Stocks News
- China Pacific up 61% on debut
Date: 28-Dec-2007 Sources: (Shenzhen Daily)
SHARES in China Pacific Insurance (Group) Co. (CPIC) closed up 61 percent on their debut on the Shanghai Stock Exchange yesterday, slightly above the market's average expectation, buoyed by its position in the world's fastest growing major insurance market.
Local-currency A shares 601601.SS in China's third-biggest life insurer closed at 48.17 yuan (US$6.53) after trading between 47.88 and 51.97 yuan. The shares were sold at 30.0 yuan in the initial public offering.
'CPIC's listing price reflects the value added by the scarcity of insurance stocks, with only three insurers traded on the domestic stock market,'said Zheng Weigang, senior stock analyst at Shanghai Securities.
'As CPIC is not a super heavyweight in the index, its relatively higher pricing on the secondary market won't have a big impact on the overall market.'
In its IPO, CPIC raised US$4.1 billion by selling 1 billion A shares, or 13 percent of its expanded capital, to boost its capital base. It has also said it would seek to issue up to 900 million H shares for a Hong Kong listing, although it has yet to announce a timetable for the H-share offer.
It has said its H shares would be priced no lower than its Shanghai shares' 30 yuan each, meaning its H-share offer could raise as much as US$3.7 billion and bring the total amount to be raised in its two equity offers to US$7.8 billion.
China's insurance industry has extremely strong potential because of low penetration in a country which has only begun to dismantle a cradle-to-grave welfare system.
By the end of 2006, China's per-capita life insurance premium payment was only US$34 a year, compared with US$2,829 for Japan and US$1,790 for the United States.
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