BIZCHINA / News
Insurers to invest in overseas equity markets
By Zhang Lu (China Daily)
Updated: 2007-06-01 08:48
Chinese insurance companies will soon be allowed to invest in equities in
overseas markets, a senior official of the China Insurance Regulatory
Commission (CIRC) said yesterday.
The move is part of the government's efforts to "deregulate the sector
step by step", said Sun Jianyong, director of the insurance fund
management regulatory department of the CIRC, at a derivates forum in
Beijing.
The regulator will initially allow insurers to invest in mature stock
markets such as London and New York this year.
"The long-awaited new rules on insurers' overseas investments will be
issued in one to two months," Sun said.
The CIRC published the draft rules, designed to broaden insurers'
investment channels and help boost investment returns, in December to
seek public opinion on the subject.
The government is trying to deregulate the insurance sector step by step.
Under the new rules, insurers will be allowed to invest in money market
and fixed-return products, stocks, options, mutual funds and derivatives
abroad.
The rules will allow insurers to invest up to 15 percent of their total
assets in the overseas market. As the total assets of China's insurance
sector stood at 1.97 trillion yuan by the end of last year, around 300
billion yuan can be invested overseas.
The government has launched a slew of policies to broaden the investment
channels of insurers, such as allowing them to pour money into
infrastructure projects and buy stakes in commercial banks.
"There will be concrete progress this year toward letting insurers set up
fund management companies," Sun said.
The China Banking Regulatory Commission (CBRC) is also working to
cooperate with regulators of other markets to allow commercial banks,
under the qualified domestic institutional investors (QDIIs) program,
invest money on behalf of their clients in overseas stock markets, Huang
Wei, a CBRC official said at the forum.
Last month, the CBRC allowed banks to invest in overseas equities and
structured equity products, but only in markets of which regulators have
signed memorandums of understanding with the CBRC, namely Hong Kong.
The effort is seen as a boost investment yields and make the QDII program
more appealing.
"The gradual renminbi appreciation and surging domestic stock prices have
hindered development of the program," said senior CBRC official Yin Long.
The government has granted 22 banks a total quota of $14.8 billion under
the QDII scheme, Yin said. But only $800-900 million has been used up.
(For more biz stories, please visit Industry Updates)
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