[Featured Stocks] Oversold Financial and Securities Stocks Rise Early in Trading... Kiwoom Securities Up 5%

View of the National Assembly and the financial district from IFC Mall. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Minji Lee] Financial and securities stocks are showing an upward trend in early trading.

At 9:50 a.m. on the 20th, Kiwoom Securities was trading at 82,100 KRW, up 5.53% from the previous trading day. Other stocks also showed gains, including Hanwha Investment & Securities (4.93%), Samsung Securities (3.53%), Meritz Securities (3.35%), Mirae Asset Securities (3.33%), Daishin Securities (2.35%), Woori Financial Group (5.17%), KB Financial Group (4.86%), Hana Financial Group (3.09%), and Shinhan Financial Group (2.03%).

The rise in stock prices is analyzed to be driven by the view that the previous declines were excessively steep. Both sectors had experienced significant declines due to concerns over economic recession and worsening earnings forecasts amid a sluggish stock market. In particular, financial holding companies continued to decline despite an increase in net interest margin (NIM) due to interest rate hikes. Since last month until the day before, the KRX Bank Index plummeted by 23.41%, marking the largest drop among all sector indices. The KRX Securities Index also fell by 17.61%.

Junseop Jeong, a researcher at NH Investment & Securities, said, “The recent decline in bank stocks is somewhat excessive; fundamentals are sound, and the expected dividend yield has expanded to 7-10% due to the decline. Currently, stock prices are forming high downside rigidity, so when uncertainty diminishes, bank stock prices will converge back to fundamentals.”

Hyejin Park, a researcher at Daishin Securities, analyzed, “Although the securities industry has been on a downward trend since May last year, it is expected to form a bottom in second-quarter earnings and seek a rebound.”