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Securities investors think twice before borrowing money
Unlike two months ago, when applications for borrowing money for securities investments came rapid-fire, securities investors are now very cautious when contacting banks for loans.
Interest rates on the rise
Au Viet announced that it, in cooperation with the HCM City Housing Bank, began providing loans to securities investors on June 23. The lending interest rate is 1 percent per month. Clients can borrow up to 10 billion for three months at maximum.
Prior to that, the securities company, in cooperation with Agribank, set the lending interest rate at 10 percent per annum only. The company said that the credit limit reserved for loaning by Agribank has been disbursed and it is now cooperating with another bank to run the loaning programme.
FPT Securities Company has also announced it raised the lending interest rate to 12 percent per annum applied as of mid June.
Local newspaper Dau tu chung khoan reported that nearly all the newly signed contracts on providing credit to fund securities investments have the lending interest rates at 12-13 percent per annum, higher than the rates of 10-10.5 percent applied before. Meanwhile, the lending terms have also been shortened to three months on average from six months.
Banks have also set stricter requirements for providing loans, setting including lower credit limits and accepting fewer share items that can be mortgaged for loans.
An BInh Bank, for example, through SJC Securities Company, only lends 10,000 dong for every mortgaged share which has the market value of less than 40,000 dong. It does not lend to clients who mortgage share items which have the market prices lower than face value. At SME Securities Company HCM City branch, investors can only borrow money to purchase share items with the market prices of over 15,000 dong per share.
Investors take cautious steps
Analysts all say that the ups and downs of the market will come in the upcoming time, while no clear tendency for share prices has been seen. According to Huynh Anh Tuan, General Director of SJC Securities Company, while the market still does not reveal a clear tendency and investors still have a wait-and-see attitude, there will be few people seeking loans to make direct investment.
“Investors are not using financial tools at this moment because of the high risks. However, if there is good supporting information, or investors can see clearer investment opportunities, they will borrow more money,” Tuan said.
Director of a HCM City based securities company said that the current lending interest rates are not overly high at all. Investors can easily earn 10-15 percent profit if the market increases for a few trading sessions. However, the problem is that they still do not want to borrow money for investment at this moment.
According to the Vietnam Association of Financial Investors (VAFI), by the end of April 2009, the State Bank of Vietnam announced the total loans to fund securities investments at 7 trillion dong. If counting the loans provided by financial companies, VAFI has estimated, the figure would be some 10 trillion dong. The figure proves to be relatively low if compared with the figure of the hot development period of 60 trillion dong.
VietNamNet, DTCK
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