Insurers to be allowed to invest 10 percent of assets in stock market
17/7/2007 16:48
Ceiling of investment by China's insurers in the domestic capital market
will most likely be raised from the current five percent to 10 percent of their
gross assets, sources close to industry watchdog revealed yesterday.
But the
ceiling for private equity investment will remain unchanged, at 20 percent, the
sources added.
Meanwhile, the insurance companies will be allowed to invest
10 percent of their gross assets in mutual funds (excluding money market funds),
down from the current ceiling of 15 percent, according to the sources.
Data
from China Insurance Regulatory Commission show that by the end of last year,
Chinese insurers had pumped 92.9 billion yuan (US$12.2 billion) into stocks, a
surge of 484.9 percent from the beginning of the year. They had invested 91.2
billion yuan in mutual funds, down 17.6 percent.
According to the industry
regulator, by the end of March this year, outstanding amount of insurance assets
used stood at 2.04 trillion yuan, of which 373.3 billion yuan, or 18.3 percent,
was invested in stocks and mutual funds.
Chinese insurers began to step into
the capital market in 2005, and by the end of the year, their capital in the
market made up for only one percent of their total assets.
Last year, the
industry regulator raised the investment ceiling to five percent.
Xinhua
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