Securities firms report bumper earnings despite challenges

May 3rd at 16:09

03-05-2014 16:09:02+07:00

A number of securities firms posted huge profits in the first quarter of this year, but many were in difficulty although the market is recovering.

According to the statistics of Dau Tu Chung Khoan (Securities Investment) newspaper, to date, 78 securities firms have reported their first quarter's business results, with total pre-tax profit reaching nearly VND1.4 trillion ($67.3 million), more than doubling the figure of the same period last year.

Notably, the gain was mostly registered by 30 companies, which each earned upwards of VND2 billion ($95,000), including FPT Securities (FPTS), Vietcombank Securities and VNDirect Securities.

FPTS reported the first quarter's profit at VND38.6 billion (US$1.8 million) and nearly VND70 billion (US$3.3 million), which is 68 per cent and 43 per cent higher, respectively, than the same period last year. FPTS attributed its soaring profit to the recovery in the stock market, which helped to boost the revenue from brokerage.

VNDirect Securities also gained VND59.3 billion (US$2.8 million) in pre-tax profits, or equivalent to a 110 per cent growth rate over the same period last year.

The turnover from brokerage activities constituted 46 per cent of VNDirect's VND104.5 billion (US$4.9 million) total revenue.

The revenue from the brokerage of Vietcombank Securities also soared by nearly 100 per cent to reach nearly VND30 billion (US$1.42 million) out of the net revenue of VND109.4 billion (US$5.2 million).

The Vietcombank Securities' after-tax profits jumped 315.4 per cent over the same period last year to reach VND40 billion (US$1.9 million) in this year's first quarter.

Sai Gon Securities, one of the securities firms with the largest brokerage market share, also gained VND303 billion (US$14.4 million) in after-tax profits. Other securities firms that posted profits were Hai Phong Securities, Kim Long Securities, Sai Gon–Ha Noi Securities, and Agribank Securities.

The growth of many securities firms in the first quarter of this year mainly came from the soaring brokerage revenue, which analysts attributed to the recovery in the stock market.

Statistics revealed that the VN-Index on the HCM City Exchange soared 17.23 per cent during the first quarter. The southern bourse's total trading volume and value reached 7.69 billion shares and VND130.6 trillion (US$6.2 billion), rising by more than 40 per cent and 69 per cent over the figures reported during the previous quarter.

On the northern bourse, the trading volume and value also strongly increased, with 4.7 billion shares traded during the first quarter of this year, increasing by 70 per cent, with the total value reaching VND47.5 trillion (US$2.2 billion), more than doubling the figures recorded in the previous quarter.

Although the market rebounded, 18 companies incurred losses in the first quarter, totalling VND15.6 billion ($743,000). In addition, 30 companies had a turnover from brokerage — their core business — of less than VND1 billion ($47,000), modest in comparison with their total charter capital of VND5.44 trillion ($259 million).

Securities firms could continue to encounter difficulty this year, after more than 60 per cent (58 out of 94 companies) posted aggregated losses last year, the finance ministry's statistics showed, as a result of the market decline in the past few years.

The restructuring of securities firms is underway, and the State Securities Commission had previously said that it would create favourable conditions for the companies to hasten the process through mergers and acquisitions.

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