Ping’an Shares rebound

Ping’an Shares rebound
Mar 7, 2008 00:07
KEVIN0518 Points: Join Date: Mar 13, 2007 Status: offline	After Ping’an shareholders approved to raise 17 billion dollars for domestic and overseas acquisitions, its shares jumped about 7.9 percent, closing at 72.38 yuan, the highest in recent 8 months. On the other hand, China Life and China Pacific shares also have increased by 4.9 percent and 3.8 percent. For the whole market, the insurance shares has drive Shanghai Composite Index go up 1.6 percent. Ping’an shares in Hong Kong stock market also went up 4.6 percent. In general, H shares increased 1.7 percent. Before the shareholders’ meeting, some shareholders and investor objected strongly that Ping’an shouldn’t raise fund again. To our surprise, the fundraising plan was approved finally. However, this plan needs to be examined and approved by CSRC. Some investors say that Ping’an shares increase won’t last for long. They will go down very soon. What do you think?

Mar 7, 2008 00:07

KEVIN0518
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Join Date: Mar 13, 2007
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After Ping’an shareholders approved to raise 17 billion dollars for domestic and overseas acquisitions, its shares jumped about 7.9 percent, closing at 72.38 yuan, the highest in recent 8 months. On the other hand, China Life and China Pacific shares also have increased by 4.9 percent and 3.8 percent. For the whole market, the insurance shares has drive Shanghai Composite Index go up 1.6 percent. Ping’an shares in Hong Kong stock market also went up 4.6 percent. In general, H shares increased 1.7 percent.

Before the shareholders’ meeting, some shareholders and investor objected strongly that Ping’an shouldn’t raise fund again. To our surprise, the fundraising plan was approved finally. However, this plan needs to be examined and approved by CSRC. Some investors say that Ping’an shares increase won’t last for long. They will go down very soon. What do you think?

Mar 8, 2008 00:29

JIMMYB
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"Some investors say that Ping’an shares increase won’t last for long."

It seems that those investors' judgement are correct. Yesterday, Ping'an shares went down about 8%. Although these sharesholdres have agreed to raise funds, the CSRC hasn't approved of their plan. The decline proves that many investors still have negative views on the purpose of Ping'an's fundraising. In this situation, I wonder if CSRC approves Ping'an to raise funds by issuing convertible bonds.

Mar 9, 2008 23:14

MARRIE
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Euro and US investment banks are turning to Asian funds to modify their poor financial positions from bad mortgage lending. Lots of investment funds are being killed in this sub-prime crisis. It’s a good time for Ping An to be in now. Source says that Ping An will allocate 12% of its assets for acquisition abroad, Some of them on this agenda are 5% of stake purchase of HSBC PLC (now UK owned) and Shares of Prudential PLC (UK owned). It’s also said that China investment fund will invest US$5 billion in Morgan Stanley. Those mirror recent hot topic on china won’t rely on exports by taking advantage of cheap labor but will develop another economic pillar – international financial investment.

Mar 10, 2008 22:44

JIMMYB
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Marrie, I read the news. But I wonder why Ping'an shares went down sharply after declaring issuing more convertible bonds. Is it because these investors are short sighted and they can't see the bright future of Ping'an? I think that some of them are frightened by current mainland stock market. PetrolChina is a good example. After its debut in Chinese A share market, it has collected many funds and the price of its share is about 45 yuan. What about its price now? It has declined to half of that.

Mar 11, 2008 22:56

MARRIE
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Jimmy, mainland market is sometimes fluctuated with bullish or bearish statements via government mouthpiece. Do you think the peak point valued around RMB 125 last year is reasonable? Normally speaking, the expectation on a blue chip’s ability of generating future cash flow and the potential growth is reflected in its P/E ratio ranging from 20-40 times. I believe Ping An’s P/E ratio is far above 40 times at the price level of RMB 125 made at that time. In another words, the price is dropping back on track. Also, I heard the newly issued convertible bonds attached with warrants that will be exercised as future outstanding shares. what’s more, convertible bond its self is convertible to shares. The factor that future additional shares dilute the EPS is absorbed by market beforehand and reflected on current price as a result.

Mar 17, 2008 22:39

JIMMYB
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"Jimmy, mainland market is sometimes fluctuated with bullish or bearish statements via government mouthpiece. Do you think the peak point valued around RMB 125 last year is reasonable?"

Marrie, I have negative views on Chinese stock market. As I have said, the mainland stock market has been abnormal since last year when it reached above 6000 points. Some people say that the fluctuation in the stock market is normal. However, it fluctuates too much.

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