SEOUL, KOREA - As Samsung Life acquires a stake in Samsung Asset Management, its share price is rising fast. At 9:01 am on May 12, the shares of Samsung Life were traded at 94,900 won, up 0.96 percent from the previous trading day's 94,000 won. Earlier on the 9th, the life insurer had announced in a regulatory filing that it would buy up the 100-percent stake in the group's asset management unit.

 

Song In-chan, analyst with Shinhan Investment & Securities, said, "The acquisition of Samsung Asset Management shares by Samsung Life is interpreted as a move by Samsung Life to secure new revenue sources while strengthening its competitive edge in investment-type offerings such as equity-linked life insurance."

 

Given that the return on equity of Samsung Asset Management for the past three years was 16.8 percent, with the current profitability of the asset management business reaching 4.2 percent, Samsung Life's acquisition in the asset management company was a smart investment.

 

The analyst added, "With the latest transaction, the governance structure of Samsung's financial units has become simplified, making Samsung Life a very important pillar in the future of the group's financial sector."