Ping An Insurance (Group) Co shares rose in Shanghai yesterday after the regulator approved Thailand's Charoen Pokphand Group Co's acquisition of HSBC's stake worth US$7.4 billion in the insurer.
Ping An shares rose 1.42 percent to 51.49 yuan (US$8.27) in Shanghai yesterday, 9 percent higher than the HK$59 (US$7.6) per share that CP Group agreed to pay. The shares fell 2.8 percent in Hong Kong to HK$68.90.
"There is room for prices to rise as the valuation of Ping An's A-shares has been near the bottom of the insurance sector this year largely because of previous uncertainties over the transaction," said Ding Wentao, analyst at Haitong Securities. "Based on our analysis, Ping An's sales of life insurance products rose at least 15 percent year on year in January, better than its rivals."
HSBC said CP Group will pay in cash tomorrow, completing a two-stage purchase of the US$9.4 billion transaction the two parties agreed on December 5.
CP Group, controlled by billionaire Dhanin Chearavanont, will become the largest shareholder of Ping An. The group said in a previous statement that it will not interfere in the operation of the insurer.
The transaction had been in doubt last week due to unclear funding sources before the Chinese Insurance Regulatory Commission gave a last-minute approval on Friday.