Securities Sector - 6M2024 Update

The sector profitability continued to improve in the first six months of 2024, driven by margin lending and investment gains from the recovery in equity market valuation and improving market sentiment amid low interest rates. Sector asset risk stabilized, but several firms active in bond advisory and distribution remained more at risk as they increased their corporate bond investments and committed to buyback bonds from investors. Liquidity profiles remained stable despite firms using higher short-term borrowings to support margin and investment expansion. New capital raising, as announced by some large firms, will enhance their lossabsorption buffers against potential downside risks and support their asset growth.