◇ May Daily Average Trading Volume Exceeds 100 Trillion Won… All-Time High
According to the financial investment industry on the 2nd, the daily average trading volume in May reached a total of 106.2 trillion won, with 65.8 trillion won on the Korea Exchange (KRX) and 40.4 trillion won on Nextrade (NXT). In particular, the daily average trading volume for exchange-traded funds (ETFs) surged 84.0% month-over-month to 30.4 trillion won.
Notably, following the listing of 16 single-stock leveraged and inverse ETFs on the 27th of last month, the daily average trading volume for ETFs has expanded to 41 trillion won over the past three trading days.
Ko Yeon-soo, a researcher at Hana Securities, noted, “While the share of single-stock ETF trading has reached 23%, intensifying the concentration of supply and demand centered on #SamsungElectronics and #SKHynix, it is important to note that both individual investors’ trading volume in individual stocks and ETF trading volume are increasing simultaneously.”
In fact, as supply and demand concentrated on Samsung Electronics and SK Hynix, these two stocks accounted for over 40% of the market’s daily average trading volume, which exceeded 100 trillion won. Consequently, the KRX Securities Index fell 4.3% in May, underperforming the KOSPI by 32.8 percentage points.
However, the securities industry assesses that the effect of the recent surge in trading volume has not yet been fully reflected in securities stock prices. In particular, securities firms’ second-quarter profits are projected to increase by an additional 20–30% compared to the first quarter, which recorded an earnings surprise. Some analyses suggest that first-half profits alone could approach last year’s full-year results.
Woo Do-hyung, an analyst at Yuanta Securities, predicted, “As the growth rate of semiconductor profits is expected to slow in the second half, the concentration of capital is likely to ease. As funds shift to other sectors, the securities sector—which offers a clear profit growth effect due to elevated index levels—will begin to rebound.”
Daishin Securities projected that second-quarter brokerage commission revenue for the five brokerages under its coverage (Mirae, NH, Samsung, Korea, and Kiwoom) would reach 2.6 trillion won, a 24.3% increase from the previous quarter. Yuanta Securities projected that the combined net income attributable to controlling shareholders for the securities firms under its coverage would reach 3.2 trillion won in the second quarter, exceeding the consensus by 13.2%.
◇ Despite Strong Market Conditions, Only Mirae Asset Sees Target Price Plunge
Individual stocks highlighted included #Korea Financial Holdings, #NH Investment & Securities, and #Samsung Securities. Hana Securities listed Korea Financial Holdings and Samsung Securities as recommended stocks, while Yuanta Securities named Samsung Securities as its top pick. Daishin Securities listed Korea Financial Holdings and NH Investment & Securities as preferred stocks.
Park Hye-jin, an analyst at Daishin Securities, emphasized, “Both Korea Financial Holdings and NH Investment & Securities have seen their price-to-book ratios (PBR) fall to around 1x, making them highly attractive in terms of valuation.” She added, “In the case of Korea Financial Holdings, there is a high probability that strong earnings will continue into the second quarter, and considering a sustainable return on equity (ROE) of 15%, the stock is undervalued.”
For Samsung Securities, which has a relatively high proportion of KOSPI trading, a KOSPI-led bull market is expected to significantly boost brokerage revenue. With a dividend payout ratio of 35% and a dividend yield of around 6%, the downside risk for the stock is considered limited.
On the other hand, views on Mirae Asset Securities are mixed. Shinhan Investment Securities recently lowered its target price for Mirae Asset Securities by 13.2% from 76,000 won to 66,000 won. This was based on the assessment that expectations related to SpaceX had already been largely factored into the stock price.
Mirae Asset Securities emerged as a beneficiary of SpaceX this year, with its stock price soaring from the 20,000 won range to the 80,000 won range, but it has recently corrected to around 57,800 won.
Lim Hee-yeon, a research analyst at Shinhan Investment Securities, noted, “With expectations regarding the SpaceX IPO largely reflected in the stock price, there is a possibility that the valuation premium will narrow in a phase where the value of the held stake is overly projected onto the market capitalization.”
Experts advise that while expectations for an improvement in the securities industry remain valid, the extent to which this is reflected in individual stock prices varies, and a selective approach focused on stocks expected to benefit from improved earnings driven by increased trading volume is necessary.
Researcher Park Hye-jin explained, “The industry outlook is positive due to abundant liquidity and increased investor participation in the stock market,” but added, “In the second quarter, investment income from product management could become a variable due to increased interest rate volatility, so a selective approach is necessary.”
