Online stock trading in Korea is growing at an
explosive pace, accounting for 29 percent of the nation’s stock trading in
August, compared with 20 percent to 27 percent of the United States,
according to the Korea Securities Dealers’
Association.
Industry analysts predict that the online stock trading would expand to
nearly 50 percent of the entire stock trading in Korea in the year 2000.
Of August’s total stock trading through local brokerage houses, which
amounted to 195.12 trillion won (US$162.6 billion), 56.61 trillion won
(US$47.17 billion) worth of transactions were made online through the
Internet and PC communications networks.
In particular, Sejong
Securities saw its online trading reach nearly
80 percent of its stock brokerage. LG
Securities and Daishin Securities
lead the
market with 46 percent and 38.91 percent of their brokerage services
performed online during the month of August.
In this connection, the number of cyber stock investment accounts
jumped to 1.18 million at the end of August from a meager 220,000 at the
end of 1998.
“The brokerage commission of cyber trading is only one-fifth that of
ordinary trading, so a growing number of individual investors are
concentrating on online trading,” said Shin Hyun-Woo, head of the international
department at
Korea Securities Dealers’ Association. “Particularly, investors in their
20s
and 30s tend to enjoy using cyber trading.” he added.
As online trading is gaining popularity, Daishin Securities and Sejong
Securities even opened cyber branches, and some other companies are
preparing
for establishment of cyber securities firms.
Korea Technology Banking Corporation
(KTB) will establish a cyber
securities
firm with a paid-in capital of 30 billion won (US$24.3 million) jointly
with
Samsung Corp. and Daou Technology. For this, KTB has already
submitted
its
application for preliminary permission to the Financial Supervisory
Commission
(FSC) in August.
Company officials said that KTB will invest 22.5 billion won (US$ 18.2
million), Daou and Samsung will lay down 6.5 billion won (US$ 5.2
million) and
1.5 billion won (US$1.2 million), respectively, to set up the projected
cyber
securities company. The cyber securities firm will begin its brokerage
service
from this coming December, the officials said.
Also, NaraeMobile Telecom is
preparing to establish a cyber stock
brokerage,
which will be capitalized at 15 billion won (US$12.1 million), by
forming a
consortium with domestic financial institutions and foreign investors.
An industry analyst pointed out that online stock brokerage will have
to
focus on diversifying their services to sharpen their competitiveness
because
the brokerage commission for online trading have dropped by 0.1
percentage
point which is believed as the bottom line. He noted that competitive
cuts in
brokerage commission can no longer be used as a tool to attract more
customers.
