Shinhan Investment & Securities on the 19th predicted that the average daily transaction value of the domestic stock market in the second half of this year will reach 113.1 trillion won. It also said earnings estimates based on controlling shareholders' net income for securities firms will increase, and it raised target prices for securities stocks.
Shinhan Investment & Securities raised its estimate for the average daily transaction value in the second half from 54 trillion won to 90 trillion won, excluding ETFs.
It had suggested a KOSPI band of 7,000 to 9,300 points for the second quarter this year. Based on this band, it projected that the average daily transaction value in the second half, combining KOSPI, KOSDAQ and NEXTRADE (NXT), will reach 90.4 trillion won. Including exchange-traded funds (ETFs), the estimate is 113.1 trillion won.
Lim Hee-yeon, an analyst at Shinhan Investment & Securities, said, "In addition to the index, a variable that deserves attention is turnover," and noted, "The Korea Exchange (KRX)'s creation of a premarket and after-market in the second half and the KOSDAQ promotion and relegation system are structural changes that will drive higher turnover."
In particular, ETFs are not currently traded on NEXTRADE (NXT), so if the exchange introduces a premarket and after-market, there is a possibility that over-the-counter trading demand for ETFs will also expand, it explained.
In addition, the KOSDAQ promotion and relegation system is expected to normalize valuations across the KOSDAQ market, facilitate inflows of institutional and foreign funds, and increase confidence in the long-term investment market. Also, stocks expected to join the premium market are likely to attract preemptive buying, while stocks facing inclusion in the watchlist or delisting risk will see portfolio rebalancing demand, and turnover will likely rise by stock.
Regarding the securities sector, Lim said, "Thanks to this year's large-scale earnings growth, both capital accumulation and the capacity to use leverage are expanding, and profits are being regenerated across diverse revenue sources such as wealth management (WM), investment banking (IB) and sales and trading (S&T)," adding, "What is happening now is not a temporary cyclical improvement but a structural shift driven by capital market growth and the advancement of securities firms' business models."
At the same time, it raised this year's earnings estimates for the securities firms it covers to ▲ Mirae Asset Securities 3.6% ▲ Korea Investment Holdings 5.6% ▲ NH Investment & Securities 7.8% ▲ Samsung Securities 13.8% ▲ Kiwoom Securities 9.8%.
It also raised target prices to ▲ Mirae Asset Securities 76,000 won (8.7%) ▲ Korea Investment Holdings 370,000 won (5.7%) ▲ Samsung Securities 160,000 won (3.2%).