Insurance companies in China having been piling into local shares near the year's end, with players like Anbang Insurance Group Co., Ltd., Foresea Life Insurance Co., Ltd., and Sunshine Insurance Group Co., Ltd., one after another, striking big deals to buy stocks in Shanghai and Shenzhen. Beijing Tongrentang Co., Ltd. (600085.SH), the biggest traditional Chinese medicine company in China, announced on Tuesday night that Anbang Insurance has acquired a total of 68.57 million shares of it as of Tuesday, representing 5 percent of the total share capital of the company.
On the same night, Xinjiang Goldwind Science & Technology Co., Ltd. (2208.HK; 002202.SZ), China's leading wind turbine manufacturer, said in a stock filing that Anbang Insurance has increased its stake to five percent as of Monday. On Monday, real estate enterprise Sino-Ocean Land Holdings Ltd. (03377.HK) announced that its second largest shareholder Nan Fung Group has sold 20.5 percent company stake to Anbang Insurance for 7.78 billon Hong Kong dollars on Dec.4.
This transaction didn't take the market by surprise as Anbang Insurance currently held shares in multiple listed Chinese property companies, such as China Vanke Co. Ltd. (000002.SZ), Gemdale Corp. (600383.SH), and Financial Street Holdings Co., Ltd. (000402.SZ). Vanke, a big residential real estate developer, said on Sunday that Shenzhen Jushenghua Co., Ltd. bought a 4.969 percent stake in Vanke last Friday, making that Jushenghua and its concert party Foresea Life Insurance Co., Ltd. now jointly hold 20.008 percent shares of Vanke and are Vanke's biggest shareholder.
Jushenghua, a Chinese company with property and insurance business, currently owns a 20 percent stake in Foresea. Market watchers say a stock would usually rise after a substantial shareholder increases its stake as the purchase gives a bullish clue to the market. Previously, Sunshine Insurance bought shares of three listed companies in one day. On Nov.30, Sunshine Insurance increased its stake in travel company China CYTS Tours Holdings Co., Ltd. (600138.SH), real estate company Metro Land Corp. Ltd. (600683.SH), and beverage maker Hebei Chengde Lolo Co., Ltd. (000848.SZ) to five percent, 5.01 percent, and 5.03 percent respectively.
On Tuesday, Shanghai Pudong Development Bank Co., Ltd. (600000.SH), also known as SPD Bank, announced that Funde Sino Life Insurance Co., Ltd. had acquired a total of 3.73 billion shares of SPD Bank through the secondary market at the Shanghai Stock Exchange as of Dec.8, representing 20 percent of the total share capital of the bank.
Market observers say insurers bid for shares that are usually undervalued, or have high levels of cash flow, and recent share purchases by insurers reflected their strategy of financial investment. According to incomplete statistics, insurance industry has spent an accumulative of over 100 billion yuan acquiring shares since this year, making it a major buyer in China's stock market.
Latest comments