Ping An Insurance (Group) Co., China’s second-largest insurer, is diversifying into property and private equity and increasing its holdings in Chinese stocks to boost investment performance after its worst year since 2005.
“Returns are lower than last year and I’d say it’s the toughest time” in five years, after bond yields and the benchmark stock index declined, Timothy Chan, 49, deputy chief investment officer of Ping An and chairman of its asset management units, said in an interview at the company’s office in Shanghai. “The forecast for investment returns in 2011 looks very similar to this year’s levels.”
The government is widening the investment scope of Ping An and competitors including China Life Insurance Co., which held most assets in bonds and bank deposits, limiting returns. Ping An had 86 percent of its portfolio invested in fixed income and 9 percent in equities at the end of June, according to Chan.
China U.S. Internet
China in the past year demonstrated it can direct Internet traffic, giving the nation the capability to exploit “hijacked” data from the U.S. military and other sources, according to a new report.
Recent actions raise questions that “China might seek intentionally to leverage these abilities to assert some level of control over the Internet,” according to excerpts from the final draft of an annual report by the U.S.-China Economic and Security Review Commission. “Any attempt to do this would likely be counter to the interests of the United States and other countries.”
On April 8, China Telecom Corp., the nation’s third-largest mobile-phone company, instructed U.S. and other foreign-based Internet servers to route traffic to Chinese servers, the report said. The 18-minute re-routing included traffic from the U.S. military, the Senate and the office of Defense Secretary Robert Gates.
U.S. Query on Rare Earths
U.S. Representative Edward Markey, a Massachusetts Democrat, asked members of the Obama administration to explain specifics of China’s curbs on the export of rare earths and what such restrictions will mean for the military and U.S. clean-energy producers.
Markey sent a letter to Energy Secretary Steven Chu, Defense Secretary Robert Gates, Commerce Secretary Gary Locke and U.S. Trade Representative Ron Kirk.
HSBC Scolded in South Africa
HSBC Holdings Plc’s manner of ending talks to buy a controlling stake in Nedbank Group Ltd. was “irresponsible,” according to South Africa’s financial regulator.
“HSBC was irresponsible” in how it terminated the discussions, which “caused extensive speculation with regard to the affairs of Nedbank,” Bert Chanetsa, deputy executive officer at the Pretoria-based Financial Services Board, said in an e-mailed statement. “This is likely to result in a further negative impact on the share price.”
A spokesman for HSBC in London declined to comment when reached by Bloomberg.
Cnooc Surrenders Kenya Licenses
Cnooc Ltd., China’s biggest offshore energy explorer, told the Kenyan government it plans to drop licenses to search for oil and gas in two Kenyan blocks by December, an official said.
“They didn’t discover anything so they don’t want to continue,” Mines and Energy Ministry Permanent Secretary Patrick Nyoike said in an interview in Nairobi, the capital. The Chinese company had licenses to explore in block 9 in northern Kenya and L2, an inland area in the Lamu Basin.
An explosion near a subway station in Beijing’s downtown Dongcheng district this afternoon slightly injured one U.S. citizen, Xinhua News Agency reported, citing local police.
The blast at 3:20 p.m. local time beside a newspaper stand near the Dongzhimen subway station, Xinhua said. The 30-year-old American, who is studying in China, was injured in the leg when passing by and was sent to a nearby hospital.
Sihuan Pharmaceutical Holdings Group Ltd. raised HK$5.75 billion ($741 million) by selling stock in its Hong Kong initial public offering at the top of a price range marketed to investors.
The company sold 1.25 billion shares at HK$4.60 each, according to data compiled by Bloomberg. Morgan Stanley and UBS AG managed the transaction. The shares had been offered at HK$3.88 to HK$4.60 apiece.
LontohCoal, a closely held South African miner, said it plans to raise between $300 million and $500 million from an initial public offering in Hong Kong.
The company, based in Johannesburg, may sell shares in Hong Kong as early as the first half of 2011, spokeswoman Lizelle du Toit said by phone from the South African commercial capital. Investors in Hong Kong “understand the risk of doing business” in Zimbabwe, where LontohCoal has one of its three mines, she said.
U.S. stocks rose, sending benchmark indexes higher for a second day, as better-than-estimated earnings from EBay Inc. to McDonald’s Corp. and a drop in jobless claims helped offset a slump in financial companies amid speculation that banks face more losses from bad mortgages.
EBay, the owner of the second-most visited e-commerce site, jumped 6 percent, while McDonald’s climbed 1.3 percent. Netflix Inc., the movie-rental service, surged 13 percent after raising subscriber projections. Bank of America Corp. slid 3.3 percent. Alcoa Inc. and Occidental Petroleum Corp. slumped at least 1.3 percent as commodities prices sank amid a rebound in the dollar.
The Standard & Poor’s 500 Index advanced 0.2 percent to 1,180.26 at 4 p.m. in New York, after earlier declining as much as 0.6 percent. The Dow Jones Industrial Average rose 38.60 points, or 0.4 percent, to 11,146.57 and earlier topped the highest level on a closing basis since the week Lehman Brothers Holdings Inc. filed for bankruptcy in September 2008.
THE FOLLOWING STOCKS MAY BE ACTIVE TODAY:
Bank of Ningbo Co. (002142 CH): The lender raised 4.4 billion yuan ($662 million) in a private placing of 383.8 million shares at 11.45 yuan each. The stock fell 1.7 percent to 14.15 yuan.
China CAMC Engineering Co. (002051 CH): The construction contractor said it won a 1.96 billion yuan water-pipe order from Iran. The stock gained 1.8 percent to 55.30 yuan.
China Mengniu Dairy Co. (2319 HK): The milk producer said it was not involved in damaging rival companies’ business reputations as reported in recent newspaper articles. The stock fell 0.2 percent to HK$22.95.
Dongfang Electric Corp. (600875 CH) was downgraded to “add” from “buy” at Shanxi Securities Co Ltd by equity analyst Yumei Liang. The shares lost 1.1 percent to 37 yuan.
Freeman Corp. (279 HK): The brokerage will raise HK$550 million to expand its financial-services business through a placing of 2 billion shares at 27.5 Hong Kong cents each. The stock gained 1.6 percent to 32 Hong Kong cents.
Hutchison Whampoa Ltd. (13 HK): the Hong Kong-based telecommunications company, sold $2 billion of hybrid perpetual notes, according to data compiled by Bloomberg. The securities, which cannot be called for five years, yield 6 percent, Bloomberg data show. Hutchison fell 0.7 percent to HK$77.75.
Lippo China Resources Ltd. (156 HK): The real estate developer said it will invest $10 million for 100,000 units in the CIP Fund, a sub fund of the Lippo Expert Select Fund. The stock gained 4.4 percent to 23.6 Hong Kong cents.
Maanshan Iron & Steel Co. (323 HK) China’s second-biggest Hong Kong-traded steelmaker, said third-quarter profit fell 99.6 percent to 3.04 million yuan because demand slowed and high prices of raw materials eroded margins. The stock gained 1.3 percent to HK$4.86.
Richfield Group Holdings Ltd. (8136 HK): The real estate brokerage will place 150 million shares at HK$1.20 each, raising a net HK$174 million for “general working capital.” The stock fell 6.6 percent to HK$1.41.
Shanxi Coal International Energy Group Co. (600546 CH) said third-quarter net income rose 16.1 percent from a year earlier to 200.9 million yuan, according to a statement to the Shanghai stock exchange. The shares gained 10 percent to 34.87 yuan.
Shenzhen Zhongjin Lingnan Nonfemet Co. (000060 CH): China’s third-largest zinc producer suspended output at its Shaoguan smelter after authorities found that excessive levels of thallium were discharged by the plant into a river. The stock will resume trading today.
Sinocop Resources Holdings Ltd.(476 HK): The explorer for iron ore and copper in Chile said it will raise as much as HK$44 million for working capital and potential future investments through a private placing of 110 million shares at 40 Hong Kong cents each. The stock gained 9.9 percent to 44.5 Hong Kong cents.
SMI Corp. (198 HK): The company said it has started closing all its investment and securities trading accounts to focus on the entertainment and cinema-operation industry. The stock fell 17 percent before being suspended; it will resume trading today.
VS International Group Ltd. (1002 HK): The maker of molded plastic parts said it has held talks on possible fundraising. The stock surged 21 percent to 16.9 Hong Kong cents.
Zhejiang Expressway Co. (576 HK): The toll-road operator said it will pay 88 million yuan to buy the outstanding 44.2% stake in unit Zhejiang Expressway Investment Development Co. The stock fell 0.9 percent to HK$7.78.
Zhongyuan Environment Protection Co. (000544 CH): The company said third-quarter profit jumped 165 percent from a year earlier. The stock rose 0.6 percent to 12.86 yuan.
ZZNode Technologies Co. (2371 HK): The telecommunications support-systems provider said unit Xinhua Colour (Beijing) Cultural Communication Co. has signed an agreement for 10-year operating rights for 680 billboards along highways in China’s Hebei province. The stock fell 2 percent to 99 Hong Kong cents.
EVENTS HAPPENING TODAY: 12:30pm-1pm -Taiwan central bank announces interest rate for NT$40 billion of bonds 4:00pm -Taiwan September jobless rate Datang Power (991 HK) earnings after market. BLOOMBERG TELEVISION GUESTS SCHEDULED FOR TODAY: 9:10 Bill Belchere, Mirae Asset Securities, Chief Global Economist 10:10 Adrian Foster, Rabobank International, Asia Head of Financial Markets Research 13:40 Fazal Seyyed, BNP, Chief Investment Officer of SAIB