Mobile messenger Kakao’s entry into the stock trading market, via its fintech spinoff Kakao Pay, will boost growth of the financial technology sector and the brokerage market, according to local analysts on Thursday.

The Financial Services Commissions, South Korea’s financial regulator, on Wednesday approved Kakao Pay’s request to acquire a controlling 60 percent stake in local brokerage Baro Investment & Securities. The stock trader has been renamed to Kakao Pay Securities.

“Kakao currently runs -- via its spinoffs and affiliates like Kakao Pay and Kakao Bank -- payment, transfer and banking services, and the latest acquisition of Baro will help vitalize the fintech market,” said Lee Dong-yoon, an analyst from KB Securities, recommending “buy” on the Kakao stock.

As of 2019, Kakao Pay had attracted 30 million subscribers, while the number of monthly active users had exceeded 20 million. Total transactions reached 12.9 trillion won ($10.9 billion) in the third quarter last year.

Seong Jong-hwa, an analyst of eBest Investment & Securities, highly evaluated Kakao Pay’s potential in the stock market as well as the fintech area.

“Kakao Pay has completed technical preparations to build systems, which will be linked to Baro’s current cash management accounts, for trading domestic and global stocks, bonds, and funds,” said the eBest analyst in a report.

Officially launching its online stock trading business on Thursday, Kakao Pay said it would start receiving preliminary applications from its subscribers to upgrade their Kakao platforms with the firm’s new stock trading services.

“Working closely with Kakao Pay for the stock brokerage service for individuals, Kakao Pay Securities will also make efforts to nurture its financing services for businesses,” Kim Dae-hong, CEO of the stock company, said.

By Kim Young-won (wone0102@heraldcorp.com)