Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Securities firms tighten belts amid bearish stock market
EBest Investment & Securities headquarters on Yeouido, Seoul / Courtesy of eBest Investment & Securities
By Anna J. Park
By Anna J. Park
Local securities companies have announced that they kick-started emergency management systems, aiming to weather through the current challenges of both global and local stock markets. Such moves are deemed necessary, as various geopolitical factors increase market uncertainty. Soaring interest and exchange rates as well as tightening global monetary policies have also significantly weakened local brokerage firms' recent earnings.
Early in September, eBest Investment & Securities has launched its emergency management. According to the firm, the emergency management plan includes deferring 20 percent of executives' salaries and reducing business promotional expenses by 20 percent to 30 percent. The emergency management system is to continue until the end of the year.
“The move is a preemptive gesture to raise employees' level of alertness against the deterioration of the market,” an eBest Investment official explained.
DAOL Investment & Securities, formerly known as KTB Investment, also announced earlier this year that it was relying on an emergency management system, aiming to preemptively reduce costs as risk management measures.
Market watchers say securities firms' risk management measures will now differentiate brokerage companies' earnings in the coming quarters, given that the external environment has turned unfavorable for the brokerage sector.
Actually, the total earnings of 10 major securities companies during the first half of this year logged a 42.4 percent plunge, compared to the same period last year. Their total net profit during the first half stood at 2.6 trillion won ($1.9 billion), which is almost half the 4.6 trillion won posted during the first half of last year.
Major securities firms have also come up with various emergency and contingency plans to strengthen risk management.
KB Securities is following its risk management strategies while closely monitoring market conditions, and Meritz Securities is also aiming to raise soundness of its assets by managing risk-related measures strictly. NH Investment and Hana Securities also said they are prioritizing risk management and customers' profit management.