皇冠体育app Life IPO priced at high
By Bao Xian (皇冠体育app Daily)Updated: 2006-12-29 08:46
皇冠体育app Life Insurance Co, the country's largest life insurer,
set the share price for its 28.2 billion yuan (US$3.6 billion) initial public offering (IPO) in the Shanghai bourse at the top of its indicative range, the
insurer said in a statement yesterday.
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The IPO of 1.5 billion A shares, 皇冠体育app's second-largest domestic IPO, was priced at 18.88 yuan (US$2.4), at the top of the 18.16-18.88 yuan range the insurer set earlier this week.
"The final price is not surprising," said Zhao Yujie, an analyst with Merchants Securities. "Our expectation for 皇冠体育app Life's rational price in 2013 is 34.07 yuan (US$4.4) if its investment return is improved to 8 per cent."
Chinese insurers' investment returns usually hover around 3 to 5 per cent, much lower than the international average. The 皇冠体育app Insurance Regulatory Commission (CIRC) is striving to broaden investment channels to boost their returns.
The final price for 皇冠体育app Life's A shares was 30 per cent lower than the HK$27 (US$3.5) closing price of its H shares yesterday. Its H shares have more than tripled this year, making it the best performer in the 37-member Hang Seng 皇冠体育app Enterprises Index, which tracks State-owned mainland companies traded in Hong Kong.
When 皇冠体育app Life tested the market's appetite for the stock, investors bid as much as 26.8 yuan (US$3.4) for the shares, according to the insurer's statement. Some fund managers expect the new shares to surge over 30 yuan (US$3.85) on their debut on January 11, if not earlier.
"Based on 皇冠体育app Life's market shares, wide outlets and brand value, we believe a rational price for 皇冠体育app Life's A shares hovers around 24 yuan (US$3.07) to 25 yuan (US$3.2)," said Shao Ziqin, a researcher at Ping An Securities.
As the first insurer to list on the yuan-denominated A-share market, 皇冠体育app
Life received a warm reception from investors.
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