Finance Association, October 22 (Reporter Xia Shuyuan) Foreign-funded institutions are constantly changing domestic insurance stocks. On October 22, the Hong Kong Stock Exchange's latest equity disclosure data showed that on October 10,$CHINA LIFE (02628.HK)$FMR LLC, a subsidiary of Fidelity Investments, reduced its holdings of 35.941 million shares at an average price of HK$17.6566 per share on the market, involving approximately HK$0.635 billion. After the reduction in holdings, FMR LLC's latest shareholding was 494,504,578 shares, and the shareholding ratio dropped from 7.13% to 6.65%.

The reporter noticed that before FMR LLC reduced its holdings this time, it had significantly increased its holdings of China Life Insurance in January and June, respectively. Furthermore, J.P. Morgan Chase increased its holdings by about 0.1 billion at a high price at the end of September$PING AN (02318.HK)$Immediately after that, on October 4, the stock holdings were accurately reduced by 28.68 million, and the full amount of HK$1.514 billion was cashed out.

In response to the frequent foreign investment of insurance H shares, some industry insiders believe that the actual traders involved in some transactions may be customers of institutions such as J.P. Morgan Chase, and not the institutions themselves. Overall, foreign-funded institutions are mainly increasing their holdings of domestic insurance stocks as a whole. Morgan Stanley and many other foreign-funded institutions believe that non-bank finance has benefited from increased capital market activity and improved asset performance. They recommend overallocation of insurance, but they need to be wary of a correction after short-term overheating of brokerage firms.

Foreign-funded institutions frequently adjusted their positions in domestic insurance stocks, and Fidelity Investments reduced its holdings of China Life Insurance by 35.941 million shares

After a large increase in holdings in a short period of time, they were quickly sold soon. Foreign-funded institutions such as Fidelity Investments and J.P. Morgan Chase have recently frequently adjusted their holdings of domestic insurance stocks.

On October 22, the Hong Kong Stock Exchange's latest equity disclosure data showed that on October 10, China Life Insurance (FMR LLC) reduced its holdings of 35.941 million shares at an average price of HK$17.6566 per share on the market, involving about HK$0.635 billion. After the reduction in holdings, FMR LLC's latest shareholding was 494,504,578 shares, and the shareholding ratio dropped from 7.13% to 6.65%.

Prior to this reduction in holdings, Fidelity Investments increased its holdings of China Life Insurance in January and June, respectively. On January 5, FMR LLC increased its holdings of China Life H shares by 11.35 million shares. The average increase price was HK$14.0727 per share, and the shareholding ratio rose to 5.03%.

On June 18, China Life Insurance received another 16.867 million shares from FMR LLC at an average price of HK$10.88 per share on the market, involving approximately HK$0.184 billion. After the increase in holdings, FMR LLC's latest shareholding was 524,260,965 shares, and the shareholding ratio rose to 7.05%.

It's a coincidence. In addition to Fidelity Investments, JPMorgan Chase & Co. (JPMorgan Chase & Co.) also frequently buys and sells domestic insurance stocks to cash out.

According to stock disclosure information on the Hong Kong Stock Exchange, J.P. Morgan Chase reduced its holdings of Ping An H shares by about 14.14 million shares at an average price of HK$50.9902 per share, totaling about HK$0.721 billion. After this reduction in holdings, J.P. Morgan Chase's shareholding volume was about 0.595 billion shares, and the shareholding ratio fell from 8.18% to 7.99%.

Meanwhile, on October 9, J.P. Morgan Chase increased its holdings of Ping An H shares by about 37.2896 million shares at an average price of HK$49.0034 per share, costing about HK$1.827 billion, and the shareholding ratio increased from 7.68% to 8.18%.

On September 25 and September 26, J.P. Morgan Chase increased its holdings of 60.7043 million shares and 39.8617 million shares of Ping An H shares at an average price of HK$42.1232 and HK$44.4327 per share, respectively, at a cost of about HK$2.557 billion and HK$1.771 billion respectively. Later, on October 4, J.P. Morgan Chase also reduced its holdings of China Ping An H shares by about 28.6808 million shares at an average price of HK$56.7338 per share, totaling about HK$1.514 billion.

In response to the frequent repositioning of insurance H shares by foreign investors, some industry insiders believe that this may be some of the long money that hedge funds, pensions, etc. are traded on J.P. Morgan Chase seats. In other words, the actual traders in some of the transactions may be customers of institutions such as J.P. Morgan Chase, and not the institutions themselves. Overall, foreign-funded institutions have mainly increased their holdings of domestic insurance stocks. The latest shareholding ratio has all exceeded 5%.

According to Deng Zhijian, an investment strategist at DBS Bank, due to the huge increase in the short term, it is a normal operation for foreign investment options to be partially profitable. “However, don't think that global funding is only short-term.” Tang Chi-kin emphasized.

Recently, Hong Kong's Financial Secretary Chan Mao-po said that since the central government introduced a series of stimulus measures, US and European investors have made strong net purchases in the Hong Kong stock market, accounting for about 85% of buyers in terms of value. Of these, 90% are long-term funds and investment banks.

A number of overseas investment banks gave purchase ratings to many insurance stocks, and Goldman Sachs upgraded the insurance sector to overallocated

In addition to frequent stock adjustments, the Financial Services Association reporter noticed that several international investment banks have recently given a “buy” rating to a number of insurance stocks.

On October 22, Goldman Sachs released a report stating that Ping An China's results for the first three quarters were generally in line with the bank's expectations for the full year. The value of the new business exceeded expectations, and the value of the new life insurance business also significantly exceeded the bank's and market expectations, mainly due to strong growth in sales of new insurance policies and expansion in profit margins.

The bank believes that the basic operating trend of Ping An in China has improved. If the company wants to push for further evaluation of valuations, next year's sales will need to have strong momentum, and economic growth prospects should improve.

In addition, the bank raised its value forecast for Ping An of China's new business by 9%-13% to reflect higher than expected profit margin expansion driven by improved cost efficiency and product repricing; the operating profit forecast was raised by 2% to 5%, maintaining the target price of HK$52 and the purchase rating.

Furthermore, on October 21, HSBC raised China Life's H share rating to buy, with a target price of HK$18; raised the China Life A share rating to hold; and the target price was 45 yuan.

On the same day, UBS raised China Life Insurance's 2024 new business value and implied value forecasts by 3% and 5% respectively. The target price was raised from HK$14.5 to HK$19, with a “buy” rating.

According to Zhang Yu, deputy director of the Huachuang Securities Research Institute and chief macro analyst, recently, major policies in various fields have been introduced intensively to activate market sentiment. In terms of equity asset allocation, foreign investors generally tactically favor Chinese assets, but they are generally cautious about the long term. “Foreign investors generally believe that a sustainable bull market requires further implementation of fiscal policies, as well as substantial improvements in economic data and corporate profits.” Zhang Yu said.

Goldman Sachs said in its latest research report that if China's economic support policies continue to be followed, there is potential for further valuation recovery of Chinese assets. From an empirical point of view, there is a good correlation between fiscal easing and valuation expansion. If the economy responds to policy, earnings growth may improve from current conservative forecasts, which also tends to support valuation expansion. Raise the Chinese stock market to “overallocation,” raise the target price of the Shanghai and Shenzhen 300 Index from 4,000 points to 4,600 points, and raise insurance and other financial sectors to overallocation.