Insurers to Cut Holdings in Real Estate Stocks

Real estate stocks on the Mainland China stock market dropped for several consecutive days recently due to report that property tax pilot will be launched in Beijing, Shanghai, Shenzhen and Chongqing.

Insurers, especially those who invested much in such stocks, plan to cut holdings in them when the latter rebound. Statistics show that many insurers in the Chinese market began attaching more importance to investing in such stocks from the second half of last year. In addition, they expanded such investment at the start of February this year when the Shanghai Composite Index ranged from 2,900 to 3,000 points. Such stocks, as a result, become the second variety for insurers to buy heavily.

By the end of 2009, insurers including China Life Insurance Co., Ltd. (SHSE: 601628 and SEHK: 2628), China Pacific Insurance (Group) Co., Ltd. (CPIC, SEHK: 2601 and SHSE: 601601), China Reinsurance (Group) Corp. (China Re), China Continent Property & Casualty Insurance Co., Ltd. (CCIC), and Taikang Life Insurance Co., Ltd. had bought into real estate stocks like China Vanke Co., Ltd. (SZSE: 000002) and Gemdale Corp.