HSBC (HBC) Looks to Sell $9B Stake in Large Chinese Insurer
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HSBC (NYSE: HBC) in indicated higher Monday amid market chatter that it might be looking to unload a $9 billion stake in China's second-largest insurer.
According to Bloomberg, HSBC may sell its 1.23 billion share position in Ping An Insurance -- about 15.6 percent of the entire company -- as it looks to cut $3.5 billion in costs and return to solid profitability in 2013. The holding generated about 4.2 percent of HSBC's revs in 2011 and HSBC valued the asset at $6.37 billion at the end of 2011.
One Investec analyst noted that HSBC took the plunge as a play on the Chinese economy and it has performed well. However, rapid Chinese growth is hitting a few speed bumps. now expected to rise at an annual clip of the high-single-digits versus mid-teens growth prior.
Total investment for HSBC was about $1.64 billion in 2002 and 2005 (two separate transactions).
HSBC also issued a comment this morning via 6-K filing with the U.S. SEC:
"HSBC Holdings plc notes the recent press speculation about a possible sale of its 15.57% shareholding in Ping An Insurance (Group) Company of China, Ltd.
HSBC has from time to time received approaches regarding its shareholding and confirms that it is in discussions which may or may not lead to the sale of the shares.
A further announcement will be made if or when appropriate."
Shares of HSBC are up 1.8 percent early.
According to Bloomberg, HSBC may sell its 1.23 billion share position in Ping An Insurance -- about 15.6 percent of the entire company -- as it looks to cut $3.5 billion in costs and return to solid profitability in 2013. The holding generated about 4.2 percent of HSBC's revs in 2011 and HSBC valued the asset at $6.37 billion at the end of 2011.
One Investec analyst noted that HSBC took the plunge as a play on the Chinese economy and it has performed well. However, rapid Chinese growth is hitting a few speed bumps. now expected to rise at an annual clip of the high-single-digits versus mid-teens growth prior.
Total investment for HSBC was about $1.64 billion in 2002 and 2005 (two separate transactions).
HSBC also issued a comment this morning via 6-K filing with the U.S. SEC:
"HSBC Holdings plc notes the recent press speculation about a possible sale of its 15.57% shareholding in Ping An Insurance (Group) Company of China, Ltd.
HSBC has from time to time received approaches regarding its shareholding and confirms that it is in discussions which may or may not lead to the sale of the shares.
A further announcement will be made if or when appropriate."
Shares of HSBC are up 1.8 percent early.
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