SHANGHAI: China announced plans on Thursday to channel hundreds of billions of yuan annually into shares from state-owned insurers, in the authorities' latest effort to support equity markets.
Authorities will in the first half of this year call on insurers to invest at least 100 billion yuan ($13.75 billion) of long-term funds into stocks, China Securities Regulatory Commission head Wu Qing said at a press conference.
The regulator will encourage both state-owned and commercial insurers to invest 30% of new annual premiums in A-shares, and encourage mutual funds to increase their A-share holdings' tradable market value by at least 10% annually over the next three years, Wu said.
The plan also involves guiding mutual fund managers to increase equity funds under their management, cut fund sales fee and promote the development of exchange-traded fund products.
The CSI300 blue-chip index advanced 1.47% shortly after open on Thursday while the Shanghai Composite Index jumped 1.62%. Hong Kong's Hang Seng Index similarly gained more than 1%.
Authorities have been intensifying policy support to prop up share prices as the world's second-largest economy navigates deflationary pressure and geopolitical tension.
They introduced swap and re-lending schemes totalling 800 billion yuan for stock purchases in September as well as guidelines on market capitalisation management to encourage companies to improve shareholder returns.
The latest measures are along the same lines as previous calls to promote capital markets, said Ben Bennett, Asia-Pacific investment strategist at Legal And General Investment Management.
"It's not a big surprise, but nice to see some tangible policies. These things need to go hand in hand with stronger growth and earnings expectations to be fully effective."
Stock prices have been highly volatile since authorities signalled support. The benchmark stock index surged 35% in the two weeks after that first stimulus announcement but disappointment with the degree and pace of implementation has seen the CSI 300 index since halve that gain. ($1 = 7.2728 Chinese yuan renminbi) - Reuters
