AIA forecast to rise 11pc on its Hong Kong IPO

AIA Group is expected to post a double-digit gain in its trading debut on Friday as investors scramble for a slice of one of Asia’s most recognised life insurance brands after its record Hong Kong IPO.

AIA’s wide Asian footprint, strong life insurance cashflow and its large, $30.5bn (£19.3bn) market value are some of the main draws to investors, helping the unit of AIG price at the top of its indicative range last week.

A Reuters poll forecast AIA to start trading at HK$21.79 (£179) each, a 10.7 per cent premium to its IPO price of HK$19.68. The estimates ranged from HK$21.00-HK$23.00. Twelve fund managers, analysts and traders participated in the poll.

“Prospects of joining some major indices [locally and in the region] have made it an attractive defensive buy among institutions,” said Patrick Yiu, a director as CASH Asset Management, who expects the shares to debut between 5-10 per cent higher.

AIA’s market capitalisation means that the stock is likely to be included in the benchmark Hong Kong stock index, generating demand from index tracking funds. CLSA estimates AIA to have a five per cent weighting in the Hong Kong index.