"We see another 15 to 20 percent correction of the A-share index as is necessary and healthy," said Ma Jun, chief economist with Deutsche Bank (Greater China).

Dong Chen, a senior analyst with CITIC China Securities, said there will be more sharp ups and downs in the market this year, and investors had better fasten their seatbelts.

He added Ping An's performance today would have limited impact on the market.

The country's second-largest insurer will make its debut on the Shanghai bourse today, raising 38.87 billion yuan with an initial offer price of 33.8 yuan apiece. It is the second mainland insurer to list after China Life.

"If Ping An shares open lower than 45 yuan, it will still have enough growth potential, and could help lead upward momentum in the financial sector," Dong told China Daily. "But if the debut price is above 52 yuan, there may be more downward pressure, and it's likely to trigger a slide in financial shares."

The insurer said it would issue about 1.15 billion yuan-denominated A shares, accounting for 15.66 percent of the insurer's expanded stock of 7.345 billion shares.

(China Daily 03/01/2007 page14)

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