Stock Firms Generous in Wining & Dining
By Kim Tae-gyu
Staff Reporter
Despite their deteriorating bottom lines, Korean securities companies are not trimming spending on entertaining clients and other related people ― rather, they are increasing unnecessary expenditure.
This has caused investors to fire a salvo at the brokerages, which have refused to cut down services charges no matter how much the former lose in the bearish market.
According to the Financial Supervisory Service Sunday, nine out of the country's top 10 brokerages cranked up spending on business-associated entertainment costs over the April-Sept. period, the first half of fiscal year 2008.
On average, they increased entertainment spending by 13.22 percent during the six month span from the same period last year, which compares to a 64.86 percent fall in operating profit.
Brokerages spend the entertainment costs in the form of offering presents or wining and dining to attract new customers or retain old ones.
Daewoo Securities led the extravagant entertainment spender list with 3.58 billion won, up 4.3 percent from last year. Mirae Asset Securities spent 3 billion won, up 43.5 percent, while its operating profit halved to 109.2 billion won over the same period.
Goodmorning Shinhan Securities also jacked up costs by 25.21 percent to 2.3 billion won, followed by Woori Securities, Tong Yang Securities and Shin Young Securities, which both increased entertainment costs by double digits.
``I hope brokerages reduce services charges for share trading or fund operation instead of overspending in entertainment,'' said an elementary school teacher in Seoul, who lost about half of her investment after buying stocks and funds at the recommendation of a brokerage. She declined to be named.