Viet Capital Securities (VCI) has announced a plan to issue VND1.2 trillion worth of registered bonds, non-convertible and unsecured, in 2020-2021. The 24-month bonds will be offered to institutional and individual investors, foreign and Vietnamese, at the interest rates of 7-9 percent per annum.

The issuance aims to raise capital for its business activities and debt restructuring at stable interest rates. It plans to use money from margin loan services, self-trading and brokerage services to pay debts.

Under a newly released regulation, banks’ loans provided to fund securities investments must not be higher than 5 percent of banks’ stockholder’ equity. Therefore, the expansion of securities lending is now limited.

VCI has been mobilizing capital through bond issuance since the beginning of the year.

The business has been facing difficulties this year because of unfavorable conditions. Its major business field – giving consultancy for mergers & acquisitions and investments – has not gone well as seen in previous years.

VCI reported a 36.5 percent decrease in post-tax profit in Q3 to VND95.5 billion. In the first nine months of the year, the profit decreased by 15 percent to VND419 billion. The decline was seen in nearly all business operations, from brokerage and self-trading to profits from financial assets and lending.

VCI has advantages in investment banking. The Covid-19 pandemic has caused many businesses to lose great opportunities worth billions of dollars.

Prior to that, VCI stated that there was high possibility of fulfilling the business plan of obtaining a profit of VND550 billion in 2020. However, compared with the plan for the next three years, 2020 is an inconsiderable year as the profit has been modest compared with the company’s potential.

One of the reasons behind the predicted low profit of the company in 2020 is the pandemic. The company failed to implement investment banking projects worth $2 billion in total.

To Hai, a member of the board of directors of VCI, said if Covid-19 had not broken out, VCI would have made a deal worth $1.5 billion.

Because of the pandemic, the implementation has slowed down and it is still unclear if the deal can be completed by the end of the year. The probability of wrapping up the deal is 40 percent.

The VN Index increased by 4.35 points on November 4 to 939.76 points.

According to Thoi Bao Kinh Doanh, analysts cited statistics predicting that the market would be not positive in November.

Since 2005, the VN Index has seen decreases 10 times in November, which is even higher than In May. 

V. Ha

Multi-trillion VND helps VN-Index regain peak

The strong cash flow to the stock market in recent days has helped stock prices bounce back.

Billionaire shows his power, buys FLC shares at high prices

Trinh Van Quyet, president of FLC Group, has decided to spend nearly VND100 billion to buy FLC shares, though prices have increased sharply recently.