D-day for HSBC's sale of stake in Ping An

As the regulatory deadline falls today on HSBC's sale of its stake in Ping An Insurance, the mainland's No 2 life insurer, the market waits to see if the deal will proceed, be delayed - or called off.

Views on whether the second part of the transaction, worth about US$7.4 billion, can be completed are divided after several dramatic turns of events, including the transfer out of Hong Kong the head of China Development Bank's branch in the city, which was initially prepared to provide loans to support a Thai conglomerate's bid for the stake.

Questions quickly arose, however, as to the ability of the Charoen Pokphand Group (CP) to fund the acquisition and as to the identity of an alleged buyer behind the scenes.

Sharnie Wong, a banking analyst at Barclays, said HSBC's stake in Ping An had been reclassified from an associate holding to an available-for-sale investment, and the statutory and regulatory accounting impact would be similar whether or not the second tranche of the transaction was completed, suggesting that the deal was likely to go as planned.

However, Patricia Cheng, an analyst at CLSA Asia-Pacific Markets, said Ping An might face a trading overhang if HSBC's sale to CP fails to win regulatory approval by today's deadline.

Financing support from CDB appeared to fall apart as the Beijing-based lender started questioning who the real buyer was.