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BIZCHINA / Center
China to allow more insurance funds into stock market
By Song Hongmei (Chinadaily.com.cn)
Updated: 2007-07-17 16:38
Opening the door for insurers to plow more money into domestic stocks
caters to their development, according to insurance insiders.
Despite fluctuations in the stock market, the policy demonstrates that
CIRC thinks?the stock market will remain bullish in the long run, said a
source close to the regulator.
Although they are allowed to invest more money, insurance companies will
stick to their investment principles, pursuing long-term and stable
returns and not buying stocks immediately at a large scale, industry
insiders said.
China has relaxed restrictions on insurers' investment options over the
past two years. In 2005, insurance companies were allowed to invest one
to two percent of their assets in domestic equities. And the ceiling was
gradually raised to five percent in 2006.
According to CIRC, Chinese insurers earned 8.9 billion yuan by investing
in the country's bullish stock market last year. The yield of stock
investment for the entire insurance industry was 27.1 percent, more than
four times that of returns on the insurance funds.
The insurance sector made 93.2 billion yuan on all investments last year,
with a yield of 5.82 percent and doubling that of 2005.
(For more biz stories, please visit Industry Updates)
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