Many listed securities companies reported profits in the first six months given their restructuring measures and a mild recovery of the local stock market.
In late 2011, Viet Dragon Securities Corp. (VDS) reported losses of VND126 billion, prompting its leaders to explain causes of the loss and present solutions for the problem. This year, the broker posted a profit of VND3.2 billion in the first quarter and VND105 million in the second quarter.
VDS general director Nguyen Mien Tuan told the Daily that the broker in first few months of 2012 had sharply cut expenditure by closing branches in provinces and reducing staff. The enterprise has also liquidated assets.
VDS also has plans to spur its chartered capital from VND350 billion to VND700 billion within this year to supplement operational capital. “Cautious investment and expenditure reduction are the best ways to survive as the economy and the stock market have yet to see positive signs,” Tuan said.
Apec Securities Company has also reduced its employee numbers from 180 to 60 and closed many branches, cutting management costs to VND4.7 billion in the first half of 2012 compared to VND7.7 billion in the year-ago period.
Nguyen Do Lang, general director of Apec Company, said the enterprise is now profitable by reducing securities investment and scaling down its operation. Its profit comes from bank deposits, brokerage services and recovery of its provisions.
Other securities firms also reported profits in the January-June period, led by Saigon Securities Inc. with VND331 billion and HCM City Securities Corp. with VND204 billion. Meanwhile, Phu Hung, Sao Viet and Trang An reported losses.
As stock indices recently have failed to maintain a strong rally as in the first four months of this year, difficulties for securities firms are foreseen in the final half of this year. According to the director of a securities company, there will be a cut in profits due to gloomy macro factors and falling bank deposit rates.
Many enterprises have plans to merge into others to maintain business amid the economic challenges.
The board of directors of Apec Securities Company at its annual general meeting asked for permission to seek partners for its merger plan. The proposal was approved and Apec will carry out the merger from now until the end of the year.
Lang of Apec said merging is the shortcut for the broker to expand operation scale and raise brokerage market share. Apec is negotiating to merge with a broker with smaller capital but having healthy operation.