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Article taken from Inquirer.net dated April 27, 2007:
PHILNARE EYES LISTING IN REGIONAL MARKETS IN 3 YEARS -- CHAIRMAN
MANILA, Philippines--The National Reinsurance Corp of the Philippines (Philnare) is planning to list in key regional markets such as Hong Kong and Singapore in the next three years in a bid to increase its market capitalization to $1 billion from 200 million, chairman Winston Garcia said.
"There is so much liquidity in these markets, they can absorb such a big volume. We will be listing if the conditions are right," Garcia told reporters in a briefing after Philnare's listing here.
Philnare on Friday listed a total of 2.29 billion shares, including 638 million shares that were offered to the public.
Garcia said proceeds from the exercise totaled P2.8 billion, raising Philnare's capital to P9 billion and enhancing its capacity to accept and retain premiums, while at the same time bolstering its goal to become a major regional player in the reinsurance business.
The offering is also expected to increase Philnare's net profit this year, which Garcia said should hit P620 million, from 310 million in 2006.
He said because of the huge demand for the stock, Philnare's underwriter, BDO Capital & Investment Corp, already exercised the over-allotment option upon listing, raising an additional P400 million.
"The foreign roadshow that we held generated a lot of interest, but we prioritized the strong demand from local investors. There were only a handful of foreign buyers that could be taken in," said Eduardo Francisco, president of BDO Capital.
One of these few foreign investors was the International Finance Corp, investment arm of the World Bank, which bought Philnare shares through a private placement worth $15 million.
"Increasing our capital will enable Philnare to achieve an acceptable insurance rating as a security (company) in the Asian region, which is a prerequisite to gaining entry into the Asian reinsurance markets," said Garcia.
He said the next step for Philnare would be to look for possible alliances with other reinsurance companies in the region, and to establish anchor markets in different countries in Asia.
Following the IPO, the Government Service Insurance System, the pension fund for government employees of which Garcia is general manager, now holds 17.25 percent of National Reinsurance, while publicly-listed Bank of the Philippine Islands has 13.99 percent.
On its debut at the stock exchange, Philnare opened sharply higher against its initial public offering price of P3.80 per share, rising by as much as 31.6 percent to P5.00 in early deals. It closed P0.70 or 18.42 percent higher at P4.50s, with 179.76 million shares worth P832.6 million exchanged.
The issue, which was 12 times oversubscribed, was snapped up mostly by small local investors, said Garcia.
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