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Securities companies just trying to hang on
The goal that securities companies have set for themselves in 2009 is trying to survive – development is not even a consideration.
The main sources of income of securities companies come from brokerage, consultancy and securities issuance guarantee fees, and from trading activities themselves. However, the gloomy market has made no money flow into the pockets of the companies.
The general director of a securities company in HCM City said that his company has been providing IPO consultancy for some companies the last few months, but it cannot find investors who will pay money for the shares.
Meanwhile, he said, the ‘brokerage service cake’ has become so small that it cannot feed the nearly 100 securities companies. The gloomy stock market has prompted businesses to delay their securities issuance plans, which also means no jobs for securities companies.
When asked if he was seeking to buy securities companies which are on the verge of bankruptcy and being offered for sale, Nguyen Duy Hung, Chairman and General Director of the Saigon Securities Incorporated (SSI), said: “There is nothing worth purchasing.”
SJC Securities Company’s General Director Huynh Anh Tuan said that the best way for companies which have fallen into big difficulties is to dissolve. The most valuable assets of securities companies are technology and staffs, which are difficult to sell.
Sources say that a securities company has to spend at least VND50mil a month to keep operating, while the income from brokerage fees is just VND1mil a day.
Director of SME Securities Company, HCM City branch Bui Van Quang said that the income from brokerage fees ‘died’ several months ago. He said that the company now focuses on consultancy services on investment and capital mobilisation for unlisted companies.
Nguyen Duy Hung from SSI said that in 2009, SSI will make investment in the share items of leading companies which have prices close to the book value. SSI will also launch completely new investment products to attract rich investors.
According to Bui Thi Thanh Huong, Head of the Securities Trade Management Department under the State Securities Commission (SSC), securities companies need to adjust their activities and business plans to survive the current difficulties. The companies should also sit together to come up with solutions for their problems.
Huong said that SSC is going to allow securities companies to launch some new operations, including margin trade. To date, SSC has not given any detailed information about the depository fee or tax exemption and reductions for securities companies. However, Huong said that the incentives will be very useful for struggling companies.
SSC’s Chairman Vu Bang, in a meeting with the press yesterday morning, said that the watchdog agency is planning long-term measures to get prepared for the market’s recovery, expected to come in the third quarter of the year.
Regarding the ‘health’ of securities companies, SSC said that 15 of the 50 companies which have submitted business reports to the agency made profit. One company is going to be dissolved (the company has not become operational yet, though it was licenced one year ago).
Bang said that SSC will have the business reports of over 90 operational securities companies by the end of the first quarter of 2009.
VietNamNet, NLD, VNE
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