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Lackluster market forces securities companies to close branches   2011-05-22 - Viet Nam Net

The quiet stock market and the decreasing VN Index have made investors turn their backs to trading floors. A lot of securities companies have to close their branches to cut down expenses.





Several days ago, Vina Securities Company announced the closing of the Hanoi branch of the company, which was located on the seventh floor of the building at No 60 Ly Thai To, in Hoan Kiem district from May 13.




Vina Securities has its headquarters on the fifth floor of Sun Wah Tower at No 115, Nguyen Hue Road in District 1 in HCM City. The company has been incurring losses for the last three consecutive years from 2008 to 2010, totaling 128 billion dong. In 2010, the company’s chartered capital increased from 100 billion dong to 185 billion dong. However, with the loss taking in the last three consecutive years, the stockholder equity has dropped to 58.8 billion dong.




Vina Securities now has three shareholders, including VinaCapital, which is holding 49 percent of stakes. Tran Le Nguyen, General Director of KDC, is holding 20 percent, and Ho Thi My Diem 31 percent.




The lackluster of the stock market has made securities investors to turn their backs to the trading floors and made securities companies unable to earn money. Meanwhile, many securities investors do not come directly to securities company transaction points, but make transactions online or through phones. Therefore, trading floors have become deserted, which has prompted securities companies to close the floors to cut down expenses.




Prior to that, ACB Securities Company announced the closing of three branches and transaction points in HCM City, including the Tran Khai Nguyen transaction point at No 134, Nguyen Tri Phuong street, the Khanh Hoi transaction point at No 130, Khanh Hoi, and the Nguyen Cong Tru branch.




The Wall Street Securities WSS has also announced the temporary halt of the operation of the Hoan Kiem transaction point at No 46, Ngo Quyen, from May 12 to July 12.




However, some companies have announced the setting up of new branches. The Phu Hung Securities Company, for example, has established a branch in Can Tho City, while Bao Viet Securities has set up a transaction point in My Dinh area in Hanoi.




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. 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.




Especially, the information that the Saigon Securities Incorporated (SSI), a giant on the stock market, also took loss of 101.87 billion dong in the first quarter has discouraged people. In 2010, SSI planned to obtain 1200 billion dong of pretax profit, but it finally got 902 billion dong only.




Recently, some securities companies such as Dong A Securities, Mekong, Ban Viet or HSC have hired foreign analysts and researchers. The specialists have good experiences in the finance sector from newly emerging markets and they have been providing in dept analysis reports.




Other securities companies not only hire foreign experts, but also invite Viet Kieu (overseas Vietnamese) finance experts to work for them. It remains unclear about the benefits the experts can bring, but it is clear that they have succeeded in attracting the attention from investors.

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