As volatility in Korea's stock market expanded sharply in the first quarter and transaction value increased, large securities firms are expected to post strong results. Securities firms are rolling out aggressive shareholder return policies, including higher dividends.
As of Apr. 15, according to the financial investment industry and Yonhap Infomax, the consensus (market average forecast) for combined operating profit on a consolidation basis for the top five securities firms—Mirae Asset Securities, Korea Investment Holdings, Samsung Securities, NH Investment & Securities, and Kiwoom Securities—in the first quarter of this year is tallied at 3.028 trillion won.
The consensus for total revenue of the five companies is 4.1591 trillion won, and the consensus for net income is 2.3122 trillion won. Compared with the same period last year, operating profit is estimated to surge 65.92%, while revenue and net income are expected to increase 46.62% and 64.02%, respectively.
By securities firm, Mirae Asset Securities showed the steepest growth. Operating profit is expected to come in at 978.2 billion won, up 182.56% from a year earlier. Next, Korea Investment Holdings is estimated to post operating profit of 705.9 billion won, up 33.3% from a year earlier.
Kiwoom Securities is projected to record operating profit of 497.7 billion won, up 52.9% from a year earlier; NH Investment & Securities, 427.2 billion won, up 47.82%; and Samsung Securities, 418.9 billion won, up 25.22%.
These strong results are due to the KOSPI index hitting a record high in the first quarter and a continued "roller coaster market" driven by external variables such as the Middle East war, which triggered a surge in trading by individuals and institutions.
In fact, from the start of the year through Apr. 13, the combined average daily transaction value of the Korea Exchange main board and the KOSDAQ market reached 45.297 trillion won. The average daily trading volume amounted to 2.1 billion shares. Notably, on Apr. 4, when volatility was severe, the daily transaction value swelled to 79.47 trillion won. Considering that the average daily transaction value in the first quarter of last year was 18.363 trillion won and trading volume was 1.3 billion shares, the market has more than doubled in size.
Securities firms, based on improved profitability, are moving to enhance shareholder value with large dividends and other measures.
Mirae Asset Securities last month announced a shareholder return plan of 635.4 billion won, the largest ever. Of that, the total cash dividends amount to 465.3 billion won. Korea Investment & Securities Co. resolved dividends totaling 620 billion won. NH Investment & Securities plans to pay 487.8 billion won in cash dividends, Samsung Securities 357.2 billion won, and Kiwoom Securities 301.3 billion won.