Prudential shares tumble on report China will tax offshore insurance returns

Prudential said at the time it was confident of the continuation of demand from visitors from China. The insurer did not respond to a request for comment on Wednesday.

Its shares were last down 6 per cent, bringing their year-to-date loss to 10 per cent.

China’s finance ministry and the National Financial Regulatory Administration did not immediately respond to Reuters requests for comment outside of regular business hours.

Shares of HSBC, which has a big insurance business in Hong Kong, also dropped as much as 6 per cent. It did not respond to a request for comment.

LEVIES “HIGHLY LIKELY” TO AFFECT SALES, BROKER SAYS

Jefferies said the report had sparked “investor panic” in Prudential shares.

Analysts at the US bank said the move would reduce the appeal of Hong Kong insurance products relative to domestic ones, but could also ease fears that Beijing may eventually ban offshore insurance sales outright.

Caixin said the tax collection drive has been made possible by data sharing under the Common Reporting Standard, which allows mainland authorities to track overseas policy details, adding that enforcement was expected to tighten further.