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| Samsung Securities Research Center co-Head Oh Hyun-seok, right, and Yoon Sok-mo speak during an interview with The Korea Times at the brokerage's head office in Gangnam-gu, Seoul, April 11. Courtesy of Samsung Securities |
Seoul stock markets expected to remain resilient
By Jhoo Dong-chan
Stock trading used to be just for a limited number of investors who are wealthy enough to visit a brokerage and invest a certain amount of money in listed firms. Access to information about these firms was limited to very few, and often irrelevant to ordinary citizens.
Thanks to the introduction of home and mobile trading system, however, investors no longer need to visit brokerages. More people started investing with less money.
In a bid to meet demand from the larger number of investors, market analysts started to release their outlooks for stocks on an everyday basis. Information now seems open to everyone.
"Now, it's not really difficult for retail investors to get a stock outlook released by a seasoned analyst. We believe, however, this wasn't enough," Samsung Securities Research Center co-Head Yoon Sok-mo said during an interview with The Korea Times.
"There are some difficult financial terms in these reports. In a bid to help retail investors, Samsung Securities has operated its own Youtube channel for years."
Samsung Securities stock analysts even stream their analyses in real time where subscribers can ask a question during the show.
"It's now essential for analysts to create their own contents with differentiated perspectives," said co-Head Oh Hyun-seok.
"Such quality doesn't come all of sudden. Samsung Securities analysts build up their professionalism through appren.ticeship since they join us."
Career as analyst
Reflecting growing interests in stock trading, not only commerce college students but also high or even middle school students now form or join an investment club to study the stock market.
"It is interesting to see an increasing number of young students become interested in stocks," Yoon said. "Many analysts here also have similar experience when they were students."
They then join a securities firm to start their career as stock trader or market analyst.
"You spend four or five years as a research assistant (RA) when you first join a securities firm. The job is pretty demanding," Yoon added.
"There are many things to learn. You need to understand how to read a financial statement. You should also be well aware of latest issues in related stocks. It involves a lot of translations since Samsung Securities is releasing stock analysis not only in Korean but also in English for foreign investors."
He also said there are other analysts who had different career and then joined Samsung Securities with their own experience and expertise.
"There is an analyst who used to be a reporter. One analyst was also from a pharmaceutical company. Their diversity and expertise are a valuable asset in Samsung Securities."
Oh said Samsung Securities analysts are also required to engage in a lot of meetings as well.
"In order to provide differentiated outlooks, analysts visit companies very often to understand them more precisely. We also meet not only institutional investors by also retail investors face-to-face on a regular basis," he added.
"We also have an in-house meeting every time we release our outlooks and target prices on stocks. It also involves a lot of discussion."
Citing the mounting importance of foreign investors and understanding the latest market issues, they are now required to go on a business trip abroad more often.
"The Consumer Electronics Show is a must," Oh said.
"The event now hosts not only electronics companies but also automobile and fintech companies. In order to understand industry in general, we should visit the show."
Stock market and economy
The duo believes the nation's stock market is entering a recovery phase despite Samsung Electronics' disappointing earnings in the first quarter of.
"Stock price always precede firm's earnings," Oh said.
"Samsung Electronics enjoyed a series of record high earnings last year, but its stock prices didn't reflect the earnings because of this year's weakening chip prices. I believe such negative factors have fully reflected in its share prices."
Samsung Securities set Samsung Electronics' target price at 52,000 won ($45.77).
Citing the U.S. Federal Reserve's recent stance, they claim the Seoul bourse is expected to continue its momentum through the year.
"It was difficult to talk about demand last year. The Fed raised rates four times last year while the trade dispute between the U.S. and China was getting intensified," said Yoon. "I believe the Fed has now turned dovish."
Oh said, however, the Fed is unlikely to lower rates this year.
"The U.S. economy is still strong and sound. Some claim the central bank could lower rates based on their expectation, but it's unlikely," he said.
"Likewise, the Bank of Korea is also likely to keep the nation's policy rate unchanged at the current level."
