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E-mail Xinhua, January 23, 2025
Chinese financial authorities have unveiled a plan to detail measures for encouraging medium- and long-term funds into the capital market to further stabilize stock performance, the country's top securities regulator said Wednesday.
The document, jointly released by the office of the Central Financial Work Commission, as well as five government departments, stressed attracting funds from commercial insurance, national social security and basic pension funds.
Annuity funds, public funds, and other medium- to long-term capital funds are also expected to increase their stock market investments, it said.
Toward that end, the plan aims to increase the proportion and stability of A-share investment in the portfolios of commercial insurance companies, and improve the investment management mechanism of the national social security fund and the basic pension insurance fund.
The performance of state-owned insurance companies will be assessed over a cycle of more than three years. For the national social security and basic pension funds, the evaluation periods will be over five years and over three years, respectively.
The investment of annuity funds should be more market-oriented, and both the scale and the proportion of equity funds should be expanded in public offering funds, said the document.
The plan also underscored efforts to optimize the capital market's investment ecosystem, pledging to encourage listed companies to increase stock buybacks and distribute dividends several times per year.
Public funds, commercial insurance, basic pension, annuity funds and wealth management funds will be able to participate in listed companies' private placements as strategic investors, and the scale of the Securities, Funds and Insurance companies Swap Facility operation will be expanded, it said.
At the end of August 2024, institutional investors, including public equity, insurance and various pension funds, collectively held 14.5 trillion yuan (about $2.02 trillion) of circulating A-shares. Their proportion of the total market value increased from 17 percent at the beginning of 2019 to 22.2 percent by last August.
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