SSI to stun market with poor first quarter

Scores of brokers have been left in the doldrums by Vietnam’s off colour bourses

A Saigon Securities Incorporated (SSI) source said the company might suffer a loss in the year’s first quarter as it had to use big sums for its financial and stock investment provisions.

The news came as a shock to market analysts and investors as in 2010, when numerous securities firms lost out, SSI still earned a VND900 billion ($43.5 million) pre-tax profit. In 2008, when the country’s stock market fell, SSI earned a VND250 billion ($12 million) profit.

Market analysts said SSI’s first loss was due to the company having to spent  money to pay VND2,000 billion ($96.6 million) in corporate bonds it issued last year, but bond holders refused to convert into shares. SSI paid VND2,000 billion plus VND80 billion ($3.86 million) yields in late March.

“It is likely that SSI had to use its available cash from its current profits to pay bond holders. However, investors should study the financial statements carefully,” Nguyen Duc Tuan, an independent analyst, told VIR.

According to current regulations, SSI is not obliged to give full explanations about its financial numbers in its first 2011 quarterly reports. Therefore, investors will only realise the truth in SSI’s full year 2011 financial reports.

SSI chairman Nguyen Duy Hung declined to respond to questions when contacted by VIR.

SSI shares reacted positively, reaching ceiling limits at VND22,600 a share on April 6, a day after the news were leaked and contrasted to the day SSI announced no bond holders converted into shares, when SSI plunged 2.12 per cent, closing at VND23,100 each.

In a related development, SSI on March 28 paid VND2.08 trillion of originals and yield money for SSICB2010 bond holders. Earlier, no bond holder converted into shares at VND35,639 each on March 24, the firm said in a filing posted on Ho Chi Minh Stock Exchange’s website.

At the payment time, SSI’s available cash was just VND1,735 billion ($83.8 million).