AIA reels from share sale
Shares in AIA Group (1299) had their second-biggest one- day percentage fall yesterday after its former parent, American International Group, raised about US$6 billion (HK$46.8 billion) by selling shares at the bottom end of the marketing range.
AIG's long-awaited selldown punctured a rally in AIA shares this year - driven up by strong earnings and on expectations of a bid for ING's Asian life insurance business.
The US insurer will use the proceeds to repay part of the US$182 billion bailout it got in 2008 from the US government at the height of the global financial crisis. AIG said it will not sell any more AIA shares until September 4.
Still, analysts said AIG's remaining stake will be seen as a potential overhang on the stock and any run-up in the price may make investors suspicious about AIG offloading its remaining 18.6 percent stake valued at US$7.7 billion.
AIA shares shed 8.4 percent to HK$26.75 as trading resumed yesterday, compared with a 2.2 percent drop in the Hang Seng Index. Despite the fall, AIA is one of the best- performing stocks in the Hang Seng Index over the past year, having risen about 27 percent.
AIG sold 1.72 billion ordinary shares at HK$27.15 each in a block sale to unnamed institutional investors.
The shares were first offered in a range of HK$27.15 to HK$27.50, a discount of up to 7 percent on AIA's closing price on Friday.
AIG was forced to spin off AIA, widely considered its crown jewel, and other assets following the bailout.
Source: REUTERS
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