PICC defies expectations with solid debut Chinese insurer PICC Group defied market expectations with a strong trading debut as Hong Kong's biggest initial public offering in two years caught the eye of retail investors. The stock rose as much as 7.8 per cent in morning trading on Friday after the deal was priced toward the bottom of the marketed range last week. The group leaned heavily on cornerstone investors, pre-selling about half of the deal to a large group of insurance peers and Chinese state groups, led by AIG of the US, which pledged to buy $500m worth of stock. But as a well-known brand, PICC also drew strong demand from retail investors, according to bankers close to the deal, leading bookrunners to claw back some of the stock allocated to institutions for ordinary investors - a requirement peculiar to Hong Kong. PICC's upbeat performance comes as a surprise following a run of poor debuts for smaller deals that struggled to generate interest. Zhengzhou Coal Mining Machinery, a $300m listing, left underwriters led by CICC holding 12 per cent of its deal. The stock fell more than 9.5 per cent on its debut this week and has not recovered. Both Fosun Pharmaceuticals, which raised $512m in October, and Haitong Securities, the second-largest IPO this year in Hong Kong after PICC, are trading below their listing price. PICC's offering raised $3.1bn, making it the second-largest in Asia this year outside Japan, after Felda's $3.2bn listing in Malaysia, and the fifth biggest globally. It was the biggest in Hong Kong since the more than $20bn raised in 2010 by AIA, the pan-Asia life assurer. The PICC deal helped Hong Kong finally overtake the Kuala Lumpur exchange in the table of new listings this year, but the city still ranks only fourth behind New York, Nasdaq in the US, and Tokyo, having been the world's top IPO destination for the previous three years. A string of large deals has made Kuala Lumpur a hotbed of new listings, but otherwise Asia's IPO market has had a poor year. The overall value of total listings this year is down 47 per cent compared to 2011 in Asia ex-Japan, according to Dealogic. The number of deals has fallen 38 per cent year to date, marking the slowest year for new equity raising since 2008. PICC hired 17 bookrunners for the deal - the highest number ever recorded for an IPO - helping it pre-sell around half the shares to cornerstone investors that included Japan's Tokio Marine and a number of Chinese state enterprises such as State Grid and China Life. Shares in PICC were trading at HK$3.72 late Friday morning in Hong Kong, up 6.9 per cent from their issue price.