Increase in Trading Value... Securities Stocks Enjoy a Rare 'Good Breeze'

Securities Industry Q2 Net Profit Consensus Up 7.55% YoY to 715.4 Billion Won

[Asia Economy Reporter Song Hwajeong] As stock market trading volume continues to expand, a green light has turned on for securities firms' earnings improvement. With expectations of improved performance, the stock prices, which had been relatively sluggish, are also expected to show a positive trend.

According to financial information provider FnGuide on the 8th, the consensus net profit for the KOSPI securities sector in the second quarter is 715.4 billion KRW, up 7.55% compared to the same period last year. This figure was revised upward by 10.25% compared to a month ago. Samsung Securities is expected to post 107.4 billion KRW, up 11.61%, NH Investment & Securities 128.1 billion KRW, up 1933%, and Kiwoom Securities 129.7 billion KRW, up 133.62%. Mirae Asset Daewoo is forecasted to decline by 25.74% to 162.2 billion KRW, and Meritz Securities by 1.01% to 143 billion KRW, but both were revised upward by 5.65% and 2.88%, respectively, compared to a month ago.

With trading volume increasing significantly, actual earnings are expected to exceed consensus estimates. Korea Investment & Securities projected that the combined net profit of four companies?Mirae Asset Daewoo, NH Investment & Securities, Samsung Securities, and Kiwoom Securities?would reach 688.5 billion KRW, surpassing consensus by 43%. Mirae Asset Daewoo's second-quarter net profit is expected to be 189 billion KRW, 23% above consensus; NH Investment & Securities 192.1 billion KRW, 74% above; Samsung Securities 135.5 billion KRW, 33% above; and Kiwoom Securities 174 billion KRW, 40% above consensus. Baek Doosan, a researcher at Korea Investment & Securities, said, "The stock management and credit bond sectors, which posted losses in the first quarter, have largely recovered, and with falling interest rates and a strong stock market, bond management and brokerage divisions are also expected to perform well."

Yuanta Securities also analyzed that the second-quarter net profits of six covered companies (Mirae Asset Daewoo, NH Investment & Securities, Korea Financial Group, Samsung Securities, Meritz Securities, and Kiwoom Securities) would exceed consensus by 16% to 103%. Jeong Taejun, a researcher at Yuanta Securities, said, "Commission fees from consignment trading and trading and product profits have increased significantly compared to the previous quarter, which will help overcome the slowdown in the project financing (PF) market."

In particular, with the Donghak Ant Movement and others, trading volume has continuously increased, and brokerage revenue is also expected to have grown significantly. In the second quarter, individuals net purchased 15.7 trillion KRW worth of domestic stocks, driving stock market gains and increased trading volume. Accordingly, the average daily trading volume of domestic stocks in the second quarter was 21.8 trillion KRW, up 46% from the previous quarter and 131% from the same period last year. Researcher Baek said, "Domestic stock brokerage commission revenue appears to have increased by 50% compared to the previous quarter," adding, "Considering that the net change in stock trading activity accounts rebounded to 540,000 in June after 860,000 in March, and customer deposits increased significantly to 46 trillion KRW compared to the usual 30 trillion KRW, domestic stock trading activity is expected to remain active for the time being."

With expectations for second-quarter earnings, stock prices are also likely to gain upward momentum. The KOSPI securities sector index rose 10.12% in the second quarter, about half the increase of the KOSPI (20.16%) during the same period. This month, it has risen 2.7%, slightly outperforming the KOSPI (2.65%). Researcher Baek said, "Not only in the second quarter, when expectations increased, but also with brokerage and trading as two pillars, corporate finance (IB) performed better than expected, so good earnings are expected in the second half as well, and we maintain an overweight position in the securities sector."

This content was produced with the assistance of AI translation services.