CHINESE STATE MEDIA CONFIRMS INSURER INVESTMENT CHANGE

Chinese insurers have been given permission to invest 10% of their funds in domestic equities, twice the previous limit, state media have confirmed. The China Insurance Regulatory Commission (CIRC) has long been rumoured to be planning such a move, which will permit insurers to invest a further 100bn yuan ($13.2bn) on the Shanghai Exchange. However, the impact will be lessened by the fact that the cap on investments in stocks via fund products will be lowered to 10% from 15%. Up to the end of last year Chinese insurers continued to hold some 80% of their funds in low-yield instruments such as government bonds and bank deposits. Permission to invest up to 5% of funds in domestic equities was granted in February 2005.