Mainland insurers can now invest an additional 100 billion yuan directly in the A-share market after the regulator doubled their investment quota to 10 per cent of their total assets, according to sources.
The move reflects the regulator's intention to increase liquidity before the listings of major state-owned firms and the return of Hong Kong-listed heavyweights to the domestic markets in coming months.
'We received an approval recently,' said a portfolio manager at a top mainland insurer who declined to be identified. 'The increase gives us flexibility in operations but it doesn't necessarily mean we will plough all the money into stocks.'
The China Securities Journal, Shanghai Securities News and Securities Times yesterday reported that the China Insurance Regulatory Commission was about to announce the deregulation, driving the Shanghai Composite Index 1.94 per cent up after a 2.36 per cent drop on Monday.
Mainland insurers had previously been allowed to spend as much as 5 per cent of their 1.9 trillion yuan in total assets to buy stocks directly. They could invest another 15 per cent in mutual funds.
The portfolio manager said the regulator still required insurers to invest no more than 20 per cent of their total assets into stocks and funds.
