The opposite picture of the business results of securities companies

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Many large securities companies simultaneously saw their profits fall due to negative movements of the general market

Specifically, in the second quarter of 2019, the securities market continued to experience strong fluctuations, the VN-Index fell by 3.14 percent compared to the end of the first quarter. Market liquidity also fell sharply, total average trading value in the second quarter was only VND 4,325 billion, down 40 percent. On HoSE alone, the average trading value decreased by 38.4 percent compared to the same period last year. The total trading value of the whole market in the first six months of 2019 decreased by approximately 45 percent.

External uncertainties such as international trade conflicts, fears of slow growth leading to capital withdrawal from risky assets such as stocks, dominated not only the domestic financial market but also almost all markets around the world. Vietnam’s market lost an important impetus when foreign investors made net sales of VND 921 billion on HoSE via order matching, which was in contrast to the net buying trend of VND 2.220 billion in the previous quarter.

Reduced liquidity was the main reason for the strong decrease in revenue from securities brokerage and margin lending and cash advance operations of SSI company compared to the same period last year of VND 131 billion and VND 178 billion in second quarter of 2019, respectively down 61 percent and 11 percent. As a result, SSI's net profit was only VND 199 billion in the second quarter of 2019, down 3 percent compared to the second quarter of 2018. In the first six months of 2019, SSI’s net profit was VND 391 billion, down by 45 percent and reaching 30 percent of the 2019 profit plan. According to SSI, this result was behind the company’s expectation, but it was completely consistent with the current general market context.

Similarly, net profit of Ho Chi Minh City Securities Corporation (HSC) in the second quarter of 2019 also decreased by 25 percent compared to the same period last year, reaching only VND 110 billion. Of which, securities brokerage revenue dropped by 45 percent, only VND 126 billion in the second quarter, which was the main factor leading to the drop in profit.

In the first six months of 2019, HSC's brokerage revenue and margin trading activities decreased by 48 percent and 20 percent respectively over the same period in 2018. Therefore, HSC's net profit in the first half 2019 only reached VND 193 billion, down 59 percent.

Many other securities companies also shared the plight of plunging profits such as Ban Viet Securities down 30 percent, Rong Viet Securities down 14 percent, VNDirect down 60 percent, and BSC 84 percent.

However, while a series of large securities companies saw a decrease in profits, some small securities companies came back spectacularly thanks to prosperity in self-trading.

Typically, FPTS securities company’s net profit in the second quarter of 2019 increased 72 percent compared to the same period last year. this was due to the self-trading in the period reaching nearly VND 61 billion while it was nearly VND 1.3 billion in the same period last year. In the six months, FPTS self-trading revenue reached VND 126 billion, a strong increase compared to VND 1.5 billion in the first half of 2018.

The self-trading revenue of Bao Viet Securities Company (BVSC) also increased strongly by 67 percent, reached VND 45 billion. This has contributed significantly to BVSC's net profit of over VND 33 billion, an increase of 12 percent compared to the second quarter of 2018.

Similarly, many other securities companies also recorded profit growth such as MBS, BMS, DVSC and Aseansc.

Allowing securities companies to invest indirectly overseas VCN- In circular No.105/2016/TT-BTC of the Ministry of Finance entered into force on 15-8-2016, the Ministry of Finance ...

In July 2019, the market received positive signals such as the expectation for FED's interest rate reduction to stimulate the US economy, leading global growth; Vietnam signing EVFTA to open up great opportunities for exporting goods to the EU; stable profit growth of leading enterprises, bringing market valuation to an attractive level; the return of foreign capital; Premia MSCI Viet Nam ETF - the third foreign ETF starting disbursement into Vietnam market. In the context of stable macro indicators, securities companies expect a recovery and growth again of the market in the second half of the year.