On 26 Mar 2008, insiders of China Pacific Insurance (Group) Company claimed that the company's plan to list on the Hong Kong Stock Exchange may be stalled due to the fact that the A-shares of the company had dropped below their opening day price. According to a pledge made by China Pacific Insurance in 2007, the company would issue up to 900 million H-shares at a price higher than its A-share opening day listing price in order to protect the interests of investors. However, at present, the A-share price of the company has dropped below the issuance price resulting in its listing plan on the Hong Kong Stock Exchange to be stalled.

According to statistics, share values of China Life Insurance and China Ping An shrank further. Wei Tao, an insurance analyst at China Securities Research has expressed that there seems to be a relatively big difference between the performance of individual insurance stocks in the markets and in 2008 the market has been pessimistic about the performance of insurance companies as their investment profits lack sustainability and as predicted profits will not be achieved. At the same time, the market seems to be responding to the huge refinancing plan of China Ping An and worries that China Life Insurance might propose a similar refinancing plan. Consequently, insurance stocks have dropped drastically and expectations for their future performance are not optimistic. On the other hand, according to the 2007 Annual Reports of China Ping An and China Life Insurance, the two companies have started to reduce their projections of return on stock market investment to 5%, making them appear comparatively more conservative and more attractive to long-term investors.


Source: International Finance News

Date: 27 Mar 2008

CN01/SW/BT/GB