China pushes to diversify stock market investment: Report, Latest Business News - The New Paper

China pushes to diversify stock market investment: Report

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BEIJING: China will encourage the development of annuities and endowment insurance to diversify people's investment in the stock market, instead of direct share purchases from savings, the government-backed Securities Times said.

"The key consideration is to cultivate a multi-layer capital market," the newspaper reported, quoting spokesman of China Banking and Insurance Regulatory Commission Xiao Yuanqi.

"There'll be part of savings flows to the institutional investors for sure, then the professional investors can allocate those funds to bond and equity investments," Mr Xiao said on Monday.

"We didn't mean to encourage direct purchase of shares from household savings."


The media briefing was held days after a statement from the banking and insurance regulator that it would promote the conversion of household savings into long-term funds in the capital markets.

China's benchmark index rose on Monday as analysts believed the move would bode well for the country's capital market in the long run.

The regulator would learn from overseas experience and explore the risk disposal framework of problematic institutions, further strengthening the shareholding management of smaller banks to fend off contagious risks, the newspaper quoted Mr Xiao as saying.

To recapitalise the cash-starved banking sector, Mr Xiao said the regulator would also develop capital tools to replenish banks' non-tier-one capital ratios. - REUTERS