BEIJING, Nov. 15 (InfoChina) – The H-share price of China Life (LFC. NYSE, 2628.HK) listed on Hong Kong Stock Exchange hit a historical high of 18.12 HK dollars on November 14’s session, almost five times the issue price and breaking a just-made high of 17.34 HK dollars four days before.

An analyst attributes the hectic price rise to huge amount of purchases by foreign funds recently on the HK market.

       Relaxed policy environment for insurers in China, especially for the Measures on Investment of Insurance Funds pending to be launched next month to allow domestic insurers to invest abroad, has drawn positive anticipation from foreign investors on insurance stocks, said Ronald Wan, President of Softbank Investment. So foreign investors prefer to buying China Life before it goes too high, he added.

       Deutsche Bank analyst optimistically sees China Life as a long-term investment especially considering its pending coming back to the domestic A-share market as the first insurance stock.

       It is reported that Deutsche Bank recently bought in additional 209 million shares of China Life at 16.576 HK dollars per share, bringing its holdings from 5.93 percent to 8.75 percent.

Besides, UBS recently issued a report that uplifted China Life’s annual profit expectation by 10-13 percent from 2006 to 2008, respectively up to 16.302 billion yuan, 17.229 billion yuan and 18.667 billion yuan.

However, such a high price may lay a problem for China Life in pricing its upcoming IPO in Shanghai as the H-shares may function as a reference for the A-shares.

If the IPO is set at this record high price, foreign investors who have obtained large portion of China Life H-shares will gain from the IPO while the interests of domestic investors will be harmed because they will have to pay for the gains of foreign investors.