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Chinese authorities have sought to boost the stock market and restore confidence in the world’s second-largest economy by telling local insurance companies and mutual funds to invest more in domestic stocks.
Regulators have told state insurers to invest a minimum of 30 per cent of their new policy premiums in local shares, while mutual funds have been told to increase these shareholdings by 10 per cent annually for the next three years. This is the first time regulators have set an explicit target for investments.
The policy shift could mean that up to Rmb500bn ($68bn) could flow into the market from China’s three biggest state-owned insurers alone, according to a Financial Times analysis of last year’s policy premiums. Insurers already hold shares worth Rmb4.4tn, said regulators.
The mainland’s CSI 300…
