DealZone

Having taken a nibble at the Chinese insurance market in December, helping number three life insurer China Pacific Insurance list a $3.1 billion IPO in Hong Kong in December, Goldman Sachs is taking a bigger bite at that most promising and enticing of global investments, China’s financial products industry.

Sources tell us that an investing arm of Goldman is in the final stages of an agreement to buy AXA’s $1.05 billion stake in Taikang Life, China’s No.4 life insurer. The deal would allow France’s AXA to shed a non-core asset, while granting Goldman a piece of China’s growing insurance industry, report George Chen and Michael Flaherty.

Several private equity firms, including Kohlberg Kravis Roberts & Co and Blackstone Group, competed in the Taikang auction, as did Singapore’s Temasek Holdings, sources have told them.

As we’re talking about Goldman’s private equity business, divining strategic intentions could be difficult beyond what looks like a potentially lucrative business. Might one detect the invisible hand of the Oracle of Omaha here? After all, Buffett, who took a confidence-building $5 billion stake in Goldman at the height of the crisis, is long both China and insurance.

A Goldman takeover of Taikang Life would interestingly also put it in indirect competition with near-collapsed insurer AIG, which has a piece of the Chinese life insurance market, albeit a small one, through its AIA unit, which sells life insurance in China. A potential showdown between Goldman and AIG would be interesting, given the already bitter history between the two companies; Goldman was AIG’s counterparty on many of the credit default swaps which sent the insurer to the brink of bankruptcy.

MetLife is moving up in Japan, the world’s second-largest life insurance market, with the $15.5 billion purchase of Alico from AIG. The unit accounted for 70 percent of Alico’s pre-tax operating income in fiscal year. It also has operations in Europe and emerging markets in Central and Eastern Europe, the Middle East and Latin America. Much like the $35.5 billion sale of AIG’s Hong Kong-based AIA subsidiary the week before to Prudential of the U.K, a chunk of AIG is a transformative expansion for Metlife.

Both AIG and Metlife share rose on the news – one of those win-win deals, the market says. But if you want to be skeptical, just keep in mind that AIG is still only part of the way towards repaying the $182.3 billion it owes the U.S. government and Metlife has just exposed itself to an aging Japanese population with prospects in some ways even more worrying than in the U.S., given its lost decade and its near-routine bouts of deflation.

One thing Metlife will not have to worry about is having a government functionary on its board. Though the sale features a sizable equity component from AIG, we’re told that the chance of Uncle Sam calling the shots at yet another major U.S. corporation is nil.

Sands China’s weak debut in Hong Kong - a first-day drop of 10 percent – was the fourth-worst launch on that market this year, but came as little shock to analysts who were betting against the Asian gambling play. Rival Wynn Macau is down 5 percent since listing in October.

Sands China’s $2.5 billion IPO wasn’t helped by the default tremors kicked off by Dubai, which has helped to expose a whole new area of risky bets in emerging markets.

“The fever for casino stocks is seen to be over now,” said Patrick Yiu, a director at CASH Asset Management. “Investors are worrying about the industry outlook, especially keen competition, when more casinos are ready for business.”

Nobody ever got poor betting on Chinese demand for gambling, though the big players in Macau have seen a few busted flushes along the way. With more than a billion fatalists eager to hit the tables, and only one place to do it (Macau is China’s only legal gambling venue), it’s not hard to see the case that Wynn Macau and Las Vegas Sands are making for Hong Kong investors. It’s the same story Hong Kong and Macau magnate Stanley Ho has made for decades.

Wynn Macau’s $1.63 billion Hong Kong IPO, the sixth-largest in the world this year, was considered rich, despite the hype and that “sure thing” ring. After all, the colony is covered with half-finished projects and other remnants of the last time this too-good-to-be-true investment turned out to be what it was.

Wynn Macau shares ended 6 percent higher on Friday, valuing the casino giant at $6.9 billion. The solid debut bodes well for rival Las Vegas Sands, which plans to raise up to $2 billion in a Hong Kong offering for its Asia assets, most notably in Macau.

HSBC CEO Michael Geoghegan isn’t just furniture shopping for the big move back to Hong Kong.

The Wall Street Journal reports HSBC is in “advanced discussions” to acquire Royal Bank of Scotland’s banking assets in three Asian countries. The talks concern RBS’s retail and commercial banking assets in China, India and Malaysia, according to the report, which cited a person familiar with the situation.

In late September, HSBC decided to return its CEO to the place of the bank’s birth 144 years ago, as it refocuses on Asia. Europe’s biggest bank said it would stay based in London for tax purposes and had no plans to move, and Britain’s Financial Services Authority will remain its lead regulator. After the drama of Britain’s 1997 retreat from its lucrative colony, there are clearly still limits on just how Asian HSBC wants to be.