China stock market

More Chinese insurers buy up stakes in property developers

PUBLISHED : Monday, 07 December, 2015, 12:02pm
UPDATED : Monday, 07 December, 2015, 10:48pm

Anbang Insurance is buying into mainland property developer Sino Ocean Land, according to a stock exchange filing yesterday, a day after Foresea Life Insurance and a related company emerged as the biggest stake holders in real estate major China Vanke.

Anbang is buying a combined 20.5 per cent stake worth HK$7.8 billion in Sino Ocean from two subsidiary companies of Nan Fung Group, said a Sino Ocean filing to the Hong Kong stock exchange. Each Sino Ocean Land share is priced at HK5.05 in the deal, slightly higher than the stock’s last closing price of HK$4.69.

The Sino Ocean deal comes after a stock exchange filing by Vanke on Sunday said Shenzhen Jushenghua and sister company Foresea Life Insurance had increased their stake in the developer to 20 per cent, displacing China Resources as the largest stakeholder.

READ MORE: The Chinese are coming: Insurers expected to pour US$73b into overseas properties

This is the first time Vanke has officially identified Jushenghua and Foresea. Jushenghua, an investment firm, is the largest stakeholder in Foresea.

Jushenghua has bought shares amounting to 4.969 per cent of Vanke on the Shenzhen stock exchange from November 27 to December 4, Vanke said in a Hong Kong stock exchange filing. Calculating the average price of the last six trading days until December 4, Jushenghua is estimated to have spent about 9.4 billion yuan.

The two companies together already held 15 per cent of Vanke.

Foresea Life, a private insurer formed in 2012, has aggressively increased its stake in Vanke this year, adding to its shareholdings through purchases from June to August.

Vanke’s A shares surged sharply last week, with the stock price rising by the maximum 10 per cent for two consecutive days. The developer is listed both in Shenzhen and Hong Kong.

Before Sunday’s stock exchange filing, Vanke’s largest stake holder was state-backed China Resources, which has also increased its stake recently to 15.29 per cent.

“The company (Vanke) has no controlling shareholder and de facto controller due to its scattered shareholding structure,” company secretary Tan Huajie said in Sunday’s filing.

Analysts showed worries on the change of largest shareholder.

“Moves like this may lead to management changes, affecting companies’ decision making,” said a Hong Kong-based property analyst at an investment bank who did not want to be named. “Investors who value the management skills and experience of the current managements will now want to wait and watch.”

Secretary Tan told mainland media earlier existing Board of Directors will remain unchanged until re-election in 2017.

Vanke’s 215 billion yuan sales ranked second in China last year, after state-owned Greenland Group. The company has a market value of HK$239 billion. Its stock price slid 5 per cent in Hong Kong and Shenzhen yesterday.

Insurance companies have emerged as a major force in real estate investment in recent years since the regulators relaxed their investment norms.

Ping An Insurance became the second-largest shareholder of Country Garden this year while Funde Sino Life Insurance became Kaisa’s second-largest shareholder last year.

Insurers have also been investing aggressively abroad. Anbang last year bought Waldorf Astoria hotel in New York for US$1.95 billion while Ping An Insurance this year bought London’s Tower Place.