RISE IN EQUITY INVESTMENT ALLOWANCE EXPECTED IN CHINA

Chinese insurers are set to see the limit on investment in equities increased to 10%, according to official publication Shanghai Securities News , without naming sources. Currently investments by insurers on the stockmarket have to be calculated at stock price and to be no more than 5% of a total portfolio. However, insurers were thought unlikely to take up the quota in full, at least not immediately. Guotai Jun’an Securities analyst Wu Jianxiong said that “the allowed ratio of insurers’ investment in shares is different from the realistic one”. Xinhua has reported that by the end of June insurers had invested a total of 2.75% of their investable assets in stocks, so an increase of the cap from 5% to 10% would not have that great an effect. Taiping Life executive Wang Jian noted that the move increased the flexibility of the investment arms of assurers in China, but he conceded that it was hard to say whether the expected change in limits would have much impact on the distribution of funds. Manulife-Sinochem investment department manager Ma Xiaoyang told China Daily that “we want the licence to make direct investments on the stockmarket, but it doesn’t necessarily men we would buy shares immediately”.