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SCMP Reporter

The mainland insurer lags a strong rise on the stock market with a 0.67pc gain

The much-hyped debut of Ping An Insurance (Group) fell flat yesterday, disappointing the market on a day Hong Kong and China stocks soared.

The mainland's  second-biggest life insurer  rose a paltry seven  cents, or 0.67 per cent, on its Hong Kong trading debut.

'It's below my expectations. I thought it would go up about 5 per cent,' said Frederick Tsang, the head of research at China Everbright Securities, noting  the first-day gains would not have covered costs for retail investors.

Analysts said the  debut was even more disappointing, coming  on a day when renewed confidence   pushed the broader market  up.

The Hang Seng Index  rose  2.64 per cent while the H-share index soared 5.35 per cent in its biggest one-day gain since May 19 after the  State Development and Reform Commission said on Wednesday that  Beijing's  economic cooling measures  had been effective.

This was interpreted by the market as a signal that Chinese interest rates would remain on hold in the near term.

China-related shares received  an additional boost from news that insurance companies were  a step closer to being allowed to invest their premium income overseas.

While other insurers gained on  prospects of better investment returns, Ping An  barely moved  from its $10.33 offer price. Even at the intraday peak of $10.55 - reached  at the 10am opening bell - the stock was up no more than 2.1 per cent and twice fell below the IPO price.

'Share prices go up and down. We should take a  relaxed approach towards it,' Ping An chairman Peter Ma Mingzhe said after the close.

Some brokers noted  that Ping An was priced  comparatively higher than China Life Insurance, whose share price has slid  since its  January peak.

However, DBS Vickers research head Trevor Cheung said the premium might be warranted, as Ping An had  more scope for growth  and was  perceived as  better managed.

Ping An chief operating officer Louis Cheung said the company's strategy both this year and in the future  would be 'to focus on long-term, stable profit growth'.

'Based on our business performance in the first few months, we are very confident about reaching our full-year profit target,' he said.

Compared with China Shipping Container Lines' 11.81 per cent drop on its first day last week, Ping An's debut was acceptable,  observers said.

'Disappointing, but not devastating,' Celestial Asia Securities research head Herbert Lau said.

Bookrunners BOC International, Goldman Sachs, HSBC and Morgan Stanley  supported the stock, with Goldman particularly active at $10.35 and $10.40,  brokers said.

Just 6.6 per cent of the  1.38 billion shares issued changed hands, suggesting  that most of the institutional investors who bought shares before the  listing were aiming to hold  for the longer term.

Before the market opened, Ping An announced that three directors at its subsidiaries had been allocated about 309,500 shares from the public offer - a fact not  mentioned in its 14-page allocation notice the previous day.



Ping An Insurance fails to live up to the hype