China Pacific Ins soars 61pc in Shanghai debut
Wednesday, 26 December 2007
SHANGHAI, Dec 25 (Bloomberg): China Pacific Insurance (Group) Company, the nation's third-largest insurer, surged 61 per cent on its debut in Shanghai as investors pile into initial public offering (IPO) after slides in the broader market.
The stock closed at 48.17 yuan, after gaining as much as 73 per cent Monday from its offer price of 30 yuan. Shanghai-based China Pacific, 19.90 per cent owned by companies controlled by funds managed by the Carlyle Group, sold 30 billion yuan (US$4.10 billion) of shares.
Investors are seeking out IPOs after China's secondary stock market eased on concerns about rising interest rates and other government measures to cool growth in the world's fastest-growing major economy.
China Pacific may also entice investors because it's growing much faster than bigger rivals China Life Insurance Company and Ping An Insurance (Group) Company.
"IPOs are a major source of profits for Chinese funds since they're a sure bet in China" as companies tend to price their offerings low, said Lu Yizhen, who oversees the equivalent of $1.30 billion at Citic-Prudential Fund Management Co. in Shanghai.
The firm bought shares in China Pacific's sale.
"This becomes especially attractive with the secondary market being a bit of a roller coaster lately," he said.
The 22 Chinese domestic IPOs that began trading since November 1 rose at least 59 per cent, beating an approximately 7.0 per cent decline in the nation's benchmark CSI 300 Index during the same period, according to data compiled by Bloomberg.
The index has recovered some lost ground with a 10 per cent gain this month.
Meanwhile, China Pacific is the third insurer to trade on the Shanghai bourse. China has urged its largest financial firms to sell stock domestically to give mainland citizens more investment choices.
Shenzhen-based Ping An, the nation's second-largest insurer, raised $5.0 billion in February in the world's biggest stock sale by an insurer. Larger China Life, based in Beijing, raised $3.60 billion in December 2006.
The stock closed at 48.17 yuan, after gaining as much as 73 per cent Monday from its offer price of 30 yuan. Shanghai-based China Pacific, 19.90 per cent owned by companies controlled by funds managed by the Carlyle Group, sold 30 billion yuan (US$4.10 billion) of shares.
Investors are seeking out IPOs after China's secondary stock market eased on concerns about rising interest rates and other government measures to cool growth in the world's fastest-growing major economy.
China Pacific may also entice investors because it's growing much faster than bigger rivals China Life Insurance Company and Ping An Insurance (Group) Company.
"IPOs are a major source of profits for Chinese funds since they're a sure bet in China" as companies tend to price their offerings low, said Lu Yizhen, who oversees the equivalent of $1.30 billion at Citic-Prudential Fund Management Co. in Shanghai.
The firm bought shares in China Pacific's sale.
"This becomes especially attractive with the secondary market being a bit of a roller coaster lately," he said.
The 22 Chinese domestic IPOs that began trading since November 1 rose at least 59 per cent, beating an approximately 7.0 per cent decline in the nation's benchmark CSI 300 Index during the same period, according to data compiled by Bloomberg.
The index has recovered some lost ground with a 10 per cent gain this month.
Meanwhile, China Pacific is the third insurer to trade on the Shanghai bourse. China has urged its largest financial firms to sell stock domestically to give mainland citizens more investment choices.
Shenzhen-based Ping An, the nation's second-largest insurer, raised $5.0 billion in February in the world's biggest stock sale by an insurer. Larger China Life, based in Beijing, raised $3.60 billion in December 2006.