CHINA’S banking and insurance regulator said it was raising the cap on how much the country’s insurers can invest in equity assets, an effort trying to bring more long-term funds into the capital market.

The China Banking and Insurance Regulatory Commission (CBIRC) said in an online statement late Friday that it will allow insurers to invest up to 45 percent of their total assets recorded at the end of the previous quarter in equity investments.

Currently, China caps all insurance companies’ equity investment at 30 percent of their total assets.

Investments will be capped at 10 percent of the total share capital of any single listed company, the regulator added.

Shanghai Securities News said the move to raise the equity investment ceiling to 45 percent from 30 percent should introduce hundreds of billions of yuan into China’s A-share market.

Shanghai shares ended higher Friday, but still suffered their worst weekly drop in five months, as China’s better-than-expected economic data fuelled worries over the pace of policy easing, while foreign investors cashed in after a bull run.

The banking and insurance regulator said last year it encouraged insurance institutions to invest in more good quality stocks and bonds to improve their portfolios.

“This will help ensure stability in the capital markets and will allow insurers to improve their investment portfolios,” the CBIRC said in a brief statement posted on its website.

(SD-Agencies)