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S. Korea’s Securities Firms Expected to Record Earnings Surprise in Q1
Riding on Rebound of Stock Market
S. Korea’s Securities Firms Expected to Record Earnings Surprise in Q1
  • By Yoon Young-sil
  • April 23, 2019, 09:44
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Korea's securities firms are expected to show a better performance than expected in the first quarter of this year.

With securities firms expected to show a better performance than expected in the first quarter of this year, Hana Financial Group has officially announced the tentative performance of its subsidiary, Hana Financial Investment.

Hana Financial Investment posted 85.45 billion won (US$74.86 million) in consolidated operating profit and 62.35 billion won (US$54.62 million) in net profit in the first quarter, up 699.64 percent and 527.30 percent from the previous quarter, respectively, according to preliminary figures disclosed by Hana Financial Group on April 19. The net profit reached 64.60 billion won (US$56.59 million), which is a similar level to the highest ever result in the second quarter of last year.
 

Securities companies delivered an earnings shock in the second half of last year due to a sharp drop in stock prices but they are forecast to put up a good show in the first half of this year thanks to the stock market rally.
 

Won Jae-woong, an analyst at NH Investment & Securities Co., said, “The daily average amount of trading remains at 9 trillion won (US$7.88 billion), not a big rebound, but securities companies see bonds and ELS related profits dramatically increase and show good performance in the IB sector.”

In fact, the estimated operating profit of major securities firms is expected to far surpass the consensus in the first quarter. By securities company, the net profit of Mirae Asset is estimated at 134.40 billion won (US$117.74 million), NH Investment & Securities at 130.40 billion won (US$114.24 million), Korea Investment & Securities at 198.30 billion won (US$173.72 million), Kiwoom Securities at 80.20 billion won (US$70.26 million) and Meritz Securities at 117.80 billion won (US$103.20 million) in the first quarter, according to Samsung Securities Co. The combined net profit estimation comes to 661.10 billion won (US$579.15 million), exceeding the consensus estimate of 557.90 billion won (US$488.74 million) by 18.5 percent.

Securities firms are expected to continue fare well in the second quarter. Despite concerns over the global economic slowdown, the daily average amount of trading is on the rise thanks to the drop in market interest rates and recovery of international investment sentiment. Based on this, the stock market index of the securities industry rose by 15.9 percent from the beginning of the year.