Sharing Knowledge in Smallcaps

[KastelCo]

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=18085230

Hello Jay, <<(a) Bet on the Scots - Doubled my existing stake in The Hong Kong and Shanghai Banking Corporation (HSBC) ... If I know the Scots, they should be preparing to buy cheap in blown apart markets soon>>

The buying starts now (expensive, but for growth):
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%...

10/08 07:20
HSBC Buys 10% Stake in Ping An of China for $600 Mln (Update3)
By Theresa Tang

Hong Kong, Oct. 8 (Bloomberg) -- HSBC Holdings Plc, Europe's biggest bank by market value, agreed to buy a 10 percent stake in China's Ping An Insurance Co. for $600 million to gain access to one of the world's fastest-growing insurance markets.

The investment in China's second-biggest insurer is subject to regulatory approvals, HSBC said in a statement. HSBC will provide technical assistance to the insurer, which is about 15 percent-owned by Goldman Sachs Group Inc. and Morgan Stanley.

HSBC, founded in Hong Kong and Shanghai in 1865, wants a bigger presence in China, where the government expects life insurance premiums to double to 290 billion yuan ($35 billion) by 2005. Ping An gets access to technology and expertise that will help it compete as barriers to foreign insurers fall.

``It makes sense for HSBC to line up with local financial giants to access China's banking and insurance industry,'' said Nelson Lee, who helps manage $2.3 billion at BNP Paribas Asset Management Ltd., which holds HSBC shares. ``Insurance businesses also need extensive networks that must be very costly for foreign players to develop on their own.''

European insurers including Aegon NV of the Netherlands also are forming alliances hoping to tap China's savings market following the country's entry last year into the World Trade Organization. American International Group Inc., the world's biggest insurer, was granted a license in May to sell life insurance in Beijing.

``These are good moves strategically, but could take 10 to 20 years to pay off,'' said Barrington Pitt Miller, an analyst at Banc of America.

Bond's View

HSBC Chairman Sir John Bond said in a statement that ``long- term prospects are very favorable in China.'' In August, household savings in China rose above $1 trillion for the first time, according to the National Bureau of Statistics.

London-based HSBC, which in December agreed to buy an 8 percent stake in Bank of Shanghai, bought 247 million new shares in the insurer. Shenzhen Venture Capital Co. is Ping An's largest investor, holding 17.8 percent, said spokesman Sheng Ruisheng.

``We are still reviewing Ping An's share sale plan and no final approval has yet been granted,'' said Meng Zhaoyi, deputy director at China Insurance Regulatory Commission's International Cooperation Department in Beijing. ``Chinese regulators are taking a positive attitude toward this kind of move because it's market driven and will facilitate changes in domestic insurers.''

Ping An, which employs 21,500 staff serving more than 20 million policyholders, reported audited profits of $351.3 million in 2001 using international accounting standards, according to the HSBC statement.