Lean times require mean valuations. And so it is with Chinese state-owned insurer PICC Group, which has cut back the proposed price tag on its Hong Kong IPO from an original estimate of up to $30.5bn to $15.4bn-$18.2bn.
The much-delayed sale would still raise up to $3.6bn in Hong Kong’s biggest offering since AIA (also an insurer) secured $20.5bn in 2010. With cornerstone investors headed by US insurer AIG and Chinese state companies pledging $1.85bn, the deal – at its new price level – finally seems set to reach the market.
So is the worst over for the Chinese economy? Figures on Thursday morning showed GDP grew 7.4 per cent in the third quarter from a year earlier – the seventh consecutive quarter of slowing annual growth.
But premier Wen Jiabao cheered the markets when he said, shortly before the figures were published, that the Chinese economy had started to stabilise and predicted it would meet Beijing’s full-year growth target of 7.5 per cent. That helped push the Shanghai stocks up by nearly 1.5 per cent and the MSCI Asia Ex-Japan index by 0.7 per cent.