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Gold trading floors still mushrooming
Securities companies are still setting up new gold trading floors despite the State Securities Commission (SSC) ordering them to stop opening floors until it releases guiding documents.
In late March, SSC released a document, instructing securities companies to report about the operations of existing gold trading floors and to stop opening new floors until further documents were issued.
However, many new gold trading floors have appeared in the last two months.
The Vietnam Gold Business Company (VGB), has been at the forefront in expanding its network, and it favours securities companies to serve as its order-taking agents.
In May alone, a lot of securities companies became order-taking agents for VGB, including DongA Securities, MHB Securities, Truong Son and Vincom Securities Company. Moreover, VGB is also cooperating with many other companies to open gold trading floors, namely Rong Viet Online Service Company and Van Xuan Company.
Asia Gold Company (AGC) has revealed an ambitious plan to develop its network of brokerage and order-taking agents, saying that it is aiming to open brokerage agents across the country. AGC is actively seeking securities companies, real estate trading floors, gold trading companies and other enterprises to become its agents.
The list of companies which are now serving as order-taking agents for AGC proves to be quite long, including Nam Viet Securities, National Securities Company, An Binh, Viet Tin, Bien Viet and Alpha Securities Companies.
Gold trading floors need to be “untied”
The VN Index dropped continuously for a long time from 1,000 to 200 points, causing investors big losses. The big losses prompted investors to seek investment opportunities in other channels, and many of them decided to invest in gold.
Seeing the demand, a lot of securities companies opened gold trading floors.
The establishment of a massive number of gold trading floors created concerns about management of the floors and led to the State Securities Commission’s decision to temporarily prohibit the opening of new floors.
However, Tran Thanh Hai, General Director of VGB, said that government agencies should set regulations to tighten control over the floors rather than prohibit the opening of new floors. Hai said that if they are thwarted from opening new floors, investors will try to dodge the law.
Hai went on to say that securities companies now feel it is a big waste that they have to make heavy investment in material facilities and manpower while the stock market only operates in the morning.
Securities companies have to pay high leasing fees to maintain their offices in the most advantageous positions in big cities like Hanoi and HCM City. While expenses are high, turnover remains modest, which has prompted them to provide more services.
Therefore, Hai said that gold trading floors need to be “untied” so both investors and securities companies can optimise profit. He believes that the decision to stop opening new gold trading floors is just a temporary measure.
Nguyen Thanh Truc, Permanent Deputy Chairman of the Vietnam Business Gold Association, also said that it is necessary to encourage the development of gold trading floors, as trading gold on floors has become very popular in the world.
VietNamNet, Info TV
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