China insurers allowed to invest more in equities and real estate
China Insurance Regulatory Commission plans to allow insurers to increase their stakes in equities and property in bid to boost returns
The mainland's insurance regulator is planning to allow insurers to invest a bigger share of their portfolios in equities and real estate in the hope it will boost their investment returns.
The China Insurance Regulatory Commission plans to loosen caps on insurers' investments in equities to 30 per cent of total assets from the current 25 per cent, the China Securities Journal reported yesterday, citing draft rules recently sent to insurance companies.
The limit on investments in real estate and infrastructure will also be raised to 30 per cent of insurers' total assets from 20 per cent, the report says.
The CIRC did not respond to queries yesterday.
Equity investment includes listed shares and equity funds. Insurance funds are also allowed to invest up to 10 per cent of their portfolios in private equity and funds.
The loosening of controls over investments in insurance funds in equities will help foster the development of capital markets, according to Chen Xingyu, a Shanghai-based analyst with Phillip Securities.
"Insurers are the major institutional investors in shares listed on the mainland," he said.