[Edaily Kim Kyung-eun Reporter] Although stock market trading volume in August fell by more than 30% from the previous month, analysts say securities stocks remain highly attractive to investors. With concerns over rising interest rates and other factors largely priced into stock prices, there are signs that investor sentiment is recovering as the balance of margin trading loans has recently begun to rise again.

In a report released on the 2nd, Jang Young-im, an analyst at SKSecurities, stated, “The outstanding balance of margin loans is showing signs of a rebound,” and maintained an “Overweight” investment rating for the securities sector.

SKSecurities noted that even if third-quarter trading volume declines from the previous quarter, the absolute volume is expected to exceed twice that of the same period last year. The firm also cited the fact that the average dividend yield of major securities firms has surpassed 6% due to falling stock prices as a factor enhancing their investment appeal.

Currently, the average price-to-book ratio (PBR) of major securities firms has fallen to 0.8x, returning to early-year levels. This reflects the impact of concerns over declining trading volume, weakened investor sentiment, and interest rate hikes being factored into stock prices.

In August, the average daily trading volume on the domestic stock market was 67.2 trillion won, a 32.5% decrease from the previous month’s 99.5 trillion won. The Korea Exchange (KRX) recorded 31.8 trillion won, Nextrade (NXT) recorded 17.7 trillion won, and exchange-traded funds (ETFs) recorded 17.6 trillion won.

In particular, ETF trading volume plummeted 47.1% from the previous month, exacerbating the overall decline in trading volume. This was due to the tightening of regulations on single-stock leveraged ETFs, which took effect on July 31. The average daily trading volume for single-stock leveraged ETFs plummeted from 9.3 trillion won in May, 11.4 trillion won in June, and 11.9 trillion won in July to 900 billion won in August. Their share of total ETF trading volume also shrank from the 30% range to the 5% range.

However, considering the sharp stock market decline in July and the tighter regulations on single-stock leveraged ETFs, analysts assessed that trading volume remained more robust than expected. They explained that while August trading volume decreased compared to the previous month, the combined volume for July and August remained at a level similar to that of the first quarter of this year.

The margin loan balance, a key indicator of investor sentiment, is also rebounding. On a monthly average basis, it stood at 30.9 trillion won in August, down 10.4% from the previous month; however, on a daily basis, after falling to 27.4 trillion won in early August, it has since been on an upward trend.

By securities firm, he maintained KOREA INVESTMENT HOLDINGS(071050)and SamsungSecurities(016360)as top picks. He also suggested KIWOOM Securities(039490)as stocks to watch.

Regarding KOREA INVESTMENT HOLDINGS, Analyst Jang stated, “Despite its high brokerage market share and stable profit contributions from non-brokerage businesses such as commercial paper, its PBR is only 0.7 times.”

Regarding SamsungSecurities, he analyzed, “In addition to its retail competitiveness, it offers the highest dividend yield in the sector at 8.2%, while its PBR is low at 0.8x, making it highly attractive from a valuation perspective.”

Regarding KIWOOM Securities, he explained, “Although its PBR fell to 0.8x as concerns over a decline in market share were reflected, both its share of KOSDAQ trading volume and its brokerage market share rebounded last month.”