Minsheng Securities released a report on the “Implementation Plan for Promoting Medium- and Long-Term Capital Entry into the Market” jointly issued by six government units of China.

Yesterday, the General Office of the Central Committee for Finance, the China Securities Regulatory Commission (CSRC), the Ministry of Finance (MOF), the Ministry of Human Resources and Social Security (MOHRSS), the People's Bank of China (PBOC), and the National Financial Regulatory Administration (NAFR) jointly issued the “Implementation Plan on Promoting the Entry of Medium- and Long-term Funds into the Market”.

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The authorities clearly enhance the proportion and stability of A-share investment of commercial insurance funds, and the space for insurance investment in equity is expected to open up. The Plan formulates targeted reforms addressing some of the hiccups and hurdles of the current insurance capital investment in equity.

Enhancing the assessment cycle is expected to really lengthen the investment cycle and match the attributes of long-term capital, in the broker’s view. At the same time, the second batch of pilot long-term stock investment by insurance funds is envisioned to promote the implementation and gradually expand the scope of participating organizations and the scale of capital. Insurance funds are expected to share the benefits brought by the development of the capital market while acting the role of a good patient capital.

The liquidity environment and fundamentals are supportive at the moment. Raising the proportion and stability of equity investment and establishing a dynamic adjustment mechanism for preset interest rates will help insurance companies cope with potential interest rate spread risks.

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Individual stocks recommended for attention include CPIC (02601.HK)  -0.400 (-1.699%)    Short selling $7.10M; Ratio 9.713%   , NCI (01336.HK)  -0.150 (-0.613%)    Short selling $10.89M; Ratio 12.941%   , CHINA LIFE (02628.HK)  -0.160 (-1.100%)    Short selling $41.30M; Ratio 20.809%   , PICC P&C (02328.HK)  -0.180 (-1.404%)    Short selling $8.05M; Ratio 11.945%   , and SUNSHINE INS (06963.HK)  -0.020 (-0.709%)    Short selling $19.74K; Ratio 10.651%   . As for brokers, the growth of self-operated income in 2024 is predicted to propel the overall performance recovery. The stable operation of the capital market will also help accelerate the bottoming process of brokers' performance. Minsheng Securities recommended to focus on CGS (06881.HK)  -0.060 (-0.844%)    Short selling $3.60M; Ratio 15.091%   , CITIC SEC (06030.HK)  -0.200 (-0.939%)    Short selling $16.50M; Ratio 28.238%   and HTSC (06886.HK)  0.000 (0.000%)    Short selling $1.77M; Ratio 8.341%   and other leading Chinese brokers.
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