Nomura completed a 4.5 million share placement for Great Eastern Holdings on Friday after beating two other investment banks in a bake-off the previous night.
Great Eastern, in which OCBC Bank owns a 49% stake, has been one of Singapore's best performing financial stocks this year, up 24.62% to Friday's S$12.40 close. At these levels, it is just off its 52 week high of S$13.40 and nearly 100% higher than where it traded last March when it hit an S$6.95 low. For the undisclosed selling shareholder it was, therefore, felt to be an opportune time to offload a 1% stake.
The placement was also a welcome addition for the public equity markets given that the company has a market capitalization of S$5.8 billion ($3.18 billion), but a free float of only 10% according to bankers. Pricing at S$12.2 represented a 3.2% discount to spot, 31 days trading volume and raised proceeds of S$54.9 million ($30 million).
Despite the small size, the deal was relatively widely placed, with participation from a total of 15 accounts, of which 50% were from Asia and 50% Europe.
Having merged with Overseas Assurance Corp during 2001, the group announced in late February that full year net profit rose 12% to S$202.2 million ($110.4 million). Most of the increase has been attributed to an opening up of the Central Provident Fund. Great Eastern also now has a combined asset base of S$24 billion ($13.17 billion).
Nomura is also forecasting EPS growth of 21% in 2002 and 17% in 2003. For the securities house, the transaction marks a minor coup in a market where it has not previously had much of a presence. Winning has been attributed to an aggressive bid and the foresight of its well-regarded co-head of Asian equities, Stephen Hunt.