Samsung Securities looks for opportunity

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Samsung Securities looks for opportunity


Park Chun-hyeon

Samsung Securities is trying to revamp itself as a comprehensive asset management company. In an interview with the JoongAng Ilbo, Park Chun-hyeon, Samsung Securities president, said he sees banks and insurers as his main competitors. He said Samsung Securities’ primary targets are rich customers and baby boomers planning for their retirement.

Park said the recent turbulence in the financial market presented an opportunity for Samsung Securities to go beyond its image as a brokerage firm and expand into a comprehensive asset management company.

Park is considered a pioneer in the asset management market.

Before moving on from his position as vice president of Samsung Life Insurance, Park worked in the asset management department.

Q. The stock market seems to be stabilizing after the recent turmoil.

A. We expected the volatility in the stock market to get worse this year, and for that reason, instead of downsizing our wrap accounts, which are concentrated in stocks, we expanded products that invest in both bonds and stocks in July.

But the market was hit by a much bigger shock that exceeded our projections.

Now a situation where the market will see slow growth with periodic bouts of volatility will remain for an extended period of time.

Will that result in an overall change in the asset management market, including in stock brokering?

Yes. With the recent global crisis, a new asset management paradigm has taken hold.

We are passed the era of making profit by burying certain stocks and products that are projected to grow and waiting for that to happen.

It is time to be aggressive in asset management that takes into consideration market cycles and trend changes. We are now living in an era where inflation is eating into asset value.

What is your advice on asset management?

First and foremost, Korean investors should adjust their portfolio asset structure, which is heavily concentrated in the real estate market. Investors need to convert to profitable financial products that produce immediate cash.

Additionally, investors need to expand their investment portfolios into stocks and bonds, rather than concentrating on deposits.

Although bond prices have gone up recently, it is still not too late. It is appropriate to have bonds with 10 year maturities to account for 20 percent of your portfolio. Stocks are one way to overcome inflation.

Isn’t it difficult for an individual to plan out a portfolio?

One could utilize a comprehensive asset management account. When paying a certain amount of commission, the financial companies mix various products and solutions.

Samsung Securities is offering our POP Golden Egg Account, which invests in bonds and stocks whose high-return high-risk investment does not exceed 40 percent.

Aren’t banks and insurers already in the lead in asset management?

Times like these where the market changes radically is a good opportunity for brokerage firms.

We have a large pool of well-trained brokers who are quick to catch onto changing trends and find new investments opportunities.

Samsung Securities’ research department had expected a summer rally.

Whether it was the sovereign debt situation in Europe or the credit rating downgrade in the U.S., these variables were already exposed in the market. However, we admit that we had let our guard down and were too optimistic.

As a result, I asked for changes in the research department.

From now on, instead of predicting which way the market will go, we will plan a new strategy where our research department projects the market with different scenarios.

By Kim Kwang-ki []
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