Ping An Insurance (Group) Co said yesterday it remained confident about its investment in Fortis despite the Belgian-Dutch company's recent share plunge.
"Fortis shares have dropped sharply recently. However, we believe in its financial operating capability and potential for future development and we are confident in the investment," said Jin Shaoliang, head of the board of directors' office, during a Web cast yesterday.
Jin said Ping An would maintain its holding in Fortis as a long-term investment.
Ping An said it needed a balanced global investment portfolio to trim its risks and increase yields.
The investment in Fortis could help Ping An to shed currency risks, the company said.
Sheng Ruisheng, spokesman of the insurer, said Ping An paid 10 euros (US$14.68) for each share of Fortis in a June share sale by Belgium's biggest financial-services company.
The price is almost half of the average 19 euros a share Ping An paid for Fortis on the secondary market last year.
Fortis said on June 26 it planned to raise 8 billion euros by selling stock and ''non-core'' assets such as real estate.
Sheng said at the time that the insurer had joined the placement to maintain its stake in Fortis at 5 percent.
Last November Ping An paid 1.81 billion euros to make it the single biggest shareholder of Fortis, marking the largest overseas investment by a Chinese insurer.
China remains Ping An's main business base despite its overseas investment, the company said yesterday.
The company had no plans to operate business in Europe or the United States, said Sheng, as those markets were mature and did not offer opportunities comparable to those in China.
Sheng said the company's "no additional shares sale plan in six months" would not cast a shadow on Ping An's future development.
"The capital we are targeting from the sale is an in-advance preparation for the company's development for the next 3 years to 5 years," he said. "The suspension won't effect our business." Ping An said in May that it would not sell additional shares for the following six months.
The insurer announced its behemoth funding plan in January to sell up to 1.2 billion additional shares and led the tumble of the yuan-backed A share market.
Peter Ma, chairman of Ping An, said yesterday the company paid 317 million yuan (US$46.34 million) on claims related to February's snow storms, the devastating 8-magnitude earthquake in Sichuan Province on May 12 and the floods that wreaked havoc across southern China in June.
Ping An ended at 44.73 yuan yesterday in Shanghai, up 1.8 percent.
The benchmark Shanghai Composite Index yesterday inched down 0.34 percent to 2,342.18.
(Shanghai Daily August 28, 2008)
