Ping An Denies Regulator Halted Sales of Alternative Investments
(Bloomberg) -- Ping An Insurance (Group) Co. denied that it has been ordered by regulators to halt sales of property-related alternative investments in response to a Reuters report that sent shares tumbling.
The group and its asset management arm don’t sell any property-related alternative investments, while such investments at its trust unit were not halted, Ping An said in an emailed statement to Bloomberg on Tuesday.
The insurer’s shares nosedived as much as 8.2% in Hong Kong after the Reuters report, which also said that Ping An’s property investments are being investigated by the China Banking and Insurance Regulatory Commission. In response the company said it has been strictly following regulatory rules, adding that the probe on property investments “had no factual basis.”
The nation’s largest insurer by market value is facing a setback after impairments related to troubled property developer China Fortune Land Development Co. wiped 20.8 billion yuan ($3.2 billion) from profit in the first half. The company on Friday had signaled the worst of the hit may be over and it may even claw back some of the losses this year if the debt situation of the developer improves.
Ping An’s real estate exposure is 4.8% of its insurance investment fund, when counting real estate-related stock and debt holdings, a company spokesperson said Monday. That compares with the 30% cap set by the regulator.
Ping An Trust, a unit of the insurer, has been reducing property-related alternative investments this year in accordance with regulatory requirements for the industry, but such business is still being conducted normally, the company added.
Regulators are ratcheting up efforts to tame land and home prices that have fueled China’s runaway property industry. The world’s second-biggest economy recently halted private equity funds from raising money to invest in residential property developments, turning off the spigot on one of the last stable funding resorts for the sector, people familiar with the matter have said.
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