China’s Ping An overtakes BlackRock to become HSBC’s biggest shareholder

A unit of China’s Ping An Insurance Group has overtaken US asset manager BlackRock to become the largest shareholder of HSBC Holdings.

Ping An Asset Management raised its stake in the bank to more than 7%, the Hong Kong Stock Exchange’s website showed today. Based on the lender’s closing price of $8.40 (HKD65.5) a share yesterday, Ping An’s 1.4 billion HSBC shares are worth about $11.9bn (HKD92.9bn).  It has now overtaken BlackRock’s 6.6% stake.

New York-based BlackRock is the world’s largest asset manager with $6.29trn in assets under management as of December 2017.

“This type of investment is purely a financial investment of insurance funds. Ping An sees good prospects in HSBC’s development and HSBC has a relatively high dividend payout ratio, which [are] in line with the risk preference and return objective of insurance,” a Ping An spokesperson told the South China Morning Post.

HSBC pays an annual dividend of about 6 per cent of its share price, making its stock an attractive option for investors amid the uncertainty caused by the current trade tensions between the US and China.

The bank, which reported third-quarter results last week, saw earnings rise 32 per cent to $3.9bn.

In 2002, HSBC spent $600m to take a 10% stake in Ping An Insurance. When the insurer went public in 2007, the HSBC became its biggest shareholder. In 2012, HSBC sold all the shares to Thailand’s Charoen Pokphand Group in a deal worth about $9.3bn.

Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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