ZhongAn shares resume gains in Hong Kong after regulator said it misplaced an opinion article
An article published on the website of the Hainan bureau of the China Insurance Regulatory Commission -- and later withdrawn -- turned out to be a misplaced opinion piece, not a formal regulatory notice.
Shares of ZhongAn Online Property & Casualty Insurance, China’s first online insurer, rose for the first time in five days, after the insurance regulator clarified that an article on a website warning of potential risks in ZhongAn’s business model was a misplaced opinion piece, not a formal regulatory notice.
ZhongAn shares rose as much as 2.9 per cent to HK$79.10 on the Hong Kong exchange. The stock had slumped as much as 7.1 per cent on Thursday, after the Hainan branch of the China Insurance Regulatory Commission published an article on its website that called ZhongAn’s business model into question.
As it turned out, the article was merely an opinion piece meant for debate that was mistakenly posted on the website, misleading readers into thinking it was an official regulatory investigation, a regulatory official told the South China Morning Post, declining to be named.
Shares of the online investor had been surging since they were listed at HK$59.70 on September 28, surging as much as 57 per cent to a record on HK$93.65 on October 6.
Investors had been looking for reasons to cash out, conserving their cash for the HK$8.3 billion initial public offering of China Literature, a unit of Tencent Holdings, said Louis Wong Wai Kit, director for Phillip Securities and Phillip Capital Management.
China Literature aims to offer 151.37 million shares globally at a maximum price of HK$55 each. It is expected to debut on the main board of the Hong Kong stock exchange on November 8, according to the prospectus seen by the Post.
Guo Zhenhua, head of the insurance department at Shanghai University of International Business and Economics, said internet insurance is expected to keep growing.
ZhongAn’s largest shareholder is Ant Financial, an affiliate of Alibaba Group Holding, which owns the South China Morning Post.