Ping An Insurance (Group) Co ofChina Ltd , the world's second-largest life insurer by market value, will increase the fixed-income products in its investment portfolio this year, its chief investment officer said on Friday.
"This year we will keep to our strategy of increasing our holdings of fixed income products," Timothy Chan said at a briefing, adding that he didn't see much room for interest rate movement.
Chan's remarks reflects Ping An's concerns over the volatility of China's stock market, which hurt the firm's investment yields last year.
Ping An, which last year invested 58.2 percent of its assets in bonds and 8.6 percent in stocks, posted a 12.5 percent rise in net profit in 2011 after growth in its banking business offset lower investment returns.
Profit contribution from Ping An's banking business nearly trebled to 7.98 billion yuan ($1.26 billion) in 2011, when the insurer, aiming to become a financial conglomerate, completed its acquisition of Shenzhen Development Bank.
Total investment yields fell to 4 percent from 4.9 percent in 2010 as Ping An suffered from a stock market that slumped 22 percent last year, it said in its earnings report on Thursday.
Ping An said in December it planned to raise up to $4.1 billion selling convertible bonds, nine months after the company raised $2.5 billion through a private placement in Hong Kong.
Ping An's president, Alex Ren, said on Friday that the bond sale was still awaiting regulatory approval, which typically takes six to nine months and that the pricing of the bonds would depend on Ping An's stock prices.
Ren also said that Ping An was looking at ways to invest in low-cost housing and that "some projects are in the pipeline." He did not specify the number of projects or their value.
Beijing has been on a push for two years to rein in escalating property prices by encouraging developers to switch from building high-margin luxury properties to building affordable housing.
Insurers became bigger players in the real estate market in 2010 when the China Insurance Regulatory Commission said they would be allowed to broaden their range of investment options to include real estate.
($1 = 6.3300 Chinese yuan)
SOURCE Reuters
