By Investing in Money-Management Firms, Chinese Insurers May be Signaling Bull Market's Return
From Staff Reports
When leading China-based life insurer China Life Insurance Co. Ltd. (LFC) launched its first investment-linked insurance product this week, analysts took the announcement as a sign that the downturn in the Chinese stock market was all but over.
The product - the China Life Yufeng Investment-linked Insurance Fund - will invest chiefly in the blue-chip and financial-services stocks of Mainland China companies, Yu Yong, general management assistant for the China Life Bank Assurance unit, told journalists this week. The fund will purchase stocks already trading in the secondary markets, and will also invest in new issues, such as initial public offerings (IPOs), according to a report by TradingMarkets.com.
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Analysts said this announcement was a clear signal that the "recession" in China's stock market was over. That's because China's insurance companies have been buying shares in top-performing money-management companies, including China Asset Management Co. Ltd. - one of the first asset-management firms to be licensed in China - AIG-Huatai Fund Management Co. Ltd. and Harvest Fund Management Co. Ltd. Risk-averse insurers are loathe to make such moves if they think that market swings and share-price volatility are on the upswing.
Ping An Insurance (Group) Company of China Ltd. - the domestic archrival of China Life - has also been investing in asset-management firms.
News and Related Story Links:
- TradingMarkets.com:
Insurance Firms Eye Funds in China.