...Strengths: Weaknesses: + Strong market position as Korea's largest securities company. + Diversified revenue structure compared with domestic peers'. + Potential pressure on funding and liquidity from sizable exposure to securities lending and borrowing business in the U.S. + Exposure to market risks, including interest rate risk, given large holdings of fixed-income securities. Outlook The negative outlook on Mirae Asset Daewoo Co. Ltd. (MAD) reflects our view that the company's capitalization could significantly weaken over the next one to two years. This is mainly driven by an increase in equity investments, higher market risks amid increased market volatility, and lower profitability compared with major peers. We also consider heightened execution risks in overseas investments, such as hotels, could lead to significantly weaker financial performance. A weakening in the credit quality of MAD's corporate lending and investment assets could undermine its overall risk management, in our...
