Which Stocks to Buy Amid Heightened Interest Rate Fears [Weekend Money]

Hana Securities Issues "Overweight" Rating on Securities Sector
Korea Financial Group and Samsung Securities Selected as Top Picks

Although the stock price growth rate of the securities sector in the first half of this year lagged behind the KOSPI returns, expectations for related stocks remain strong, as the domestic stock market is forecast to continue its positive trend.

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On June 20, Hana Securities issued an "overweight" investment opinion on the securities sector. Go Yeon-su, a researcher at Hana Securities, stated, "As capital inflows into the domestic stock market are expected to continue, we recommend taking advantage of any share price corrections stemming from concerns about interest rate hikes as buying opportunities."

As of the cumulative second quarter, the KRX Securities Index rose by only 6.1%, underperforming the KOSPI return (+61.8%) by 68.5 percentage points. In particular, the share prices of Mirae Asset Securities and Kiwoom Securities as of March 4—immediately after the outbreak of the US-Iran war—were lower by 10.8% and 0.9%, respectively. The decline in Mirae Asset Securities appears to reflect the fading expectations following the IPO of SpaceX, while Kiwoom Securities was impacted by concerns over a slowdown in its share of trading turnover. Even those stocks that performed relatively well—such as Samsung Securities (+40.8%), Korea Financial Group (+16.2%), and NH Investment & Securities (+12.3%)—failed to match the returns of the KOSPI.

While some are expressing concerns about a potential slowdown in trading profits due to the possibility of a benchmark interest rate hike in the second half of the year, Hana Securities projects that performance will be better than expected. Go Yeon-su explained, "Most securities firms are employing hedging strategies for their bond positions, so the scale of bond valuation losses from rising interest rates should be manageable compared to worries. Moreover, we expect that an increase in equity-related valuation gains, driven by the bullish stock market, will offset such losses."

As of the cumulative second quarter, the average daily trading value in the domestic stock market was 89 trillion won, up 33% from the previous quarter, while the average daily trading value for ETFs rose to 25 trillion won, a 42% increase from the prior quarter. As of June, the cumulative average daily trading value in the domestic market reached approximately 101 trillion won, maintaining a level above 100 trillion won for the second consecutive month. Hana Securities estimated that if this condition persists, the second-quarter net profit of covered securities companies will surpass market expectations by about 20%.

Hana Securities selected Korea Financial Group and Samsung Securities as its top picks. This is due to the expectation that, as proprietary capital management by subsidiaries expands from deposits and savings to equities and ETFs, valuation gains stemming from the buoyant stock market will increase.

Regarding Samsung Securities, the brokerage and wealth management businesses account for 50% of its revenue, a relatively high ratio compared to peers, and the average commission rates for both domestic and overseas stocks remain elevated, supporting expectations for earnings growth in line with increased trading value. The acquisition of a stake in Dunamu by the Samsung Group was also highlighted as a positive factor, reflecting a strategic intent to participate in the digital asset ecosystem.

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