VietNamNet Bridge – Only 24 out of the 47 investment fund management companies reported profit in the first three quarters of 2013.

Investment fund management companies were once described as the “big fish in the little pond” in the hot development period of the stock market. But the economic recession and the gloomy stock market have made a lot of them “short of breath.”   

Big loss, small profit

The Q3 finance reports just released by fund management companies showed that the majority of them are facing big difficulties. Only 24 out of 47 companies have declared profit, including Vietinbank Capital, MB Capital and ACB Capital, while the others incurred big loss.

Manulife Fund Management Company Ltd, for example, reported the Q3 loss of VND3.2 billion, triple that of the same period of the last year, raising the accumulative loss by the end of the third quarter to VND5.7 billion.

Viet Cat Fund Management Company has also reported the loss of VND510 million, triple that of the same period of the last year. As such, the company with the chartered capital of VND25 billion had incurred the accumulative loss of VND1.1 billion and seen the total asset value down to VND24 billion.

Six fund management companies have become the “aiming points” of the State Securities Commission (SSC). One of them has got dissolved, two others have suspended operation to undergo the restructuring process. Another one has been forced to stop operation and two have been put under the watchdog agency’s special control because it could not satisfy the requirements on financial safety.

It is estimated that some 40 non-public management companies, which are not required to make public the finance reports, have been struggling hard to survive.

Ten of them have stopped operation, nearly 10 others have not updated information on their websites, have websites inaccessible or don’t have websites. These include Minh Viet Fund Management Company, An Pha Company, International Company. The latest updated finance report of the Saigon – Hanoi Fund Management Company’s on its website was the one for the third quarter of 2012.

Analysts have noted that fund management companies, especially the newly set up ones, have been facing big difficulties in a harsh market and the decreased investment demand.

Besides, the businesses’ lack of capital has made it more difficult for the management companies to raise funds.

This explains why the newly set up funds all have small scale, while the individual investors’ interest in investment products is low.

Which way to go?

Fund management companies have been struggling hard to survive the current difficulties. They have been trying to attack niche markets to optimize the business results, including establishing open end funds, ETF, or REIT.

A lot of the companies have declared the big changes in their personnel. Vietinbank Fund Management Company has changed its board of directors. Tran Minh Binh from the holding company Vietinbank has replaced the former President Nguyen Anh Tuan.

At least six companies reported the changes with the key personnel (CEO or member of the board of directors) in 2013.

In principle, the personnel changes do not always mean the “problems” of businesses. However, the businesses with instability would see regular personnel changes.

NCDT