China relaxes rules for insurers to invest in stock markets
China relaxes rules for insurers to invest in stock markets: China’s financial regulator cut the risk weighting it assigns to insurance firms’ holdings in blue-chip stocks and technology stocks on Sunday, encouraging them to invest more in the country’s lagging stock market.
On its website, the National Administration of Financial Regulation (NAFR) said that the risk weighting for CSI300 Index members would be decreased to 0.3 from 0.35 and that the risk weighting for companies listed on Shanghai’s tech-focused STAR Market would be reduced to 0.4 from 0.45. A lower risk weighting allows insurers to spend more cash.
Furthermore, the watchdog decreased the risk weighting it provides to investments in Real Estate Investment Trusts (REITs), which are mostly used to fund infrastructure projects in China.
It also established a relatively low-risk weighting for private equity investments in important and developing areas in China.
China has announced a raft of policies aimed at boosting investor confidence and reviving its stock market. They include lowering the stock trading stamp tax and decreasing the pace of first public offerings (IPOs).
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