Experts said that the stock market would remain largely unaffected by listed companies’ earnings results in 2010’s first quarter, released recently as a surge of information had affected the market.
By last week 15 companies had released their business results, with a majority reporting positive performances, compared to the same period last year.
Hoang Anh Gia Lai Group (HAG) had a pre-tax profit of VND697 billion in the first quarter, increasing 94% from the same period in 2009. The company is developing projects related to real estate, hydropower, mining and rubber. It expects to obtain VND2.68 trillion in after-tax profit this year.
Cuu Long Fisheries Company in An Giang Province (ACL) reported VND23.47 billion in after-tax profit in the first quarter of this year compared to VND1.94 billion in the same period in 2009. The company is investing in a 34-hectare clean catfish facility to produce products satisfactory to the EU market.
Sacombank (STB) earned more than VND510 billion in pre-tax profit excluding profit from subsidiaries, rising 46% from the same period last year. Of this sum, profit from credit operation accounted for 26.5%.
Some business reports were not so positive. Central Region Investment and Development Joint Stock Company (SEB), listed on the Hanoi Stock Exchange, obtained only VND1.88 billion in after-tax profit in this year’s first quarter, falling 67% year-on-year and accounting for only 10% of the entire year’s target.
In addition, Bim Son Cement Comapny (BCC) made only VND50 billion in pre-tax profit in the first quarter, VND15 billion lower than the same period last year. The company said cement prices had remained stable while material prices had surged, accounting for the decline.
Le Anh Thi, Deputy General Director of Au Viet Securities Comapny, said the listed firms’ first quarter results were better than the same period last year but were not as good as 2009’s fourth quarter.
He added enterprises usually slumped in the first quarter, as they had to stop operations due to the long Tet holiday. In addition, investors usually meet in March, April and May, and as such, care more about the previous year’s results, rather than first quarter results.
Thi said second quarter results would carry more weight as they were fundamental to enterprises’ results for the rest of the year.
Currently, most investors care about bonus, dividend and newly issued shares, as they were important benefits for shareholders, he added.
“Only long-term investors care about the first quarter results so they can restructure their portfolio while short-term investors do not care much as most of their first quarter results have already been forecasted and reflected in stock prices,” Thi explained.
Hoang Thi Hoa, Head of Viet Capital Securities Co.’s research department, said that first quarter results were not low but that it was hard to see breakthrough. Enterprises with positive results in the first quarter usually operate in food or essential goods as they have good purchasing power. Mining and natural rubber industries generally receive good results too, as their prices increase in line with the global market. Meanwhile, many importers and exporters will face difficulties because of higher foreign exchange rates, lending rates and material prices, Hoa said.
“First quarter results will have less impact on the market. Macroeconomic news is what investors care about now. Most investors expect a low consumer price index and for lending rates to decline at the moment,” he added.
Meanwhile, Nguyen Dinh Cung, Deputy Head of the Central Institute for Economic Management (CIEM), said that the macro economy was still gloomy, as inflation remains high, there is a high budget deficit and foreign fund reserves continue to fall. These factors will create difficulties for enterprises and affect the market in the second quarter, he said.