Despite their negative third quarter earning results,
large listed companies on the Ho Chi Minh Stock Exchange, particularly
financial firms, look set to overcome the difficult time, an economist
said.


Saigon Thuong Tin Commercial Joint Stock Bank
(Sacombank) and Asia Commercial Joint Stock Bank (ACB) posted
considerable a drop in earnings in the third quarter of the year.


Sacombank, the Ho Chi Minh City stock exchange’s only
listed lender and Vietnam's sixth-largest lender, announced its
after-tax profit from July to September was VND175.6 billion (US$10.5
million), down 37.5 percent over the previous quarter.


The HCMC-based bank, 10 percent owned by ANZ, said
gross profit in the first nine months of this year fell 5.4 percent to
VND952 billion ($57.6 million), according to Reuters.


ACB, the Hanoi exchange’s only listed bank and
Vietnam’s fifth-largest bank, also reported its after-tax profit
decreased 34.6 percent quarter-on-quarter to VND298.4 billion ($17.8
million).


Economist Le Dat Chi of the HCMC Economics University
said the fall in earnings have happened because they had to pay high
deposit interest rates for raising money and struggled to find
borrowers because of high lending interest rates.


Sacombank’s expenses increased constantly as well. Its
total expenditure in the fourth quarter of last year was 70.9 percent
of the quarter’s total receipts and this figure has risen steadily
since at 78.1 in the first quarter of this year, 85 percent in the
second quarter and 91.5 percent in the third quarter, according to Chi.


Chi said ACB’s expenses have followed a similar
pattern, increasing from 69 percent of the quarter’s earnings in the
fourth quarter of last year to 76 percent in this year’s first quarter,
80.5 percent in the second quarter and 89.1 percent in the third
quarter.


“But I’m pretty sure that Sacombank, ACB or even small
commercial banks will not collapse,” Chi said, adding that unlike
developed countries’ companies, Vietnam’s financial firms offer just
afew derivative products that carry high risks of losses.


Meanwhile, the stock market’s 50 percent fall in the
first nine months of the year hit listed brokerages hard. Bao Viet
Securities Joint Stock Company, Vietnam’s third-biggest publicly traded
brokerage by number of customers, lost more than VND300 billion ($18
million) from January to September.


Hai Phong Securities Co., a listed brokerage listed on
Hanoi stock exchange, lost VND89 billion ($5.3 million) in the first
nine months of the year.


Saigon Securities Inc., the country’s largest
brokerage known as SSI, said its pretax profit in the first nine months
of the year was down 69 percent to VND260 billion($15.5 million).


But Chi said SSI could offset the loss thanks to its
third quarter cash reserves of VND1.6 billion. “SSI can spend that to
buy shares, which are pretty low now, to help lift the market,” Chi
said. “When the market recovers, it can take profit from those shares.”


Listed firms in other sectors – such as rubber and
plastic – are experiencing a difficult time as the global financial
meltdown has sunk international commodity prices. “International rubber
price is on a downward trend but remains higher than domestic firms’
production cost. Therefore the fall in international prices only
affects domestic rubber makers’ profit, and will not cause the entire
sector to collapse.”


The global slowdown is also expected to suppress
demand for rubber in the auto industries in many countries, affecting
exports of Vietnamese rubber, according to Bloomberg.


“Rubber stock is safest haven for investors when the
economy slows down,” Chi said. “Listed rubber producers – such as Hoa
Binh, Dong Phu and Tay Ninh – have an edge over other firms in
different sectors as they aren’t affected by bank debts.”


Rubber maker Dong Phu has announced third-quarter net
profits of VND104 billion, a 98 percent quarter-on-quarter increase.
The Tay Ninh Rubber Joint Stock Co. said its net income in the third
quarter was up 45 percent quarter-on-quarter, to more than VND80
billion.