Medibank shareholders set for big gains Mum and dad investors who snapped up shares in Medibank Private are expected to make substantial gains when the health insurer makes its $5.7 billion stock market debut. Shares in the nation's biggest private health insurer will hit the market on Tuesday in what is the year's most anticipated company float. Thousands of retail shareholders have bought the stock for $2 each, a slight discount to the $2.15 institutional buyers had to pay. Brokers expect Medibank shares will soar when trading begins at midday. OptionsXpress market analyst Ben Le Brun predicts the stock will leap towards $2.30, and could hit $2.50 by the end of 2014. "It's going to capture the hearts and minds of the whole market," he said. At this stage, it looks as if it's going to be a very, very successful float. Hot money investors could sell their Medibank shares to make a quick profit, but Mr Le Brun said an ageing population and bipartisan support for private health insurance subsidies made Medibank a sound investment. "Those fundamentals have seen most stocks in that health care space trade at a significant premium to other stocks listed on the market," he said. Buying shares in a privatised government asset was also historically a better investment than a company floated by private equity, he added. Finance Minister Mathias Cormann has confirmed the government raised $5.7 billion from selling off Medibank, $1 billion more than the coalition had forecast. All the money will be tipped into the government's so-called asset recycling fund, which helps pay the states and territories to sell assets and use the proceeds to build new infrastructure like roads. Medibank was established in 1976 by the Fraser government to compete in the private insurance market. It became a profit-orientated government business enterprise in 2009. The insurer made a $130.8 million net profit in the year to June 30, down from $232.7 million in 2012/13.