Investor interest is focused on whether the rising trend of securities companies' stock prices, which has been smooth this year, will continue. Analyses suggest that the emergence of alternative exchanges, the resumption of short selling, and persistent enthusiasm for overseas stock trading will serve as positive factors for securities stocks. Experts named Kiwoom Securities and Mirae Asset Securities as expected beneficiaries.
According to the Korea Exchange (KRX), as of the 26th, the KRX securities index has risen by 10.93% compared to the beginning of the year. Looking at the stock prices of listed securities companies, Mirae Asset Securities has increased by 25.78% this year, while Kyobo Securities (20.14%) and Kiwoom Securities (14.8%) have also risen by more than 10%. This figure exceeds the rise rate of the KOSPI index (10.19%) during the same period.
Analyses indicate that the settlement dividends scheduled for the end of March will have a positive impact on securities companies' stock prices. Most securities companies do not pay interim dividends and distribute settlement dividends once a year. The dividend yield ranges from 4% to 8%. Considering that the KOSPI index fell by about 10% last year, it means they maintained a high dividend tendency.
Beginning with Daishin Securities, Kyobo Securities and LS Securities (on the 28th), and Mirae Asset Securities and NH Investment & Securities (on the 31st) are ahead of the March dividend record date.
There are also analyses suggesting that the full resumption of short selling at the end of this month will serve as a positive factor for securities companies' stock prices. The resumption of short selling may lead to an influx of foreign investors into the Korean stock market. The activation of transactions resulting from foreign inflows translates into brokerage revenue for the securities firms.
Yoon Yoo-dong, a researcher at NH Investment & Securities, noted, "Based on past cases, after the resumption of short selling, foreign investors re-entered the market, increasing their trading share," adding, "It is expected to lead to a similar increase in transaction volume this time."
The fact that the balance of loaned securities will increase due to the resumption of short selling is also a positive factor for securities companies. In the domestic stock market, where illegal short selling without borrowing is prohibited, stocks must be borrowed first for short selling, and these borrowed stocks are recorded as loaned securities. Here, securities companies can again receive loan fees and increase their revenue.
With the number of transactions on the alternative exchange (NXT) increasing to 800 starting this month, there is speculation that if foreign investors are attracted by the resumption of short selling, Kiwoom Securities, which has a high retail market share, will benefit.
Yoon Yoo-dong, a researcher at NH Investment & Securities, said, "Kiwoom Securities is a company with strengths in the retail brokerage sector, holding a dominant position in the stock brokerage market," and added, "If individual investors return to the NXT trades due to short selling, they will quickly see benefits from this."
According to NH Investment & Securities, over the past three weeks (March 4-24), the market shares of securities companies on the alternative exchange were as follows: Kiwoom Securities (32.9%), Mirae Asset Securities (17.5%), and Samsung Securities (14.7%). Given that the alternative exchange is still in its early stage, it is interpreted that many retail customers used the securities firms they had previously employed.
Mirae Asset Securities is also regarded as a typical beneficiary. Seol Yong-jin, a researcher at SK Securities, selected Kiwoom Securities and Mirae Asset Securities as top picks, stating, "While large firms are generally positive, those with relatively high brokerage market shares and valid expectations for new business ventures such as integrated investment accounts (IMA) and issuance notes will stand out."
Although the U.S. stock market has recently stalled, the overall trend of expanding overseas investment may positively impact securities companies' stock prices. Despite the poor performance of the U.S. stock market, the average daily transaction amount for overseas stocks reached 6 trillion won as of the end of last month. Analysts predict that this year, high interest from domestic investors will continue, leading to a 36% increase in overseas stock trading volume compared to the previous year.
Baek Du-san, a researcher at Korea Investment & Securities, said, "The ongoing enthusiasm for overseas stock investments may lead to an estimated pre-tax profit increase of about 3-4% for each securities company," and added, "The brokerage of overseas exchange-traded funds (ETFs) and the retail sale of overseas bonds are expected to grow into hidden profitable businesses."