Funds slash suggested equity, bond exposure

    FUND managers in China cut their suggested equity exposure for a third consecutive month and halved their recommended bond allocations to a 16-month low, as increasing risks of default in the corporate bond market dampened investor confidence.

    Eight fund managers polled last week cut their suggested equity exposure for the next three months to a five-month low of 69.4 percent, from 71.3 percent a month ago. They also halved their recommended corporate bond allocations to 6.3 percent from 12.5 percent a month ago, but suggested increasing cash holdings to 24.4 percent from 16.3 percent a month ago.

    CITIC Securities first quarter profit falls 57%

    CITIC Securities Co., China’s biggest brokerage, Friday reported a 57 percent drop in first quarter net profit to 1.64 billion yuan (US$253 million) from 3.82 billion yuan a year earlier.

    The brokerage published its first quarter results in an unaudited stock exchange filing. The fallout from the market turmoil last summer means brokerages are more subdued about prospects for this year, with many cutting costs to bolster capital and expecting to take a hit from tougher rules on margin finance. In 2015, CITIC Securities posted a 75 percent jump in 2015 net profit to 19.8 billion yuan on strong fee and commission income in March.

    China Life profit plunges 57.2%

    CHINA Life Insurance Co., the country’s biggest insurer by market value, Friday reported a 57.2 percent fall in first quarter profit, due to a slide in investment income.

    China Life said net profit for the quarter fell to 5.3 billion yuan (US$818.23 million) in the first three months of the year, compared with 12.3 billion yuan a year earlier. A change of discount rate assumption of reserves of traditional insurance contracts also caused the profit drop, China Life said.

    Spring Airlines net profit rises to a record

    SPRING Airlines, China’s largest budget carrier, Friday posted a 44 percent jump in first quarter net profit to a record 366.7 million yuan (US$56.61 million), lifted by robust travel demand.

    Spring Airlines also said 2015 net profit rose 50.2 percent to 1.33 billion yuan. The airline had already flagged the 2015 profit growth in January. Spring Airlines has been profitable since it was launched in 2005. Last year, it became the first budget airline to list shares on the Shanghai Stock Exchange.