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In the latest trial scheme under the China Insurance Regulatory Comission (CIRC), insurers can invest up to 5% of their total assets under management overseas. A crude calculation using these companies' total AUM as of end-2006 suggests the total outward investments of these insurers could reach up to $9.19 billion.
CIRC issued a regulation earlier in July that allows insurance companies in China to invest up to 15% of their AUM overseas. However, unlike bank QDII and fund QDII, which are regulated under the China Bank Regulatory Commission and China Securities Regulatory Commission respectively, the insurance QDII investment scope is limited to Hong Kong registered stocks, fixed income and warrants.
According to the latest statistics by the CIRC, total assets held by ChinaÆs insurance industry now stands at $3.91 trillion. Of these, $2.56 trillion is invested in the market. CIRC says the industry is holding $9.91 in cash, and has received $788 billion of premium in the ten months this year.
These numbers do not yet reflect the lucrative revenues insurers will receive from the corporate pension business which has only just begun. The World Bank estimates it will add another $1.8 trillion to the insurersÆ assets by 2030.
Earlier, Ping An and China Life Insurance set up asset management arms in Hong Kong. However, the actual limits of these insurersÆ quota are still subject to approval, with the exception of Taiping Life, which has a disclosed quota size of $270 million.
Ping An is partnering with Mercer to build an overseas investment capability, while China Life has formed a fund management joint venture with Franklin Templeton.
TaipingÆs spokesman says the company will refrain from Hong KongÆs current stock frenzy and time for market entrance at a less volatile period later. He adds the company will aim for a more balanced allocation and will invest for long-term return enhancement.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
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SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.