HSBC to raise stake in insurer Ping An: printer friendly version
リンク: HSBC to raise stake in insurer Ping An: printer friendly version.
HONG KONG HSBC Holdings, the biggest overseas investor in the Chinese financial industry, said Monday that it would pay $1.1 billion to double its stake in Ping An Insurance.
By Michele Batchelor and Patricia Cheng Bloomberg News
TUESDAY, MAY 10, 2005The London-based HSBC said in a statement that it had agreed to pay 13.20 Hong Kong dollars, or $1.69, a share to raise its stake in Ping An, China's second-largest insurer, to 19.9 percent, the maximum permitted under Chinese law. Ping An shares closed 5.4 percent higher on Monday at 12.75 dollars. It was the biggest one-day rise in the price since Ping An went public with a share offering last June.
The insurance market in China has tripled in the past five years to $52 billion, equal to about 5 percent of the premiums collected in the United States, which has a population a quarter of China's. HSBC, which was founded in Shanghai in 1865, already has bought stakes in three Chinese banks, an insurer and a fund management company in the past four years.
"HSBC can diversify its domestic operations, helping its future business development in China," said Renault Kam, a fund manager at Atlantis Investment Management in Hong Kong. "HSBC is a relatively new player in China's insurance market and it doesn't yet have a dominant stake."
The Ping An shares bought by HSBC were sold by Goldman Sachs and Morgan Stanley, who paid $35 million each for 7.5 percent stakes in the Shenzhen, China-based insurer in 1994, according to Asian Venture Capital Journal. HSBC bought a 10 percent stake in Ping An in 2002 for $600 million.
Ping An, which competes with China Life Insurance, PICC Property & Casualty and China Pacific Insurance, was established in 1988. It sells life and non-life products using about 213,000 sales agents and more than 3,000 branches across China.
China Life, the nation's biggest insurer, and Ping An together controlled half of China's insurance market in 2004, according to the industry regulator. American International Group, Manulife Financial and other foreign insurers had a 2.3 percent market share.
The New York-based AIG, founded in Shanghai in 1919, last quarter fell from the top spot among China's overseas life insurers for the first time since 1992 amid a U.S. accounting inquiry that has sharply hit its market value. AIG's chairman and chief executive, Maurice Greenberg, resigned in March.
The life insurance market in China, valued at $39 billion in 2004, is expected to grow to $128 billion by 2008 and become the fifth-biggest globally, according to Winston Yung, a Hong Kong-based principal at the consulting firm McKinsey.
Ping An increased net income 43 percent to 1.62 billion yuan, or $197 million, in the second half of 2004 by focusing on sales of life, health and injury policies.
In the first quarter of this year it collected 17.8 billion yuan in premiums, 13 percent more than in the fourth quarter, based on Chinese accounting standards.
