[Click e-Stock] "Securities Industry Loses Momentum... Long-Term Perspective Needed"

Daishin Securities analyzed on August 13 that a long-term perspective is needed for the securities industry in the second half of the year, rather than a short-term view.

Park Hyejin, a researcher at Daishin Securities, explained, "Driven by policy, earnings, and various additional expectations, securities stocks have soared by nearly 100% since April. We believe that the main driver behind the rise in securities stocks is the increase in the index, and that the numerous policy measures being announced are creating real expectations."

However, she predicted that further gains would be limited, as the policy momentum has now dissipated. She stated, "It is necessary to focus on structural improvements rather than momentum, and a long-term perspective is required over a short-term one. Ultimately, structural improvement comes from discovering new sources of revenue, which in the securities industry can be seen as obtaining new licenses."

She continued, "The most powerful new licenses are for issuance notes and integrated investment accounts (IMA). Since the issuance note business is becoming increasingly competitive as more companies enter the market, I believe that the IMA, for which only three companies have applied, will be the deciding factor."

She added, "However, the actual profitability of the IMA must be confirmed before stock prices can rise. Therefore, I recommend taking a conservative approach to securities stocks for the time being."

Regarding the second-quarter results of major domestic securities firms this year, she explained that they achieved record-high earnings due to strong performances in both brokerage and trading divisions. According to Daishin Securities, the combined net profit of the five companies under coverage-Kiwoom Securities, Mirae Asset Securities, Korea Financial Group, Samsung Securities, and NH Investment & Securities-was KRW 1.7434 trillion, exceeding the consensus by 31.4%.