UPDATE 1-Samsung Sec Q4 profit falls 5.8 pct to 85.8 bil won

* Q4 net profit down 5.8 pct year-on-year

* Sees 85.8 billion in net profit

* Recovery in stocks offer hopes

(Adds details)

By Jungyoun Park

SEOUL, April 16 (Reuters) - Samsung Securities Co (016360.KS) reported a 5.8 percent drop in quarterly net profit as financial market turmoil slashed commissions from investment product sales.

South Korea's top brokerage by market value said January-March net profit fell to 85.8 billion won ($64.71 million) from 91.1 billion won a year earlier, beating an average forecast for a profit of 61.3 billion won, according to Reuters Estimates.

Samsung Securities cited a "drop in brokerage fees and a decrease in product sale-related income on the financial market slowdown" as the main reason for its profit decline.

The outlook for South Korea's brokerages remains fragile as concerns about the global financial slowdown threaten prospects for commission income and mutual fund sales.

But a substantial recovery in shares so far this year, particularly in recent weeks when the main KOSPI index rose by more than a quarter, offers a glimmer of hope.

Average daily trading volume in January-March hit about 473 million shares, up 58 percent from 299 million a year earlier.

"The latest rise in trading volume indicates that the stock market is slowly picking up, and as more investors participate in the markets, Samsung Securities should see more earnings opportunities in fiscal 2009," said Park Sun-ho, an analyst at Goodmorning Shinhan Securities.

Rival Daewoo Securities (006800.KS) last week posted an 8 percent fall in fourth-quarter net profit to 68.4 billion won.

Shares in Samsung Securities fell 6.8 percent in January-March, underperforming the benchmark KOSPI's 7.3 percent gain, as investors shunned the financial sector.

(Editing by Jonathan Hopfner, Ian Geoghegan & Chris Lewis)