South Korea’s Samsung Life Insurance Co debuted with a bang on the Seoul stock market on Wednesday, raising in the country’s largest ever initial public offering (IPO).
Shares began trading at 119,500 won (104.9 dollars) as the market opened, up 8.6 per cent from the initial offering price of 110,000 won. The controlling Samsung Group had put 44.4 million shares on the market. The price eventually settled to 114,500 won by 11:54 am (0254 GMT), a more moderate gain from the initial price at 4.18 per cent, but still stronger than the market’s benchmark index Kospi as a whole, which was down 0.2 per cent since opening.
The life insurance company broke a national record for IPO applications when it was oversubscribed by a factor of more than 40 by domestic retail investors, who were allotted 20 per cent of the 44.44 million shares, main underwriter Korea Investment & Securities Co reported last week.
The IPO attracted subscription deposits worth 19.84 trillion won, Korea Investment & Securities said.
Samsung’s offering comes as interest grows in South Korean stocks despite market turbulence overseas.
“The European sovereign debt problems have negatively influenced the IPO markets in Hong Kong and Singapore, but Korea has been resilient since it’s more dependent on local funds rather than overseas funds for the IPO purchases,” Choi Gwang Hyuk, an analyst with Hanwha Securities Co Ltd, told the local JoongAng Daily newspaper.
South Korea removed barriers to stock market listing for life insurers in 2007, which spurred IPOs for mid—size firm Tong Yang Life Insurance Co Ltd in October and Korea Life Insurance Co in March.
Under the umbrella of the mammoth family—owned conglomerate Samsung Group, Samsung Life has annual revenue of about 22 billion dollars and holds a 28—per—cent market share.
Samsung Life, Korea Life and Kyobo Life Insurance Co Ltd control 51.7 per cent of the market of 14 domestic and eight foreign firms, as reported in a Samsung Life regulatory filing on April 16.
Keywords: Samsung Life