[Featured Stock] Korean Re Rises 5% on News of Co-Reinsurance Agreement and Free Capital Increase

[Asia Economy Reporter Myunghwan Lee] Korean Re is showing strong performance in the early trading session on the 29th. This appears to be influenced by the news of signing a joint reinsurance contract with Samsung Life the previous day, along with the decision to issue a bonus share.

As of 9:37 AM, Korean Re is trading at 8,500 KRW, up 4.94% (400 KRW) from the previous trading day.

Korean Re announced that it signed a joint reinsurance contract with Samsung Life the day before. Although the exact contract size will be disclosed later, securities firms expect it to exceed the 230 billion KRW contract signed with Shinhan Life earlier this year.

The news of deciding on a bonus share issuance of 0.2 shares per common stock the previous day is also estimated to be driving the stock price up. Due to this bonus share issuance, the number of listed shares of Korean Re is expected to increase from approximately 120.37 million shares to about 140.82 million shares. The record date for new share allocation is December 13, and the listing date is scheduled for December 28.

Securities firms have diagnosed that both pieces of news will act as positive factors for Korean Re. NH Investment & Securities analyst Yongjin Seol said, "Symbolically, joint reinsurance is quite useful for capital management of life insurance companies and signals that there is continued high demand across the industry," adding, "In terms of profitability, an overall improvement in earning capacity is expected."

Hanwha Investment & Securities analyst Doha Kim also commented, "Bonus share issuance does not cause changes in capital value but is generally evaluated favorably in terms of market value," and predicted, "In the case of Korean Re, excluding treasury shares will have the effect of increasing the shareholding ratio, which is expected to act positively."