There has been
no sign showing that the stock market would get better in the time to come,
while securities companies are believed to continue incurring heavy losses in
the second quarter of the year.

The trading
volumes on the bourses have been decreasing dramatically. Enterprises do not
intend to list shares on the markets at this moment, while securities investors
have become too tired that they do not want to inject money in stocks now. All
that reasons have made securities companies miserable, forcing them struggle to
survive.

Losses weakening securities
companies

50 percent
of the 28 securities companies which list their shares on the Hanoi
and HCM City bourses reported loss for the first
quarter of 2011. Meanwhile, profitable companies reported the profit decreases
of 60-95 percent in comparison with the same period of the last year.

The Hai Phong
Securities Company has been placed under the alert because it took a loss of
48.7 billion dong in 2010, and incurred the loss of six billion dong more in
the first quarter of 2011.

The Bao
Viet Securities Company continued incurring the loss of 54 billion dong in the
first quarter, raising the accumulative loss until the first quarter of 2011,
to 269 billion dong. Similarly, VNDirector incurred a loss of 42 billion dong
in the first quarter, while SME Securities 16.5 billion dong.

The
business reports all showed that the business expenses and management costs
have all increased, while the turnover has been decreasing dramatically. As for
some companies, the expenses were double the turnover. BVS, for example, had
the turnover of 45 billion dong, while it had to spend nearly 100 billion dong
on business and management costs.

Most
recently, Sacombank Securities Company SBS was asked to give an explanation on share
price decreases over the five consecutive trading sessions. Also, the company’s
profit was modest in the first quarter of 2011 at 6.13 billion dong, down by 84
percent in comparison with the same period of the last year. The problem was
that the expenses increased by 67 percent to 326 billion dong, while the
management cost was 24 billion dong.

A finance
expert said it will not be a surprise to him if the expenses of securities
companies continue rising in the second and third quarters of the year, and the
companies continue incurring losses. The stock market remains gloomy, while the
bank loan interest rates are sky high; therefore, it is easy to foresee that
difficulties will still encircle securities companies.

What to do? Laying off workers,
depositing money at banks

According
to General Director of SJC Securities Company, Huynh Anh Tuan, there are 100
operational securities companies in the market, and each company can have a
“small piece of the market cake”. Trading securities does not bring high profit
to the companies, because the VN Index keeps decreasing. Very few enterprises
intend to list on the bourse, this means that there are not many opportunities
for the companies to provide consultant services. Meanwhile, the service of
giving consultancy on share issuance also cannot find many clients.

According
to Nguoi lao dong, a lot of securities companies have to scale down their
business and dare not to expand production. In general, they have to cut down
the workforce by 15-20 percent. Especially, some securities companies have
deposited money at banks to live on deposit interest rates, instead of using
the money for investment deals. Consequently, some securities companies have
jumped into the real estate sector.

Kim Long
Securities Company and Saigon Securities Incorporated, for example, hope to
obtain attractive profits from the investments in the real estate projects in
the US,
hoping to take back investment capital after five years.

A new wave
of merger and acquisition of securities companies has been triggered. The
Vincom Securities Company has turned into Xuan Thanh Securities Company, after
Vincom sold 95 percent of the stakes to a group of institutional and individual
investors.

Prior to
that, Gia Quyen Securities Company (EPS) was renamed as KIS Vietnam after 49
percent of the stakes were sold to a South Korean partner, or Click and Call
Company became Golden Bridge Veitnam, Gia Anh Company became Hamico Securities.

Source: NLD