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By Jhoo Dong-chan
The nation's securities firms posted disappointing earnings in the Chinese market last year.
Six domestic brokerages, including Mirae Asset Daewoo, Korea Investment & Securities and NH Investment & Securities, have a corporate body in the country.
According to the Financial Supervisory Service (FSS), Sunday, the six securities firms saw a combined loss of $1.3 million in the Chinese market in 2018.
"These six securities firms have yet to receive approval from the China Securities Regulatory Commission as financial firms. The Ministry of Commerce in China still registers them as general consulting companies," the FSS said in a press release.
"For that reason, their operations here have been very limited. They have only engaged in M&As and corporate information business before the initial public offering in China."
Apart from their poor businesses in China, Korea's securities firms have enjoyed a surging profit in other overseas markets.
Domestic securities firms posted a 135.1 billion won ($122.8 million) net profit in the global market last year, up 155.7 percent from the year before, according to the data.
Hong Kong topped the list as Korean brokerages posted a $57.6 million net profit there, followed by Vietnam with $18.3 million, Indonesia with $17.7 million and the U.S. with $16.2 million.
Along with their earnings, domestic brokerages also continued increasing their overseas assets last year.
The data suggested the total assets of Korean brokerages' overseas corporate bodies were $49.49 billion as of December 2018, also up 50.6 percent from a year ago.
"Korean securities firms posted a net loss in the global market in 2017," said a domestic securities firm IPO researcher who asked not to be named.
"The nation's financial market is pretty saturated, and firms started looking abroad to diversify their revenue portfolio. More securities firms have since set up an overseas corporate body to carry out a wider range of investment bank businesses."
The FSS said the Southeast Asian market has been the foothold for the nation's brokerages thanks to the government's New Southern Policy.
Six ASEAN countries, including Vietnam, Indonesia, Thailand, Singapore and Cambodia, accounted for 29.4 percent in the total number of domestic brokerages' foreign corporate bodies in 2016. The figure has since grown to 30.2 percent in 2017 and 33.9 percent last year.
"The FSS will do its best to support their entry in overseas markets while studying the latest global issues to hedge possible risks," an FSS official said.
