Anbang-owned stocks decline in Hong Kong, China in sign of strain at country’s biggest asset buyer

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The headquarters building of Anbang Insurance Group in Beijing. Photo: Reuters

Published: 2:17pm, 14 Jun 2017Updated: 10:45pm, 14 Jun 2017

Shares of several publicly traded companies owned by Anbang Insurance Group are plummeting on the bourses of Hong Kong and mainland China, after the insurer said its chairman Wu Xiaohui is indisposed, in a sign of strain at one of China’s biggest asset acquirers amid a government campaign to impose financial discipline.

Declines were paced by China Merchants Bank Co., one of the country’s largest lenders, in which Anbang owns 10 per cent. Merchants Bank’s shares fell 2.1 per cent in Shanghai to 21.30 yuan, and declined 2.2 per cent to HK$22.15 in Hong Kong.

Anbang also owns 15 per cent of China Minsheng Banking Corp., the country’s first non-state lender, which fell 0.4 per cent to 8.06 yuan on the Shanghai bourse. The lender reversed earlier losses, adding 0.1 per cent to HK$7.78 in Hong Kong.

Analysts said that the reversal was likely to be sustained.

“I think the drop in China Minsheng bank and China Merchants Bank is a short term matter and they will bounce back,” said Marco Yau senior analyst covering banks at CEB International Research.

“Anbang has some sources of funds beyond just their insurance products, for example their asset management arm in Hong Kong. Also, China Minsheng and China Merchants are major banks in China. I don’t expect Anbang to be forced to sell off its stake in them, but in an absolutely worst case scenario, the government could ask an SOE to step in.”