President Hong Sung-guk of KDB Daewoo Securities Co. said everyone should change their investment habits in the era of low interest rates.
The CEO rose through the ranks at the company after joining via public application. He said that in this era of low interest rates, people should change their habits of investing only in safe assets such as real estate and deposits.
Hong said they should forget about making only risk free investments, as there is no investment area without some risk, at least in this age of low interest rates.
The scale of Korea’s investment asset market takes up only 2 percent of the global market, and investing only in Korea means that Korean investors are shut out of the global investment asset market totally. They should invest overseas, too, so that Korean investments are spread around the world, not losing investment opportunities overseas.
The company achieved an earnings surprise in the first quarter this year with an outstanding result in the area of the bond trading, boosting its earnings rates.
While rival securities firms expected that interest rates would stay at the same level as last year, Daewoo Securities bet against that, and the company bet strongly on its projection that interest rates would fall.
That’s exactly what happened.
The Bank of Korea’s move to cut the basic interest rate helped Daewoo’s gamble on the interest rates, and the end result was that the securities firm made 110 billion won in net income in Q1, the highest in the securities industry, about double what the company made in the same period last year at 46 billion won. Korea Investment and Securities Co. made 85 billion won in net income in Q1, versus 44.8 billion won in the same period last year, but fell short of matching that of Daewoo Securities.
Most securities firms did well in Q1 this year thanks to increases in the trading volume in the Kosdaq market and an increase in the values of bonds. However, Daewoo Securities’ earnings were unusually large, taking up around 50 percent of total quarterly earnings. The company’s sales and trading unit has achieved its annual target for this year already.
For the past 40 years, KDB Daewoo Securities has played a leading role in the development of the Korean financial industry. Now, it is preparing to take another great leap forward, to become a player on the global stage.
“To achieve this end, we will strive to respond proactively to the changing capital market environment by expanding our business operations and continuing to offer products that meet the needs of customers,” the company said. “In addition, we will achieve steady growth by continuing our overseas expansion efforts and identifying new business opportunities via synergies with group affiliates.”
KDB Daewoo Security will also present a long-term vision for the Korean financial industry and endeavor to nurture and enhance the capabilities of its employees, so that they are able to pursue growth on the global stage.
“We will always put the interests of our customers at the center of our management decisions, and will continue to innovate and challenge ourselves to earn customers’ trust,” the company added.
_대우증권 홍성국.jpg)
