Korea’s leading brokerage houses are reeling from the unprecedented earning shocks many suffered between April and June in the wake of the prolonged market slump

August 19, 2013 Leave a comment

2013-08-18 16:48

Soaring loss hits Hyundai Securities

By Yi Whan-woo
A number of the nation’s leading brokerage houses are reeling from the unprecedented earning shocks many suffered between April and June in the wake of the prolonged market slump. Among them, Hyundai Securities suffered the worst performance, with its operating loss expanding to 25.6 billion won ($23 million) in the first quarter from the previous year’s 11.4 billion won loss. Brokerages close their books in March. Daeshin Securities also had its operating loss more than double to 14.3 billion won during the same period. The worsening performance was due mainly to a toxic mixture of sluggish trading caused by the prolonged market slump and the rise in yields on bonds following U.S. Federal Reserve Chairman Ben Bernanke’s remark on ending the economic stimulus policy. Bernanke said in June that the U.S. economy offers hints of the possibility of beginning to slow the pace of its bond-buying stimulus. KDB Daewoo Securities, the No. 1 market player, posted an operating profit of 3.76 billion won ($3.36 million) in the April-June period, down 86.8 percent from the previous year and worse than the 56 percent forecasted by FnGuide, a financial news provider. Samsung Securities posted an operating profit of 15.4 billion won, a 63 percent year-on-year decrease. Mirae Assets Securities said its operating profit fall by more than six-fold during the same period, down 19.8 billion won in 2011 to 3 billion won this year. In contrast, there are a couple of firms that have managed to weather the market slump. Korea Investment & Securities posted an operating profit of 24.7 billion won in the first quarter, up 10 percent from a year before. Shinhan Investment, the securities arm of Shinhan Financial Group, and Hana Daetoo Securities, also saw their operating profits jump by 298 percent and 606 percent, respectively, to 19.7 billion won and 4 billion won, during the cited period.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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