#NH Investment & Securities The New York local office has recently seen a sharp increase in inquiries not only about Samsung Electronics and SK Hynix but also about other Korean semiconductor companies. In the past, investment orders were placed mainly for large-cap stocks like Samsung Electronics and SK Hynix, but now there are requests for corporate meetings or in-depth research materials. Requests to directly visit Korean companies have also increased, making coordination work busier.
#Korea Investment & Securities The Hong Kong office successfully concluded syndicated loans with Hyundai Card and Woori Card alongside the head office this year. The amounts were $350 million (approximately 490 billion won) and $300 million (approximately 410 billion won), respectively. The Hong Kong office is expanding its business scope beyond proprietary investment and bond intermediation by discovering IB (investment banking) deals together with the head office and other overseas offices, and connecting local investors to domestic stocks and financial products.
Overseas businesses of the domestic securities industry are experiencing high-growth growth. Since the second half of last year, KOSPI has continued to stand out among global stock markets with its upward trend, and as foreign investors' interest in Korean companies centered on semiconductors has increased, business opportunities for domestic securities firms have expanded. This year, net profits from overseas subsidiaries of the securities industry are expected to exceed 1 trillion won for the first time.
According to the financial investment industry on the 28th, the first-half net profits of overseas subsidiaries of three major securities firms—Mirae Asset Securities, NH Investment & Securities, and Korea Investment & Securities (Mirae Asset Securities' pre-tax profit)—totalled approximately 950 billion won, far surpassing last year's total net profits from overseas subsidiaries of all securities firms (654 billion won). If this trend continues, breaking the 1st trillion won mark this year is certain. By firm, Mirae Asset Securities recorded a 480% surge to 852.3 billion won compared to the same period last year, NH Investment & Securities saw a 67.9% increase to 49.7 billion won, and Korea Investment & Securities recorded a 33.7% increase to 48.2 billion won.
A Korea Investment & Securities official explained, "As the profit base of existing Asian offices such as Vietnam and Hong Kong stabilizes, the expansion of results from U.S. IB (corporate finance) and credit businesses has diversified revenue sources." An NH Investment & Securities official stated, "As core businesses for each overseas subsidiary stabilize, overall performance is improving." Mirae Asset Securities saw a sharp increase in profits due to the inclusion of gains from SpaceX valuation.
Overseas subsidiary results of domestic securities firms have steadily grown over the past decade. Net profits from overseas subsidiaries, which were only $4.8 million in 2017, increased nearly tenfold to $455.8 million last year. The introduction of the super-large IB system in 2017 allowed major securities firms to expand their scale and business, taking overseas operations to a new level. In the following two years, the boom in global stock markets led to increased overseas investments by domestic investors and increased investments by foreign investors in Korean stocks, contributing to performance growth. Expanding business areas through IB and credit businesses is also positively evaluated. In particular, profit growth rates over the past two years have reached 150%.
Domestic securities firms entered retail brokerage markets centered on emerging Asian countries in the 2010s and achieved results. They secured significant market shares, especially in the stock brokerage markets of Vietnam and Indonesia. In the Vietnamese stock brokerage market, Korea Investment & Securities ranks ninth, while Mirae Asset Securities ranks tenth. Mirae Asset Securities is strengthening its local influence by acquiring Sharekhan, a major Indian retail securities firm.
Recently, business opportunities are expanding into advanced markets such as the United States, Hong Kong, and London. Representative businesses include not only IB and proprietary investments but also connecting domestic investors' overseas investments with foreign investors' investments in Korean financial products. Im Kyung-jun, head of Korea Investment & Securities' Hong Kong office, said, "Recently, both overseas business by Korean financial companies and investments by foreign investors into Korea are changing significantly at the same time." He added, "In the past, when Korean financial companies went abroad to enter local markets was the center of globalization (Globalization), but now it is becoming equally important to make it easy and efficient for Hong Kong and global investors to invest in Korean stocks, bonds, and financial products."
The status of the domestic stock market and securities industry is also changing locally overseas. Woo Yeon-kwang, head of Korea Investment & Securities' KIS US office, said, "There is much interest from foreign IBs in Korea's major trend of shifting from bank deposits to capital market investments." He added, "At the recent 'KIS Night' IR event held in New York, major IBs such as Nuverber and JPMorgan gathered and showed high interest." Han Joong-seok, head of Korea Exchange's London office, said, "With KOSPI exceeding 9,000, it seems to have become a global brand," noting that "the temperature difference in recent IR events was enormous."
However, experts point out that becoming a competitive global player requires much time and investment beyond just performance growth. This is because regulations and market environments differ by country, and building a competitive business foundation is not easy. The industry believes that policy support such as regulatory relaxation is also necessary for this purpose.
A securities industry official stated, "Each region has unique characteristics and different stages of capital market development, so it is necessary to approach each market with differentiated strategies and investments." He added, "Given the significant time and investment required, domestic prudential regulations applied to capital injection into local subsidiaries, credit provision, and mergers and acquisitions of foreign financial companies need to be adjusted according to the actual substance and risk level of the business."
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