Anbang's takeover is part of anti-corruption drive: Expert

APD NEWS

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China's insurance regulator is taking over the Anbang Insurance Group for one year. An expert said the takeover is part of anti-corruption in the financial sector.

“Things are moving in the right direction. Today we’ve seen the takeover of Anbang Insurance. That is because the systemic risk could have resulted from some of the operations and leveraged trades,” said Hong Hao, Chief China strategist of BOCOM International Holdings.

The China Insurance Regulatory Commission said Friday that Anbang Group's operations violated laws and may have endangered the company's solvency. The takeover of Anbang will start on February 23 to protect consumers' legitimate rights.

Anbang will continue its usual business as the takeover will not affect its liabilities and creditors' rights.

Hong said investors are concerned because Anbang’s stock holdings, since its entire stock portfolio, is about 200 billion yuan, and some prominent banks in China are part of it.

“It’s quite a sizeable stock holding. It’s difficult to get what the regulator is going to do with the stocks. But today’s market reaction towards announcement is relatively positive. And we have seen all stocks related to Anbang’s holding have performed well,” Hong noted.

“I would say that the certain expectation has been priced at the market price… And I think the most important thing now is that since the selloff two weeks ago, the market manages found footings in some very significant technical support levels, so hopefully we can stabilize from here and move forward as the year goes by,” Hong added.

(CGTN)