Korean brokerages post stellar earnings in Q1 on ample liquidity

South Korean securities firms reported strong earnings in the first quarter after upbeat market sentiment has allowed investors to make aggressive bets on securities.

Mirae Asset Daewoo Co., the country’s top broker, reported a consolidated operating profit of 214.6 billion won ($201.4 million) for the January-March this year, up 49.6 percent from a year earlier, in a regulatory filing last week. Other leading firms Korea Investment & Securities Co. saw its first-quarter operating profit jump 22.2 percent on year to 206.5 billion won and NH Investment and Securities Co. up 46.9 percent on year to 176.3 billion won.

Kiwoom Securities Co. booked 114.2 billion won in operating profit for the first quarter, up 45.2 percent from a year earlier, and HMC Investment Securities Co.’s operating profit soared 81.6 percent to 25.2 billion won over the cited period.

Meritz Securities Co. whose first-quarter operating profit rose 38.1 percent on year to 135.1 billion won had its quarterly net profit top 100 billion won for the first time since its inception. Its net figure expanded 27.8 percent from a year earlier to 103.4 billion won in the January-March period.

Brokerages posted strong earnings as the stock market that enjoyed an exceptional boom last year has stayed buoyant this year. Increased market volatility also has attracted ample liquidity to the market. Solid earnings and eased geopolitical risk have allowed investors to continue to show a voracious appetite for stocks even after the first quarter.

Daily trading volume during the first two weeks of May averaged 15.9 trillion won hitting a record high. It averaged 14.3 trillion won in April and 13.7 trillion won during the first three months this year.

Samsung Electronics Co. that split its stock 50-for-1 earlier this month also has played a major role in driving up the trading volume in local securities market this month. The trading value of the company on May 4 or the first trading day after a three-day suspension for the stock split hit 2.08 trillion won, which is 2.9 times more than its daily average of 724.7 billion won for this year until April 27.

Market experts anticipate the country’s securities sector to perform even better in the following quarters with the Korean government’s drive to promote the nation’s secondary Kosdaq market through tax breaks and new index products.

On Monday, securities sector stocks gained 1.66 percent.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]