Chinese insurer Ping An eyes Hong Kong ETFs as Beijing greenlights cross-border investment

China's largest insurer, Ping An Insurance, is considering investing in Hong Kong-listed exchange-traded funds (ETFs) to enhance returns, following Beijing's approval for cross-border allocations, according to senior executives. Richard Sheng, secretary of the company's board, commented on the potential tightening of ties between Hong Kong and mainland capital markets.

The National Financial Regulatory Administration (NFRA) has endorsed insurance funds investing in ETFs through the Stock Connect schemes, which enable cross-border trading between mainland China and Hong Kong financial markets. Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators, noted that Hong Kong ETFs can provide exposure to non-Hong Kong and non-mainland assets, enriching mainland insurers' investment options.

Ping An executives expressed confidence in the tax policy, stating that it would not significantly impact Ping An's overseas policies due to its limited exposure. Beijing has recently tightened controls on cross-border investment, including a 20% tax on gains from offshore insurance policies, but Ping An's executive director, Xie Yonglin, assured that the tax policy does not yet apply to domestic insurance income and has a minimal impact on the company.

After reporting a 36% growth in first-half net profit, driven by investment income and sales growth, Xie expressed a positive outlook for Ping An, citing the long-term stability of life insurance as an attractive investment avenue despite low-interest rates. Mainland insurers hold substantial assets of 41.31 trillion yuan, making them significant players in the equity markets.