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Ping An Belgian deal raises fears
Bill Condie, Evening Standard27.06.08
HSBC's Chinese insurer Ping An has been hit by worries that a deal to buy into Belgian banking group Fortis will erode its capital base.
Ping An shares fell 4% in Shanghai today. Fortis is trying to raise €8 billion (£6.4 billion) by selling stock and non-core assets to shore up capital.
It agreed in March to sell half its asset-management arm to €2.15billion. The insurer last month bought 4.2% of Fortis for €1.81 billion to become its biggest shareholder.
"We're buying into Fortis's capital-raising plan to keep our stake from being diluted," Ping An spokesman Sheng Ruisheng told Bloomberg. "We intend to remain their biggest shareholder."
Ping An and other Chinese insurers are looking to diversify amid plunging mainland Chinese stock markets.
The benchmark CSI 300 stock index has fallen 46% this year, cutting into the insurer's investment gains.
