Manulife Buys JV in China

Bilibala: insurance company face aging problem, on the other hand, aging will give opportunity for asset management, that's why Manulife keep acquire aum business in the world.

http://www.benzinga.com/208438/manulife-buys-jv-in-china-analyst-blog
Posted on 04/06/10 at 9:45am by Zacks

Last week, Manulife Financial Corporation (MFC) completed the deal to buy Fortis Bank SA/NV's 49% ownership in ABN AMRO TEDA Fund Management Co. Ltd. The remaining 51% ownership is owned by Northern International Trust, part of Tianjin TEDA Investment Holding Co. Ltd. The deal pertains to MFC Global Investment Management, the asset management division of Manulife Financial.

The new joint venture has been renamed Manulife TEDA Fund Management Company Ltd. It will continue to provide traditional retail and institutional asset management services for clients across the Chinese market. As of Dec 31, 2009, Manulife TEDA's assets under management were RMB 30 billion (US$4.4 billion). This represents a 45% increase from the prior year level. The transaction has received the necessary regulatory approvals.

The agreement to purchase the fund management joint venture in China was announced last November. At that time, Manulife said that the purchase was for a cash consideration of €105 million (US$156 million). The acquisition is expected to be accretive to Manulife Financial’s earnings in the first year and would have a negligible impact on capital levels.

The asset management and insurance market in China is attractive to investors for its growth potential. Manulife Financial is also growing its insurance business in China through Manulife-Sinochem.

Manulife-Sinochem is a joint venture company between Manulife (International) Limited (51%) and China Foreign Economic and Trade Trust & Investment Company, a member of the Sinochem group (49%).

Manulife-Sinochem, which began operations in Nov 1996, was the first Chinese-foreign joint-venture life insurance company established in the country. The company currently serves over 500,000 customers in 41 cities across China through approximately 11,000 professionally trained staff and agents.

Manulife's fourth-quarter earnings of 48 cents per share were below the Zacks Consensus Estimate of 51 cents. The miss was driven by mark-to-market adjustments in real estate investments, model refinements to actuarial liabilities and tax adjustments.

However, the company benefited from equity market appreciation and increases in corporate bond yields. In addition, we think that such an expansion drive will considerably add to Manulife's scale and strengthen its position globally in the foreseeable future.

Shares of Manulife Financial increased 36 cents or 1.83% to $20.05 during the regular session on the New York Stock Exchange last Thursday.