China Life I.P.O. Price Is in Low Range
December 25, 2006
China Life I.P.O. Price Is in Low Range
By REUTERS
SHANGHAI, Dec. 24 ( Reuters) — The China Life Insurance Company, China’s biggest life insurer, set the price range in its $3.6 billion initial public offering lower than expected on Sunday in a move that is likely to ensure huge demand for the offer.
The range for the stock sale, the second-largest domestic offering in China, was set at 18.16 to 18.88 yuan a share ($2.33 to $2.42), China Life said in a statement to the Shanghai Stock Exchange.
China Life, based in Beijing, plans to sell as many as 1.5 billion local currency A-shares, equivalent to 5.3 percent of its expanded share capital, meaning it could raise as much as 28.32 billion yuan, or $3.6 billion.
The price range was well below the forecasts of many brokerage officials and analysts. Expectations had ranged from roughly 18 yuan to 23 yuan, with many analysts predicting a price of 20 yuan or higher.
The relatively conservative pricing appears likely to ensure a high price for the stock when trading begins on or before Jan. 11.
The insurer’s Hong Kong-listed H-shares, which have more than tripled this year, soared 29 percent, to 24.40 Hong Kong dollars ($3.14), in the seven trading days through Friday, leaving them at a premium of 30 percent to 35 percent above the price range for the A-share offering.
The A-shares of several top dual-listed Chinese financial companies now trade at premiums to their H-shares, suggesting China Life could easily rise by a third on its first day of trading in Shanghai. At almost any price, China Life’s offering has been expected to attract strong demand because it will be the first insurer to list on mainland Chinese stock markets.
China’s largest initial public offering was in October, when the Industrial & Commercial Bank of China sold stock valued at $22 billion.
China Life I.P.O. Price Is in Low Range
By REUTERS
SHANGHAI, Dec. 24 ( Reuters) — The China Life Insurance Company, China’s biggest life insurer, set the price range in its $3.6 billion initial public offering lower than expected on Sunday in a move that is likely to ensure huge demand for the offer.
The range for the stock sale, the second-largest domestic offering in China, was set at 18.16 to 18.88 yuan a share ($2.33 to $2.42), China Life said in a statement to the Shanghai Stock Exchange.
China Life, based in Beijing, plans to sell as many as 1.5 billion local currency A-shares, equivalent to 5.3 percent of its expanded share capital, meaning it could raise as much as 28.32 billion yuan, or $3.6 billion.
The price range was well below the forecasts of many brokerage officials and analysts. Expectations had ranged from roughly 18 yuan to 23 yuan, with many analysts predicting a price of 20 yuan or higher.
The relatively conservative pricing appears likely to ensure a high price for the stock when trading begins on or before Jan. 11.
The insurer’s Hong Kong-listed H-shares, which have more than tripled this year, soared 29 percent, to 24.40 Hong Kong dollars ($3.14), in the seven trading days through Friday, leaving them at a premium of 30 percent to 35 percent above the price range for the A-share offering.
The A-shares of several top dual-listed Chinese financial companies now trade at premiums to their H-shares, suggesting China Life could easily rise by a third on its first day of trading in Shanghai. At almost any price, China Life’s offering has been expected to attract strong demand because it will be the first insurer to list on mainland Chinese stock markets.
China’s largest initial public offering was in October, when the Industrial & Commercial Bank of China sold stock valued at $22 billion.
posted by B at 11:50 AM
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