Feb 2, 2013

Vietnam - Brokers report contrast pictures of 2012 profits

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VietNamNet Bridge – Although the overall picture of losses and gains is still unclear, many securities enterprises reported contrast situations in 2012 with some posting up big profits while others incurred heavy losses.

Around 40 securities have submitted 2012 financial statements to local stock watchdogs, of which only seven firms suffered losses.

Sacombank Securities Company (SBS) incurred the biggest loss of around VND127 billion. Notably, SBS posted up profits in the second half of last year with VND10 billion in the third quarter and VND2 billion in the fourth quarter.

Explaining these gains, SBS said it had offloaded some stocks and reduced operating costs.

With an accumulative loss of VND1.4 trillion, exceeding its equity, SBS is facing an extremely high danger of compulsory delisting.

Phu Hung Securities Company (PHS) lost VND101.5 billion in 2012, taking to VND148 billion its total loss in the past two years.

The broker earlier revised down its 2012 profit target from a VND1-billion gain to a loss of VND95 billion. However, its actual loss was still higher than projected.

Meanwhile, the strong rally on the stock market last December helped some brokers cut down losses. Vietnam Industrial & Commercial Securities Company (VIG) made a gain of VND900 million last quarter due to rising stock prices.

However, this minor gain could not make up for its hefty loss in the first quarter. VIG had an accumulative loss of over VND140 billion, including VND63.5 billion in 2012 alone.

In contrast, many securities firms saw their profits surging last year, including Saigon Securities Inc. (SSI) that took the lead with VND448.5 billion in after-tax profits. Stock investment fetched a revenue of VND346 billion while consultancy service brought about VND80 billion for SSI.

In the fourth quarter, some VND111 billion of provisions was refunded to its reserve fund as stock prices rallied.

HCMC Securities Corp. (HCM) followed with over VND246 billion in after-tax profits. Brokerage activities made a major contribution to its profit while revenue of stock investment was modest.

Large enterprises have continued raising market shares while ailing firms are struggling with losses and insolvency.

On the Hochiminh Stock Exchange (HOSE), 10 out of 100 brokers held a 61% brokerage market share last year, suggesting that many enterprises were facing challenges in stock investment due to modest brokerage revenues and banks’ credit tightening policy.

Around 40 securities firms with a charter capital of over VND300 billion each are operating well on the market while small enterprises are still mired in hardship.

Source: SGT

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