For the latest news on U.S.- and Hong Kong-traded Chinese stocks, visit our new Bamboo Works site.
Investors are still pondering Goldman Sachs’ (NYSE: GS) sale this week of its remaining stake in Chinese banking giant ICBC (HKEx: 1398; NYSE: 601398), trying to figure out if the move is a positive or negative for China’s wobbly banking sector. My view is that the move is indeed positive, which is being supported by the latest word that a big portion of Goldman’s stake was purchased by Temasek, the massive Singaporean sovereign wealth fund. Read Full Post…
A new media report says global banking giant HSBC (HKEx: 5; London: HSBA) is likely to sell-off more of its Chinese assets, continuing an ongoing divorce by top global lenders tired of slow progress in the complex China market. This latest report doesn’t have any specific insider knowledge of a looming sale, but rather quotes analysts saying such a move is likely. (English article) Still, such disposals seem both likely and logical, following HSBC’s sale last year of its 15.6 percent holdings in Ping An Insurance (HKEx: 2318; Shanghai: 601318) after years of inability to get any strategic returns out of the tie-up. Read Full Post…
Since China first announced its plans to launch an International Board several years ago, a group of overseas-based companies that do big business in China have been waiting patiently to list on the board to raise both cash and their profiles on the mainland. Many of those companies were genuine foreign firms, such as banking giants HSBC (HKEx: 5; London: HSBA) and Standard Chartered (HKEx: 2888; London: STAN); but an equally large group were Chinese companies like mobile carrier China Mobile (HKEx: 941; NYSE: CHL) and PC maker Lenovo (HKEx: 992), which incorporated overseas so they could list their shares in Hong Kong. Now it appears that at least some of the Chinese companies that wanted to list on the International Board are losing their patience with the slow progress, with word that Lenovo’s parent and telecoms carrier China Telecom (HKEx: 728; NYSE: CHA) may both be exploring more traditional A-share listings for some of their units.
The following press releases and media reports about Chinese companies were carried on February 2-4. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
The slow-motion collapse this week of HSBC’s (HKEx: 5; London: HSBA) plans to sell its stake in Ping An Insurance (HKEx: 2318; Shanghai: 601318) is shining a harsh spotlight on the big role that politics can play in deals involving major Chinese companies. The case is particularly interesting because it also shows how this kind of Chinese politics can quickly cost investors billions of dollars, since Ping An’s shares have dropped sharply as it looks increasingly likely the deal will collapse. Ping An’s Hong Kong-listed shares lost more than 6 percent of their value early this week after news of the deal’s potential collapse first emerged, though they’ve regained some of the ground since then.
The following press releases and media reports about Chinese companies were carried on January 9. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
After years of focusing on the domestic market, leading Chinese bank ICBC (HKEx: 1398; Shanghai: 601398) is suddenly embarking on a rapid global expansion, this time with the announcement that it has received the necessary approvals to open a Brazilian unit. This latest move would follow a rapid series of new initiatives over the last 2 years, including new entries into South America, the Middle East and US.
If I were a short-term investor, I would say that now looks like a good time to buy Chinese insurance shares following positive developments from newly listed PICC Group (HKEx: 2328) and Ping An (HKEx: 2318; Shanghai: 601318), 2 of China’s leading players. But from a longer-term perspective, this brief and relatively rare uptick is likely to be short-lived for an industry that faces a number of major problems despite the strong growth potential of China’s insurance market.
I was amused to read a new report saying that German business software giant SAP (Frankfurt: SAP) may list its shares on China’s planned International Board in Shanghai, since it’s been quite a while since I’ve read any reports like this, which were still quite common as recently as 2010. If I were an optimist, I would say these new reports might indicate a launch is coming in the first half of next year for the long-planned International Board, which would allow offshore companies to raise funds through IPOs in China. But instead, these latest reports, which appear to have originated offshore, are probably just a public relations exercise by SAP, which probably just wants to remind everyone of its commitment to China.
China’s young insurance market has proven attractive to foreign players for its huge potential, but has also been an extremely difficult place for them to do business due to numerous obstacles and competition from local players. That reality appears to be a major factor behind an uneasy alliance that has just been announced between US insurance giant AIG (NYSE: AIG) and Chinese counterpart PICC Group, who have signaled their intent to form a life insurance joint venture just as PICC is raising up to $3.6 billion in a Hong Kong IPO.
Two new mega-deals on the M&A front are highlighting the fact that foreign companies are shedding assets as they look to improve their performance during the global downturn, providing both risks and opportunities for major Chinese firms. On the risk side of the equation, Ping An Insurance (HKEx: 2318; Shanghai: 601318) is learning the hard way that having a big foreign investor has both its advantages and disadvantages, as global banking giant HSBC (HKEx: 5; London: HSBA) prepares to dump its $9.5 billion stake in the company. On the positive side, oil refiner Sinopec (HKEx: 386; Shanghai: 600028) could be getting a good deal with its new $2.5 billion purchase of Nigerian oil assets from Total (Paris: TOTF) as the French oil giant looks to raise cash to boost its exploration operations.
