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Business Times
12 hours ago
- Business
- Business Times
Ping An builds HK$180 billion stake in China banks on dividend bet
[HONG KONG] Ping An Insurance Group, as well as other Chinese insurers, have ramped up investments in the nation's biggest banks on a bet that the dividend yields will outweigh headwinds of narrower margins and earnings pressure. Ping An has since late 2024 boosted its holdings of Hong Kong-listed stocks in some of the nation's largest lenders to a combined HK$180 billion (S$29 billion), according to Bloomberg calculations based on exchange data. Its purchases had pushed its stake in the Hong Kong-listed shares of Industrial & Commercial Bank of China to as high as 18 per cent, while holdings in China Merchants Bank and Agricultural Bank of China rose to at least 15 per cent. Its total holdings in the firms are substantially lower when also including their Shanghai-listed shares. The aggressive purchases underscore a growing demand for high-yielding assets amid limited investment options. While Chinese authorities had guided state-backed insurers to allocate 30 per cent of their new premiums to onshore listed shares annually, Hong Kong-traded bank shares offer more appeal with cheaper valuations and high dividend yields. At the same time, Chinese banks are suffering under record low margins and slow profit growth. The years-long property crisis has also dented balance sheets because of a jump in bad loans. The government has underscored its backing for the lenders by a massive recapitalisation. 'The historically low valuations and high dividend payouts have made banking stocks an inevitable choice for those in the hunt for dividends or long-term investors looking to build defensive positions,' said Yang Bo, an investment director with Shenzhen Zenith Investment. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The Hong Kong-listed shares of China's largest banks had an indicated average dividend yield of more than 4 per cent, compared with a 1.65 per cent yield on the benchmark 10-year government bonds. Other Chinese insurers had also been actively buying bank stocks. Rui Life Insurance in March raised its stake in Hong Kong-traded China Citic Bank to 5 per cent from 4.98 per cent. New China Life Insurance in January bought a 5.45 per cent stake in Shanghai-listed Bank of Hangzhou from the Commonwealth Bank of Australia. Ping An preferred the bank stocks for their quasi-fixed-income attributes and state backing, it said in a response to a Bloomberg News inquiry. Their low volatility and high dividends will contribute substantial interest spreads, the insurer said, adding it also added non-bank shares in its portfolio to cut risks. 'We will adhere to a balanced approach of investing in both growth stocks and high-dividend value stocks,' it said. Ping An's total investment portfolio of insurance funds is 5.9 trillion yuan (S$1 trillion). The buying has fuelled a sector-wide rally, sending a gauge of Hong Kong-listed Chinese banks to a seven-year high. China Citic Bank, one of the best performers this year, hit a record high while AgBank closed at the highest since its 2010 listing on Tuesday (Jun 24). Yang of Zenith said while the momentum may persist in the short term, the sustainability of the rally remains to be seen as the banks are still contending with a contraction in margins, high funding costs and weak financing needs from the real economy. 'The stock performance has deviated from banks' fundamentals,' he said. 'We will have to see whether their credit expansion translates into real economic activity, as well as how local government debt and property sector risks unravel going forward.' BLOOMBERG
South China Morning Post
28-04-2025
- Business
- South China Morning Post
Hong Kong stocks slip as investors await Beijing briefing on economic growth
Hong Kong stocks edged down as investors awaited potential stimulus measures from Chinese authorities in an imminent briefing, amid uncertainty about economic support for the country's recovery and tariff tensions with the US. Advertisement The Hang Seng Index dropped 0.5 per cent to 21,882.57 as of 9.45am local time. The Hang Seng Tech Index lost 0.2 per cent. On the mainland, the CSI 300 Index slipped 0.2 per cent and the Shanghai Composite Index dropped 0.3 per cent. BYD Electronic International fell 6.6 per cent to HK$32.45, while electric-vehicle maker BYD slid 4.6 per cent to HK$29.40. Ping An Insurance Group declined 2.2 per cent to HK$44.95, and China Resources Land dropped 3.1 per cent to HK$26.25. On the flip side, e-commerce giant rose 1.7 per cent to HK$125.90, Sinopharm gained 2 per cent to HK$17.76 and Wuxi Biologics rose 1.1 per cent to HK$23.05. Advertisement Retail broker Bright Smart Securities surged 34.8 per cent to HK$4.11 after it resumed trading following an announcement that mainland China's online payment giant Ant Group agreed to buy a controlling stake Multiple Chinese agencies are set to hold a joint briefing at 10am local time to discuss policies and measures on stabilising employment, ensuring stable growth and promoting high-quality development. The National Development and Reform Commission, Ministry of Human Resources and Social Security, Ministry of Commerce and the People's Bank of China are in the line-up.
South China Morning Post
20-03-2025
- Business
- South China Morning Post
Hong Kong stocks fall from 3-year high as China leaves key interest rate unchanged
Hong Kong stocks retreated from a three-year high on Thursday after China kept its benchmark borrowing cost unchanged for a fifth consecutive month. Advertisement The Hang Seng Index fell 1.2 per cent to 24,460.22 as of 10.01am local time, snapping gains of 5.6 per cent over four days. The Hang Seng Tech Index dropped nearly 2 per cent. On the mainland, the CSI 300 Index slid 0.6 per cent and the Shanghai Composite Index lost 0.4 per cent. Ping An Insurance Group slumped 4.1 per cent to HK$49.75 after earnings missed analysts' estimates. Tencent Holdings declined 3.5 per cent to HK$520.50 despite full-year revenue matching expectations. CK Infrastructure Holdings lost 4.1 per cent to HK$48.60 on concerns about the sale of its port assets. China left its five-year loan prime rate (LPR) and one-year LPR unchanged at 3.6 per cent and 3.1 per cent, respectively, according to the central bank, disappointing investors who had hoped for lower rates to bolster stocks and economic growth. US stocks rose overnight after Federal Reserve chair Jerome Powell said he saw some room for interest-rate cuts this year. The Fed kept its benchmark interest rate unchanged at a range between 4.25 and 4.5 per cent at its latest policy meeting. Advertisement Other major Asia-Pacific markets were mixed. Japan's Nikkei 225 slipped 0.3 per cent, while South Korea's Kospi rose 0.5 per cent and Australia's S&P/ASX 200 added 1.1 per cent.
South China Morning Post
13-03-2025
- Business
- South China Morning Post
Global funds exit China's commercial properties with fourth year of net selling
Foreign investors were net sellers in China's commercial real estate market for a fourth year in 2024, hastening their retreat as the nation struggled with deflation and higher global borrowing costs diminished the potential for capital gains. Advertisement They bought US$5.9 billion worth of office, hotel, industrial and retail properties last year, the lowest since 2014, as risk appetite waned, according to MSCI, which tracks property transactions worth at least US$10 million. Investors also sold US$6.9 billion of assets at the same time. The US$969 million net selling last year brought the cumulative 2021-to-2024 outflows to US$11.2 billion, exceeding the net inflows for the preceding two years combined. Since the Covid-19 outbreak in early 2020, global funds were net sellers in every segment bar industrial assets, MSCI data showed. 'The office market has welcomed a lot of new supply, meaning that existing stock has faced downward pressure on occupancy and rents,' said Benjamin Chow, head of Asia real estate research at MSCI. 'Investors have been less acquisitive' since rates increased from late 2022, and were likely to wait and see until values stabilised, he added. Office properties, once favoured by funds betting on China's rapid economic development, bore the brunt of the retreat as vacancy rates climbed. Net disposals amounted to US$1.9 billion last year, the largest among all commercial asset classes. Advertisement Blackstone, the world's largest alternative asset manager, sold three logistics projects in the Greater Bay Area to Ping An Insurance Group in February, according to a Bloomberg report. The Canada Pension Plan Investment Board sold its 49 per cent stake in four shopping complexes to state-owned Dajia Insurance in January.
