South Korea’s biggest initial public offering has drawn a huge response from investors, a brokerage said Tuesday, with shares in top insurer Samsung Life more than 40 times oversubscribed.
Samsung Life Insurance is offering 44.44 million shares at 110,000 won (99 dollars) with 20 percent for small domestic retail investors, 40 percent for foreigners and 20 percent each for local institutional investors and employees. Six securities firms offering the shares had accepted a subscription of 40.6 times the allotted amount for retail investors, said main underwriter Korea Investment and Securities.
They took in a record amount of subscription deposits valued at 19.84 trillion won, it said. Analysts said Samsung Life’s status as the country’s leading life insurer gave its shares premium value. “Many investors are reacting positively to the listing of Samsung Life shares,” Tong Yang Securities analyst Lee Jae-Man told AFP, adding that it would allow its parent to put more cash aside for investment.
With annual revenue of around 22 billion dollars, Samsung Life controls a 27.9 percent share of the life insurance market. The prospect of solid institutional purchases also helped fuel retail investors’ appetite. In terms of the IPO price, Samsung Life Insurance will become the sixth largest firm on the main bourse by market capitalisation, with 22 trillion won when it makes its market debut next week. Samsung Life has long been regarded as the virtual holding company of the Samsung group, which has 64 units including Samsung Electronics, the world’s largest computer memory chip maker.
Seoul, May 4, 2010 (AFP)
