DAISHIN Securities is moving towards becoming a financing investment company in accordance with the enactment of the Capital Markets Consolidation Act (CMCA) as of last February by creating new profit models on the basis of enhancing competitiveness of vested retail fields and stable advancement of its profitable asset management, investment banking, and principle investment.
Amongst them, reforming and diversifying profit-making structures by creating new profit models has been one of the most immense jobs of the past three years. First of all, the firm has made remarkable investment in the research and analysis sectors, and major economic magazines ranked the firm’s ability in research and analysis at the top-level of market competitors for the first half of 2009, in consequence. The firm is also increasing earnings of the wholesale sector by virtue of strengthening capability in research, including, for instance, increasing its market share of commission business for corporation sales and overseas institution sales.
The Investment Banking sector, which has actually has seesawed for a long time before, is now surging upward. Restructuring deals among companies are increasing, such as bonds with warrants, convertible bonds, paidin capital raising, and initial public offering (IPO). Also, the high-tech financing sector, including structured financing, is a newlydeveloped business area of the firm, as well as the traditional corporate financing. Eventually, Daishin Securities aims at constructing a comprehensive sales system with corporate sales, research and analysis, investment banking, pension business, and futures, thus providing total financing services to corporate customers.
The overseas market is another profitmaking instrument that the firm has been focusing on in the last couple of years. The financial institutions of Japan, China, Taiwan, Vietnam and Cambodia have agreed on strategic partnerships with Daishin Securities. Establishing local subsidiaries in various countries is a significant strategy for constructing a global financing network not only among local offices but also international agencies. They have local branches in Tokyo and Shanghai, while ones in Vietnam and Singapore are under consideration. In Hong Kong, a local corporation was created for the commission business in the local market in February. The Hong Kong Corporation will be a bridge for expansion in South East Asia.
Accordingly, overseas equity trading services will be consistently developed by providing not only an online platform for trading, but also local information about the local stock exchange using the firm’s own research to customers as well, as the Tokyo stock trading service, launched last February. Hong Kong and China are expected to be additional regions for the overseas equity trading service by the end of this year under cooperative partnership with Merchants Securities of China.
One of the most striking features influenced by the enactment of the Capital Markets Consolidation Act (CMCA) is the introduction of various CMA (Cash Management Account) products based on newly allowed customer banking services for equity firms, which were prohibited before the new law.
Dashin Securities recently launched a new CMA product consisting solely of government bonds and currency stabilization bonds famous for their high level of risk-free characteristics and cash realization. Thus, more than 50 million won of principle is eligible to be guaranteed compared to the CMA products of commercial banks, saving banks, and bank holding companies, which are guaranteed only up to 50 million won of principle. Furthermore, customers that invest over 20 million won in equity funds are eligible to attain an interest rate between 5% and 9%, depending on the investment amount.
Balance transfer fees are not applied for any transfer to a financial company domestically, and CD/ATM withdrawal from Woori Bank and Kookmin Bank can be conducted without an ATM fee.
“We are facing rapidly increasing demand for risk-free asset tranches under the on-going global credit crunch,” said Lee Kwang-hee, head of the Department of Financial Service Development in Daishin Securities. “The fixed income CMA will be a sound alternative for customers who favor riskless assets due to its reliable stratum of cash realization and stability,” Lee added.