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| Samsung Fire & Marine Insurance CEO Choi Young-moo |
Many insurance firm CEOs have been buying back large amounts of firm shares over the past few weeks, fanning expectations that the recent nosedive in stock value in a tumbling market will recover sooner than expected, industry data showed Friday.
According to data from the Financial Supervisory Service (FSS), Samsung Life Insurance CEO Jeon Young-mook bought 6,000 shares of the firm between March 19 and 20, a move followed by its chief financial officer Yoo Ho-seok who bought 3,000 shares.
The combined move toward "responsible management" came shortly after the two were appointed as new internal directors at the Samsung Group's shareholders' meeting, March 19.
The decision followed the firm's share bottoming at 31,900 won ($26.3), March 19, a price that would have fallen further amid the continued downward trend since March 12 when it fell below the 50,000 won level.
The value showed signs of a rebound March 20, and peaked at 45,050 won March 25, but slid to 42,400 won the next day.
Similarly, Samsung Fire & Marine Insurance CEO Choi Young-moo bought 797 shares in February. The firm's vice president and chief financial officer bought 300 shares each.
The firm's share plunged as low as 117,500 won on March 23, and has since been on an upward trend hovering at around 150,000 won.
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| Hanwha Life Insurance CEO Yeo Seung-joo |
Despite the effort, the firm's share value plunged below 1,000 won on March 18, prompting key executives to buy shares in an attempt to prevent a further drop.
Hanwha General Insurance CEO Kang Sung-soo bought 72,000 shares between March 17 and 24. Those were among over 84,000 shares bought by the firm's management.
The rushed move managed to push up the shares to 1,275 won, March 25, six trading days after staying below the 1,000 won mark.
Luo Jianrong, the CEO of Tongyang Life Insurance, owned by China's Anbang Insurance Group, bought 8,000 shares between March 23 and 24.
DB Insurance said it plans to buy 3.54 million shares worth 92.6 billion won in the next three months.
The collective efforts seek to bolster returns for shareholders, as part of responsible corporate activity via stable management and proper valuation of firm shares, but the intended effect could be short-lived, according to an expert.
"The much-appreciated efforts could be undermined by a corporate earnings shock, a dreaded yet highly likely scenario given low interest rates and the new coronavirus outbreak eating into their profits. It could provide a temporary boost, but will not have a long-term effect," Korea Insurance Research Institute (KIRI) senior research fellow Im Joon-hwan said.
