Shares of China's largest property insurer, PICC Property and Casualty, soared 50 per cent on their debut yesterday as investors snapped up the chance to buy into the country's fledgling insurance market.

PICC raised HK$5.409 billion (US$693.51 million) from Hong Kong's biggest initial public offering this year, making it the first of China's insurance giants to sell shares to the public.

The deal, which drew massive orders from investors, bodes well for upcoming share sales from the country's two biggest life insurers - China Life Insurance and Ping An Insurance - that could raise some US$4 billion.

PICC shares ended the day at HK$2.70, 50 per cent higher than their issue price of HK$1.80 and giving the company a total market value of HK$28.98 billion (US$3.72 billion).

The stock was the most actively traded on the market, accounting for about 21 per cent of turnover on the main board.

"There are no similar stocks in Hong Kong. If fund managers want to hold financial counters other than banks, they would definitely go for PICC," said Alex Tang, research director at Core Pacific-Yamaichi.

Some investors are bullish about the outlook for China's car and property insurance market as the economy continues to grow.

"There's still room for further development and the penetration rate is low," said Pauline Dan, a director at I.G. Investment Management Hong Kong, which bought PICC shares.

China's insurance market is growing rapidly as Beijing tears down a cradle-to-grave welfare system for its 1.3 billion people. Premiums rose 31.78 per cent to 265.4 billion yuan (US$32.06 billion) in the first eight months of this year from the same period in 2002, according to the industry regulator.

PICC dominates China's property and casualty insurance market with a near 70 per cent share of premiums. But its market share has been falling in recent years and the trend is likely to continue amid competition, the firm said in its listing document.

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