Insurers urged to back State share sales
(Shenzhen Daily/Agencies)
Updated: 2005-06-24 15:17

China urged insurers to build up their stock holdings, calling on them to support a domestic stock market pilot program to trim State holdings, the China Business News reported Thursday.

“Insurance firms are important institutional investors,” said Li Kemu, vice chairman of the China Insurance Regulatory Commission.

“They should increase their stock holdings steadily and appropriately to support the share sell-down,” Li said during an address at an insurance forum in Beijing.

The call is the government’s latest effort to support the markets from sliding, following the revival in April of a plan to sell down more than US$200 billion in non-traded government holdings to finance a patchy welfare system and enhance transparency.

In other efforts to shore up the market, China has allowed listed firms to buy back their own shares and has temporarily halved personal income taxes on dividend earned by individual investors.

The government, worried that failure to meet policy obligations could foment social instability, confined insurers until this year to investments less risky than shares.

Domestic insurers, such as top life insurers China Life Insurance Co. and Ping An Insurance, are now allowed to invest in overseas debt and domestic stocks.