PICC Leads Sizzling Chinese Companies' IPO
PICC Property and Casualty, China's leading property
and insurance insurer debuted on the Hong Kong Stock Exchange
Thursday, soaring 50 percent. The H share opened at HK$2.425,
hit an intraday high of $2.725, and closed at $2.70. Buying
was led by institutional investors and retail investors
who want to grab a piece of China's growing insurance
sector. About 1.63 billion shares worth $4.22 billion
were traded, accounting for 21 percent of the exchange's
total turnover for the day.
The HK$5.4 billion issue drew $73.31 billion in demand,
making it the most oversubscribed IPO in Hong Kong this
year. It is also the largest flotation in Hong Kong this
year.
In October, AIG
purchased a 9.9 percent stake in PICC, and was positioned
as a strategic investor. For AIG, this has brought the
company a HK$956.23 million paper profit on its first
day of trading. After AIG made its investment, many other
traders felt better about making an investment in the
company.
PICC Holding's chairman, Tang Yunxiang, parent company
of PICC Property and Casualty, commented that he would
like the government to ease restrictions on the insurance
industry so that it can operate in multiple insurance
fields. China's 1995 insurance law separated it into property,
casualty, life and re-insurance divisions, putting it
in alignment with international practice.
Tang said that the company would like to become a universal
financial services player. Currently, this is not allowed.
The next major company in the IPO pipeline is China Yangtze
Power, which is already 70 times oversubscribed, attracting
more than 385 billion yuan worth of investment from institutional
investors. The retail portion of the A-share offering
is in the amount of 10 billion yuan. The IPO has Citic
Securities as the lead underwriter, and UBS and Deutsche
Bank as strategic investors under the QFII (qualified
foreign institutional investor) program.
This year, China has suffered from an electricity
shortage.
Before you go, did you like this article?
If so, you can receive a free email newsletter version
each weekday. Sign up using the China Business Express
form on this page.
