VNDirect Securities Corporation's annual shareholder meeting on Tuesday. — Photo courtesy of VNDirect Securities

HÀ NỘI — VNDirect Securities Corporation projects its total post-tax profit may increase 5 per cent year-on-year to VNĐ405 billion (US$17.5 million) in 2020.

Total revenue is forecast to gain 17 per cent on-year to VNĐ1.87 trillion, according to acting CEO Đỗ Ngọc Quỳnh.

The earnings forecasts were made upon VNDirect’s expectation that the benchmark VN-Index on the Hồ Chí Minh Stock Exchange will move between 840 points and 920 points in 2020.

“Average market liquidity is estimated to increase by 14.5 per cent from the same period of last year,” the brokerage firm said in a filing to shareholders at the annual meeting on Tuesday.

“Subject to the basic scenario, foreign investors are not really excited about the Vietnamese market this year, thus, the market is mostly supported by domestic investors.”

VNDirect also delivered two other projections for this year’s performance, in which the VN-Index may end 2020 in the ranges of 940-810 points or 960-1,000 points.

In the better forecast, positive signs will appear, for example, the total weight of Vietnamese shares in the MSCI Frontier Index will gain, the trend of global quantitative easing will direct cheap capital to flow into emerging markets, and foreign investors will return to net-buying from July.

Under this forecast, trading liquidity will grow 20.8 per cent year-on-year in 2020 and post-tax profit is estimated at VNĐ490 billion.

Meanwhile, if the VN-Index falls back to the 940-810 range, average trading liquidity on the local market will increase by only 5.8 per cent year-on-year in 2020.

Post-tax profit may fall to VNĐ320 billion under this projection.

In 2019, VNDirect earned VNĐ1.5 trillion in total revenue, down 7.8 per cent year-on-year, and VNĐ383 billion in post-tax profit, up 2.7 per cent year-on-year.

The company’s financial report 2019 pointed out that revenues from brokerage services and proprietary trading lost 34.5 per cent and 12.8 per cent year-on-year.

But a 113.6 per cent surge in revenue from investment banking, which was VNĐ48 billion, helped offset those losses.

VNDirect blamed losses in proprietary trading and brokerage services on the sharp drop of the local market in 2019 caused by “disappointing earnings growth of listed companies, the absence of notable IPOs and the delay of State-owned enterprises’ divestments, and the vibrant corporate bond market which has partially absorbed money from the equity market”.

In the second half of 2020, the company expects the stock market will recover as the amended Law on Securities will “improve share quality, enhance the transparency and better protect investors’ interests.”

More domestic and foreign funds are expected to enter Việt Nam’s stock market and accelerate the process of upgrading the market to the “emerging markets” level, the company said.

In addition, the Government’s divestment plans in large-cap companies like dairy producer Vinamilk, petrol firm Petrolimex, the Vietnam Engine and Agricultural Machinery Corporation (VEAM), tech group FPT and insurer Bảo Minh may be executed in the short term, probably this year, VNDirect said.

“However, the progress of equitisation and divestment in SOEs may be difficult to improve in 2020 because the bottlenecks in the equitisation process have not been thoroughly solved, especially the issues related to land pricing.” — VNS