Friends Provident will join the FTSE 100 on Monday

Most analysts advised those receiving shares to resist selling them immediately.

Financial bookmaker IG Index quoted a price range of 231.5-237.5p for the level at which it expects the shares to close after day one.

The float price values Friends Provident at about �3.7bn ($5.2bn).

It recently issued a profit warning and is in a sector that is under pressure from all sides.

The whole life insurance industry is still tainted by the Equitable Life and endowments misselling scandals.

Under threat

Profits in the pensions sector are also under threat from the introduction of stakeholder pensions, the new retirement schemes that employers must arrange in the next three months.

As stakeholder pension charges are capped at 1%, there is less room to make money from commissions.

Experts are predicting a period of consolidation in the industry, and believe that Friends Provident could be a rich-picking for a larger competitor.

Provident shareholders may receive a premium on top of their shares, if the company is taken over.

Additional shares

All qualifying policyholders will receive windfalls worth about �450 although some could receive substantially more depending on the value of their policies, and the length of time they have held it.

Friends Provident customers have also been offered the chance to buy additional shares at a discounted price of 213.75p each.

The shares available for purchase by institutions were three times oversubscribed, the company said.

More than 97% of members voted for the demutualisation of the group, which was founded in 1832 to provide life insurance for Quakers.

The Marconi effect

Sharp share price falls in the past week were prompted by the suspension of trade in Marconi - a flagship UK company - and its subsequent profit warning.

Analysts said investor sentiment was damaged at least as much by the bungled way in which the warning was issued as by its contents.

The Friends Provident flotation is the UK's biggest so far this year.