Mark Tucker, the chief executive of the Prudential, has ruled out a flotation of the insurer's booming Asian unit, which some shareholders reckon is worth as much as £16 billion - equivalent to the entire group's value on the UK stock market.

Mr Tucker said that the group might consider a secondary listing for the Pru on an Asian exchange in future. He also said that the Pru would consider relocating its corporate headquarters to the region over the longer term.

However, outlining a decision set to disappoint some of the insurer's more activist investors, Mr Tucker said yesterday: “We've not got any intention of listing it [the Asian arm]. The important point is that it dilutes the equity of existing shareholders. There are other methods of releasing value.”

He said that Prudential would look at listing in Asia “over time”, but it “comes down to value. You have to ask how valuable would a secondary listing be.”

Several hedge funds, including Toscafund, have built up stakes in Britain's second-largest insurer in anticipation that it might release value for shareholders by hiving off some parts.

The insurer, which is under pressure to revive its ailing share price, told analysts this year that it was open to options for the Asian unit. It is run by Barry Stowe, a former AIG executive and a potential replacement for Mr Tucker, who originally built operations there.

Prudential's reticence about an Asian flotation came as annual new business profits at the division soared 34 per cent to £653 million, helping to spur a 22 per cent jump in group new business profits to more than £1.2 billion. The company employs about 450,000 staff in Asia and, unlike Britain, operates a direct sales force network as well as using agency staff. The insurer promised that, thanks to spectacular growth in regions such as India, Indonesia and Hong Kong, Asia should double its 2005 operating profits by the end of next year, a full 12 months early. Shares in Prudential leapt 20p to 674p as the market welcomed a 25 per cent increase in operating profits to £2.54 billion.

They fell heavily later as the insurer refused to be drawn on whether Ping An was poised to take up a strategic stake and seemed to dash hopes of a break-up. Analysts have long speculated that splitting up Prudential would realise value for shareholders. Between them, Asia and the United States account for 75 per cent of new business profits.

However, the Pru appeared to be reaping the rewards from its emphasis on chasing higher-margin British business, as its domestic unit boosted operating profits using the embedded value accounting method by 25 per cent to £859 million. Operating profits at M&G, the fund management arm, surged 28 per cent to £334 million as the unit recorded its second-highest annual inflows of £8 billion to take its total worldwide funds under management to almost £170 billion.

Mr Tucker rounded on Alistair Darling, the Chancellor, for failing to dilute proposals in this week's Budget to introduce a flat rate of capital gains tax of 18 per cent.

“We are disappointed that the changes we suggested to create a level playing field were not taken up,” Mr Tucker said.

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