Shares in China Life Insurance, the country's biggest life insurer, more than doubled in their Shanghai debut on Tuesday, attracting huge interest as the first insurer to list on the country's domestic stock market.
China Life, the first new listing this year in Shanghai, was bought heavily by new mutual funds created during the market's bull run of recent months.
Local currency A-shares in the company, which has almost half of the country's fast-growing life insurance market, opened at 37.00 yuan, 96% above their initial public offer price of 18.88 yuan and near the high end of market expectations.
The shares then continued rising in heavy trade, hitting a high of 40.20 yuan and standing up 106% at 38.96 yuan 25 minutes after the opening.
The price of 38.96 yuan brought the A-shares to a 45% premium above the HK$26.85 last close of China Life's Hong Kong-listed H shares.
Last month, the IPO raised 28.32 billion yuan ($3.6 billion), the second-largest domestic IPO in China's history. It was nearly 30 times subscribed, attracting over 810 billion yuan of subscriptions by retail and institutional investors, a record amount.
The 38.96 yuan price in Shanghai valued China Life at 1.10 trillion yuan or about 13 times book value, far above roughly 2.5 times for the global insurance sector. But investors believe rapid growth in China's fledgling insurance sector will give the company much faster growth than foreign firms are able to achieve in coming years.