Capital Increase in Vietnam
Korea Investment & Securities (KIS) is pumping money into its Vietnamese subsidiary this year, as the ideal example of the profitability of its expansion into Southeast Asia.
According to sources in the investment industry, the KIS will increase the capital of its Vietnamese subsidiary by VND 849.1 billion (43.7 billion won, or US$40.02 million). The move was approved by the board at the end of December last year and by the State Securities of Vietnam (SSC) last month. Now there is nothing standing in the way of the cash infusion.
Yoo Sang-ho, president of the KIS, said, “This capital increase of 40 billion won is a part of measures to strengthen the local subsidiary in Vietnam. We have created a foothold for business last year, forming a surplus, and we are aiming to enter the top 10 through an aggressive business strategy this year.”
The whole Vietnam move in 2010 was a part of a larger strategy of the KIS to enter many overseas markets. The plan has proven to be a good one, because its Vietnam subsidiary turned a profit only 2 years after its founding. This result is even more surprising because Vietnam is considered to be an unfavorable environment, in which 60 percent of securities firms fail.
This achievement was possible largely because of the thorough localization strategy of the company. At the time of the acquisition, the KIS remained in the top 60 in the market share. However, it made the top 20 just after 4 years of acquisitions.
Meanwhile, the KIS opened a local office in Jakarta, Indonesia in December last year. It is also planning to create M&A opportunities by seeking multilateral partnerships based on its success in Vietnam.