Dealers work at Hana Bank's dealing room in Seoul on Monday morning when the benchmark KOSPI started off with a 0.65 percent drop. Yonhap

By Lee Min-hyung

Competition is intensifying between Korean securities firms to offer overseas stock trading services to make up for their declining revenues from local brokerage commissions.

According to data from the Korea Exchange, the nation's total stock transaction volume reached 1,082 trillion won in the third quarter of this year, down 39.6 percent from a year earlier. This was triggered by freezing market sentiment after the U.S. Federal Reserve and the Bank of Korea took a series of aggressive rate hikes this year.

Brokerage commission earnings at local securities firms also declined in line with the bearish stock market. As the local market is showing no clear signs of a rebound for the time being, they are focusing more on attracting investors for overseas stock transaction services.

Samsung Securities, one of the major brokerage houses here, started a daytime U.S. stock trading service in February by clinching a deal with Blue Ocean, a U.S. broker dealer offering an alternative trading system. The service became popular among local investors, with its transaction volume topping 1 trillion won for the first two months after its launch.

Mirae Asset Securities has also been offering a similar trading service from October by signing a contract with the U.S.-based company. Other top-tier brokerage houses are also considering introducing the services sometime in early 2023.

In August, Yuanta Securities launched an agent service for investors seeking to purchase U.S. stocks for public subscription for the first time here. NH Investment & Securities also started offering a similar service in November, with a view to increasing its commission revenue from local investors.

"Demand for overseas stock trading, particularly in the U.S. market, is widely expected to remain solid down the road, as more investors still believe stocks from developed markets are less risky than local ones at this period of financial uncertainty," an industry source said. "Competition will also intensify among securities firms to attract more investors for the new revenue source."