The business results of companies in the third quarter are unlikely to see significant growth since companies have been facing many difficulties, according to report on investment strategy of SME Securities Joint Stock Company.
Power outages, high interest rates, exchange rate increase, high inflation, along with increase of input material prices in some sectors are the major hindrances for business activities.
Deputy general director of Au Viet Securities Corporation Le Anh Thi said the moderate growth of credit compared to the same period of last year has also proved that businesses have been unable to access bank loans, the business expansion to make significant profit thus possibly would not happen.
In addition, although the stock market has not hit a new low, there has been almost no growth and the liquidity is relatively low. This has directly affected the businesses with large financial investment on the listing market, as well as the securities companies, banks, financial service and insurance firms. Moreover, listed companies involved in financial investment would also have to consider deducting financial standby fund as stock prices fell down.
SME also said that currently only a few businesses have announced estimated business results in the first eight or nine months of 2010, as the previous prosperous quarters, it shows that the business situation of the third quarter may not see optimistic results.
According to Thi, businesses would not report the whole profit figures of the third quarter, the rest profit would be accounted in the fourth quarter, when businesses would be audited and would drawn more attention from investors, because in the third quarter, the financial statements of businesses would not be examined.
The group of sectors hardly expect good growth in the third quarter includes shipping, fishery and real estate sectors. Shipping sector has not recovered since the global economy is still facing difficulties, and petrol price is high. Fishery sector has been subject to anti-dumping duty. Real estate market continues being quiet and supply exceeds demand, etc.
Some groups of sectors that SME forecast to obtain good growths include consumer goods and consumer services, book publishing, natural rubber and pharmaceutical products.
Meanwhile, according to analysis manager of another securities company, steel industry would also achieve high profit in the third quarter. This manager said that the steel inventories at low prices from mid May to the first half of July could lead to very low production costs for the remaining two consumption months of the third quarter, while finished product prices remain at high level, hence, the profit of this industry in the third quarter would be high.
What securities are affected?
Thi said that the stock market would not be affected much by the business results of the third quarter, partly because the financial statement of this quarter would not be examined, so the accuracy might not be high. In addition, the macro factors such as inflation, interest rates, etc are directly affecting the market.
SME said the market would continue being under the pressure from the capital inflows which are hardly to be increase when Circular 19 took effect from October 1, in which the risk coefficient ratio for real estate loans is set at 250 percent. SME added that the constantly setting new heights of gold price has made large part of capital investment to be allocated into this market.
The report on investment strategy of Viet Dragon Securities Corporation mentioned that the stock market is under a very heavy pressure from the significant increase of stock supply from the beginning of the year.
According to Viet Dragon's statistics, from early this year to date, 3.1 billion shares have been listed on the two floors in Hochiminh city and Hanoi, equivalent to market value of 90.8 trillion dong.
Moreover, according to statistics of the State Securities Commission (SSC), to late September 2010, the raised capital from public distribution reached 34.622 trillion dong, of that third quarter accounted for nearly half. In the near future, the wave of stock issuance would continue to occur. Within two months (August and September), SSC has granted permission to issue about 2.69 billion shares, equivalent to the charter capital of about 26.9 trillion dong.
Information from the Hochiminh city Stock Exchange shows that 1.3 billion shares have been waiting to be listed on this floor. In addition, in October, the market would witness a remarkable IPO of PVGas, which would likely draw a large amount of capital from the formal market. Therefore, supply would continue being the hindrance of the stock market in the fourth quarter.
Power outages, high interest rates, exchange rate increase, high inflation, along with increase of input material prices in some sectors are the major hindrances for business activities.
Deputy general director of Au Viet Securities Corporation Le Anh Thi said the moderate growth of credit compared to the same period of last year has also proved that businesses have been unable to access bank loans, the business expansion to make significant profit thus possibly would not happen.
In addition, although the stock market has not hit a new low, there has been almost no growth and the liquidity is relatively low. This has directly affected the businesses with large financial investment on the listing market, as well as the securities companies, banks, financial service and insurance firms. Moreover, listed companies involved in financial investment would also have to consider deducting financial standby fund as stock prices fell down.
SME also said that currently only a few businesses have announced estimated business results in the first eight or nine months of 2010, as the previous prosperous quarters, it shows that the business situation of the third quarter may not see optimistic results.
According to Thi, businesses would not report the whole profit figures of the third quarter, the rest profit would be accounted in the fourth quarter, when businesses would be audited and would drawn more attention from investors, because in the third quarter, the financial statements of businesses would not be examined.
The group of sectors hardly expect good growth in the third quarter includes shipping, fishery and real estate sectors. Shipping sector has not recovered since the global economy is still facing difficulties, and petrol price is high. Fishery sector has been subject to anti-dumping duty. Real estate market continues being quiet and supply exceeds demand, etc.
Some groups of sectors that SME forecast to obtain good growths include consumer goods and consumer services, book publishing, natural rubber and pharmaceutical products.
Meanwhile, according to analysis manager of another securities company, steel industry would also achieve high profit in the third quarter. This manager said that the steel inventories at low prices from mid May to the first half of July could lead to very low production costs for the remaining two consumption months of the third quarter, while finished product prices remain at high level, hence, the profit of this industry in the third quarter would be high.
What securities are affected?
Thi said that the stock market would not be affected much by the business results of the third quarter, partly because the financial statement of this quarter would not be examined, so the accuracy might not be high. In addition, the macro factors such as inflation, interest rates, etc are directly affecting the market.
SME said the market would continue being under the pressure from the capital inflows which are hardly to be increase when Circular 19 took effect from October 1, in which the risk coefficient ratio for real estate loans is set at 250 percent. SME added that the constantly setting new heights of gold price has made large part of capital investment to be allocated into this market.
The report on investment strategy of Viet Dragon Securities Corporation mentioned that the stock market is under a very heavy pressure from the significant increase of stock supply from the beginning of the year.
According to Viet Dragon's statistics, from early this year to date, 3.1 billion shares have been listed on the two floors in Hochiminh city and Hanoi, equivalent to market value of 90.8 trillion dong.
Moreover, according to statistics of the State Securities Commission (SSC), to late September 2010, the raised capital from public distribution reached 34.622 trillion dong, of that third quarter accounted for nearly half. In the near future, the wave of stock issuance would continue to occur. Within two months (August and September), SSC has granted permission to issue about 2.69 billion shares, equivalent to the charter capital of about 26.9 trillion dong.
Information from the Hochiminh city Stock Exchange shows that 1.3 billion shares have been waiting to be listed on this floor. In addition, in October, the market would witness a remarkable IPO of PVGas, which would likely draw a large amount of capital from the formal market. Therefore, supply would continue being the hindrance of the stock market in the fourth quarter.
No comments:
Post a Comment