“Lean years” testing securities companies’ patience and stuff
Published: 02/06/2011 05:00
VietNamNet Bridge – Incurring big losses and restructuring the workforce are the things securities companies are doing at this moment. They have to wait on hold and struggle for the stock market recovery.
Stock market remains lackluster
The VN Index is on the rise in recent trading sessions, having climbed to the 410 point threshold. However, on the HCM City bourse, the average trading volume only reaches 560 billion dong per trading session, much lower than the 2200 billion dong seen in May 2010.
The stock prices have decreased to the levels which are much lower than that in the previous crisis (the VN Index dropped to 273 points in February 2009). Currently, tens of shares have the market prices of less than 4000 dong, while the prices of hundreds of shares have plummeted to below the face value.
General Director of a HCM City-based securities company said that brokerage service brings 70 percent of the company’s turnover, which helped earn the profit of several billion dong in 2010. However, the source of income has decreased by 60 percent since the beginning of the year, thus leading to the loss of 10 billion dong in the first quarter of the year.
“We are sure of taking losses continuously in the second quarter, because the business conditions are very bad,” he complained.
In fact, closing branches and shutting down transaction points have become a popular thing. Even the “big guys” like Thang Long Securities Company, ACB Securities and Vietinbank all have to cut down the numbers of branches due to the decreasing turnover from the brokerage service.
According to the State Securities Commission, 24 securities companies have reported losses for the first quarter of the year with the total loss of up to 574 billion dong.
Meanwhile, the pressure on the stock market will continue to be hard in the time to come. The State Bank of Vietnam has instructed commercial banks to reduce the loans to non-production sectors (including securities investments) to below 22 percent of total outstanding loans prior to June 30. In order to do that, banks will have to take back the loans they gave before to securities investors. If so, the stock market will not have the financial driving force to bounce back.
Securities companies’ managers leave
Just within one month, tens of securities companies have changed their chairs, general directors, deputy directors and branch directors.
The most sensational news of the stock market in the last few days is the disappearance of the Chair of Ha Thanh Securities Company (HASC), Truong Duy Son with the account deficit of up to 100 billion dong. The board of directors of HASC had to gather an extraordinary meeting, which decided to put Bui Quang Hung into the post of the chair.
Prior to that, Nguyen Quang Vinh, General Director of SHB Securities Company, also stepped down to look for another job. At that time, the price of the company’s share was 7000 dong per share, while it has dropped to 5900 dong. The resignation of Vinh caught the special attention from the public, because Vinh once worked as the general director for Bao Viet Securities, the first securities company in Vietnam.
General Director of Lien Viet Securities Company, Hoang Xuan Quyen is going to leave the company after one year of working for some personal reasons. However, like other managers, Quyen decides to leave in the most difficult period.
At Kenanga Securities, Cao Van Son has replaced Do Quang Trung to take the post of the chair of the boards of directors. At VSEC, Kellee Chee Khiong has replaced Chay Wai Leong.
“It is understandable why securities companies restructure the apparatus at this moment,” a member of the board of directors of a company said. “When the business prospers, this satisfies every one. However, arguments rise when difficulties appear”.
Source: VNE |
Provide by Vietnam Travel
“Lean years” testing securities companies’ patience and stuff - Business - News | vietnam travel company
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