Kyobo rumors send securities unit higher
Shares of Kyobo Securities rose by the daily limit, 15 percent, for the second consecutive trading day, yesterday, after its largest shareholder announced a plan to put the brokerage up for sale. It rose 2,650 won ($2.50), closing at 20,400 won.Kyobo Life Insurance, which owns 51.6 percent of Kyobo Securities, said in a Friday regulatory filing that it is considering selling all or part of its stake after mid-June.
The announcement came after a request by the Korea Exchange, the local bourse operator, to make its position clear after rumors begin spreading about the sale of Kyobo Securities. Shin Chang-jae, chairman of Kyobo Life Insurance had previously denied the rumor.
According to several local news sources, Kyobo Life is seeking to sell its entire stake in Kyobo Securities for 650 billion won, or 35,000 won per share. That is slightly less than double the current market value.
Sung Yong-hoon, a brokerage industry analyst at Goodmorning Shinhan Securities, said shares in Kyobo Securities could rise further on something not related to company fundamentals.
“If a potential buyer is looming, and an offered price is confirmed, the share price of Kyobo Securities will be able to go up,” Sung said. “But Kyobo Securities shares, per se, are not recommended given rising competition among brokerages due to lower entry barriers into the industry.”
By Moon Gwang-lip Staff Reporter [joe@joongang.co.kr]
with the Korea JoongAng Daily
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