Vietnam - Vietnam's Listed Firms Fare Poorly

Up to 60% of listed firms on both stock markets saw their performances shrinking in 2011, and some 85 firms were mired in the red last year, according to the State Securities Commission (SSC).

The final statistics is not yet available though most listed firms have submitted their financial statements. However, SSC said 2011 was a grim year for the economy, especially so for the equity market.

Listed firms had to grapple with a raft of hot problems, from higher interest rates to high input costs and difficulties to mobilize funds on bourse. Understandably, the number of loss-making enterprises in 2011 was higher than in the previous year, at 85 compared to some 50.

Property companies suffered the most, followed by construction, sea-freight, power generation and financial enterprises.

Property companies incurred biggest losses in the last quarter last year given surging lending rates as 80% of their investments in property projects were bank loans.

Quoc Cuong Gia Lai Joint Stock Co. (QCG) posted the accumulated losses for the whole year of 2011 at 30.76 billion dong despite a profit of 236.9 billion dong in 2010. The company’s financial costs, mainly lending rates in the fourth quarter last year, was 23.47 billion dong, up 160% against 9.03 billion dong in the same period one year earlier.

The firm attributed the late handover of the apartment building Quoc Cuong Gia Lai 1 to the borrowing problem. It complained accessing banking loans was very difficult under the monetary tightening policy and extremely high annual lending rates, at up to 22-24%, which adversely affected its operation.

Similarly, Song Da Urban & Industrial Zone Investment and Development JSC (SJS) suffered a loss of 61.93 billion dong in the last quarter in 2011 while having earned 127.03 billion dong in profits in the same period in 2010. The whole year of 2011’s accumulated losses of the business amounted to 46.22 billion dong while it obtained a profit of 456.12 billion dong in 2010.

Local securities trading firms have continuously incurred losses as a result of the gloomy stock market. As of now, 12 listing securities companies have posted losses, mostly due to brokerage services and self-trading activities like AVS, BSI and BVS.

Notably, Sacom Development and Investment Corporation (SAM) posted the loss of 204.46 billion dong for the whole year of 2011.

The stock broker’s general director Do Van Trac said his firm had a loss of over 200 billion dong for last year’s performance while it earned a profit of 108 billion dong in the previous year.

Meanwhile, the loss of Pha Lai Thermal Power JSC (PPC) in 2011 came from exchange rate risks, with a loss of 1.262 trillion dong.

Saigon Times

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