Korea’s top brokerage house sees its 1Q revenue jump 10.4%
South Korea’s top brokerage house Mirae Asset Securities announced on May 12 that its first-quarter sales amounted to 5.26 trillion won ($4.1 billion), up 10.4 percent from a year ago.
Observers point out that the Seoul-based company had managed to chalk up double-digit growth in revenue despite the bearish stock market this year.
Yet, its operating profit went down 32.1 percent to 284.7 billion ($22 million) as the rising interest rates led to the sluggish stock market across the world.
Earlier this month, the U.S. Federal Reserve jacked up the key borrowing rate by 0.5 percentage points to tame the inflationary pressure. The outfit also hinted at a further increase in the rate this year.
The Bank of Korea also raised its benchmark interest rate by 0.25 percentage points twice this year.
These measures reduced liquidity in the global financial markets, which weighed on the stock markets and brokerages.
As a result, some securities companies in South Korea saw their 1Q bottom lines almost halve year-on-year.
In comparison, Mirae Asset Securities could defend its earnings by diversifying its revenue sources. For example, the entity’s commissions from corporate financing and investment banking jumped significantly.
“Mirae Asset Securities’ revenues from investment banking and other areas were much higher than the market expectation,” Yuanta Securities analyst Jeong Tae-joon said.
“In particular, its earnings related to the private equity funds rocketed. The firm appears to adopt a diversification strategy to deal with the slowdown in brokerage and trading.”
And Mirae Asset Securities continued its efforts to prop up its share price by canceling some 20 million of its shares and buying around 10 million shares worth more than 85 billion won ($67 million).