Convertible bonds

SHARES of Ping An Insurance Group fell after China’s biggest insurer said it intends to issue US$3.5 billion of convertible bonds in Hong Kong to fund its business development.

Ping An’s mainland-listed equity dropped 3.15% to 41.19 yuan (US$5.67) yesterday whereas in Hong Kong, its shares slipped 5.41% to HK$34.1 (US$4.37).

Bonds that can be converted into stock, with an annual interest rate of 0.875%, will mature July 22, 2029. Investors can convert them into shares at a price of HK$43.71 apiece under specified conditions. If the issuance were to be fully converted into stock, it would account for 3.4% of Ping An’s current total share capital.

Nongfu Spring responds to report

SHARES of Nongfu Spring dropped even though the bottled water giant said Hong Kong Consumer Council’s report on the level of bromate in its water products was inaccurate.

Nongfu Spring dropped 2.84% to HK$32.55 (US$4.17) in Hong Kong yesterday, after plunging 4.6% Monday.

The product the council tested was drinking water but was evaluated based on natural mineral water standards, the Hangzhou-based company said in a statement. Nongfu Spring's bottled water contains 3 micrograms per liter of bromate, which is the maximum acceptable concentration for natural mineral water set by the European Union, according to the council’s report on 30 bottled water brands. However, the level is much lower than the maximum of 10 micrograms/liter for drinking water set by the United States, Japan, the United Kingdom, and the World Health Organization, the company said.

Size of MLF loans shrinks

THE People’s Bank of China (PBOC) reduced the size of its medium-term lending facility this month and is expected to continue on this path for the whole year to shift its focus on short-term operating rates. China’s central bank Monday injected 100 billion yuan (US$13.8 billion) worth of fresh funds into the financial system through one-year MLF operations and kept the rate unchanged at 2.5%. It replaced 103 billion yuan worth of funds that expired the same day.

In the future, the PBOC may conduct policy adjustments mainly through the seven-day reverse repurchase rate, said Wen Bin, chief economist at China Minsheng Bank, as quoted by yicai.com.