Insurance News
- Insurers to double stock investment
Date: 13-Jul-2007 Sources: (Shenzhen Daily)
THE government will allow insurers to double the share of assets invested in local equities to 10 percent after the stock market surged 87 percent this year, said industry executives briefed by the insurance regulator Thursday.
The China Insurance Regulatory Commission has told the asset management arms of insurance companies to prepare for buying more domestic stocks, said the three people, declining to be identified as the regulator hasn't announced the plan.
The move will help China Life Insurance Co., Ping An Insurance Co. and rivals boost returns from their US$321 billion in assets as premium growth slows. Insurance companies may use some of the funds to invest in companies traded in Hong Kong that are planning to sell A shares on the mainland.
'This is aimed at increasing the profits of the insurers,'' said Huang Huamin, a Beijing-based analyst at CITIC Securities Co. 'It's also to prepare for the return of mainland companies listed in Hong Kong, known as red chips.'
China's rules do not allow offshore-incorporated companies to trade their shares on the nation's domestic markets in Shanghai and Shenzhen. Mainland incorporated companies traded in Hong Kong are called H shares.
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