Zurich sells HK$2.2b New China Life stake
Zurich Insurance has raised HK$2.19 billion from selling New China Life Insurance's H shares, making it the first stake reduction in the mainland's third-biggest life insurer after its listing in 2011.
Joining the recent profit-taking activities by major investors after a mild market recovery, the Swiss insurer sold 97.5 million shares - about 3.1 per cent of New China Life's share capital - at HK$22.50 each.
The sale price represents a 6.4 discount to Thursday's close of HK$24.05. The stock closed at HK$22.50 yesterday.
"The sale reflects Zurich's desire to manage its financial exposure to a large single holding of shares," Geoff Riddell, the company's chairman for Asia-Pacific, the Middle East and Africa, said in a statement.
Riddell said the proceeds from the sale would be reinvested in Asia.
"This will allow Zurich to hold its position in Asian markets while also diversifying its investment portfolio," he said.
After the share sale, Zurich, which first invested in New China Life in 2000, still owns 9.4 per cent of the Chinese insurer.
Goldman Sachs was the sole bookrunner for the transaction.
New China Life listed in Hong Kong and Shanghai in December 2011.
Before the US$1.9 billion dual listing, Zurich raised US$500 million by selling a 5 per cent stake in the Chinese insurer, reducing its holding to 15 per cent.
According to the Hong Kong stock exchange, Zurich owned 390 million shares or 37.8 per cent of the H-share stake in New China Life before yesterday's sale.
In the face of persistent weakness in trading volume, the benchmark Hang Seng index fell 0.75 per cent yesterday, as lingering worries about the mainland's economic growth dented positive sentiment in the US market after the Fed chairman's latest dovish statement.
On Wednesday, an undisclosed institutional investor in Chow Tai Fook Jewellery raised more than US$100 million by selling less than 1 per cent of the retailer's shares.