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By Geoff Dyer in Shanghai Shares in China's second largest insurer rose from an offer price of Rmb33.80 to Rmb46.79 at the close. Mainland initial public offerings have seen heavy retail speculation immediately after listing. Ping An shares rose in the face of a 2.9 per cent decline in the overall market to 2,797 points.
The insurer raised Rmb38.9bn ($5bn) from the listing, making it the second largest in the mainland market after Industrial and Commercial Bank, which raised Rmb46.6bn in October. Ping An is one of a group of well-known Chinese companies already listed in Hong Kong that the government is eager to bring back to the mainland market to improve the quality of listed companies. The flurry of offerings could see the Shanghai market raise more money this year than Hong Kong. Financial stocks have been popular among Chinese investors because of the strong growth prospects, given the growth in the country's middle classes. She Minhua, analyst at Citic Securities in Shanghai, said that in “coming days, when the market is likely to fluctuate, financial shares like Ping An could serve as safe harbours”. It and other blue-chip financial shares “could possibly outperform during this period”. But some analysts fear the financial sector could be more vulnerable than other parts of the market to a further correction. Ping An's Shanghai listed shares are at a 36 per cent premium to those in Hong Kong, while China Life's shares in Shanghai fell 5.21 per cent yesterday. Standard & Poor's warned yesterday that the mainland market was still potentially overvalued and could suffer further declines as a result of government measures to restrict liquidity.
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