Watch out for locally traded China Life Insurance ADRs tomorrow morning. It should react well today after market opens, following suit their sister listing in Shanghai.
Their new listing, making them a listed company on the New York Stock Exchange, the Hong Kong Stock Exchange, and now the newly on the Shanghai Stock Exchange, jumped well over 100%, doubling in a matter of hours after the market opened. At an initial offering price of 18.88 Chinese Yuan, their price jumped up to 38.90 Chinese Yuan. Analysts are now suggesting that from all the speculation and hype on this one, it wouldn't be a surprise to see the price triple in a matter of weeks.
Chinese companies have become a major player within their industries, but on a global scale. Just after Christmas, news came out that the Industrial and Commercial Bank of China (ICBC), surpassed both the Hongkong and Shanghai Banking Corporation (British-based) and Bank of America (American-based) to lead as the world's second largest bank, just under Citigroup. But yet, Citigroup being the world's number one player has established itself on a global-scale, while ICBC still remains within China. Just imagine what would happen if they stepped foot outside to get itself globally - would Citigroup still remain No. 1?
And now with China Life Insurance (China's largest insurer) has surpassed ING Groep NV, Allianz SE and AXA to also take the world's No. 2 spot, just behind American International Group. Actually, China Life's situation is almost identical to ICBC, being only focused in the China market. With the China insurance market penetration less than 10% by the top players, and a total population of 1.6 billion. How much room to you think their business can expand? quite a lot would be an understatment.
Meanwhile, after China Life's listing in Shanghai, we saw their ADR's traded locally adjust prices, with a 12% jump just today alone to welcome the event. My forecast previously was a bit too optimistic. Their shares tumbled in the Hong Kong stock exchange after its listing, perhaps investors feel that it is time to cash out. I've changed my opinions on this one, and expect a drop here for the following few days as well.