Securities companies have a bumper season thanks to market support

08-Aug-2020 Intellasia | Nhip cau Dau tu | 6:50 AM Print This Post

The second quarter (Q2) of 2020 is considered a bumper season for securities companies when the market grew impressively from the end of March.

The global economy in 2020 is greatly affected by the Covid-19 pandemic. To prevent the disease, governments of different countries have taken measures of social distancing and it has greatly affected the production and business activities of the whole economy.

The stock market of Vietnam is not an exception. Starting from the first trading session after the Lunar New Year holiday (January 30th), the stock market has had many negative developments.

For the first time in three years, the VN Index dropped to the 652 points (March 2020). In the first quarter (Q1) 2020, the stock market experienced a lot of fluctuations. The VN Index fell by more than 31 percent in Q1, along with the decline of more than 90 percent of the stocks.

After a difficult period due to the Covid-19, the stock market of Vietnam has witnessed a strong recovery, in line with the world stock market with many stocks recording impressive recovery from 30 50 percent compared to the bottom zone set up in March 2020. In Q2 alone, the VN Index rose by 24.5 percent from 662.5 points to 825 points in the end of June.

With the support of the market, securities attained huge profits. In particular, the top four securities companies in brokerage market share including Saigon Securities Incorporation (SSI, stock code on HoSE: SSI), HCM City Securities Company (HSC, stock code on HoSE: HCM), VNDirect Securities Company (stock code on HoSE: VND), and Viet Capital Securities Company (VCSC, stock code on HoSE: VCI) all recorded outstanding business results.

The most notable case in Q2 is VNDirect with an increase of 315.3 percent in after-tax profit, reaching over 412.8 billion dong of net revenue, only slightly up by 4.9 percent compared to the same period of 2019. Specifically, the revenue from brokerage activities, and securities investment and capital contribution all posted strong growth of respectively 42 percent and 86 percent over Q2 2019.

Considering cost factor, all costs of VNDirect dropped significantly in the period, particularly operating expenses with up to 50 percent decline due to the reversal of the provisions for investments. Overall, the support of revenue and operating expenses have created VNDirect’s bumper season with over 134.9 billion dong of after-tax profit.

Following the growth of VNDirect is SSI with pre-tax profit growth of 137.7%. In Q2 2020, SSI recorded over 1.327 trillion dong of net revenue and over 522.4 billion dong of after-tax profit. Most notably, the proprietary trading of SSI brought out 738.4 billion dong, while it was only 169.1 billion dong in the same period of 2019.

Explaining this impressive business results, SSI said that the stock market recovered considerably in Q2 and led to an increase of nearly 385.4 billion dong in the positive difference in revaluation of financial assets at fair value through profit or loss (FVTPL) compared to Q2 of 2019. Meanwhile, the negative difference in revaluation of financial assets at FVTPL in Q2 2020 fell by nearly 50.6 billion dong compared to the same period of last year.

In addition, according to SSI, the sharp increase in trading scale led to a strong increase in brokerage revenue of 45 percent over the same period of 2019.

After the loss in Q1 2020, VCSC also achieved positive business results in Q2 2020. Compared to Q2 2019, VCSC’s revenue levelled off in this quarter, reaching over 406.8 billion dong. However, thanks to the positive developments of the stock market, the revaluation of financial assets was recorded through FVTPL of the proprietary activities. That is also the main reason for the 59 percent decrease in the company’s expenses compared to the same period of last year.

In Q2 2020, VCSC reported an after-tax profit of over 205.1 billion dong, up by over 46.7 percent compared to the same period of last year. By the end of Q1 2020, the value of investment in the stocks listed and traded on the Unlisted Public Company Market (UPCoM) of HSC remained only 66.2 billion dong, and all are stocks in VN30 such as MWG, MBB, TCB and VPB.

In Q2 2020, HSC generated over 438.8 billion dong of net revenue, down by 6.5 percent compared to the same period of 2019.

In Q2, HSC recorded positive growth from both proprietary and brokerage activities. However, the company’s margin trading saw a decline of 23 percent over the same period of last year to over 103 billion dong. In Q2 2020, HSC attained an after-tax profit of over 150.1 billion dong, up by 35.7 percent over the same period of 2019.

 


Category: Stocks, Vietnam

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