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Wednesday August 1, 4:54 PM Samsung Sec net profit surges, outlook seen good SEOUL, Aug 1 (Reuters) - Samsung Securities Co. , the South Korean brokerage with the most client assets, posted its best net profit in five quarters on Wednesday and analysts said the outlook appeared good despite a recent downturn in stock markets. Samsung has benefited from a windfall in trading commissions and fund sales during the long bull market, with its more lucrative strategy of targeting wealthier retail clients paying off as South Koreans increase their stock allocations. Analysts still expect brokerages to post solid earnings this year, despite the drop in global markets that threatens to dent trading volumes. Any extended fall in markets -- with the KOSPI down 7.9 percent since hitting a record high last week -- would also cast doubts over whether fresh share listings will materialise as needed to revive anaemic investment banking operations. "The earnings outlook for Samsung Securities looks good as daily trading volumes, which account for the bulk of its earnings, are expected to remain solid," said Kim Ji-young, an analyst at CJ Investment & Securities. "But the fallout from the U.S. housing crisis is a worry in the near term," he added. Samsung, which brokers around 7.3 percent of the country's stock trading, said net profit in its first quarter ended in June reached 96.4 billion won ($104.7 million), up from 63.7 billion won a year earlier and 65.1 billion won in the preceding quarter. The result was slightly below an average profit forecast of 100.4 billion won from a Reuters survey of eight analysts, although it was Samsung's best quarter since January-March 2006. It compares with a 121.6 billion won net profit for the April-June quarter posted last week by Daewoo Securities Co. , South Korea's most valuable brokerage. Money flowing into domestic mutual funds surged as the KOSPI went on a record-setting streak that saw it gain 20 percent during the previous quarter. Samsung saw its amount of client assets under management rise 12.7 percent to 122.3 trillion won from the previous quarter, while increasing the number of its target clients -- those with investable assets of over 100 million won -- by 13.9 percent to 61,401. But it was a 73 percent surge in commissions from the previous quarter that accounted for most of its earnings surge, with trading fees accounting for around half of its net revenues. Samsung had steadily reduced its reliance on commissions, but has been quick to reverse the policy when trading volumes surge. That was the case this quarter, when average daily trading value in the KOSPI and junior Kosdaq reached 7.8 trillion won, well above 5.3 trillion won a year earlier and 4.9 trillion won in the preceding quarter. INVESTMENT BANKING Brokerages, which collectively own a majority of the Korea Exchange, could also reap capital gains following the expected $700 million listing of the bourse operator in August. Investment banking activity could accelerate as a growing number of firms seek listings. Kyobo Life Insurance and Samsung Life Insurance could raise as much as a combined $2 billion this year. Although fees are traditionally low, a good quarter can have a significant impact to the bottom line. Samsung is ranked fourth so far this year in terms of revenues earned from investment banking, according to data from Dealogic. Topping the ranking was Korea Investment and Securities Co., part of Korea Investment Holdings , which lead managed the 576 billion won listing of Samsung Card Co. in June, in the country's biggest initial public offering in 2007. Shares in Samsung Securities surged 45.1 percent in the April-June quarter and are up 65.3 percent for the year.