China Life sale 'could raise US$3.6 billion'
By Bao Xian (China Daily)Updated: 2006-12-26 10:22 China Life Insurance Co, the country's largest life insurer, may raise as much as 28.3 billion yuan (US$3.6 billion) in a domestic stock offering after it set a lower than expected price range.
The range for the stock sale, the second-largest domestic offering in China,
was priced at 18.16 yuan (US$2.33) to 18.88 yuan (US$2.42) a share, China Life
said in a statement to the Shanghai Stock Exchange yesterday.
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As China Life plans to sell 1.5 billion A shares or 5.3 per cent of its expanded share capital, it could raise as much as 28.32 billion yuan (US$3.6 billion) with the high-end pricing.
Around 62.5 per cent will go to institutional investors, with the remaining 37.5 per cent going to retailers.
"The price range, which is well below the forecasts of many brokers and analysts, will ensure smooth trading begins on or before January 11," said an analyst at CITIC Securities. "And such a small gap between the top and bottom line leaves investors little room when bidding, thus ensuring a higher success rate."
China Life's H shares have soared around 20 per cent since the China Securities Regulatory Commission (CSRC) approved the company's issuing of A shares on Friday. Its H shares rose 3.84 per cent in Hong Kong yesterday, closing at HK$24.35 (US$3.12).
As the price of A shares is usually around 90 per cent that of H shares,
expectations had ranged from roughly 18 yuan (US$2.28) to 23 yuan (US$2.9), with
many analysts predicting a price of 20 yuan (US$2.5) or higher.
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