UPDATE 1-PICC Group rises in grey market, ahead of Hong Kong debut

Thu Dec 6, 2012 5:00am EST

Related Topics

* PICC Group shares gain as much as 6.3 pct in grey market

* Retail investor demand driving up shares of Chinese state-owned insurer (Adds details of the IPO, comments)

By Elzio Barreto

HONG KONG, Dec 6 (Reuters) - PICC Group gained as much as 6.3 percent in grey market trading on Thursday, signalling expectations that the Chinese state-owned insurer will climb in its official debut on the Hong Kong stock exchange on Friday.

The shares were bolstered by individual investors looking to buy into the insurer, after many were left out of the deal last week, analysts said. PICC Group priced its $3.1 billion IPO near the bottom of an indicative range, also leaving some room for gains in the debut.

"Retail investors seem to be really interested in PICC," said Jasper Chan, corporate finance officer at Phillip Securities in Hong Kong.

Demand from retail investors for the PICC Group IPO was 17.5 times larger than the number of shares offered, the insurance company said in a securities filing on Thursday. Institutional demand, excluding orders from cornerstone investors, was equivalent to three times the amount of stock on offer, Thomson Reuters publication IFR reported.

Shares in People's Insurance Company (Group) of China (PICC), as the company is formally called, changed hands at HK$3.64, up from the IPO price of HK$3.48, according to PhillipMart, the pre-market trading platform of Phillip Securities in Hong Kong. The stock traded at HK$3.7, up 6.3 percent, at the Bright Smart Securities pre-IPO platform.

Grey market prices are quoted by brokerages ahead of a security being officially traded on an exchange.

PICC Group priced the IPO near the bottom of an indicative range of HK$3.42 to HK$4.03 per share last week.

The company hired a record number of underwriters and secured $1.82 billion in commitments from cornerstone investors to help ensure its IPO would get done without delays.

China International Capital Corp (CICC), Credit Suisse Group AG, Goldman Sachs Group Inc and HSBC Holdings Plc acted as sponsors of the IPO.

The list of 17 banks helping to underwrite the deal also included Bank of America Merrill Lynch, Morgan Stanley and UBS AG, as well Chinese firms such as ABC International and BOC International. (Reporting by Elzio Barreto; Editing by Chris Gallagher and Edmund Klamann)

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