Ping An Insurance Group stock suffered its worst daily drop in almost three years of Hong Kong trading yesterday after rumours that major shareholders were unloading their holdings trigged panic selling. Shares of the mainland's second-largest insurer plummeted 13.7 per cent on more than three times their 30-day average trading volume to close at HK$42.50, their lowest level since March 2009. That compares with the Hang Seng Index's overall decline of 1.48 per cent. Ping An's Shanghai-traded stock - protected by a 10 per cent cap on daily price swings - fell 9.6 per cent to 34.37 yuan (HK$41.73). 'The shares plunged on market rumours,' said Peng Yulong, an analyst at Guotai Junan Securities in Shanghai. 'There is no change in the corporate fundamentals supporting such a big decline.' The sell-off began after word circulated that HSBC was dumping Hong Kong shares to scale back its 15.6 per cent stake in the company, according to market sources. Traders also heard that some cash-thirsty foreign funds had sold the stock to prepare for redemptions back home. HSBC said it would not comment on market speculation. Ping An sold a 10 per cent stake to the London-based banking giant for US$600 million in October 2002 as part of a pursuit for capital and foreign expertise. Ping An spokesman Sheng Ruisheng said the company's operations were unchanged. 'There's nothing that we should disclose that we have not disclosed,' Sheng said. The company issued a statement last night to the stock exchange saying that 'the board is not aware of any reasons for the drop in share prices'. Ping An shares have fallen more than 50 per cent this year - nearly double the market's overall decline. Analysts say investors are wary of the insurer's massive funding scheme and its connections to Greentown China Holdings, a property developer whose trust unit is under investigation by banking regulators. One subsidiary, Ping An Life Insurance, has recently been approved to sell as much as four billion yuan in 10-year bonds to improve solvency. 'These insurers face moderately high industry risk due to their low-to-modest capitalisation, unsophisticated risk management and limited choices for asset and liabilities management,' said Connie Wong, an S&P credit analyst. Ping An also faces exposure to Greentown's debt woes because of a 1.5 billion yuan trust. Greentown will be the most leveraged property firm on the Hong Kong stock exchange by the end of the year, the Industrial and Commercial Bank of China said.