Vietnam biggest gold trader sjc and 5 selective banks make huge profit from selling gold
The SJC and 5 banks (Eximbank, ACB, Techcombank, Dong A Bank and Sacombank) earned huge profit from selling gold to the public under the central bank’s decision to allow them to offload gold deposits to meet local demand.
The State Bank of Vietnam, the country’s central bank, granted permission to the country’s biggest gold trader SJC and five commercial banks (G5+1) to sell gold deposits and to re-open their international gold trading accounts in an effort to pull down the local gold premium on Oct 6.
The Saigon Jewelry Company Limited (SJC) and these 5 banks earned huge profits as local premiums were very high at around VND1.3-1.5 million/tael. It is estimated that they gained VND200 billion on 6 tons of gold sold to the market on Oct 6 alone. Some worried that these gold traders are not willing to pull down the local prices further to enjoy profits.
The SBV should publicize the criteria for banks to sell gold deposits to ensure fairness in the banking system, said Hoang Cong Gia Khanh, Head of Banking Department, University of Economics and Law Ho Chi Minh City, fearing that it is unfair for those who are not granted permission.
Banks currently apply interest rates of 1.5% on gold deposits. If the rates are capped at 0.5%, G5+1 will enjoy more profits, concerned Le Dat Chi, Head of Financial Department, University of Economics Ho Chi Minh City, adding that there is a need to specify an appropriate profit margin, add it to the global gold price to result in the price ceiling for local gold selling.
G5+1, after selling gold to the domestic market, are likely to purchase gold when premium goes negative and sell gold when the gap expands to continually earn profits, Chi added.
Source Sophie/ News Writer/ StoxPlus
Tags: vietnam gold, Vietnam gold market, Vietnam gold prices
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