China Life Insurance

Investor tries to cash in as China Life stock surges

PUBLISHED : Thursday, 30 March, 2006, 12:00am
UPDATED : Thursday, 30 March, 2006, 12:00am

A European investor was last night trying to cash in as much as $980.12 million by selling 99.5 million shares in China Life Insurance, after a strong run-up in the share price of the mainland's largest life insurer.

The shares were on offer at a price between $9.75 and $9.85, according to market sources, a discount of up to 1.01 per cent on yesterday's closing price of $9.85.

With no discount at all at the top end of the offer price range, one fund manager said some investors might still be willing to buy as it was difficult to acquire such a large lot of shares in the market at one time.

'On top of that, there is fresh money coming in every day, and fund managers need to invest in stocks with growth potential,' the manager said.

Citigroup was arranging the placement but the investment bank declined to comment yesterday.

It is understood that the shares came from an European institution but no further information was available on its identity. According to Bloomberg, JP Morgan Chase holds a 9 per cent stake in China Life, while 5.75 per cent is held by Henderson Land Development chairman Lee Shau-kee, and 3.79 per cent by Credit Suisse Group.

China Life has surged sharply since the end of last year due to hopes of further yuan appreciation and the prospect that the National Social Security Fund might start to invest in Hong Kong as soon as next month.

Its shares have soared 43.8 per cent to $9.85 so far this year after climbing to a historical high of $10.15 on Tuesday. Compared with its initial offering price of $3.59 in December 2003, the stock has now more than doubled in price.

Brokers said the price was likely to be further supported by the mainland stock-buying frenzy and because local tycoons who hold substantial shares might cash in their gains in the near future.