New China Life submits listing application
New China Life Insurance, the mainland's third-largest life insurer, has reportedly filed an application to the Hong Kong stock exchange, kick-starting its dual Shanghai-Hong Kong initial public offering despite weak market conditions.
The company, 15 per cent owned by Zurich Financial Services, planned to launch the share offering in October to raise as much as US$4 billion, Dow Jones reported.
New China Life could not be reached for comment yesterday.
Rating agency Standard & Poor's estimated last month that mainland insurers would need to raise an additional 110 billon yuan (HK$134 billion) over the next few years to support their growth.
'These companies face moderately high industry risk due to their low to modest capitalisation, unsophisticated risk management and limited choices for asset and liabilities management,' S&P analyst Connie Wong said.
'Economic hiccups or catastrophes could also hurt them.'
The timing of New China Life's offering raised investors' and market watchers' eyebrows as the recent market downturn is expected to dent buying interest in new shares.
Several share offerings in Hong Kong, including Beijing Jingneng Clean Energy and China Everbright Bank, have already been delayed.
An estimated US$19 billion worth of fund-raising deals in the city are expected to be postponed after sharp falls on Asian markets over the past week.