China relaxes rules for insurers to invest in stock markets

BEIJING (Reuters) – China’s financial regulator on Sunday reduced the risk weighting it attaches to insurance companies’ holdings of blue-chip shares and tech stocks, encouraging them to invest more in the country’s lagging stock market.

The National Administration of Financial Regulation (NAFR)said on its website that the risk weighting for CSI300 Index constituents would be reduced to 0.3 from 0.35, while that for stocks listed on Shanghai’s tech-focused STAR Market would be cut to 0.4, from 0.45.

A lower risk weighting frees up more capital for insurers to invest.

In addition, the watchdog reduced the risk weighting it assigns to investments in Real Estate Investment Trusts (REITs), which in China channel money mainly into infrastructure projects.

It also set a relatively low risk weighting for private equity investments in China’s strategic and emerging sectors.

China has unveiled a slew of measures to boost investor confidence and revive its stock market. They include halving stamp duty on stock trading and slowing the pace of initial public offerings (IPOs).

(Reporting by Samuel Shen in Shanghai and Yew Lun Tian in Beijing; Editing by Christina Fincher)