Chinese regulators have told insurers to make timely disclosures on investments in public stocks amid a buying spree that has included China Vanke Co (萬科), triggering a fight over control of the nation’s largest listed developer.
Insurers should publicize details on transaction type, funding sources and other parties acting in concert within two days after a listed company discloses that its total ownership or additional purchases exceed 5 percent of its stock, according to China Insurance Regulatory Commission (CIRC) rules posted on Wednesday evening on its Web site.
The new rules came hours before Vanke issued a midnight statement to welcome Anbang Insurance Group Co (安邦保險集團) as an ally after the insurer boosted its stake in the Shenzhen-based home builder, potentially helping it fend off what Vanke management labels a “hostile takeover” by Baoneng Group (寶能集團).
The disclosure requirements followed rules earlier this month ordering insurers to conduct stress tests on their investments. The industry watchdog is seeking to contain risks after smaller insurers led by Anbang and Baoneng’s Foresea Life Insurance Co (前海人壽保險) snapped up shares of listed companies, such as developer Gemdale Corp (金地) and China Minsheng Banking Corp (中國民生銀行) to boost returns amid falling interest rates.
“The insurers have been purchasing like crazy these days and that is having a negative impact on the market, which explains why the regulators are taking a more prudent stance,” Chen Xingyu (陳星宇), a Shanghai-based analyst at Phillip Securities Group (輝立證券), said by telephone.
While they still face very strong pressures to boost yields next year, buying stocks for the mere purpose of returns, especially short-term returns, could fuel speculation in the market, increasing risks, Chen said.
Anbang raised its holding in Vanke’s Shenzhen-listed shares on Thursday and Friday last week to 7.01 percent from 5.69 percent, before trading in the A shares was halted on Friday pending a share sale and an asset restructuring, according to filings with the Hong Kong Stock Exchange on Tuesday.
Vanke said that while it conducted “highly effective” communications with Anbang after the stake increase and is willing to work together to explore global opportunities, it has yet to receive a satisfactory explanation for why Baoneng has built its stake.
All 12 smaller, closely held insurers tracked by Ping An Securities Co (平安證券) more than doubled their gross premiums in the first 10 months of this year from the previous year, as they boosted sales of high-return products to expand revenue and fend off competition from banks’ wealth management products. That compared with less than 20 percent growth among their bigger, listed rivals.
At a time of falling interest rates, that puts them under “relatively large” pressure to allocate the funds, making bulk stock purchases the main solution, analysts at Ping An Securities, led by Jiao Wenchao (繳文超), wrote in a report last week.
Foresea Life offered returns as high as 7.5 percent to policyholders of universal-life contracts — its main product — last month, dwarfing a range of 4.5 percent to 5 percent among its bigger rivals, the report said.
Foresea Life now owns 23.52 percent of Vanke together with fellow Baoneng unit Shenzhen Jushenghua Co (深圳巨盛華) after displacing China Resources Co (華潤置地) as the developer’s biggest shareholder.
The insurers have favored investments in leading property companies such as Vanke, Gemdale and Financial Street Holdings Co (金融街控股), national banks such as Minsheng and China Merchants Bank Co (招商銀行), low-valuation stocks like Daqin Railway Co (大秦鐵路), as well as high cash-flow companies such as beverage maker Hebei Chengde Lolo Co (河北承德露露), Ping An Securities said.
Possible targets include lenders such as Bank of Beijing Co (北京銀行), Bank of Nanjing Co (南京銀行) and stocks in the railway and highway sectors, as well as power companies, the analysts wrote in the report.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last