A temporary suspension of shares in Prudential was triggered this afternoon, after its share price fell more than eight per cent.
The fall came after Bloomberg reported China's currency regulator was tightening restrictions on its citizens buying insurance products from overseas.
Purchases of insurance products using UnionPay credit and debit cards will be capped at $5,000 per transaction, according to sources.
That caused Prudential shares to plummet more than eight per cent, to 1,208p, and triggered an automatic suspension of shares.
A mechanism used by the London Stock Exchange puts shares into an auction if a suspension is triggered. It's thought Prudential's shares were out of action for around five minutes.
However, Prudential’s Hong Kong unit is primarily focused on regular premium business where the average premium size is below the $5,000 cap. Analysts also indicated the impact on Prudential is likely to be limited.
Meanwhile, the FTSE 100 was 2.7 per cent down, at 5,897 points, in late afternoon trading, as oil fell back below $30 per barrel.
"Amid today's unsettling stock market reaction, Prudential stands out as one of the big losers," said David Morrison, senior market strategist at SpreadCo.
"This isn’t just bad news for the Pru or the insurance sector in general. It raises fears that the Chinese authorities may take further action to limit capital controls. This is a particular worry as we head towards the extended Chinese New Year holiday break"
Prudential did not comment.
2 February 2016 @ 3:15pmPrudential (PRU)