Hana: "Volatility Has Increased... But Fund Inflows Into Stock Market Will Continue"

Hana Securities has assessed that, despite increased volatility in global risk assets recently due to geopolitical risks stemming from the Middle East, the inflow of funds into the domestic stock market is expected to continue.

On March 25, Hana Securities researcher Ko Yeonsu stated in a securities industry analysis report, "During periods of heightened volatility like now, it is important to pay attention to trading value. When volatility increases, turnover rises and retail investor participation expands, making it highly likely that trading value will remain robust."

Ko added, "The domestic stock market is seeing a continued upward revision of earnings estimates, primarily led by the semiconductor sector. The annual operating profit estimate for KOSPI in 2026 is projected to increase by more than 100% year-on-year to 638 trillion won, which represents the steepest growth among major global stock markets." He also noted, "If we factor in improvements in corporate governance and a growing trend of shareholder returns due to amendments to the Commercial Act, there is ample room for a KOSPI multiple re-rating."

Furthermore, Ko commented, "The trading value and turnover rates for KOSPI and KOSDAQ are still below the levels seen during the COVID-19 global pandemic." However, he pointed out that the trend of increasing investment in Exchange-Traded Funds (ETFs), which had acted as a drag on turnover rates earlier this year, is beginning to shift toward increased buying of individual stocks.

This suggests that turnover rates could rise further in the future. In addition, Ko analyzed that recent and upcoming regulatory changes—such as the introduction of domestic market return accounts (RIA) this month, the launch of double-leverage ETFs for individual stocks in May, and the extension of trading hours in September—are expected to encourage trading activity and expand trading value.

Ko also stated, "The increase in commission revenue resulting from higher trading value will be seen across the entire securities sector. Considering that brokerage and wealth management account for about 30-50% and trading for about 20-30% of net operating income at coverage securities firms, the decrease in bond valuation gains due to rising interest rates can be largely offset by increased retail segment revenue."

Accordingly, Ko maintained Kiwoom Securities and Samsung Securities as his top picks in the securities sector, given their high market share in domestic stocks and ETF liquidity provider markets.

This content was produced with the assistance of AI translation services.