Korea Life makes strong debut after $1.6 billion IPO

SEOUL (Reuters) - Shares in Korea Life (088350.KS) rose more 11 percent in their first day of trading on the Seoul bourse on Wednesday, setting a promising stage for other upcoming IPOs including Samsung Life's much anticipated offering in May.

Shares of the country's No. 2 life insurer were trading at 8,860 won per share as of 0016 GMT after hitting a high of 9,130 won, up 11.3 percent from the initial public offering price of 8,200 won, which was below the target range.

The broader market .KS11 was up 0.9 percent.

Korea Life shares were the most heavily traded stock on the main KOSPI, Korea Exchange data showed.

Analysts said the insurer's lower-than-expected IPO pricing offered an upside and helped it trade firmly.

"Given that its IPO price came out lower than the initial range, shares are trading firm near 9,000 won, which is the level the market had expected for its IPO price," said Sung Yong-hoon, a market analyst at Shinhan Investment Corporation, adding that shares were likely to continue trading around that level.

"Korea Life shares' moves are being closely watched because of the upcoming Samsung Life IPO. The better it performs, the brighter the outlook for Samsung Life," said Seo Bo-ick, an analyst at Eugene Investment & Securities.

South Korea's leading life insurer Samsung Life won Korea Exchange approval for its public offering last week, and its May IPO is expected to be the country's biggest share float at an estimated $4 billion.

Korea Life, run by CEO Shin Eun-chul, sold about 158.5 million new shares, and Hanwha firms and state-run Korea Deposit Insurance Corp (KDIC) offered 58.6 million existing shares.

South Korea's insurance market is Asia's third-largest after Japan and China, and demand is growing for more sophisticated insurance products with the population aging fast.

Insurers are expected to benefit from the full adoption of corporate pensions in 2010, which will unlock some of local companies' massive retirement savings.