PhilNaRe stocks jump 18% on listing despite bearish market
- Zinnia B. Dela Peña () - April 28, 2007 - 3:55am

The National Reinsurance Corp. of the Philippines (PhilNaRe), the second company to list on the stock exchange this year, rose 18 percent on its trading debut yesterday despite a bearish market.
PhilNaRe, the country’s largest reinsurance company, opened and closed at P4.50 per share or 70 centavos higher than its initial public offering (IPO) price of P3.80 each. It went up by as much as 31.6 percent to P5 in intraday trades before closing at P4.50. Volume traded reached 179.76 million shares.
“We’re very happy with the listing. The support for the PhilNaRe IPO was overwhelming. The issue was 12 times oversubscribed due to strong support from the local small investors,” PhilNaRe chairman and general manager of the Government Service Insurance System Winston Garcia said during the listing ceremonies yesterday at the Philippine Stock Exchange’s (PSE) Ayala floor.
Garcia said more than 12,000 subscribed to Phil-NaRe’s IPO, 90 percent of which are local small investors.
“This is highly encouraging for it only goes to show the relentless need and want for a local champion to venture out into the regional market and make our country and more importantly, our people proud.”
He said PhilNaRe raised P2.8 billion from the IPO (inclusive of the over-allotment option), which the company plans to use to increase its capacity to accept and retain premiums.
The successful IPO likewise resulted in the increase in the company’s capitalization to P9 billion.
“We should not stop here. We want to grow further. We’re studying all possible strategies to become the dominant reinsurance company in Asia,” Garcia said.
Garcia said PhilNaRe may raise as much as $1 billion in three years by selling stocks overseas.
PhilNaRe is considering the possibility of listing in Singapore or Hong Kong in the next three years, in line with its capital enhancement program, he added.
“The company is already embarking on strategies that will translate its enhanced capabilities to a better bottom line  for itself and the Philippine insurance in-dustry.  It will then be better able to accept more and bigger companies so that they can ride on our financial strength, thus offering better services to the public as well,” Gar-cia said.
Garcia said PhilNaRe has asked the PSE to include the company among the stocks in the main index considering that it is the only reinsurance company listed on the exchange.
 Following the IPO, GSIS — the pension fund for government employees — now holds 17.25 percent of PhilNaRe while publicly-listed Bank of the Philippine Islands owns 13.99 percent.
Garcia believes that the future of reinsurance is bright and promising because there is still room for growth.  In 2005, the insurance sector had total premiums of P73.9 billion, up  6.9 percent from the previous year’s P69.2 billion.  Of this amount, P15.5 billion came from the non-life sector and P47 billion from the  life insurance sec-tor, which translate to an increase of 7.3 percent and 6.5 percent, respectively, from the year earlier level.
PhilNaRe expects its net profit to nearly double this year to P627 million from P316 million in 2006. Gross premiums are projected to reach P5.21 billion from only P3.88 billion in 2006 while investment and other income is seen to hit P506 million from P343 million.   

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