Kiwoom Sec shares jump on capital increase scheme to join big IB rank

Shares of Kiwoom Securities Co. soared 8 percent Tuesday as investors hailed the top retail brokerage house’s plan to scale up through capital increase of 440 billion won ($388.4 million) to join the ranks of big investment banks.

The Korean brokerage firm disclosed Monday that it will issue 440 billion won worth redeemable convertible preference shares (RCPS) on July 12.

The newly issued RCPS, which gives the holder an option to convert the shares into a fixed number of common shares after a predetermined date, will go to Kiwoom Securities’s largest shareholder Dau Technology Inc. and a number of the country’s major securities firms including Hanwha, KB, Shinyoung and Meritz. Other financial investors including Shinhan Bank will also take part in Kiwoom’s recapitalization scheme.

Kiwoom will issue the RCPS with a lockup period of one year.

The issue will expand Kiwoom’s equity capital to over 3 trillion won, the minimum requirement for a securities firm to become a full-service investment banking and financial services company. Kiwoom is the country's ninth securities firm to become a comprehensive IB and financial services firm.

As of the end of March 2021, Kiwoom’s equity capital amounted 2.7 trillion won on a separate basis.

Kiwoom Securities shares closed Tuesday 7.92 percent higher at 129,500 won.

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