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Securities loaning closed right after opening
In early September, a lot of banks announced they would resume providing loans to fund securities investments. However, just a short time after the announcement was made, banks have re-tightened loaning at the urging of state management agencies.
The State Securities Commission (SSC) has released a document, asking securities companies, investment fund management companies and banks to reconsider their investments and securities loaning, and limit repo contracts in order to ensure safety in the context of the uncertain global financial market.
Nguyen Doan Hung, Deputy Chairman of SSC, said that repo contracts are risky for both investors and securities companies, and that SSC has called for the limitation of repo contracts in order to protect the interests of subjects at this moment with the market fluctuating wildly.
Right after the stock market showed signs of recovery one or two months ago, ABBank also announced it would pump capital into the market. However, in his latest talk with the press, Luu Duc Khanh, ABBank’s General Director, said that the bank is only providing the services it promised while it dares not provide the other services it wanted to. Some other banks, which previously planned to follow other banks by resuming securities loans, said that they have cancelled their plans.
Nguyen Nhan Nghia, Deputy General Director of BIDV Investment Fund Management Company, said that it is really risky to give loans and sign repo contracts at this moment. The VN Index has been sliding so dramatically, while there has not been any sign of the market’s recovery.
Meanwhile, Tuan Anh, an investor on Vien Dong securities trading floor, said that with the current uncertainties of the stock market, he would not borrow money even if banks flung open their doors.
Therefore, the tightened credit will not much affect investors’ decisions. They just want to know how long the banks’ doors will be closed to them. However, lenders still cannot give an answer.
VNN
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