crashnitrofueledsteam| The Hang Seng Index rises strongly, Chinese banks and insurance stocks perform well

Securities Times online newsCrashnitrofueledsteamThe Hang Seng Index fluctuated higher in intraday trading on the 10th, rising nearly 2% at one point. The performance of Chinese banks and insurance stocks is outstanding. As of press time, China Pacific Insurance (601601) rose by more than 8%, Postal savings Bank and Construction Bank by about 7%, Agricultural Bank of China (601288), Industrial and Commercial Bank of China, Xinhua Insurance (601336) and China property Insurance by more than 5%, and Ping an of China and China Life Insurance rose by more than 4%.

In terms of news, the State Administration of Financial Supervision and Administration recently issued the Circular on matters related to the Insurance Business of Commercial Banks, which proposes to abolish the limit on the number of cooperation between bank outlets and insurance companies. It is clear that commercial banks act as agents for Internet insurance business, telemarketing insurance business and other insurance business, and branches and outlets at all levels do not limit the number of cooperative insurance companies. Clarify the level of cooperation between the two sides. If insurance companies are required to cooperate with commercial banks, in principle, a written principal-agent agreement shall be signed by the legal entities of both parties. If it is really necessary for the first-level branch to sign a principal-agent agreement, the first-level branch shall obtain the written authorization of its legal person in advance. At the same time, make clear the commission standard of bank agency business. It is required that the commission rate stipulated in the principal-agent agreement shall not exceed the commission level for the product filing of the legal entity of the insurance company.

In this regard, Ping an Securities pointed out that after the implementation of the Bancassurance policy of "integration of newspapers and banks", supervision will remove the quantitative restrictions on cooperation between bank outlets and insurance enterprises, which will benefit head insurance companies with standardized management and comprehensive advantages. Life insurance NBV generally increased by a large margin in the first quarter, residents' demand for savings is strong, the rate of return on insurance competition is declining, and the demand for savings insurance will continue to be released. It is expected that the trend of improvement in the debt side will continue throughout 2024. The asset side is expected to usher in an improvement in the rate of return on investment by insurance companies against the background of the stabilization of the stock and bond markets. At present, the industry valuation and positions are still at the bottom, and the β attribute will help the insurance sector to repair the bottom of the valuation. Be optimistic about the long-term allocation value of the industry.

Cinda Securities said that the release of the notice brought both opportunities and challenges for commercial banks. In the short term, it may have different effects on banks with different consignment strength, but in the long run, promoting the high-quality development of bank agency insurance business will help to improve the income. There will still be narrowing pressure on bank spreads in 2024, mainly due to the expectation of implied LPR downgrade and banks' assistance to local debt resolution. It is suggested to focus on the banks whose performance is strong and the asset quality is expected to improve gradually.