Korean securities firms are scrambling to attract individual Korean investors who prefer to invest in foreign stocks.
The amount of payments for foreign currency shares stood at US$198.32 billion in 2020, up 383.9 percent from the previous year, said the Korea Securities Depository on Feb. 22.
As overseas stock investment grows rapidly, securities firms are also moving to attract more individual investors. The most representative benefits they offer are lower stock trading fees and favorable exchange rates. In general, the fee for overseas stock transactions is 0.25 percent. Mirae Asset Daewoo will reduce its commission rate for overseas stock trading to 0.07 percent by the end of June if a new customer opens a non-face-to-face (online) account by Feb. 26. NH Investment & Securities will offer a 100 percent preferential exchange rate until March.
A customer can also receive cash incentives. Samsung Securities will provide US$100 to a new customer by the end of February if they make overseas stock transactions online.
Korean securities firms are making real-time market price provision services free. In the past, they received as much as 10,000 won for such services. Korean investors who did not use the service have received information on market prices about 15 minutes later than local investors. Samsung Securities, KB Securities, and Kiwoom Securities have also recently followed suit since Mirae Asset Daewoo provided real-time market information such as real-time asking prices, order volume, and closing prices of U.S. stocks free of charge since November 2020.
Securities firms are also stepping up their efforts to expand the provision of information which has been cited as a disadvantage of investment in overseas stocks. Kiwoom Securities provides about 10,000 U.S. stock research materials from Morningstar, a U.S. investment research company, free of charge after putting them into Korea.