Ping An Insurance (Group) Co, China's second-largest insurance company, plans to increase its shares in HSBC Holdings PLC to help it reach its targeted capital adequacy.
"Ping An will join the rights offer plan of HSBC Holdings PLC. So far, the total amount hasn't come out, since the specific holding shares haven't been calculated," Sheng Ruisheng, spokesman of Ping An, was quoted by China Business News as saying.
HSBC Holdings PLC announced on March 2 that it would raise 12.5 billion pounds (US$17.7 billion) in a rights offer to increase the capital adequacy to 10 percent from 8.5 percent. According to the plan, 5 shares are offered for every 12 shares, at a price of 254 penny per share.
"Compared with the market price of about HK$40, the additional equity offer priced at HK$28 per share is attractive. The move won't bring too much impact to Ping An, since its shares in HSBC are limited," said Wang Xiaogang, analyst at Orient Securities.
(China Daily March 17, 2009)
