"‘Donghak Gaemi Effect’ Asset Management Firms' Q2 Net Profit 317.1 Billion KRW... 170% Increase from Previous Quarter"

[Image source=Yonhap News]

[Asia Economy Reporter Park Ji-hwan] The net profits of asset management companies in the second quarter of this year significantly increased due to the effect of the 'Donghak Ant Movement.' The buying spree by individuals lifted the domestic stock market, which had plummeted in the first quarter due to the COVID-19 pandemic, greatly improving the profitability indicators of asset management firms.

According to the second-quarter performance of asset management companies disclosed by the Financial Supervisory Service on the 10th, the total net profit of 309 asset management companies was 317.1 billion KRW. This represents an increase of 199.4 billion KRW (169.4%) compared to the previous quarter and 104.2 billion KRW (48.9%) compared to the same period last year.

The increase in net profits in the second quarter is attributed to the rise in stock prices driven by the activities of Donghak Ants, which significantly increased the net asset value of funds.

Among the 309 asset management companies, 189 posted profits, while 120 recorded losses. The proportion of companies with losses decreased by 22.5 percentage points from 61.3% in the previous quarter to 38.8%.

The return on equity (ROE) of asset management companies in the second quarter was 15.8%, up 9.6 percentage points from 6.2% in the previous quarter and 2.5 percentage points from 13.3% in the same period last year.

As of the end of June, the assets under management of asset management companies stood at 1,186.5 trillion KRW, an increase of 37.1 trillion KRW (3.2%) from 1,149.4 trillion KRW at the end of March.

Fund custody assets were 681.8 trillion KRW, and discretionary investment contracts amounted to 504.7 trillion KRW, increasing by 22.8 trillion KRW (3.5%) and 14.3 trillion KRW (2.9%) respectively compared to the end of March.

The number of asset management companies as of the end of June was 309, an increase of 9 companies from the end of March. The total number of employees was 10,095, up 248 (2.5%).

Kim Myung-chul, Deputy Director of the Financial Supervisory Service, stated, "As the COVID-19 situation somewhat eased during the second quarter, the net profits and profitability indicators of asset management companies greatly improved. However, since external and internal risk factors such as concerns about the resurgence of COVID-19 and stock market instability remain, we plan to closely examine the financial and profit and loss status of companies with weak profit bases."

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