBS VCI MBS

Proprietary Trading Proprietary Trading Revenue/Total Revenue Proprietary Trading Proprietary Trading Revenue/Total Revenue

Selected Foreign Securities Firms

USD mn USD mn
2018 2017
55.8%
20.0 60. 0% 20.0
60.2% 70. 0%

18.0 18.0

49.9%
38.6%
60. 0%
50. 0%

16.0 16.0

14.0

40. 0%
14.0
37.6% 50. 0%

12.0 12.0

40. 0%

10.0

8.0
17.7% 30. 0% 10.0

8.0
30. 0%

7.3% 7.6%
20. 0%

6.0 6.0
20. 0%

4.0
9.3 4.0

5.2
10. 0%
10. 0%

2.0

-
2.3 2.1 0.8 0.0 %
2.0

-
0.2 3.4 0.5 0.0 %

Mirae Asset KIS Shinhan KBSV Mirae Asset Shinhan KIS KBSV

Proprietary Trading Proprietary Trading Revenue/Total Revenue Proprietary Trading Proprietary Trading Revenue/Total Revenue

Note: Data is based on consolidated financial statements

Sources: Companies’ Financial Statements
Proprietary Trading Account Balance in Total Equity
Selected Local Securities Firms
USD mn USD mn
670.9 2.3 2018 2017
1.5
700 .0 2.5 700 .0 2.5

1.7 2.0 2.0

477.9 1.3
600 .0 600 .0

0.7 0.6 0.6 0.8 0.8

0.5
1.5 1.5

500 .0

392.9 0.3 500 .0

0.5
379.6
1.0 1.0

400 .0

290.8 0.5
400 .0
0.5

- -
300 .0 300 .0

128.1 156.4 133.3 164.8 133.0 114.7

(0 .5) (0 .5)

200 .0

105.7 82.1 62.7 131.4 200 .0

110.8 123.0
40.3
(1 .0)

100.3 59.1 44.9 56.6

(1 .0)

100 .0

36.6 (1 .5)
100 .0

55.5 (1 .5)

- (2 .0) - (2 .0)

SSI VND VCI TCBS MBS HCM SSI VND VCI TCBS MBS HCM

Proprietary Trading Account Balance Total Equity Proprietary Trading Account Balance Total Equity

Proprietary Trading Account Balance/Total Equity Proprietary Trading Account Balance/Total Equity

Selected Foreign Securities Firms

USD mn USD mn
300 .0
1.3 2018 1.5 100 .0
92.8 2017 0.7 0.8
1.0

250 .0
252.2 0.7 0.8 90.0
0.6 0.8

197.7
1.0 80.0

0.2 0.6

200 .0
0.3 70.0 0.4

0.5 60.0
55.1 49.0 0.2

41.3
34.7
150 .0 50.0 -

84.6 - 40.0

25.8 (0 .2)

100 .0

57.9 22.2
42.0
30.0 (0 .4)

29.2 36.0 22.6 4.7

(0 .5) 20.0 (0 .6)

50.0

10.0 (0 .8)

- (1 .0) - (1 .0)

Mirae Asset KBSV Shinhan KIS Mirae Asset KBSV Shinhan KIS

Proprietary Trading Account Balance Proprietary Trading Account Balance

Total Equity Total Equity
Proprietary Trading Account Balance/Total Equity Proprietary Trading Account Balance/Total Equity

Note: Data is based on consolidated financial statements

Sources: Companies’ Financial Statements
Case Study – SSI Securities Corporation
Proprietary Trading Overview Proprietary Trading is Supported by SSI’s Investment Arm - SSIAM

Underwriting, Pre-IPO,
early investment Funds under SSIAM’s Management
IB&A
(AUM of external clients as at May 2018 of USD330 mn)

Open-ended Funds Member Funds Exchange-Traded Fund

Proprietary Warehouse, block deal Institutional
Trading Sales
Equity Fund PE Fund
SSI Sustainable Competitive Vietnam Growth Fund DAIWA- ETF SSIAM VNX50 Fund
ETFs, future arbitrage, Advantage Fund (SSI-SCA) SSIAM II
covered warrant Market-
Making Bond Fund SSI Member Fund
SSI Bond Fund (SSIBF) (SSI IMF)

Equity Fund
Proprietary Trading Value Andbanc Investment SIF –
Vietnam Value and Income
Portfolio
USD mn
1,40 0.0

1,185.8
1,20 0.0
Equity Fund
962.8 958.6 SSIAM UCITS – Vietnam Value
1,00 0.0

Income and Growth Fund

800 .0

600 .0

400 .0
328.5

200 .0

47.7 73.4 0.0 109.3

23.5 0.1 52.8 8.8 16.1 - 0.4
-

2014 2015 2016 2017 2018

Stock Bond Fund Certificate

Sources: Company filings and website
Case Study – Ho Chi Minh Securities Corporation
Diversified Trading with New Financial Instruments such as Independent Strategy From IB&A and Institutional Brokerage but
Derivatives and Covered Warrant Loosely Backed by Dragon Capital and VFM
Launched in August 2017 but derivative trading quickly Coordination Loop
generated the second highest income for HSC Proprietary
Trading with VND136.9bn, contributing to 32% of total revenue.
HSC is also open for covered warrant trading.
USD mn
Proprietary Trading Revenue
9.2
2016 2017

5.9

2.7
2.0
1.1 1.3
0.3 0.0 0.0 0.2

Stock Derivative Deposit interest ETF Certificate Bond

2017 Proprietary Trading Revenue Breakdown

Proprietary Trading
6.1% 1.1%

Stock
10.6% Underwriting,
Derivative
Pre-IPO, early Warehouse,
Deposit interest investment block deal
50.2%
32.0% ETF Certificate IB&A Institutional Sales
Bond

Source: HSC Annual Report 2017

 Case Study – Techcom Securities JSC

Focus on DCM Advisory Distribution Channel

• Offer interest rate varying from 9% to 12% per

annum but corporate is required to deposit a part Retail Corporate Bond
of cash at Techcom Bank.
• Overall, taking into account of all process fees iBond
(transaction fee, out-of-pocket fee, deposit rate,
etc.), corporate will be charged a total interest
rate for straight bond of 11% - 14% per annum. • Distribution of bond certificate issued by leading
companies and advised by TCBS in 284
Techcombank branches nationwide
• Minimum investment: VND 200 mn
• Coupon: 9%/year. The bonds’ coupon rate is
amended annually or bi-annually
• Liquidity
- Use bonds as mortgage at Techcombank
Proprietary Trading Value - Bonds are listed on HOSE
- Flexible liquidity packages of TCBS
✓ Bond Plus & Pro: Sell back to TCBS at
USD mn
3,00 0.0
2,775.1 2,758.6 predetermined time and interest
2,50 0.0
Open-ended Fund
iFund
Investing in corporate bond, government bond,
term deposits and other valuable papers.
✓ Techcombank Bond Fund (TCBF):
• Expected return: >8%/year
• Minimum investment: VND 1 mn
• Portfolio:
- Government bonds: 20%-50%
- Corporate bonds: 50%-80%
- Certificate of deposit: 0%-5%
✓ Techcom FlexiCash Fund (TCFF): first money
market fund in Vietnam – FlexiCA$H to help
maximize short-term cash flow for
corporates and individuals.

Sell back time Coupon • Expected return: 6%/year

2,00 0.0
Plus 2nd/17th each month Max: 7%/year • Minimum investment: VND1 mn
1,348.3
Pro 90 3 months 5.9%/year • Portfolio:
Pro 180 6 months 6.55%/year
1,50 0.0

- Government bonds: 30%

1,00 0.0

Pro 360 1 year 7.2%/year - Corporate bonds – banking

371.9 industry: 30%
Other corporate bonds: 20%
500 .0

102.6 92.1 -
14.3 1.9 19.7 9.4
-
✓ iBond Prix: - Certificate of deposit: 15%
o Sell any time at market prices and has - Short-term deposit: 5%
2014 2015 2016 2017 2018 high return.
o Interest hold to maturity date:
Stock Bond > 9%/year

Sources: Company filings and website

Case Study – Korean Securities Firms
Shinhan Securities Mirae Asset Securities

Corporates

Debt solution advisory

Guarantee for
bond issuance
Bond Proprietary Trading

Shinhan Securities Shinhan Investment

Vietnam Corporation (Korea)

Wealth Investment
Brokerage
Bond distribution Management Banking
Shinhan bank

Bond distribution
Institutional Investors

USD’000 USD mn
Proprietary Trading Value Proprietary Trading Value
6,00 0.0
5,591.4 250 .0
221.9
5,00 0.0

200 .0

4,00 0.0

150 .0

3,00 0.0

100 .0

2,00 0.0

50.0

9.4 18.6 22.9

- 0.0 - -
1,00 0.0

7.3 1.6 0.6

- -

2016 2017 2018 2016 2017 2018

Stock Bond Stock Bond

Sources: Company filings and website