Ping An Insurance Group yesterday reported a nearly 40 percent jump in net profit last year on stellar life insurance sales and investment returns.
Ping An, Asia's second-largest insurance company by market value, said its net profit rose 38 percent to 54.2 billion yuan ($8.3 billion) in 2015, the highest since 2003.
Strong life insurance sales and a surge of investment returns partly from the bullish Chinese stock market in the first half of last year helped drive up the profits.
The company reported that premiums for life insurance rose 20 percent to 299.8 billion yuan, and the gross investment returns jumped 80.1 percent to 114.75 billion yuan last year.
Timothy Chan, the group's chief investment officer, told reporters yesterday that he expected more uncertainties this year and would seek more investment opportunities in blue-chip stocks, preferred stocks and fixed assets, especially logistic infrastructure in first and second-tier cities.
Guotai Junan Securities said in a note that Ping An's investment returns this year is likely to fall but its core insurance business remains in good shape.
The life insurance sector has benefited from greater focus on offering protection type of policies than capital-consuming investment-related ones.
The property and casualty sector has also outperformed industrial average in managing costs, the note said.
Analysts also said the group's more than 10 Internet financing branches spanning wealth management, e-commerce, health care consulting, and home sales will bring more revenue as well as clients.
China vows to further open up domestic markets to foreign investors with fewer restrictions as the country's economic reform goes deeper.
"We have largely slashed restrictions to market access to the Chinese market to further lure foreign investment," said Lian Weiliang, deputy head of the National Development and Reform Commission, at a news briefing on Wednesday.
He added that restrictions over the proportion of foreign equity have also been further eased in the foreign-invested projects, especially in the service and manufacturing sectors.
"It's very important to set up a new system for an open economy and create a business environment that is more legalized and more international", he said. "And the country's efforts have paid off."
China's foreign investment has bucked the trend of the cooling global economy to increase 9.2 percent during January-August, among which investment in the service sector surged 20.1 percent from a year earlier.
In March, the country halved the number of industries that used to be off-limits to foreign investors, another big step toward a more favorable business environment amid reforms.
Lian said the country has been gradually shifting to the "negative list" approach to better regulate market access and encourage foreign investment.
The negative list, which identifies sectors and businesses that are off-limits for investment and allows investment in all other sectors, was first announced in September 2013 in the Shanghai Free Trade Zone and then extended to the other three FTZs in Guangdong, Tianjin and Fujian a year later.
Retail investors check share prices at a brokerage in Qingdao, Shandong province, on Aug 18. The benchmark Shanghai Composite Index plunged by 6.15 percent to close at 3,748.16 points.
Share prices plunged on Tuesday as jittery investors resorted to huge sell-offs on concerns that the government has halted its plan to buy equities to stabilize the market.
The benchmark Shanghai Composite Index sank by 6.15 percent, or 245.5 points, to close at 3,748.16. It was the biggest loss in three weeks since an 8.5 percent dip on July 27.
State-owned enterprises, which are expected to undergo major ownership reforms, led the decline with more than 1,600 stocks on both the Shanghai and Shenzhen bourses tumbling by the 10 percent daily limit.
The market slump came after the country's securities regulator said on Friday that the State-owned margin lender China Securities Finance Corp will not step into the market unless there are abnormal market fluctuations.
The regulator's announcement has been widely interpreted as a signal that the government is ending its direct intervention and letting the market mechanism play a bigger role after the benchmark rebounded by about 15 percent from a bottom on July 8.
But Tuesday's decline underscored that investors' sentiment remained fragile as a slowing economy and the depreciation of the yuan continued to weigh on the market.
Jiang Chao, an analyst with Haitong Securities Co, said that the monetary authorities appear to be in a dilemma over the easing policies and the monetary uncertainty may continue to destabilize the market.
"There is need to inject more liquidity as the depreciation of the yuan is likely to trigger capital outflows. But the market rescue efforts have led to a surge in the broad monetary supply which created a policy dilemma," he said in a research note.
The recovery of the country's home prices has also dimmed investors' expectation for further monetary easing, some analysts said.
Li Daxiao, chief economist at Yingda Securities Co, urged investors not to overreact to Tuesday's decline, but warned about the risk of excess valuations of companies in the military industry.
Share prices of listed military-related companies have ballooned substantially ahead of the country's military parade commemorating the end of World War II and on expectations of major reforms.
The average valuation of the industry has been ranked the top among all industries with the price-to-earnings ratio of most companies exceeding 100 times, according to estimates.
"There is a big risk of the bubble bursting in military-related stocks, which is even worse than the startup board," Li said.
Chinese shares bounced back from early morning losses and closed sharply higher on Tuesday following a nightmarish two weeks.
After a two-week tumble, China stocks surged on Tuesday as a series of government measures bolstered investor confidence.
The CSI 300 Index, which monitors share prices of the largest companies listed in Shanghai and Shenzhen, jumped by 6.7 percent to 4,473.00 points, while the Shanghai Composite Index gained 5.6 percent to 4,277.22 points, the highest daily gain since 2009. The Chinese A-share market has fallen by about 20 percent from its peak in mid-June.
A series of measures to maintain market confidence have been introduced since Friday, including draft rules to allow pension funds to buy stocks, funds and equity-backed pension products.
That could channel more than 1.5 trillion yuan ($242 billion) into equity-backed investments, including about 15 billion yuan directly into the A-share market, Shanghai Securities News reported.
Pension funds may not be allowed to buy stocks before the end of this year, according to the draft rules, but investor confidence has been bolstered by the news, pushing up sentiments in the A-share market, researchers said.
"Although the pension funds may not help the A-share market in the short term, the draft measure, along with the recent cuts in the reserve requirement ratio and interest rates, show intentions to stabilize market incentives," a research report by Haitong Securities said.
The country's fund association said the falling prices presented valuable buying opportunities and it urged hedge fund managers to make rational investment decisions.
"Confidence is more important than gold," the Asset Management Association of China said on Tuesday. "Sunshine always follows rainy days," it added.
Brokerage firm Guotai Junan Securities said it would lower margin requirements for certain blue chips to lever-age investment values.
Leading asset managers echoed the sentiments to convince investors that the bull market was not yet over.
Managers of private equity funds also stated that they believe the market will continue to be bullish.
"From a mid-to long-term perspective, the foundations of the bull market have not been shaken. Instead, they have been consolidated amid corrections, and the market will be bullish in a more stable and lasting manner. We believe it is a rational decision and good timing for value investing," said Wang Yawei, president of Shenzhen Qianhe Capital Management.
Technology companies and brokerage stocks rallied on Tuesday, with an average rise of the sectors reaching about 8 percent.
Mainland stock markets tumbled in late afternoon trading Thursday as investors cashed in on gains from earlier in the day.
The Shanghai Composite Index fell 3.46 percent or 162.37 points to 4,527.78 points Thursday. The Shenzhen Component Index lost 3.80 percent or 619.87 points to close at 15,692.44 points.
The CSI 300 Index of the biggest companies traded in Shanghai and Shenzhen fell 3.56 percent or 173.61 points to 4,706.52 points.
A total of 1.55 trillion yuan ($249.71 billion) changed hands on the two bourses, up from the previous trading day's 1.49 trillion yuan.
News about the central government's decision to scrap the debt-to-loan ratio for banks sent heavily weighted financial stocks soaring during morning trading, pushing the Shanghai benchmark above the 4,700 point mark by midday.
However, in the afternoon session, banking heavyweights took a hit as cautious investors decided to take some profit, dragging down the Shanghai index.
Despite the good news about the debt-to-loan ratio, the banking sector still suffered losses, indicating weak investor sentiment, New Times Securities said in a note Thursday.
The regulatory approval of a new batch of IPOs may have also contributed to the fragile sentiment.
The China Securities Regulatory Commission said late Wednesday that it has approved 28 new IPOs, which media reports said would freeze more than 1.4 trillion yuan.
The coal and nonferrous metal sectors were among the worst performers Thursday. Gansu Jingyuan Coal Industry and Electricity Power Co, Shaanxi Coal Industry Co, Anhui Jingcheng Copper Share Co and Shenghe Resources Holding Co fell 9.46 percent, 9.04 percent, 9.45 percent and 9.20 percent, respectively.
ChiNext, the country's NASDAQ-style board for high-tech and emerging start-ups, slumped 5.23 percent or 177.02 points to close at 3,206.38 points.
Japanese fashion manufacturer and retailer UNIQLO opened its first store in Ma'anshan City in east China's Anhui Province earlier this year, thanks in part to China's campaign to streamline administration.
With the help of a local subdistrict office, Fast Retailing (China) Trading Co., Ltd. managed to obtain a business license, despite lacking an important document.
"We needed the department store's certificate of title for our business license before making orders and employing people. However, the construction work was not done yet and we didn't have much time to wait," said Qiang Lili, a manager with the company.
The company went to the city's government affairs service center for help and learned that Ma'anshan had just launched a new regulation simplifying business location registration.
According to the new rule, which went into effect on December 31, 2014, those who temporarily lack the certificate of title for business license applications can submit proof of location from the local subdistrict office instead.
"We know the streamlining campaign is going on and we experienced the convenience this time. It's encouraging," said Qiang.
In addition to making business registration easier, Ma'anshan has also shortened the vetting period for investment projects. For example, the approval time for industrial projects was slashed from more than 30 to just 17 days.
"Foreign investors came for business opportunities, but the better government affairs services gave us more confidence," Qiang said.
In the first quarter of this year, Ma'anshan City's utilization of foreign direct investment reached 347 million U.S. dollars, up 12.8 percent year on year.
Similarly, foreign direct investment in other provinces also achieved steady growth in the first quarter of this year.
In Hubei, utilization of foreign investment hit 2.24 billion U.S.dollars, up 10.1 percent year on year. In Jiangxi, utilization of foreign investment reached 2.21 billion U.S. dollars, up 10.3 percent, and in Tianjin, it hit 6.37 billion U.S. dollars, up 10.5 percent.
Since 2013, China's State Council has been streamlining government administration to reduce government control and unleash market vitality.
In two years, more than 700 approval items controlled by central government departments have been canceled or delegated to lower agencies, more than a third of all approval items handled by the State Council prior to streamlining.
Following the steps of the central government, local administrations also explored ways to simplify the approval process and lower the threshold for investment.
On May 12, Chinese Premier Li Keqiang again called for more efforts to streamline administration procedures at a national teleconference attended by senior and mid-level officials.
Li said the government will cancel more approval items, make business registration easier and waive administrative charges it deems unreasonable this year.
"It is a positive trend," said Wang Yukai, a professor from the Chinese Academy of Governance. "But to create a better foreign investment environment in the long run, the government management system should also be improved."
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