Listed Insurers Expanding Equity Investment

Three Mainland China-listed insurers seems to value investment opportunities in the domestic stock market much in the second half of this year as they have begun expanding such investment in succession.

According to statistics from Wind Info, China Life Insurance Co., Ltd. (SHSE: 601628 and SEHK: 2628), the nation's biggest life insurer, edged onto the top 10 tradable shareholder tally of over 100 listed companies as at the start of September. Ping An Insurance (Group) Company of China, Ltd. (SEHK: 601318 and SEHK: 2318) and China Pacific Insurance (Group) Co., Ltd. (CPIC, SHSE: 601601 and SEHK: 2601) each appeared on the top 10 tradable shareholder tally of about 40 and 48 listed companies.

The stocks they preferred to mainly involve in pharmaceutical, liquor, new energy and environmental protection. For instance, China Life, CPIC and the nation's Social Security Fund appeared on the top 10 tradable shareholder tally of Xinjiang Qingsong Building Materials and Chemicals (Group) Co., Ltd. (SHSE: 600425). Meanwhile, Shandong Jinjing Science and Technology Co., Ltd. (SHSE: 600586) was heavily bought by both China Life and its domestic archrival Ping An.

Chen Dexian, vice CEO of Ping An, said at a press conference held for its first-half performance that in the second half of the year, it would prefer to investment opportunities in the fields of new energy, wind power, new material, environmental protection, and so on. Liu Jiade, vice president of China Life, revealed that as for investment with fixed yields, it would adjust strategy in accordance to the market and as for equity investment, it would keep a more flexile attitude. "Insurers in the market will expand equity investment in the second half due to rising capital pressure," an analyst with China Everbright Securities Co., Ltd. (SHSE: 601788), said in an interview. "They have not used out the quota, so there is little possibility for them to change investment strategy to a large extent owning to policy guidelines," said another analyst.

The Shanghai Composite Index dropped 26.82 percent in the first six months of this year and in order to reduce risk, the three-listed insurers lowered proportion of capital used for equity investment in succession. The figures of China Life, Ping An and CPIC each stood at 11.1 percent, 8.11 percent and 10.9 percent as at June 30, compared to 15.3 percent, 10.71 percent and 12.3 percent as at the end of 2009.