China eases rules for insurers buying stocks in support measure
CHINA will make it easier for insurance companies to invest in domestic stocks, the latest in a series of measures aimed at shoring up market sentiment.
The risk weighting will be lowered for insurers’ investments in CSI 300 Index members, as well as stocks listed on the Star market, according to new rules issued by China’s National Administration of Financial Regulation.
The minimum capital requirements for insurers will also be cut, according to the statement.
Insurers may speed up the flow of funds into the capital market after the new rules, Wang Junhui, chief investment officer of China Life Insurance Group Co, was cited as saying in the China Securities Journal.
Beijing has taken a number of steps in recent weeks to restore investor confidence, from lowering transaction costs to restricting some top shareholders from selling stakes.
The moves have done little to arrest the slide in stocks as investors are worried that the government will fail to issue enough stimulus to rescue the economy.
The CSI 300 has slumped 11 per cent since this year’s January high, after tumbling 22 per cent in 2022.
The move is aimed at guiding insurers to support capital market development and technology innovation, according to the statement, adding that the firms are encouraged to develop long-term products.
The China Securities Regulatory Commission (CSRC) last month asked executives from insurers as well as the country’s pension fund and large banks to increase support for the market. The executives vowed to help stabilise shares and boost economic development, according to a CSRC statement. BLOOMBERG
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