Worldsec, the Hong Kong brokerage listed in London, yesterday said it could become part of a larger group, which would help strengthen its competitive position. The company, despite reporting a small profit for the six months to June, yesterday warned shareholders not to expect a return to profitability this year. Worldsec's future as an independent company has been the subject of speculation for several months and it is understood Vickers Ballas is one of the leading contenders to take over the firm. 'We have been in discussions with a number of parties interested in investing in Worldsec,' the firm said. 'Such discussions could lead to Worldsec becoming part of a larger group, thereby strengthening our competitive position in the industry.' Vickers owns 80 per cent of Singapore Technologies Capital Services, which is Worldsec's second largest shareholder with a 20.6 per cent holding in the group. Worldsec's largest shareholder is Japanese banking giant Bank of Tokyo-Mitsubishi, which has a 24.1 per cent holding. Unveiling its interim results, Worldsec said competition in the industry was still intense and there was continuing pressure on commission rates. 'Although the volume of our business has improved, the bias that exists against smaller brokers persists,' the company said. After falling to an after-tax loss of US$4.5 million in the first half of last year, Worldsec said its performance in the first six months of this year edged back into the black, with an $8,000 gain, and an 18 per cent increase in turnover to $7.48 million. However, the group told shareholders that it might be too hopeful to expect a profit for the full year. 'With our margins under pressure, any fall off in investor interest in Asian equities would be negative and it may be optimistic to expect a return to profitability this year.' Shares in the company slumped in early London trade, before closing the day 3.44 per cent lower at 140 pence (about HK$17.97). The company remained cautious about the short-term prospects for Asian stock markets but was still 'convinced' about longer-term potential in the region. The group said much of its improved performance was brought about by a heavy cost-cutting exercise, which included downsizing its offices, reducing basic salaries, and revising staff incentive scheme.
