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July 6, 2017

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Home » Business » Finance

Pension reforms nudge shares higher

By Hu Yumo | 00:01 UTC+8 July 6, 2017 | Print Edition

SHANGHAI stocks closed higher yesterday as investors turned optimistic after the State Council released a guideline encouraging commercial pension funds to invest in the financial market.

The Shanghai Composite Index edged up 0.76 percent to close at 3,207.13 points, above the 3,200 psychological threshold yesterday.

The new State Council guideline encourages commercial pension funds to invest in stocks, bonds and securities. It is aimed at providing long-term support for the development of the capital market.

“China is going to further promote the development of commercial pension insurance. Commercial pension insurance will become a stable contributor to financial safety and economic growth,” the guideline said.

Analysts said the guideline was a positive signal to insurance companies and the market, with more long-term funds expected to flow in.

“The guideline released by the State Council has a positive effect on the insurance industry. Insurance sector (stocks) jumped a lot and played decisive role in today’s market activity,” QianKun Investment Co said in a note yesterday.

Most sectors rose: financial, consumer and telecommunications companies were among the biggest gainers.

Insurance companies jumped sharply.

New China Life Insurance Co Ltd surged 7.27 percent to 53.69 yuan (US$7.90), Ping An Insurance Group Co of China Ltd rose 5.22 percent to 50.42 yuan and China Pacific Insurance group Co Ltd was up 4.23 percent to 34.47 yuan.

Commercial pension insurance mainly serves older citizens, similar to social security.

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