Hong Kong stock market movement: Mainland insurance stocks are leading the gains, with shares of New China Life Insurance (01336) rising 5.41% to HK$40.94, while China Life Insurance (02628) shares are up 5.28% at HK$25.14. Ping An Insurance (02318) shares are also trading 3.14% higher at HK$51.3, and China Pacific Insurance (02601) shares have gained 2.82% to HK$26.96.
On the news front, on November 2, the People's Bank of China and the China Securities Regulatory Commission will convene a meeting with certain securities firms and fund companies to study and promote the use of tools supporting the capital market. On the same day, the People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission will convene a meeting with banks to study and optimize the policy on relending for stock buybacks and increased holdings. According to another report, a large state-owned bank recently plans to increase the quota for stock buyback and holding increase loans to two central state-owned enterprises, China Reform Holdings and China Chengtong, with the new quota for each potentially reaching 100 billion yuan.
According to a research report released by Sinolink Securities, in the short term, the weak third-quarter performance and pessimistic market expectations have triggered concerns about risks on the asset side of insurers. However, from a valuation perspective, the PB ratios of some insurance companies are already below the levels seen on September 23, 2024, indicating that the market has already fully reflected pessimistic expectations for the asset side. Once market expectations stabilize, the insurance sector is expected to see a valuation rebound. Currently, targets with defensive attributes and higher dividend yields are more recommended.
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