The most read financial stories in S&P Global Market Intelligence's Asia-Pacific coverage include Tata Sons' planned acquisition of a stake in PNB MetLife, while editors' picks feature an economic slowdown in Hong Kong courtesy of China's economic decline.
1. Tata Sons, AIA Group eye acquisition of PNB MetLife
Tata Sons Ltd. and AIA Group Ltd. are considering an acquisition of a 70% stake in PNB MetLife India Insurance Co. Ltd. and then a merger of the company with their joint venture, Tata AIA Life Insurance Co. Ltd. Tata Sons' stake in Tata AIA Life is expected to dilute to 45% from 51% if the proposed deal goes through.
2. Report: Macquarie likely to get nod to buy Green Investment Bank
Macquarie Group Ltd. is likely to receive the U.K. government's approval to buy UK Green Investment Bank Plc in January 2017. The sale of the bank is expected to be complete before the end of March 2017. The investment bank could be valued at as much as £4.2 billion, including investments the new owners will be expected to make in the next three years.
3. 2 Australian banks enter enforcement undertaking with regulator over forex biz
National Australia Bank Ltd. and Commonwealth Bank of Australia agreed to make changes to their existing systems and controls after failing to address risks relating to wholesale spot foreign exchange businesses between Jan. 1, 2008, and June 30, 2013. The Australian Securities and Investments Commission accepted enforceable undertakings from both banks.
4. StanChart to transfer Thai retail banking biz to TISCO Financial
Standard Chartered Plc will transfer its retail banking business unit in Standard Chartered Bank (Thai) PCL to TISCO Financial Group PCL subsidiaries TISCO Bank PCL and All-Ways Co. Ltd. The proposed transfer is expected to be completed in 2017, subject to regulatory and shareholder approvals.
5. China Construction Bank to set up asset management unit
China Construction Bank Corp. proposed to establish unit Bank of China Asset Management Co. Ltd. to conduct debt-to-equity swap business. The asset management unit will be set up with a proposed registered capital of 12 billion yuan, subject to regulatory approval, and will operate as a tier 1 subsidiary of the bank.
1. Why Hong Kong banks are feeling China's pain
The recent slowdown in China's economy had a weakening impact on Hong Kong economic growth, with Hong Kong's real GDP growth declining from a peak of 6.8% in 2010 to 1.6% in 2016. Hong Kong retail business receipts showed a 7.5% year-over-year drop in the third quarter. Banks in Hong Kong are also facing worsening credit quality and growth prospects. Bank of East Asia Ltd. and Hang Seng Bank Ltd. are among the banks showing signs of the spillover of China's economic decline.
2. China's new reinsurers unlikely to challenge established names in near future
China's booming insurance market has prompted more companies to pursue a reinsurance license in the country, with a number of domestic players seeking entry into China's underdeveloped reinsurance market. Shenzhen-based Qianhai Reinsurance Co. Ltd. officially began operations in China's underdeveloped reinsurance market in early December to become the third domestic player in the market after China Reinsurance (Group) Corp. and Taiping Reinsurance Co. Ltd.
3. Samsung Securities to raise 354B won through new share issuance
Samsung Securities Co. Ltd. is expected to raise 354.43 billion South Korean won through issuance of 12,864,835 new shares at 27,550 won per share. The new shares will be issued March 24, 2017, and listed March 27, 2017.
4. Negative rates may be driving Japan's rental sector loan spike
Japanese banks' new loans to the real estate sector hit an all-time high of ¥5.894 trillion in the fiscal first half ended Sept. 30, according to data from the Bank of Japan. The latest level is even higher than seen during Japan's real estate bubble in the late 1980s.