Two half-month listed companies with insurance capital
As an institutional investor, insurance capital should pursue the concepts of rational investment, value investment, and long-term investment, and permeate this concept in investment practice.
Following the seven listed companies listed in 2019, the momentum of listed companies with insurance funds has continued unabated since 2020. On January 3, Taiping Life announced the matter of raising Joy City with 1.907 billion yuan. On January 14, the “Simplified Report of Changes in Equity” disclosed by Guochuang Hi-Tech revealed that Huatai Insurance’s Huatai Assets acquired a major shareholder of nearly 280 million yuan, accounting for 8% of the total equity. In just half a month in 2020, there were two insurance companies, Taiping Life Insurance and Huatai Insurance, which spent nearly 2.2 billion yuan to raise two listed companies. This was rare before.
Why hold a card? Taiping Life said that it has always regarded the target company with high-quality assets, controllable risks and reasonable valuation as a long-term investment object, and expects to share its stable financial income. Huatai Assets said that this increase in Guochuang High-tech stocks is mainly optimistic about the long-term development potential of the industry and the company. In the final analysis, this phenomenon is more common objectively when risk capital is holding the word “profit”.
Over the years, the CSRC has been vigorously developing institutional investors and expanding the institutional investor team. Insurance capital is also a key development target of the CSRC. As more and more insurance funds enter the market, insurance capital has also become an important investment force in the capital market. In addition, the investment of insurance capital in the stock market is often no shortage of “magic strokes”, such as multiple successful bottom attempts and top escapes. Nevertheless, the “Baowan Controversy” three years ago has caused twists and turns in the listing of listed companies in insurance capital, and has also had a certain negative impact on the investment of insurance capital in the stock market.
With the continuous deepening of capital market reforms in recent years, regulators have also begun to encourage long-term funds such as insurance capital to enter the market. At the beginning of the year, the “Guiding Opinions on Promoting the High-Quality Development of the Banking and Insurance Industry” issued by the CBRC clearly stated that it is necessary to “use the direct financing functions of wealth management, insurance, trust and other products effectively, cultivate value investment and long-term investment concepts, and improve Capital market investor structure. Vigorously develop corporate annuity, occupational annuity, various health and endowment insurance businesses, and promote the effective conversion of household savings into long-term capital market capital through multiple channels. “
Capital is profit-oriented, and insurance capital is no exception. As a very important investment force in the capital market, it is understandable for insurance capital to enter the capital market in pursuit of investment income. However, it is obvious that insurance capital cannot enter the market solely for the benefit. Based on the “emerging + transition” characteristics of China’s capital market, insurance capital can actually play a greater role.
As an institutional investor, insurance capital should pursue the concepts of rational investment, value investment, and long-term investment, and permeate this concept in investment practice. Due to the huge scale of insurance funds, many insurance funds can often form a “stack effect” in the market. Its large-scale entry and exit not only easily triggers the fluctuation of related stocks, but also is not conducive to the stability of the entire market. Therefore, if the insurance capital can become the long-term capital of the capital market, it will play an important role in maintaining the stability of the market.
In corporate governance, insurance capital is also indispensable. On the list of shareholders of a listed company, the emergence of insurance capital has become the norm. Holding a certain percentage of shares has a certain right of speech. However, institutional investors, including insurance capital, are often absent in the governance of listed companies, which is obviously questionable. Personally, I think that insurance capital is very promising in improving the governance structure of listed companies and regulating the operation of the “Three Associations.”
In terms of investor protection, institutional investors, including insurance capital, often experience collective aphasia. In today’s A-share market, “black swan incidents” caused by listed company violations and other reasons are not uncommon. At this time, issuing their own voice and safeguarding their own legal rights and interests should be the common demand of all investors. However, institutional investors often lose their voice in safeguarding their own legal rights and interests. In fact, as an institutional investor, its voice is more powerful and can also attract market attention.
In addition, insurance capital can also provide assistance in supporting the growth and strengthening of state-owned enterprises. Like Joy City, which is backed by its major shareholder, COFCO, Taiping Life participates in this non-public offering. While optimizing its asset allocation structure, it is also conducive to Joy City’s growth and strength.
□ Cao Zhongming (financial commentator) editor Chen Li proofreading Fu Chunyu