CHINA LIFE, PING AN SHARES SUFFER IN CHINESE EQUITY SHAKE-OUT

China Life saw 5.8% knocked off its market capitalisation yesterday, falling to HK$20.40, while Ping An saw its share price fall 4.4% to HK$34.75 as the Hong Kong market reacted to a 9% fall in share values on the Shanghai exchange. The insurers suffered in Hong Kong because their heavy investment in yuan-denominated shares means they are used as a “proxy” by investors for ‘A’ share investment. Insurers own 30% of the yuan shares of Industrial & Commercial Bank of China and 23.2% of the yuan shares of Bank of China. The Chinese stockmarket rose 130% last year, with a 14% rise this year causing fears that valuations had been pushed to unrealistic levels. The fall was the biggest one-day fall since February 1997.