Shinhan Investment & Securities launched a stock purchase service for fractional shares of Japanese stocks. It is the first among domestic securities firms to allow buying and selling shares one at a time rather than in units of 100.
Shinhan Investment & Securities introduced the fractional share order service through its SOL mobile and home trading system (MTS/HTS) on the 7th. The transactions are not conducted in real-time but are settled twice daily at the market closing price (MOC) for both the morning and afternoon sessions.
A Shinhan Investment & Securities official noted, "We developed the fractional share order service because the initial investment expense for Japanese stocks is high, making it difficult for small investors to access these stocks."
The typical transaction unit for stocks listed on the Tokyo Stock Exchange is one unit, which is 100 shares. For example, Konami Group, which is the most held stock by domestic investors among individual Japanese stocks, was trading at 18,475 yen (approximately 176,662 won) per share around 3 p.m. that day. This means that even a minimum investment in Konami Group would exceed 17.66 million won.
The same applies to other Japanese stocks preferred by domestic investors. Based on the current share price, the minimum transaction units are ▲ 7.62 million won for 100 shares of Goldwin ▲ 4.55 million won for Bandai Namco Holdings ▲ 2.71 million won for Toyota Motor Corporation ▲ 470,000 won for Line Yahoo (LY). However, Shinhan Investment & Securities anticipates that allowing transactions in single shares will reduce the trading burden for investors.
Individual investors in Japanese stocks, known as 'ilhakgaemi,' have rapidly increased. The number of Shinhan Investment & Securities customers trading Japanese stocks is expected to grow by 35% from the end of 2023 to the end of 2024, with transaction volume soaring by 125%. According to the Korea Securities Depository, domestic investors traded Japanese stocks worth $7.5713 billion (approximately 10.96 trillion won) last year, marking an all-time high.
However, for fractional share orders to gain traction, the dynamics of the Japanese stock market and exchange rate trends will be crucial. The Nikkei 225 average stock price has declined by about 2.8% this year. The exchange rate of won to yen has also risen from around 870 won last July to 927.97 won last month. Considering that the average won-yen exchange rate over the past 10 years is 1,002.74 won, the potential for additional currency gains has diminished.
Shinhan Investment & Securities is also developing a yen repurchase agreement (RP) service in collaboration with a travel card company. An RP is a financial product that provides revenue at a promised interest rate to customers after managing the securities firm's own bonds for a specified period. With the increase in travelers visiting Japan, it is anticipated that this service will allow them to utilize their remaining yen without having to exchange it back.