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Listed companies reporting losses
Many listed companies have reported business losses for 2008 in the last few days, which has made the stock market gloomier.
Consequences of financial investments
Refrigerator Engineering Enterprise shares (REE), together with other share items including VTA, BHS and VHG, have been put under management by the HCM City Stock Exchange due to the businesses having lost money in 2008.
Last year proved to be challenging for REE with ups and downs following its establishment. The enterprise has reported the accumulative loss of VND139.34bil in 2008. REE has become a typical example of an enterprise bogged down in financial investments. It spent a lot of money on financial investments and sustained a blow when stock prices dropped.
TRI, the share item of a HCM City-based drink company, has also been put under control due to losses brought about by ineffective financial investments. The company’s profit was minus VND145bil in 2008.
“No one could imagine…”
A lot of listed companies have reported minus profit for the fourth quarter of 2008 because production costs were exceedingly high, beyond the companies’ control. Sale prices were lower than cost in the fourth quarter of 2008, nullifying all the efforts the enterprises had made earlier in the year.
Nguyen Xuan Trinh, General Director of Bien Hoa Sugar Company, the issuer of BHS shares, said: “No one could have imagined that farm produce prices would drop by 2/3.”
Hoa Phat Group’s post tax profit in Q4 2008 was minus VND232bil, which has been explained by the record steel price decrease of 50%. Other companies, including PIT, an import-export company, KBG (urban area development), PVG (liquidised gas), have also reported losses.
One of the reasons which have made many business suffer was the high financial costs (bank loan interest rates). In Q4, CMC, an investment company, incurred the loss of VND27.9bil, leading to the loss of VND23.5bil for the whole year. It was because of high financial costs -- VND30bil.
Misfortunes continue in 2009
Two of the business fields REE has been following, real estate and financial investments, have suffered from the economic downturn spiral.
“We still lack experience in monetary investment,” Mai Thanh, General Director of REE, admitted.
In 2009, REE will focus on profit-making business fields, while trying to expand the market and seek profit from that.
“There is no good news about the market which can encourage investors to spend money. We are hearing the news about the loss of companies and have no other choice than waiting for the impacts of the monetary policies,” said Ly An, a securities investor.
The leader of one securities company has just sold his stakes in the company and plans to inject money in gold.
It is said that stocks will not be the choice of investors until June at the earliest.
VietNamNet/Saigon tiep thi
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