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Gold trading floors flourishing
What is happening on gold trading floors now can be described with the stock market boom in 2006-2007. Gold trading floors have been rushing to set up more transaction points, and the number of newly opened accounts has been increasing day by day.
After opening the gold trading floor on Dao Duy Anh Street in Hanoi in early December 2008, APEC Securities Company has been moving ahead with the plan to expand the transaction points to Hai Phong, Hue, and HCM City. The company plans to set gold trading floors at its thirty agents which receive investors’ orders for APEC nationwide.
APEC is now managing 15,500 investors’ accounts with the transaction value accounting for 1.5% of the total market transaction value. The Wall Street gold trading floor has the average transaction volume of 200,000 taels a day.
Other gold trading floors have also set up similar ambitious plans. Established in January, when the market reached the high tide, AGC has had nearly ten agents receiving investors’ orders so far.
According to Nguyen Cong Danh, General Director of the Asia Gold Joint Stock Company, besides the transaction office on Ly Thuong Kiet Street in Hanoi, AGC now has four other order receiving agents in Hai Phong City, Bac Ninh, and Thai Binh provinces. It is expected that AGC will have twenty operational order receiving agents in Q1.
The director revealed that in the first day after the opening of four agents, the total gold transaction volume of AGC reached 248,000 taels, valued at almost VND 4.96 trillion.
A lot of gold trading floors were established in Q2 and Q3 in 2008, when inflation escalated and people rushed to purchase gold to hoard as a safe investment channel. Commercial banks, securities companies, and gold trading companies all have jumped on the bandwagon.
Gold remains attractive to investors in 2009, especially when economists have warned about the bad performance of the world’s economy. In the domestic market, the gold price once nearly climbed to the VND 20 million/tael threshold. The highest gold price level ever has been attracting more and more investors to the gold trading floors.
On February 20, the total trading volume of ACB gold trading floor reached 348,910 taels, worth over VND 7 trillion. With the transaction fee of VND 2,000 per tael, every day, the gold trading floor can collect between VND 400 million-700 million per day in fees alone. As for a smaller trading floor, like Wall Street, or SJC Hanoi, which has the trading volume of 100,000 taels per day on average, the fee would be over VND 200 million.
VGB has reported that the average transaction volume of the floor in February was 200,000 taels per day. In the week from February 16-21, the gold trading volume of the floor reached 794,985 taels, worth VND 14 trillion. Everyday, 158,997 taels are traded. On February 20 and 21, when the gold market was scorching hot, the transaction value soared to over VND 4 trillion.
The gold price fever has attracted more and more investors to trading floors. Danh said that on February 20-21, AGC received 200 applications for opening transaction accounts. The SJC Hanoi trading floor run by Ha Thanh Securities Company has reported that it received 100 new clients a day in mid-February.
The price fluctuations have also brought large profits to bar gold trading companies. The Bao Tin Minh Chau Company has had nearly 300 transaction points in the northern provinces. In Hanoi alone, the company has 46 gold shops trading its products.
Saigon Jewellery Company SJC has reported the profit of several billions of VND a month in the first two months of the year. Cao Thi Ngoc Dung, the General Director of PNJ said that the turnover from bar gold trading of the company in the last two months was equal to 70% of the total turnover in 2008.
VietNamNet/VNE
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