043007: PhilNaRe: must be $1B in 3 years

By Honey Madrilejos-Reyes

Reporter

NATIONAL Reinsurance Corporation of the Philippines (PhilNaRe) may consider selling shares either through the Hong Kong Stock Exchange or Singapore bourse to achieve its objective of becoming a $1-billion company in three years. In an interview on Friday, PhilNaRe chairman Winston Garcia said listing of shares in the Asian market is one of the options they are considering to build up the capitalization of the company, which currently stands at over $200 million. “To be really competitive in the reinsurance business, we have to be a $1-billion company. Our IPO experience here is very encouraging and we might consider listing elsewhere to raise a large capital,” he explained. Among the Asian markets, Garcia said the Hong Kong and Singapore bourses have huge liquidity making them easy to absorb a very large issue. Another way being considered by PhilNaRe to widen its capitalization is the forming of strategic alliances with reinsurance companies in the region. PhilNaRe successfully listed its shares at the PSE last Friday. With a trading symbol of NRCP, its share price opened at P4.50 before closing at the same price at the end of Friday’s  trading. The company generated proceeds amounting to P2.8 billion from the initial public offering. The amount will fund the increase in the company’s capital, allowing it to have the capacity to retain more premiums. This translates to an estimated net income of P627 million this year, a 50-percent gain from 2006 levels. Gross premiums are also forecast to increase to P5.21 billion from  P3.88 billion in 2006, while investment and other income are seen to hit P506 million from a P343-million level. “The support for PhilNaRe IPO was overwhelming. This is the first Philippine insurance company to list in the PSE. Due to huge demand, the overallotment option covering 103.9 million shares was exercised 100 percent on listing date even while the issue manager was given 30 days to exercise,” Garcia said. PhilNaRe is the only re-insurance company in the local market, to date, and has the status of being the national reinsurer. This status allows PhilNaRe to retain  a portion of the reinsurance business from the local insurance industry.

 

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