Seoul, Oct 6
Shares in securities firms, which have already doubled this year, are widely expected to further advance down the road on the back of increased turnover and market-friendly steps, industry watchers said on Monday.
According to the Korea Exchange (KRX), the index tracking listed securities firms' stock movement has nearly doubled this year, joining the ranks of top-performing sectors, reports Yonhap news agency.
The benchmark index, the KOSPI, has rallied by more than 43 per cent so far this year, and retail investors flocked to the market out of fear of missing out.
In September alone, the securities firm-tracking stock index gained 8.2 per cent, far higher than the 0.5 per cent gain of the KOSPI.
In line with a market bull run, the daily stock turnover, which includes transactions on the country's first alternative stock trading platform, NXT, reached 27 trillion won ($19.3 billion), up from the previous month's 22.7 trillion won.
During the third quarter of the year, the daily turnover rose 9.7 per cent on-quarter to 26 trillion won.
"Foreign buying, coupled with increased turnover, will help propel the local stock market," said Koh Yeon-su, an analyst at Hana Securities.
"Securities firms are positioned to benefit from this trend," Yeon-su added.
Yoon Yu-dong, an analyst at NH Investment & Securities, said backed by an easing monetary cycle, the daily turnover will reach 30 trillion won this year and further rise to 37 trillion won in 2026 and 43 trillion won in 2027.
Analysts said a series of market-friendly measures, such as treasury share reform and tax policies, are another boon for securities firms.
"All conditions are ripe for brokerage firms' earnings improvement," said Yoon of NH Investment & Securities.
"It will be one of the shining sectors this year," Yoon added.
— IANS
Reader Comments
Korean markets showing impressive growth! In India too, brokerage stocks have performed well but we need to be cautious about valuations. The FOMO-driven retail participation mentioned here is exactly what we're seeing in Indian markets.
Interesting to see how global markets are interconnected. When one market performs well, it often creates positive sentiment across others. Hope Indian regulators take note of these market-friendly measures that are boosting Korean securities firms.
While the growth numbers look impressive, I'm concerned about the sustainability. Doubling in a year sounds like a bubble in the making. Indian investors should learn from global examples and not get carried away by such hype.
The daily turnover figures are massive! $19.3 billion is huge compared to Indian markets. This shows the potential for growth in our capital markets. More retail participation and digital platforms can help us achieve similar volumes.
As someone working in the financial sector in Mumbai, I can confirm similar trends here. Brokerage revenues are booming with increased retail trading. The key is whether this growth is sustainable or just temporary market euphoria.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.