By Park Hyong-ki
Staff Reporter
Following Doosan Group's acquisition of a small-sized brokerage house, BNG Securities, analysts say that the future for the group in the securities market is uncertain.
``Its intention to step into the market is quite reasonable, given that the market outlook is positive but highly competitive and it wants to diversify its business for growth,'' said David Kim, an analyst at Kyobo Securities. ``It really depends on how far it is willing to go and handle its securities business since this line of business requires long-term investments and more patience to see positive results at the end.''
Also, since it's a new kid on the block with experience only in producing world-class machinery equipments and plants, others believe it will face some limitations in competing and becoming one of the major players in the market.
``Doosan will have little influence in the market, considering BNG's small size,'' Jeong Je-young, an analyst at Daishin Securities said.
Doosan Group, a manufacturing conglomerate with core interests in heavy machinery and construction, has been kicking into high gear to trail-braze into the financial market for the development of a new growth engine.
It said its financial services arm, Doosan Capital, has finalized a deal to takeover the small-sized securities company as the biggest shareholder with the aim of signing a memorandum of understanding between the two firms on Thursday.
``This is part of our efforts to pioneer into a new market,'' said a Doosan Group official. ``In this case, we see a vast potential in the financial market especially with the passage of the Capital Market Consolidation Act.''
BNG Securities has capital of 3 billion won. It raked in about 612 million won in net profit last year, according to the Financial Supervisory Service.
The act is aimed at igniting a London-style ``Big Bang'' in the securities market to create a global investment bank by eliminating business barriers for brokerage houses and promoting mergers and acquisitions. It will be implemented in 2009.
The official said the group has been setting its sight on the financial market for quite some time.
The group started to venture into the financial market last year when it acquired a non-financial firm, Yonhap Capital, which became Doosan Capital, with its flagships Doosan Heavy Industries & Construction and Doosan Infracore.