As a kind of long-term funds and large amount of funds, the investment trend of insurance funds has been concerned by the market. A trend of insurance capital this year is to continue to reduce the traditional heavy position plate.
According to the recent information of the Hong Kong stock exchange, China Life Insurance Company Limited(601628) department’s capital account continued to reduce its holdings of H shares of Agricultural Bank of China in November, reducing its holdings to 1.839 billion shares, nearly half from the time when Guoshou department held the largest number of H shares of Agricultural Bank of China (3.411 billion shares) in August last year. This is an extreme epitome of insurance capital’s reduction of bank ah shares this year. At the same time, insurance capital also has a relatively concentrated reduction in the real estate sector this year.
Banking stocks and real estate stocks are the two heaviest sectors of insurance capital positions, accounting for more than 40% of the stock market value of insurance capital positions. Some insurance asset management executives believe that in the past, some insurance asset institutions allocated too much proportion to bank real estate stocks. Whether the reduction of insurance capital in these two sectors is a short-term operation or a long-term allocation strategy adjustment deserves attention.
continued reduction of bank shares
Recently, according to the information disclosed by the Hong Kong stock exchange, China Life Insurance Company Limited(601628) reduced its holdings of 15 million Agricultural Bank Of China Limited(601288) H shares on the market on November 30, realizing about HK $38.649 million.
After this reduction, the number of H shares of Agricultural Bank of China controlled by Guoshou group through direct shareholding and its subsidiaries decreased to 1.839 billion shares, accounting for less than 6% of Agricultural Bank of China’s H shares (5.98%). Among them, Guoshou group directly holds 147 million shares, China Life Insurance Company Limited(601628) holds about 1.554 billion shares, China Life Insurance Company Limited(601628) (Overseas) and life property insurance hold 71 million shares and 67 million shares respectively.
Since this year, China Life Insurance Company Limited(601628) has reduced its holdings of about 1.57 billion Agricultural Bank of China H shares. Estimated by the average transaction price of the range, the cumulative realized value is about HK $4.5 billion.
In addition to the reduction of ABC’s H shares, the HKEx also disclosed that from August to October this year, China Life Insurance Company Limited(601628) also reduced 876 million Industrial And Commercial Bank Of China Limited(601398) H shares, with a cumulative reduction of about HK $3.8 billion.
The reduction of large insurance capital in bank shares is not only reflected in H shares, but also in bank shares a shares. From the number of A-share bank shares with heavy positions of insurance capital, the reduction of insurance capital in bank shares this year is obvious. The public information visible includes China Life Insurance Company Limited(601628) reduction Agricultural Bank Of China Limited(601288) , Postal Savings Bank Of China Co.Ltd(601658) , Bank Of China Limited(601988) , CPIC life insurance, China Life Insurance Company Limited(601628) reduction Bank Of Hangzhou Co.Ltd(600926) , etc.
Among them, only from China Life Insurance Company Limited(601628) , in the first three quarters of this year, it entered the capital accounts of the top ten shareholders of A-Shares of ICBC, Agricultural Bank of China, Bank of China and postal savings bank, and reduced its holdings of A-Shares of these major banks to varying degrees. Based on the range price of bank shares this year, the total realized amount of Guoshou’s reduction in large banks reached about 10 billion, between 9.9 billion and 12 billion yuan.
According to statistics, compared with the beginning of this year, among the heavily held stocks of insurance capital at the end of the third quarter, the value of the heavily held bank stock market fell from more than 580 billion to more than 530 billion, shrinking by 50 billion. Quarter by quarter, the market value of bank shares with heavy positions of insurance capital in the third quarter decreased by more than 80 billion yuan.
Of course, the market value change of bank stocks with heavy positions of insurance capital is not only a single factor of insurance capital reducing bank stocks, but also a comprehensive factor of the stock price trend of bank stocks.
At present, bank stocks are still the largest sector with heavy positions of insurance capital (excluding insurance stocks). In terms of industry classification, as of the end of the third quarter of this year, the market value of bank shares with heavy positions of insurance capital was about 530 billion yuan, accounting for nearly 40% of the total market value of bank shares with heavy positions of insurance capital.
also reduced its holdings in real estate stocks
While reducing bank shares, insurance funds also made some adjustments in another heavy position plate – the real estate plate. At present, the market value of insurance capital’s position in real estate is also large.
By the end of the third quarter, the investment balance of insurance funds was 22.44 trillion yuan, of which 2.73 trillion yuan was invested in stocks and securities investment funds. According to the data, at the end of the third quarter, the corresponding market value of the heavily held shares of insurance companies (i.e. the top ten circulating shareholders of listed companies with insurance capital) was 1.36 trillion yuan.
In terms of industry classification, real estate is the second largest heavy position plate of insurance capital after banks. By the end of the third quarter of this year, the market value of positions in real estate stocks with heavy positions of insurance capital was about 57 billion yuan, accounting for 4.19% of the total market value of heavy positions.
Compared with the end of 2020, the market value of real estate stocks with heavy positions of insurance capital decreased by more than 25 billion at the end of the third quarter of this year. Behind the shrinkage, there are both factors of the decline of real estate stocks and the reduction of venture capital.
From the position changes in the third quarter and since this year, the reduction of insurance funds in real estate stocks is more concentrated, and a number of insurance funds have reduced their holdings in this sector to varying degrees. Among them, the relatively obvious reduction operations can be seen from the public information, that is, the reduction of everyone life’s holdings Gemdale Corporation(600383) , Financial Street Holdings Co.Ltd(000402) , China Life Insurance Company Limited(601628) , reduction of holdings China Vanke Co.Ltd(000002) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , etc.
The two institutions may have different considerations in reducing their holdings of real estate stocks. In addition to the real estate fundamentals, the reduction of everyone life has certain particularity. Since its establishment, everyone life has different ideas on investment from the original Anbang. Its concept stocks of Anbang are gradually slimming down. The stocks reduced are those with heavy positions in the original Anbang period, and the reduced real estate stocks are also part of them.
adjustment of insurance capital allocation ideas?
Banking stocks and real estate stocks, which had relatively stable performance expectations and high dividend yield in the past, are more suitable for large-scale insurance funds pursuing stable returns. However, what is the consideration of the reduction of insurance capital in bank stocks and real estate stocks this year?
From the perspective of bank stocks, last year, large-scale insurance funds repeatedly increased their holdings of bank stocks. This year, the operation of large-scale insurance funds on bank stocks is mainly reflected in the reduction of holdings. For the reasons for this change, a number of insurance investors have analyzed to the Chinese reporters of securities companies that it may be to cash in floating profits and let the income fall into the bag, or it may be to adjust and optimize the high dividend strategy and innovative growth strategy. The latter is to adjust the industry allocation direction based on the judgment of the long-term prospects of bank stocks and other racetracks. Previously, some insurance funds made it clear that the reduction of bank shares was based on the needs of strategic asset allocation.
China Life Insurance Company Limited(601628) when talking about the investment strategy at the interim performance conference in August this year, relevant people said that there are great challenges in the allocation of large categories of assets this year, and the performance of various assets in the financial market are affected by many factors, including macro fundamentals, regulatory policies, marginal improvement of liquidity, valuation level and market sentiment. In a complex environment, China Life Insurance Company Limited(601628) as a long-term investor, we should always be “upright and forward-looking”. We should deeply study national policies and change orientation, and make some forward-looking layout in the allocation of rights and interests.
In addition, since this year, the heads of more than one head insurance institution have expressed their attention to growth stocks. In recent years, there has been a trend of polarization in capital market valuation. Emerging growth industries, especially leading enterprises, have ushered in valuation premium, are sought after by market funds, and may evolve into core assets. Venture capital has realized that if it does not pay enough attention to or participate in the growth track, it may miss major strategic investment opportunities. We need to take into account risk prevention and participate in the process of economic transformation and upgrading.
From the position changes in the previous three quarters, insurance funds have some new and heavy positions in individual stocks such as semiconductors and technology. However, on the whole, the investment of individual stocks in emerging industries still accounts for a low proportion in the market value of heavy positions of insurance capital.
(brokerage China)
