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August 24, 2009

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Insurers favor equities

CHINA'S insurance companies raised their investment portfolios by more than 5 percent last month, bringing the total for the first seven months to 2.45 trillion yuan (US$358 billion), according to the country's insurance regulator.

About 10 percent of capital investments in the first half of this year were in stocks, the regulator has said, but it gave no comparative figure for January to July.

Bank deposits over the seven months fell to 1.03 trillion yuan, 15.23 billion yuan less than in the first six months, it said.

Last month alone, investments from insurance funds stood at 120.4 billion yuan, the China Insurance Regulatory Commission said in a report on its Website.

The commission said the booming equities market had led insurance companies to put more money into stocks.

The Shanghai Composite Index, China's main stock gauge, rose more than 90 percent this year to early this month before falling about 15 percent from its peak. Still, it is up nearly 63 percent so far this year.

Ping An Insurance (Group) of China Ltd, the world's second-biggest life insurer by market value, last week said it will keep stock investments at about 10 percent of its portfolio in the second half.

"The market has somewhat outpaced optimism of a good economic trend," Louis Cheung, its group president, said at a news conference days after the company reported second-quarter earnings were boosted by strong investment returns.


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