- 29Oct
(Reuters) - AIA Group Ltd (1299.HK) surged 17 percent in its Hong Kong debut as investors, chasing exposure to Asia's fast-growing life insurance business, piled into the record offering in the world's hottest IPO market.
The stronger-than-expected listing is a relief for bailed-out insurer American International Group Inc (AIG.N) after a two-year effort to sell its Asian unit, including a failed takeover attempt from British insurer Prudential plc (PRU.L).
The strong start boosted AIA's market value above the $35.5 billion Prudential had initially offered for AIA in March, vindicating AIG's decision not to accept $30.4 billion bid that followed.
AIA CEO Mark Tucker will now battle it out with Prudential to grab a greater share of the $358 billion Asia-Pacific life insurance market after spending about 17 years building Prudential's Asian business.
Diversifying quickly into bancassurance -- selling insurance products through banks -- is one of the battles Tucker has on his hands, as he gets underway to revive growth at AIA after the wounds inflicted by AIG's near-collapse.
"The successful IPO would turn management's full attention back to the core business. The IPO and the separation from AIG took up some of management's time," said Sally Yim, senior analyst of financial institutions group at Moody's Investor Service.
"Whoever is able to diversify into bancassurance and at the same time strengthen their agency productivity will be the winner in Asia," she added.
Tucker, 52, a former professional soccer player known for his long hours and competitive nature, faces off against the likes of Prudential, ING (ING.AS) and Manulife Financial Corp (MFC.TO).
AIA closed at HK$23.05, 17 percent above the IPO price of HK$19.68, after hitting a high of HK$23.15. A Reuters poll had, on average, forecast the shares to start trading at HK$21.79.
AIA accounted for about 42 percent of Hong Kong's total market turnover with early trade dominated by retail demand, according to Hong Kong exchange data.
HEAVYWEIGHT STOCK
Asia has led the world in IPOs this year, raising a record $124.7 billion to account for more than 66 percent of all global volume, according to Thomson Reuters data. One-third of Asia's IPOs have been in Hong Kong, drawing on its access to the booming China market and big investor base.
AIA also caps a record year of insurance IPOs, which saw Japan's Dai-ichi Life Insurance (8750.T) sell $11 billion in shares and Samsung Life Insurance (032830.KS) raise $4.4 billion.
AIA's IPO closed two days ahead of schedule after being swamped by orders from Chinese investors and traditional long-only funds. AIG raised $17.8 billion after selling shares at the top end of the marketing range. The offer was subscribed 9.62 times.
The IPO could raise as much as $20.5 billion if AIG exercises the over-allotment option, setting it on course to be the world's third-biggest IPO.
The strong start boosted AIA's market value above the $35.5 billion Prudential had initially offered for AIA in March, vindicating AIG's decision not to accept $30.4 billion bid that followed.
AIA CEO Mark Tucker will now battle it out with Prudential to grab a greater share of the $358 billion Asia-Pacific life insurance market after spending about 17 years building Prudential's Asian business.
Diversifying quickly into bancassurance -- selling insurance products through banks -- is one of the battles Tucker has on his hands, as he gets underway to revive growth at AIA after the wounds inflicted by AIG's near-collapse.
"The successful IPO would turn management's full attention back to the core business. The IPO and the separation from AIG took up some of management's time," said Sally Yim, senior analyst of financial institutions group at Moody's Investor Service.
"Whoever is able to diversify into bancassurance and at the same time strengthen their agency productivity will be the winner in Asia," she added.
Tucker, 52, a former professional soccer player known for his long hours and competitive nature, faces off against the likes of Prudential, ING (ING.AS) and Manulife Financial Corp (MFC.TO).
AIA closed at HK$23.05, 17 percent above the IPO price of HK$19.68, after hitting a high of HK$23.15. A Reuters poll had, on average, forecast the shares to start trading at HK$21.79.
AIA accounted for about 42 percent of Hong Kong's total market turnover with early trade dominated by retail demand, according to Hong Kong exchange data.
HEAVYWEIGHT STOCK
Asia has led the world in IPOs this year, raising a record $124.7 billion to account for more than 66 percent of all global volume, according to Thomson Reuters data. One-third of Asia's IPOs have been in Hong Kong, drawing on its access to the booming China market and big investor base.
AIA also caps a record year of insurance IPOs, which saw Japan's Dai-ichi Life Insurance (8750.T) sell $11 billion in shares and Samsung Life Insurance (032830.KS) raise $4.4 billion.
AIA's IPO closed two days ahead of schedule after being swamped by orders from Chinese investors and traditional long-only funds. AIG raised $17.8 billion after selling shares at the top end of the marketing range. The offer was subscribed 9.62 times.
The IPO could raise as much as $20.5 billion if AIG exercises the over-allotment option, setting it on course to be the world's third-biggest IPO.
