Grim Prospects for Stock Market

Many CEOs see gloomy outlook for securities market, so will focus on new business areas including IB and hedge funds

Top managers of securities firms stressed net profit this year more than any year in their New Year addresses, which is inevitable knowing that the European debt crisis would leave its mark on the domestic capital market before it goes away, jolting the world economy in its wake.
But they said they will still pursue their plans to focus on new businesses without giving up an inch to expand them, despite the heated competition expected in the investment banking (IB) sector.
Samsung Securities Co. led by President Kim Sok is at the forefront of an intense competition among securities firms to expand into new business areas, especially in R&D and consignment sales.
In a poll by Asia Money 2011, the Samsung Group affiliate came out as the top firm in Korea in such areas as research and brokerage. The company won the 21st Dasan Financial Award Gold this year.
In August, the company introduced the Bank Interest Plus Alpha that guarantees higher income than bank deposit interest rates, a new type of asset management service called the Samsung POP Golden Egg Account, which broke all kinds of records by selling more than 1 trillion won worth of the product in the first 50 days after its introduction.
President Kim said the company should focus on maximizing corporate profits. He also stressed that the investment banking and global equity business headquarters should do their utmost to expand profits as much as they can. The CEO also called for the company to strive to be a leader in the Korean-type hedge fund and other new business sectors by taking an early lead.
President Im Key-young of Daewoo Securities warned that the environment for the securities industry would not be friendly by any account, calling for very serious analyses to minimize investments that are not going to be profitable and invest only the very minimum in funds by focusing its management on profitability and cutting costs whenever and wherever possible. CEO Im also called for spurring investment banking activities to secure the company's own business capacity and expand it.
President Hwang Seong-ho of Woori Investment and Securities Co. said the business environment for this year would be worse than last year with the financial market to be divided up between market makers and niche players and called for the company to be a top market maker.
The CEO said the company should take a leading position in the investment banking sector and spur the globalization of its operation in connection with Singapore and Hong Kong.
President Ryu Sang-ho of Korea Investment and Securities Co. said he expects the securities market to remain weak for the time being this year with profits squeezed due to strengthened regulation on financial companies. "Our company should be able to introduce to the market middle-range risk and profit products, because how well we do that will determine our performance for the year."
President Choi Kyung-soo of Hyundai Securities said he is more fearful about the stock market than hopeful and the company should do all it can to diversify the profit structure this year. nw

(from top left) Chairman Hwang Kun-ho of the Korea Financial Investment Association. President Im Key-young of Daewoo Securities Co.
President Ryu Sang-ho of Korea Investment and Securities Co.,;
President Hwang Seong-ho of Woori Investment and Securities Co.,;
President Kim Sok of Samsung Securities Co.