South Korean securities companies spent far more money on entertaining customers than research activity in fiscal 2010, industry data showed Tuesday.
According to the data, 27 major brokerage houses spent more than 100 billion won (US$93 million) in entertainment expenses for the year ended on March 31, or an average of 4.13 billion won per company.
The companies also spent an average of 11 billion won on advertising last year, according to the data.
The 2010 entertainment expense was much larger than the average research spending of 960 million won for 16 of the companies, which disclosed their expenses for research activity.
Market watchers said local brokerages' focus on entertaining customers points to their "backwater" business practices, which result in the low quality of their macroeconomic forecasts, corporate value analyses and portfolio strategies.
In contrast to their large entertainment costs, securities companies were reluctant to make donations, according to the data.
Excluding market leader Samsung Securities Co., which donated 6.13 billion won, and two other players, the brokerages' social contributions were much lower than their entertainment expenditures, it showed.