Vietnamese securities firms reap profits on stock market rallies

A chorus of Vietnamese securities firms have announced impressive profit estimates for the first quarter of this year, thanks to positive market developments.

Vietnam’s stock market recorded significant growth in Q1. The VN-Index increased to 1,280 points from 1,140, up 12.2%, on the back of macroeconomic recovery and a 5.66% year-on-year economic expansion.

Data from the Ho Chi Minh Stock Exchange (HoSE) showed a monthly improvement in liquidity throughout Q1, with daily average transactions reaching VND16.5 trillion ($660.25 million) in January, VND25.67 trillion in February, and VND26.49 trillion in March.

As a result, many securities firms have reported substantial gains over the three-month period.

Viet Dragon Securities (HoSE: VDS) announced estimated revenue of VND283 billion ($11.3 million) in Q1, up 88% year-on-year, and net profit of VND110 billion, doubling that of Q1/2023.

Vietcap (HoSE: VCI) achieved an estimated VND220 billion ($8.78 million) in pre-tax profit in the period, 2.7 times higher than the same spell of 2023.

Techcom Securities (HoSE: TCBS) gained VND1.69 trillion ($67.6 million) in operating revenue and VND1.16 trillion in pre-tax profit, up 82% and 159%, respectively.

Other securities enterprises have capitalized on the bullish market. MB Securities JSC (HoSE: MBS) recorded an estimated Q1 profit of VND230 billion ($9.18 million), up 58%.

DSC Securities, featured on the Unlisted Public Company Market (UPCoM) as DSC, estimated its profit at VND74 billion, a five-fold rise over the year.

In anticipation of positive business results, a series of securities stocks have surged since early November last year.

For instance, the MBS stock price climbed from VND16,000 ($0.64) to VND30,800 as of end-Q1. VCI’s stock price jumped from VND33,000 to VND52,000, HCM from VND17,000 to VND29,500, and SSI up by 44% to VND37,500.

Experts predict that the stock market will perform well this year, driven by expected record-high public investment disbursement, low interest rates, economic recovery, anticipated rate cuts by the U.S. Federal Reserve in the second half of the year, and progress on a market upgrade with new stock trading platform KRX.

However, in the short term, the market is facing correction pressure due to significant increases over the past five months and exchange rate fluctuations. Moreover, VDS analysts noted that the price-to-earnings ratio (P/E) has hiked by 14.9 times and possibly higher.

If listed companies record good results in Q1, the P/E ratio may see a downward revision, potentially leading to another rise in market points, they added.