Securities firms expected to post losses
Two weeks after the third quarter ended, only a few securities companies have released their financial reports for the first nine months of the year, with many expected to show losses.
Saigon Securities Inc (SSI) and Sai Gon-Ha Noi Securities Company (SHS) racked up nine-month losses of VND17.4 billion (US$840,600) and VND382 billion ($18.5 million), respectively, with An Phat Securities Company and Au Viet Securities Comoany showing losses as well.
Head of the State Securities Commission's securities business management department Pham Hong Son estimated that nearly 70 out of 105 securities would follow suit and post losses for the third quarter.
"If the market recovers, these companies can get through," Son told the newspaper Tien Phong (Vanguard). "But if not, only half of them can survive."
He noted, however, that many had kept their heads above water in the meantime by making efforts to restructure themselves.
In the first three quarters, HCM City Securities Company saw earnings from margin trades and bank deposits. The company called it a "capital business" strategy in a declining market.
HCM City Securities Company posted a nine-month net profit of VND145.5 billion ($7 million) and came in second place in brokerage market share on both stock exchanges – although earnings from brokerage services could cover only 60 per cent of the costs, said general director Johan Nyvene. To reach a break-even point, the company would have to achieve an 18-per-cent market share, something no securities firm had yet achieved, Nyvene said.
Au Viet Securities Company, after closing its Ha Noi-based office and reducing its staff, was able to cut its loss from VND13.2 billion ($637,700) in the second quarter to VND5 billion ($241,500) in the third quarter.
"Our income from deposits can cover the costs, but losses from self-trading operations will be the biggest concern," said Au Viet Chairman Doan Duc Vinh.
An Phat Securities Company said the primary cause of its losses was the necessity of setting aside provisionary funds. The company estimated this year's loss would be as high as VND20 billion ($966,200).
vietnamnet, VNS
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