Prudential Selloff Erases $4 Billion Amid Fresh China Fearsby
Prudential Plc was briefly halted in London trading with 2.8 billion pounds ($4 billion) erased from the British insurer’s market value amid concern that China may place restrictions on the buying of overseas insurance.
Prudential, which operates in 12 markets across Asia, slumped 8.2 percent, the most since March 2010, following a Bloomberg report that China’s State Administration of Foreign Exchange will cap at $5,000 the use of UnionPay bankcards to buy insurance products overseas, citing people familiar with the situation.
“The story has done the damage,” said Barrie Cornes, an analyst at Panmure Gordon & Co. in London who rates the stock a buy. “In jittery markets that story and Pru’s link to Asia is a clear read-across for people who are nervous about China. The two issues have been linked and I would argue unfairly.”
Investor concern about the impact on the insurer’s sales prompted the stock’s biggest drop since March 2010. Equities across Europe tumbled Tuesday as anxiety about global growth returned after a two-week halt to the market selloff that was sparked by a China slowdown and a rout in the oil price.
The stock closed down 109 pence to 1,217.5 pence, the worst performer on a gauge of European insurance companies. U.K. peers Legal & General Group Plc, Old Mutual Plc and Aviva Plc, all declined more than 4 percent in London.
A spokesman for Prudential declined to comment.