Insurance News
- Ping An wins nod for overseas investment
Date: 6-Dec-2007 Sources: (Shenzhen Daily)
PING An Insurance (Group) Co., China's second-biggest insurer, has received regulatory approval to invest as much as 15 percent of its total assets overseas.
The Shenzhen-based company is the first insurer to get consent from the China Insurance Regulatory Commission to use its foreign currency and to exchange yuan to invest abroad. The industry regulator in July raised the cap on overseas investments by insurers to 15 percent.
Domestic insurers want to increase returns and diversify risk after the nation's benchmark CSI 300 Index more than doubled this year. The outflow of funds will help China reduce its foreign exchange reserves, now totaling US$1.46 trillion, and in turn ease pressure on the yuan to appreciate.
'Having the ability to invest more abroad has a positive impact on the company over the long term,'' said Wang Zhewen, who helps manage US$1.2 billion in Chinese stocks for Fortis NV in Shanghai. 'It broadens Ping An's investment channel and can diversify risks.''
The regulator last month allowed Ping An to begin buying Hong Kong stocks with up to 5 percent of its assets as of the end of the previous fiscal year. Ping An reported 441.8 billion yuan (US$59.7 billion) of total assets at the end of last year.
Ping An said Nov. 29 it paid 1.81 billion euros (US$2.6 billion) for a 4.2 percent stake in Fortis, Belgium's biggest financial services company, its first overseas acquisition.
Fifteen percent of Ping An's total assets at the end of the last fiscal year gives the company about US$9 billion to buy overseas stocks.
Taking away the 5 percent it's been allowed to buy Hong Kong shares with, and the Fortis investment, Ping An still has about US$3.4 billion it can use to buy foreign stocks.
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