Shares of brokerage firms are climbing sharply as South Korea's two major stock markets surged on the 10th. As trading activity increases with a booming market, brokerages' commission (brokerage) revenue rises. Both the KOSPI and KOSDAQ markets triggered sidecars, a temporary halt on program buy orders, on the day.
According to the Korea Exchange, NH Investment & Securities (005940.KS) was trading at 31,750 won as of 1:44 p.m., up 8.55% from the previous session. Korea Investment Holdings, which has Korea Investment & Securities as a subsidiary, was changing hands at 241,000 won, up 8.31%. In addition, shares of Kiwoom Securities (7.62%), Samsung Securities (7.22%), Daishin Securities (6.62%), and Mirae Asset Securities (5.59%) were rising steeply.
The strength in brokerage shares is attributed to the favorable stock market conditions. On the day, the Korea Exchange triggered buy sidecars on the KOSPI and KOSDAQ markets. The KOSPI opened at 7,552.49, up 260.58 points (3.57%) from the previous session, and extended its gains. Most top market-cap stocks, including Samsung Electronics (5.40%), rose sharply, showing signs of overheating. The KOSDAQ also surged, led by semiconductor materials, parts, and equipment companies.
The market's climb, centered on large-cap semiconductor stocks, is analyzed to reflect the partial easing of concerns over a peak in artificial intelligence (AI) investment, which had been a source of market anxiety. The previous day, U.S. memory chipmaker Micron Technology announced plans to invest more than $250 billion by 2035 to respond to rising AI demand. Because semiconductor firms closely gauge market demand and execute facility investments preemptively, the market took this as a green light for growth in the semiconductor industry. Overnight, the New York stock market saw semiconductor stocks surge, with the Nasdaq Composite Index rising 1.30% and all three major stock indexes gaining.
Reduced pressure on the National Pension Service (NPS) to adjust its asset allocation (rebalancing) following the recent market correction is also cited as a factor behind the rise. The NPS manages target weightings for each asset class to prevent excessive concentration of funds in specific assets and to stably manage long-term returns. As the domestic stock market surged this year, the weighting of domestic equities exceeded the target, and the NPS began rebalancing domestic stocks on the 1st of this month. The KOSPI index has since fallen back to the 7,000 range, which is analyzed to have partially reduced selling pressure.
