Insurance Stocks with Mixed Reactions to Share Buybacks... Mirae "Smiles" While DB "Cries"

[Asia Economy Reporter Park Jihwan] On the 30th of last month, Mirae Asset Life Insurance and DB Insurance simultaneously announced their plans to repurchase treasury shares, but their stock performance showed contrasting results.

According to the financial investment industry on the 4th, Mirae Asset Life Insurance and DB Insurance declared their intention to repurchase treasury shares to enhance shareholder value by the end of April. Mirae Asset Life Insurance plans to acquire 5 million treasury shares worth 18.5 billion KRW during this period. DB Insurance also intends to buy back 708,000 shares worth 30.6 billion KRW on the market.

Mirae Asset Life Insurance's stock surged over 15% the day after the treasury share repurchase announcement on the 30th of last month. Junseon Jeong, a researcher at NH Investment & Securities, stated, "They plan to purchase an average of 83,330 shares daily over the next three months, while the average daily trading volume over the past three months was only 57,167 shares," adding, "They need to buy 46% more shares than usual trading volume, which is a positive factor for supply and demand." He further explained, "The stock is undervalued, and among listed life insurance companies, it has a relatively sound profit structure."

On the other hand, DB Insurance's treasury share repurchase has had almost no effect. Despite initiating the buyback to support the stock price amid poor earnings, sluggish industry conditions, and the spread of the Wuhan pneumonia, the impact has been minimal. DB Insurance's stock price fell 1.50% from 43,200 KRW on the 29th of last month to 42,550 KRW on the 3rd. The stock price, which was close to 60,000 KRW on December 12, 2019, about two months ago, has now dropped approximately 28%. Heeyeon Lim, a researcher at Shinhan Financial Investment, said, "Based on 65 trading days, the average daily acquisition of 11,238 shares and acquisition amount of 485 million KRW is not large in scale but is considered positive in terms of improving supply and demand."

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