Rally Gives Big Boost to Securities Shares
The recent record-breaking stock market rally has given a boost to securities stocks. Despite the stock market fall, most securities stocks Friday continued to rise for the fourth day in a row.
Kiwoom.com Securities, the nation’s leading online stock brokerage, soared 11.36 percent to 43,600 won. It gained about 16 percent for this week, rising for five consecutive sessions.
Samsung Securities, which is one of the country’s leading brokerage firms and has gained about 5 percent throughout this week, rose 0.53 percent to 53,800 won on Friday.
Woori Investment & Securities advanced 2.9 percent to 21,250 won and Daewoo Securities also rose 1.61 percent to 18,850 won.
``Soaring trading volume on the stock markets has given a green light to securities stocks,’’ said Lee Kyung-soo, an analyst of Daewoo Securities.
Traditionally, securities stocks tend to rise when trading volume increases.
From Monday to Thursday, trading volume on the main stock market exceeded 4 trillion won.
In particular, on Wednesday, it hit a yearly high of 5.2 trillion won. If trading volume in the tech-loaded Kosdaq market was combined on that day, it totaled 7.1 trillion won.
``Trading volume has grown fast this week. If the trend continues, securities firms could emerge as a main force to lead the stock market lift,’’ Lee said.
The hike in trading volume is expected to improve earnings of domestic securities firms in the first quarter as their incomes have heavily depended on brokerage fees.
Most securities firms issued poor performance reports for their fiscal year of 2006 which ends in March due to the bearish market last year.
Operating profit of Hyundai Securities fell 54 percent to 115 billion won last year amid falling trading volume, while the firm’s net profit slipped about 60 percent to 116 billion won.
For the long term, however, some analysts issued a cautious outlook for securities stocks.
``Negative factors limiting the rally of securities stock in the long term include possible stock market corrections, the tightening of rules on loan-based stock trading, which will start from May, rising competition with large-scaled financial groups and cuts in fund fees,’’ said Kim Hyun-wook, an analyst of Woori Investment & Securities.