Companies target higher returns in home market
Cashed-up mainland insurers increased their investment in bonds and equities by 53 per cent to 1.5 trillion yuan in the first five months of the year, targeting higher returns in the domestic market.
Insurers including China Life Insurance and Ping An Insurance put more than 62 per cent of their total assets, 2.4 trillion yuan, into bonds, equities, property and infrastructure from January to May, according to the China Insurance Regulatory Commission.
China Life and Ping An, which have raised huge amounts of capital from the domestic market, are seeking better investment opportunities in the mainland to keep their assets from depreciating.
They have been buying stocks since the regulator lifted a ban on such investments in February 2005. Compared with the 53 per cent increase in stock and bond investments, bank deposits rose just 28 per cent to 700 billion yuan.
The mainland's insurance industry last year realised stock investment gains of 8.92 billion yuan, accounting for almost 10 per cent of their investment income, the regulator said earlier.