[Edaily Reporter Park Sun-Yeop ] Analysis suggests that securities stocks are being particularly left behind despite a booming stock market where average daily trading volume has surpassed 100 trillion won. While rising indices and increased trading volume are favorable factors for the securities industry’s earnings, the assessment is that securities stocks have been sidelined by market trends as investor demand has been concentrated on large-cap semiconductor stocks. However, given that the absolute level of trading volume remains high and the exchange-traded fund (ETF) market continues to grow, analysts advise that investors should pay attention to securities stocks again should a rotation in trading occur.
Jang Young-im, an analyst at SKSecurities, stated in a report on the 1st, “Even amid an unprecedented rise in the index and an era of daily average trading volume exceeding 100 trillion won, stock prices in the securities sector remain significantly lackluster.” She added, “Similar to the 2011 Cha Hwa-jeong rally, a paradoxical phenomenon is unfolding where demand is concentrated on specific leading stocks, leaving securities stocks sidelined despite the overall strength of the stock market.”

According to the report, the current daily average trading volume stands at around 100 trillion won, and when ETFs are included, it reaches around 140 trillion won. However, the KRX Securities Index has risen by only 42.7% so far this year, underperforming the KOSPI by 56.5 percentage points. In the second quarter, in particular, the underperformance relative to the KOSPI reached 76.9 percentage points. The report explains that despite positive factors such as strong earnings and rising trading volume, investor sentiment toward securities stocks has been dampened by a concentration of supply and demand centered on semiconductors and concerns that trading volume has peaked.
Researcher Jang compared the current situation to the 2011 “cha-hwa-jeong” rally. At that time as well, while the index and trading volume remained robust as funds poured into specific leading sectors such as automotive, chemicals, and refining, securities stocks fell first. However, he noted, “In the second half of 2011, macroeconomic headwinds—including a slowdown in the automotive, chemical, and refining sectors, the U.S. credit rating downgrade, and the European debt crisis—overlapped; however, currently, the semiconductor sector and South Korean exports remain robust, and trading volume continues to rise.”
The “spread” of trading volume was cited as the key factor for a rebound in securities stocks. This means that a revaluation of securities stocks will only be possible if trading activity expands beyond simply being concentrated in KOSPI large-cap stocks or semiconductors to include the KOSDAQ, ETFs, and wealth management (WM). Analyst Jang said, “It’s inevitable that securities stocks will be left behind in a semiconductor-led market, but if rotational trading emerges, it’s time to take another look at securities stocks.”
He also noted that the growth of the ETF market could serve as a new catalyst for securities stocks. This is because, following the launch of a single-stock leveraged ETF in May, ETF trading volume has risen rapidly, underpinning the overall growth in trading volume. In particular, the expansion of ETF trading volume is having an impact not only on commission revenue but also on the landscape of brokerage market share.
According to SKSecurities, as of June, the combined brokerage market share for KRX, NXT, and ETFs stood at 14.8% for KIWOOM Securities(039490)and 13.6% for #Korea Investment & Securities, narrowing the gap to 1.2 percentage points. Korea Investment & Securities has significantly boosted its share of ETF trading volume based on its DMA service. DMA is a service that allows institutions and foreign investors to utilize faster order routing, and it has emerged as a key factor in the market share competition as trading in single-stock leveraged ETFs has increased.
There are also ongoing policy expectations. Financial authorities are pushing to expand the range of investable assets for foreign integrated accounts to include domestic ETFs, and policies to revitalize the KOSDAQ market are expected to take shape in the second half of the year. Analyst Jang assessed that such policies could serve as an opportunity to partially shift trading volume—currently concentrated on large-cap KOSPI stocks—toward the KOSDAQ and ETF markets, thereby increasing turnover.
SKSecurities maintained its “Overweight” investment rating on the securities sector. As an investment strategy, the firm proposed a stock-centric approach focused on companies that possess a solid foundation in the brokerage division and hold wealth management (WM) and asset management portfolios capable of maximizing benefits from a bull market.
It named KOREA INVESTMENT HOLDINGS and SamsungSecurities(016360)as its top picks. KOREA INVESTMENT HOLDINGS is demonstrating brokerage competitiveness by expanding its ETF market share, and the firm expects early redemptions of ELS products due to the bull market, as well as valuation gains on securities held by its asset management subsidiaries. SKSecurities projected KOREA INVESTMENT HOLDINGS’ return on equity (ROE) for this year at 21.8%, while noting that its price-to-book ratio (PBR) stands at just 0.86x.
Regarding SamsungSecurities, the report noted that its brokerage and asset management divisions contribute significantly to profits, driven by its retail competitiveness. Analyst Jang stated, “Recent returns on securities stocks have been excessively weak relative to market conditions and earnings,” adding, “Whether trading volume expands and turnover rates improve will be key to a future rebound in securities stocks.”