Securities companies are shutting down or threatened by dissolution as the economic recovery takes time to have an effect.
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Cho Lon Securities Company recently announced that it would close after seven years. All their debts and contracts will be dealt with by the end of October. Au Viet Securities Company will also dissolve the company and try to complete all payment in 2013.
Meanwhile, many other companies have chosen to leave the market without major public announcements, such as the Lien Viet Securities Company that withdrew its membership from the country’s two stock exchanges.
The State Securities Commission of Vietnam (SSC) is also contemplating to revoke licences of Truong Son, Hanoi and Delta securities companies.
Those three companies technically have not worked in the past year because of poor financial security. Trang An Securities was also suspended because of its financial plight in April.
Dozens of other brokerage firms are suffering from debts, violations, and special controls from the SSC because they could not maintain healthy indexes.
Last year, the securities market received a heavy blow from the recession and some companies even incurred losses for six consecutive years, laying off staff, closing offices and withdrawing from the stock market.
Because of the small size of Vietnam's securities market, 60-70% of the market share belong to the 10 largest players while the remainder shared by 95 firms.
Even if the small brokerage firms can invest themselves to earn some income, they face huge challenge now from the tough times.
Several experts said firms would not publicly announce their dissolution which they deemed as a difficult task because of required procedures.
Vietnam should push on with stock market reform and start with creating favourable conditions for poorly-performed securities firms to dissolve.
