NH Investment & Securities Co. jumped the most in more than three years after its parent company was named the preferred bidder for Woori Investment & Securities Co., the country’s biggest broker by assets.
The shares surged by as much as 12 percent, the steepest intraday gain since July 2010, and traded 5.1 percent higher at 5,190 won in Seoul as of 12:07 a.m. Woori Finance Holdings Co. on Dec. 24 said NH Financial Group Inc. was the frontrunner to buy 38 percent of Woori Investment.
The selection brings NH Financial closer to a deal that could let it “take the lead in terms of scale and competitiveness” in the brokerage industry, according to a Nov. 28 e-mail from NH Investment. The sale of Woori Investment may push brokers to consolidate as the government seeks to build a national champion and competition squeezes profits.
“Getting Woori Investment will give NH decent scale and a decent investment banking business,” Heo Pil Seok, chief executive officer at Midas International Asset Management Ltd., which oversees about $8 billion, said by phone. “Retail investors seem to be the ones rushing to buy NH Investment.”
Woori Finance slipped 0.4 percent to 12,750 won and Woori Investment was unchanged at 10,000 won, while the benchmark Kospi index rose 0.2 percent.
NH Financial, which has 255 trillion won ($241 billion) of assets, holds seven affiliates including NongHyup Bank, according to the company’s website. The group, wholly owned by the National Agricultural Cooperative Federation, was also chosen to buy Woori FG Savings Bank and Woori Aviva Life Insurance Co., Woori Finance said Dec. 24.