[Click e-Industry] Reasons to Approach Securities Stocks from a Conservative Perspective

Yuanta Securities maintained its "Buy" investment rating on the securities sector on September 10, but also evaluated that the investment appeal of risk assets is diminishing, recommending a more conservative approach.

Do-Hyung Woo, a researcher at Yuanta Securities, stated, "The investment appeal of risk assets is waning due to lingering macroeconomic uncertainty and the continued rise in market interest rates. However, with the market correction appearing to come to an end, the dividend attractiveness of securities stocks is expected to increase toward the end of the year, which should support share prices on the downside. From the perspective of securing dividend yield, a trading approach is an effective strategy," he explained.

Yuanta Securities forecast the combined average daily trading value of the KOSPI and KOSDAQ markets in 2026 and 2027 to be 66 trillion won and 54.7 trillion won, respectively. These figures represent downward revisions of 9.9% and 15.0%, respectively, from their previous estimates of 73.2 trillion won and 64.4 trillion won.

The combined controlling shareholder's net profit for the third quarter of this year for the covered securities companies (Samsung Securities, Mirae Asset Securities, NH Investment & Securities, Korea Financial Group, and Kiwoom Securities) is projected to be 1.5 trillion won, which is expected to fall short of market estimates by 29.6%. Woo cited two main reasons for this: First, a decline in investor turnover rates is expected to reduce trading value, leading to disappointing brokerage profits. Second, rising interest rates and a sluggish stock market are projected to result in lower trading profits.

The securities sector is currently solidifying a bottom, making a period of sideways movement inevitable for now. Woo projected, "The trigger for a rebound will be a rise in retail investor turnover rates." He continued, "However, since it took about two years for turnover rates to rebound after past peaks, a continued sideways movement due to the current decline in turnover rates is also inevitable for the time being."

He noted that the taxation of virtual assets, which will be implemented starting next year, may become a major variable. "If the virtual asset tax is implemented this time without further delay, funds could flow into the stock market, contributing to an increase in retail investor turnover rates," Woo said.

As the top pick in the securities sector, he recommended Samsung Securities. Woo explained, "The market is expected to remain centered on the KOSPI going forward, and with a dividend yield of around 8%, the downside for share prices should remain limited." He added, "In the case of Samsung Securities, as the firm has a mid-to-long-term target of a 50% dividend payout ratio, the total dividend amount is expected to rise steeply compared to its competitors."

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