Move indicates market is turning more rational, say analysts
Ping An Insurance (Group), the country's second-largest life insurer, will probably price its yuan-denominated A shares at about 33 yuan, the high end of the indicative range, according to a source.
Shenzhen-based Ping An will raise as much as 38.9 billion yuan by selling 1.15 billion A shares, based on the range between 31.80 yuan and 33.80 yuan, according to its statement filed to the Shanghai stock exchange. The price range is lower than expected, as some analysts had suggested that the price might go as high as 50 yuan.
'This is a sign that the A-share market has turned more rational,' BNP Paribas analyst Dorris Chen said. 'Institutional investors don't expect retail investors to pour money into the market on the first day, so they no longer believe A shares deserve a premium over their H-share counterparts.
'They want to guarantee their returns by quoting A shares at a discount to H shares.'
At the top end of the price range, Ping An's A shares would be about 15 per cent below the Hong Kong shares, which closed 1.98 per cent higher yesterday at HK$38.55.
The stock, which has more than doubled over the past 12 months, is down 23.05 per cent from its historic intraday high of HK$50.10 reached early last month.
