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Saturday, November 06, 1999, updated at 11:08(GMT+8) Business China's New Securities Investment Policy Welcomed China's newly announced policy of allowing insurers to buy into securities investment funds has been welcomed by both experts and the insurance and securities sectors. They say the move will help insurers enter the stock market indirectly and therefore will benefit both the insurers and China' s stock exchanges. Joseph Sin, president of AXA-Minmetals Assurance Co., Ltd., said this provides a new investment venue for insurance companies and will be conducive to their long-term development. At present, Sin said, Chinese insurance firms put their capital mostly in banks, which have lowered interest rates seven times since 1996, prompting insurance companies to seek new investment opportunities. Sin's company has just purchased two million shares of the Tongsheng Securities Investment Fund, the first such fund to be invested in by insurance firms. "A wider investment channel may help us reduce operation costs and risks," Sin added. Experts said insurance companies' buying into securities investment funds will also increase the capital supply in China's securities market, which needs more institutional investors, including insurance firms, to keep it stable and growing. Official statistics show Chinese insurance firms generated a total of 210 billion yuan from premiums from 1993 to 1997, the bulk of which has been lying idle in banks. This capital now can become a source of long-term investment for the securities market, experts say. Printer-friendly Version In This SectionSearch Back to top Copyright by People's Daily Online, All rights reserved |
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