HSBC Holdings plc confirmed Monday that it is in talks to sell its shares in Ping An Insurance (Group) Company of China, a move analysts said showed that the biggest bank in Europe planned to shuck off some of its non-core businesses.
"HSBC has from time to time received approaches regarding its shareholding and confirms that it is in discussions which may or may not lead to the sale of the shares," the bank said in a statement e-mailed to the Global Times Monday afternoon.
The statement followed speculation by Hong Kong Economic Journal on Monday morning about a possible sale of HSBC's 15.57 percent stake in Ping An.
HSBC, Ping An's largest shareholder, could cash in around HK$73.5 billion ($9.4 billion) via the sale, according to the newspaper.
Ping An, the world's second largest life insurer by market value, could not be reached by press time.
Its shares fell by 6 percent on the Shanghai Stock Exchange by midday on the news, and saw a 1.6 percent drop at the close Monday. Its shares on the Hong Kong Stock Exchange declined by 2.8 percent, while HSBC's climbed 0.95 percent.
"HSBC's move is not unexpected, as it needs to peel off part of its non-core business," Li Daxiao, a research director at Yingda Securities Co, told the Global Times Monday.
Li also noted that investors' panic reactions in the stock market are "irrational" as Ping An still witnessed a robust business performance.
Ping An posted a 31.6 percent year-on-year increase in its net profits for the first three quarters this year.
Li said finding a buyer with capital strength is crucial, because the amount of shares is huge, it is impossible to sell them to many small-sized investors at one time.
And Hong Kong Economic Journal reported that Thailand's richest person Dhanin Chearavanont, the owner of CP Group, is one of the likeliest buyers.
Hu Bo, an insurance professor at Renmin University of China, told the Global Times Monday that "we won't likely see a dramatic fluctuation of Ping An in capital markets over the long term, since any sale of China's major insurers must be permitted by the insurance regulators, who are always very cautious about any investment in the insurance sector."