Insurer eyes securities, infrastructure in emerging markets
Ping An Insurance, the nation's second-largest life insurer, could invest as much as 74 billion yuan overseas, preferably in financial institutions in emerging markets and infrastructure construction, after China lifts its ban on insurers investing money in foreign markets, according to company president Louis Cheung Chi-yan.
Under the qualified domestic institutional investor scheme, mainland financial institutions are allowed to invest domestic funds in overseas equities, bonds and other investment products to increase the country's capital outflow.
The government is expected to allow insurers this year to invest at least 300 billion yuan in an expanded portfolio including equities and equity funds in the global markets, such as New York and London, after lifting the ban on overseas investment by banks last month.
Insurers will be allowed to invest assets overseas, instead of raising money from clients, giving themselves flexibility to expand their global portfolios rather than relying on customer demand. Also, insurers have more experience in overseas investment, having started to invest their foreign-currency assets overseas since last year.
Ping An has begun investing its foreign currency capital of US$2 billion overseas, realising higher returns than its yuan asset investments, excluding foreign exchange losses.