By Joanne Chiu
Ping An Insurance (Group) Co.'s (>> Ping An Insurance (Grp) Co of China Ltd) first-time disclosure that it holds a 5.01% stake in global banking giant HSBC Holdings Plc. (>> HSBC Holdings plc) highlights the Chinese insurer's attempt to boost its financial investments to improve returns.
The Hong Kong and Shanghai-listed insurer has cumulatively bought 1.02 billion shares of HSBC through the southbound Stock Connect program, which allows mainland Chinese companies to buy Hong Kong shares, making it one of HSBC's significant investors, Ping An said in a statement late Wednesday.
Ping An last week unveiled that it had boosted its stake in China's top lender Industrial & Commercial Bank of China to 8% from 7.9%, for around HK$483 million (US$61.8 million). The latest disclosure also marks a reversal of Ping An's historical relationship with the U.K. bank, which in 2012 sold its 15.6% stake in the Chinese insurer to a conglomerate controlled by Thailand's tycoon Dhanin Chearavanont for US$9.39 billion.
Ping An said that investing in HSBC is a financial investment given the bank's strong business performance and good dividend. "This complements the assets and liabilities matching principles of Ping An Asset Management's insurance funds," it said.
Write to Joanne Chiu at [email protected]