On April 8, ahead of the market opening, key statements were made by the People's Bank of China, Central Huijin Investment Ltd., and the financial regulatory authority regarding the stability of the capital market.
People's Bank of China Vows to Provide Firm Support for Capital Market Stability
A spokesperson for the People's Bank of China addressed the media about supporting Central Huijin in stabilizing the capital market. When asked about Central Huijin's announcement on April 7 to increase investments in ETFs, the spokesperson expressed strong support for these actions and stated that the central bank would provide adequate refinancing support when necessary to ensure the smooth operation of the capital market.
Central Huijin Expresses Confidence in Capital Market Stability
On April 7, Central Huijin announced its commitment to the development prospects of the Chinese capital market and recognized the current investment value of A-shares. The company has already increased its holdings in exchange-traded funds (ETFs) and plans to continue doing so to maintain market stability. A person in charge emphasized on April 8 that as reforms in capital markets advance, the quality of listed companies is improving, and the attractiveness of core A-share assets is increasing, with overall valuations at relatively low historical levels.
Central Huijin is determined to act as a "stabilizer" in the capital market, effectively mitigating abnormal market fluctuations and decisively intervening when necessary. They will focus on increasing investments across various market styles and ensuring a balanced investment structure.
National Financial Regulatory Administration: Increasing Insurance Fund Investments in the Stock Market
The National Financial Regulatory Administration (NFRA) recently issued a notice to adjust the regulatory ratios for equity assets of insurance funds, optimizing policies to support the capital market and the real economy. The notice raises the upper limit on the allocation of equity assets and simplifies standards, allowing for a 5% increase in the proportion of equity assets corresponding to certain solvency ratios, thus expanding investment opportunities in the equity market.
The notice also encourages higher concentrations of investments in venture capital funds and guides insurance funds to increase equity investments in strategic emerging industries. Additionally, it relaxes regulatory requirements for tax-deferred retirement accounts, facilitating the high-quality development of the third pillar of retirement insurance.
Officials stated that this notice is a significant step in optimizing the asset allocation of insurance funds, promoting the insurance industry's role in supporting financial initiatives, and leveraging the advantages of long-term and patient capital. Moving forward, the regulatory authority will continue to improve policies governing the use of insurance funds to support economic and social development.
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