KB Financial is showing strength, hitting an intraday record high even as the domestic stock market plummets by over 5%. This surge is attributed to improved investor sentiment following expectations that regulatory burdens related to Hong Kong H-index equity-linked securities (ELS) will ease.
According to the Korea Exchange, as of 10:34 a.m., KB Financial shares were trading at 168,300 won, up 4,100 won (2.50%) from the previous trading day. The stock began the day at 167,000 won and reached a peak of 175,700 won, setting a new 52-week record.
Other bank stocks are also performing well. Shinhan Financial Group shares rose by 5,100 won (5.09%) to 105,200 won, Hana Financial Group increased by 800 won (0.66%) to 121,400 won, and Woori Financial Group gained 650 won (2.14%) to 31,050 won.
The strength in bank stocks is seen as a reflection of expectations that the regulatory pressures concerning Hong Kong H-index ELS will be less severe than initially feared.
On the previous day, the Financial Supervisory Service decided to adjust the penalties for five banks, including KB Kookmin, Shinhan, Hana, NH Nonghyup, and SC First Bank, which sold Hong Kong H-index ELS, imposing fines totaling approximately 600 billion won. This amount is significantly lower than what the market had anticipated. The final decision on these penalties will be made after approval from the Financial Services Commission.
Notably, KB Financial's record high comes amid a sharp decline in the domestic stock market, influenced by a correction in U.S. tech stocks and foreign selling pressure, which even triggered a sell-side circuit breaker in the KOSPI.
Analysts maintain a positive outlook based on solid performance and proactive shareholder return policies. Kiwoom Securities has reiterated a 'Buy' rating on KB Financial, setting a target price of 220,000 won.
In a recent report, Kiwoom Securities analyst Kim Eun-gap noted, "The company has resolved to retire all 143 million shares of its existing treasury stock, which represents 3.8% of the total issued shares. Additionally, further treasury stock retirements, including 600 billion won worth of shares bought between February and April this year, are expected to continue."
He added, "The retirement of treasury stock is increasing the per-share value, and considering the highest shareholder return rate in the banking sector and an ROE of over 10%, KB Financial is well-positioned to deserve a PBR premium."
* This article has been translated by AI.
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