American International Group is one step closer to repaying its debt to the United States government after the successful listing of its Hong Kong-based Asian insurance unit AIA, which jumped more than 17 per cent on its trading debut yesterday.
The initial public offering originally raised HK$135.1 billion, according to a statement posted by AIA on the Hong Kong stock exchange. However, the exercise of an over-allotment option last night increased the offering to 8.08 billion shares raising net proceeds of HK$159.1 billion.
This was AIG's third attempt this year to sell its stake in AIA, after a proposed takeover by Prudential collapsed in June because shareholders of the British insurer baulked at the US$35.5 billion price.
AIA shares hit an intraday high of HK$23.15, before closing at HK$23.05, or 17.12 per cent above its offer price of HK$19.68. AIA recorded HK$49.4 billion in trading turnover yesterday, accounting for more than a third of Hong Kong's main board total and it was the largest for a single listed company on its first trading day, the exchange said.
AIA's market capitalisation yesterday stood at HK$277.61 billion, the 11th largest on the stock exchange.
As a result of AIA's large market capitalisation, investors are expecting the insurer to be added to major equity benchmarks, said Patrick Yiu Ho-yin, the managing director at CASH Asset Management.