The State Securities Commission (SSC) has kicked off a campaign of “health general examination and inspection” over securities companies. The companies to be dislodged from the market would show their faces in some more days.
The second quarter of 2012 has come, but 20 securities companies still have not submitted finance reports for 2011. Of the 80 companies which have submitted reports, more than a half incurred loss.
HRS, in the finance report released last week, informed that it took a loss of 9.6 billion dong in 2011. The accumulative loss of the company since 2007 has reached 45.8 billion dong, and the stockholder equity has dropped to 14 billion dong.
The worrying problem is that the revenue of the enterprise in recent years has always been at alarmingly low levels. In 2011, HRS earned 2.7 billion dong, while the total revenue of the last five years was 12 billion dong only.
In 2011, the company increased its capital to 60 billion dong. However, the additional capital volume of 15 billion dong was just enough to cover losses and add some more money to the company’s coffer.
Meanwhile, Vina, KIS and Navibank Securities, which were believed to be “stronger” than HRS and VIT, incurred loss in 2011, for the fourth consecutive year.
The audited finance report of Navibank Securities (NVS) showed that the company had the revenue of 17 billion dong in 2011 and incurred the loss of 15 billion dong, raising the accumulative loss to 36 billion dong. Especially, NVS still took loss in 2011 after it got more capital from some individuals from Saigon Invest Group, and the chartered capital jumped from 35.1 billion dong to 161 billion dong.
HSSC, which incurred loss for three years, had quietly left the market before Tet. Starting business with the chartered capital of 50 billion dong, the stockholder equity has dropped to 15.7 billion dong.
The alarm bell has also been rung over a series of other securities companies, which incurred loss in 2011, namely APS (- 2 billion dong), Alpha (- 7 billion dong), OSC (- 4.7), VDS (- 126), HPC (- 94.7), TLS (- 592), ORS (- 40.9), AVS (-40.5).
Except TLS, which had big revenue, other companies are all very small and have limited sources of income which cannot offset the losses incurred in securities investment.
The Vietnamese stock market remains very small with modest trading volume, where 10 biggest companies out of the 105 operational companies alone account for 80 percent of the market share already. SSC has been urged to eliminate 50 percent, or even 70-80 percent of the companies from the market, because they are too weak and cannot survive the difficulties.
Experts believe that the most difficult period is over and the market has been witnessing an impressive recovery. However, many securities companies still show signs of becoming unable to make payment.
The Vietnam Securities Depository Center VSD in early April 2012 served a warning on the Trang An Securities Company for the company’s violations. Prior to that, the company received the same warning in late November 2011.
Analysts believe that Trang An’s current status is not as serious as SME’s in 2011. However, this can show that securities companies are still in big difficulties.
The difficulties have forced many companies to narrow their networks. ORS, for example, has closed the Dong Nai branch, while PSI has closed the Hanoi, Thanh Hoa, and Nghe An branches.
Rong Viet, SME, An Phat and Thang Long securities companies have also made similar moves.