Brokerages post strong performances in 1st quarter

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Brokerages post strong performances in 1st quarter

Despite a stock market correction, Korean securities companies posted strong performances in the first quarter of the year thanks to ample market liquidity, data showed Friday.

Mirae Asset Daewoo, one of the leading local brokerages, registered an operating income of 214.6 billion won ($200 million) in the January-March period, up nearly 50 percent from the same period a year earlier, according to the data from the Financial Supervisory Service.

NH Investment & Securities also saw its operating income spike about 47 percent on-year to 176.3 billion won during the three-month period.

The operating income of Meritz Securities soared 38 percent to 135.1 billion won, and Kiwoom Securities chalked up an operating income of 114.2 billion won, up 45 percent from a year earlier.

In particular, Meritz Securities posted a net profit of 103.4 billion won for the last quarter, up about 28 percent from a year ago. The brokerage’s quarterly bottom line breached the 100 billion won mark for the first time.

Market watchers estimated the local brokerage industry might have posted record profits in the first quarter though the stock market underwent a period of correction.

“Despite increased uncertainty facing the stock market in February and March, securities companies are believed to have recorded stellar earnings in the first quarter, bolstered by brisk performances in January,” said Won Jae-woong, a researcher at NH Investment & Securities.

Analysts predicted local securities firms to continue their strong performances during the second quarter on an inflow of investment funds into the bourse.

The average daily turnover of the main stock market stands at a record high of 15.9 trillion won, up from 14.3 trillion won for April.

“Expectations for brokerages’ improved earnings are likely to last in the second quarter,” said Jeon Bae-seung, an analyst at Cape Investment & Securities. “Their second-quarter earnings are expected to rise more than 20 percent on-year should the current level of turnover last.”

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