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* Genworth Australia hits high of A$3.02 vs A$2.65 issue price
* IPO is Australia's largest for 2014, values company at A$1.9 bln (Adds details on Australian IPO market, company prospectus)
SYDNEY, May 20 (Reuters) - Shares in home-loan insurer Genworth Mortgage Insurance Australia Ltd rose 14 percent on Tuesday in an upbeat first day of trading for the country's biggest initial public offer of the year so far.
U.S. financial services giant Genworth Financial Inc raised A$583 million ($545 million) by selling 34 percent of its Australian business, joining a rush of companies to capitalise on the country's buoyant equity markets.
After a two-year delay blamed on unfavourable market conditions, Genworth Financial revived the listing of its Australian unit this year as the country's benchmark S&P/ASX 200 Index rallied to a five-year-high.
Genworth Australia shares opened at A$2.91 compared to an issue price of A$2.65, and hit a peak of A$3.02, giving it a market capitalisation of almost A$2 billion.
Genworth provides insurance to mortgage lenders, mostly for high loan to value residential mortgages and has been profitable for 46 of the past 48 years, according to its prospectus.
Australia's residential property market has been enjoying a revival in prices and activity after a period of stagnation, thanks largely to record low interest rates.
Genworth flagged rising mortgage rates, higher unemployment and weaker consumer confidence as among its key risks in its prospectus.
IPO issuance in Australia since the beginning of the year has more than doubled to $1.2 billion over the same period in 2013, according to Thomson Reuters data. Companies raised $6 billion from new listings in 2013, the best year since 2010.
But performance has been patchy. Shares of aged care provider Japara Health, until Tuesday the biggest float of the year after raising A$525 million, have traded consistently above their issue price since listing on April 17.
However, three other mid-range floats - online retail company OzSale, education group Stirling Early Education and hotel company Mantra Hotels - were cancelled because of lack of investor take-up.
The Genworth float will be closely watched by Australia's Pacific Equity Partners which plans to raise A$1 billion by selling 51 percent of cleaning and catering company Spotless Group in a listing scheduled for Friday, eclipsing Genworth.
Private equity behemoths TPG and Carlyle will also be watching Genworth. They are expected to decide in June whether to sell Australian healthcare provider Healthscope in a public listing or via private sale, valued at an estimated A$4 billion.
$1 = 1.0696 Australian dollars Reporting by Byron Kaye and Lincoln Feast; Editing by Edwina Gibbs and Matt Driskill