Samsung Life rises 7% after $4.4 billion IPO

Shares in South Korea's No. 1 life insurer, Samsung Life Insurance Co Ltd, rose 7% on their debut on Wednesday, helped by strong demand for what now has become the country's fourth-largest listed company.

The solid performance of the IPO, which raised $4.4 billion in the world's second-largest initial public offering so far this year, comes after Samsung Life priced its offering at the top of its indicated range, prior to the global financial market turmoil triggered by Greece's debt problems.

It also comes as firms from Istanbul to Hong Kong reduce or shelve IPO plans, chilled by market volatility and the financial turmoil in Europe.

Samsung's offering soaked up nearly 20 trillion won ($17.63 billion) of market liquidity last week, the biggest pool of money for a local IPO subscription in more than a decade, as individual investors flocked to snap up new floats amid record low interest rates, pushing competition to over 40 times.

Shares of Samsung Life opened at 119,500 won in heavy trade, up 8.6% from the IPO price of 1,10,000 won. But the stock trimmed early gains and traded 7% higher at 1,18,000 won by 0025 GMT, versus a 0.5% rise in the broader index.

"I do not see much upside, in terms of share price, in the short-term," said Shim Hong-seop, head of equity division at Kyobo Axa Investment Managers.

"Investors holding the shares probably do not expect drastic gains, but the share is the fourth-largest stock on the KOSPI. Its market cap is meaningful from an investment perspective."

Samsung Life's IPO, South Korea's biggest-ever float, follows major Asian life insurance offerings this year by Korea Life and Japan's Dai-ichi Life Insurance, which have performed well since their debuts. Dai-ichi shares are up 13% from the IPO price while Korea Life has gained 9%.

Some top asset management companies will not be allowed to buy Samsung Life shares until August because their affiliates have participated in the IPO as underwriters, limiting the offering's demand base for the time being.

But longer-term demand would be solid from portfolio investors, index trackers, and those betting on a positive outlook for the life insurance industry, analysts said.

Samsung Life reported on Wednesday it swung to a quarterly profit, helped by higher investment gains and rising insurance sales.

With the debut, Samsung Life becomes South Korea's fourth-biggest stock with a market capitalisation of 23 trillion won, behind only Samsung Electronics, POSCO and Hyundai Motor.

Samsung Life enjoys longstanding leadership in the local life insurance market, with around a 28% market share in the latest fiscal year, but competition has increased in recent years.