Domestic Stock Market Hit by '3 Major Adverse Factors', Trading Volume Plummets... Securities Firms' Q1 Earnings Show 'Red Light'

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] This year, concerns over the U.S. Federal Reserve's (Fed) tightening and Russia's invasion of Ukraine have significantly dampened investor sentiment, causing a sharp decline in stock market trading volume and triggering red flags for securities firms' earnings.

According to the Korea Financial Investment Association on the 6th, the average daily trading volume in the stock market last month was 18.7 trillion won (KOSPI 11 trillion won, KOSDAQ 7.7 trillion won), falling below 20 trillion won for the first time in about two years since March 2020 (18.5 trillion won).

Compared to February last year, when individual investors' participation in the stock market surged to 32.4 trillion won, this represents a sharp drop of 42.3%. The combined average daily trading volume for January and February was about 19.7 trillion won, down approximately 39.2% from the same period last year (32.7 trillion won).

As a result, the securities industry, which achieved record earnings last year fueled by the stock investment craze such as the Donghak Ant Movement after COVID-19, is expected to report sluggish performance in the first quarter of this year.

According to financial information provider FnGuide, the combined operating profit forecast for the first quarter of five major securities firms with earnings estimates (Korea Financial Group, NH Investment & Securities, Samsung Securities, Mirae Asset Securities, Kiwoom Securities) is 1.5202 trillion won. This is a 24.9% decrease compared to the same period last year (2.0251 trillion won).

Korea Financial Group's operating profit for the first quarter of this year is expected to decrease by 26.7% to 355.4 billion won compared to the same period last year, with Samsung Securities (-28.1%), NH Investment & Securities (-26.9%), Mirae Asset Securities (-21.8%), and Kiwoom Securities (-20.5%) also forecasted to see profit declines in the 20-30% range.

These securities firms all posted operating profits in the trillion-won range last year, supported by the stock market boom.

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