Bond Securities (000728) He Xi Sheng Hao Yi Tang pointed out that the style of rapid entry and exit by insurance funds determines their high sensitivity to market hotspots. The low-carbon economy is a recognized hotspot sector in the market. It is very possible that the insurance funds' reduction in positions near the 2600-point level involved low-carbon stocks. Additionally, with no long-term favorable policy support for this sector, the investment risks are relatively large. It is expected that the trend of insurance funds reducing holdings in low-carbon stocks will continue in the future market.
Banking Sector - Probability of Involvement: 95%
Haitong Securities (600837) analyst Juan Ling believed that as conservative and steady institutional investors, insurance companies have a particular fondness for blue-chip stocks among all institutional investors. The food and beverage sector, which carries lower risk, is likely to meet the investment preferences of insurance funds. After consumption follows the recovery of investments, the food sector presents more significant investment opportunities compared to home appliances, automobiles, and pharmaceuticals, which are long-term growth industries. Comparatively speaking, the food sector offers immense investment potential.
Although the investment performance of insurance funds in the first quarter has not yet been fully revealed, industry insiders pointed out that insurance funds often exhibit dual characteristics in their specific operations: on one hand, insurance funds have always had precise insights in the A-share market, moving quickly in and out, and excelling at short-term trading; on the other hand, due to being regulated by both the CIRC and the CSRC, they place greater emphasis on low-risk stock selection styles. Analyzing from these two angles, it is almost certain that insurance funds will adjust their positions and switch stocks between the second and third quarters. Several analysts indicated that under the scenario where the market enters a phase of peak, low-valued blue-chip stocks are most likely to become the next focus of insurance funds.
According to reports from the 'Shanghai Securities News', the CIRC recently disclosed an important piece of information: the proportion of insurance funds entering the market will be relaxed. Datong Securities Chief Strategy Analyst Hu Xiaohui stated that if the CIRC relaxes restrictions on insurance funds investing in A-shares, it would be a good thing for both the market and insurance companies.
Sectors like banking and low-carbon economy have the highest probability of involvement by insurance funds.
Insurance funds have always been known for their strict management. What is the purpose of now relaxing restrictions on insurance funds investing in A-shares? Can this policy be considered a signal of stability released by the regulators? And what positive impact could this bring to the market?
Datong Securities Chief Strategy Analyst Hu Xiaohui said that if the CIRC relaxes restrictions on insurance funds investing in A-shares, it would be a good thing for both the market and insurance companies. Firstly, after continuous declines, risks in the A-share market have been somewhat released, and safety has gradually increased. Relaxing the amount of insurance fund investments at this stage carries relatively less risk. Secondly, following the global financial crisis, China's economic recovery momentum is evident. As national policies gradually take effect, China will welcome another golden decade. From a long-term perspective, increasing the proportion of A-share investments for insurance funds carries little risk. Thirdly, with the rapid development of the insurance industry, the scale of insurance assets is rapidly expanding, making the expansion of investment channels urgent. Regarding whether this could bring positive impacts to the market, Hu Xiaohui believes that for the market, continuous declines in the stock market could also positively affect the real economy. At this time, releasing such signals shows the regulators' intention to stabilize the market. However, whether the stock market can truly stabilize and improve gently still depends on changes in macroeconomic conditions and external markets.
Huarong Securities analyst Li Xia determined that the current price-to-earnings ratio of the cement sector is around 13 times, historically low, already fully reflecting the market's overly pessimistic expectations. The investment value of the sector is beginning to emerge. For example, the per-ton market value of listed cement companies like Jixi Cement (000401) is even lower than the reconstruction cost. Insurance funds might follow the Xinjiang regional revitalization plan-covered Ge Shan Shares (000877) and Qing Song Construction (600425), where these stocks' valuation premiums should be higher.
Low-Carbon Economy - Probability of Involvement: 85%
As for Ping An Insurance (Group) Company of China (601318), China Life Insurance (601628), and China Pacific Insurance (601601), their investment preferences in the first quarter were different. China Ping An was the most cautious about the future, favoring industrial and consumer goods sectors resistant to deflation; China Life was the most optimistic, maintaining its preference for financial properties; while China Pacific tried to balance both, showing high interest in machinery and chemical agriculture sectors with clear profit recoveries while actively participating in market rebounds.
Food and Beverage - Probability of Involvement: 80%
With the relaxation of the proportion of insurance funds entering the market, the next move of insurance funds in the A-share market has gradually become a focus of investor attention. Although the quarterly report of listed companies this year showed that insurance funds reduced positions in electronic components, medical biology, and chemicals, industry insiders judged, based on the current market environment and the investment preferences of insurance funds, that low-valued blue-chip stocks could become the next focus of insurance funds.
Cement Sector - Probability of Involvement: 70%
Guangfa Securities analyst Wang Zicai expressed that further increases in holding CSI 300 component stocks by insurance funds could be anticipated, especially in the banking sector. After the previous adjustments, the valuation levels of bank stocks are currently at relatively low positions. Going forward, they will enter a "dual window" period of policy and real economy, during which there is hope for a phase of rebound. Insurance funds would not overlook the opportunity presented by bank stocks.
According to WIND statistics, as of the first quarter of this year, insurance funds collectively held shares in 559 A-share listed companies, with a total shareholding volume reaching 27,618,747,915 shares (including shares of insurance-related listed companies), an increase of 1,380,302,281 shares compared to the end of 2009. Among them, insurance funds entered the top ten circulating shareholders list of 31 individual stocks, with a total holding volume of 280 million shares, an increase of 83.66 million shares compared to the end of the fourth quarter last year. The position of insurance funds in the first quarter increased by over 40%, adding RMB 11.14 billion in investment funds. By industry, insurance funds mainly increased holdings in three major sectors: electronic components, medical biology, and chemicals. The electronic components sector occupied three seats, the medical biology sector also occupied three seats, and the chemicals sector occupied two seats.
According to reports from the 'Shanghai Securities News', the CIRC recently disclosed an important piece of information: the proportion of insurance funds entering the market will be relaxed. Specific content includes adjusting the scope of A-share equity (stocks + funds) investments by insurance funds. Originally, the combined investment in stocks and funds (including equity funds, bond funds, money market funds, etc.) did not exceed 20% of the company's total assets, now changed to the combined investment in stocks and equity funds not exceeding 20%. Market participants noted that although the upper limit of 20% for A-share equity investment remains unchanged, excluding equity funds theoretically allows hundreds of billions of yuan worth of additional capital to enter the market.
According to reports from the 'Shanghai Securities News', the CIRC recently disclosed an important piece of information: the proportion of insurance funds entering the market will be relaxed. Datong Securities Chief Strategy Analyst Hu Xiaohui stated that if the CIRC relaxes restrictions on insurance funds investing in A-shares, it would be a good thing for both the market and insurance companies.
News Analysis: Regulatory Authorities Sending Signals of Stability