Many listed companies have reported business losses for 2008 in the last few days, which has made the stock market gloomier.


Consequences of financial investments


Refrigerator Engineering Enterprise shares (REE),
together with other share items including VTA, BHS and VHG, have been
put under management by the HCM City Stock Exchange due to the
businesses having lost money in 2008.


Last year proved to be challenging for REE with ups
and downs following its establishment. The enterprise has reported the
accumulative loss of VND139.34bil in 2008. REE has become a typical
example of an enterprise bogged down in financial investments. It spent
a lot of money on financial investments and sustained a blow when stock
prices dropped.


TRI, the share item of a HCM City-based drink company,
has also been put under control due to losses brought about by
ineffective financial investments. The company’s profit was minus
VND145bil in 2008.


“No one could imagine…”


A lot of listed companies have reported minus profit
for the fourth quarter of 2008 because production costs were
exceedingly high, beyond the companies’ control. Sale prices were lower
than cost in the fourth quarter of 2008, nullifying all the efforts the
enterprises had made earlier in the year.


Nguyen Xuan Trinh, General Director of Bien Hoa Sugar
Company, the issuer of BHS shares, said: “No one could have imagined
that farm produce prices would drop by 2/3.”


Hoa Phat Group’s post tax profit in Q4 2008 was minus
VND232bil, which has been explained by the record steel price decrease
of 50%. Other companies, including PIT, an import-export company, KBG
(urban area development), PVG (liquidised gas), have also reported
losses.


One of the reasons which have made many business
suffer was the high financial costs (bank loan interest rates). In Q4,
CMC, an investment company, incurred the loss of VND27.9bil, leading to
the loss of VND23.5bil for the whole year. It was because of high
financial costs -- VND30bil.


Misfortunes continue in 2009


Two of the business fields REE has been following,
real estate and financial investments, have suffered from the economic
downturn spiral.


“We still lack experience in monetary investment,” Mai Thanh, General Director of REE, admitted.


In 2009, REE will focus on profit-making business fields, while trying to expand the market and seek profit from that.


“There is no good news about the market which can
encourage investors to spend money. We are hearing the news about the
loss of companies and have no other choice than waiting for the impacts
of the monetary policies,” said Ly An, a securities investor.


The leader of one securities company has just sold his stakes in the company and plans to inject money in gold.


It is said that stocks will not be the choice of investors until June at the earliest.