HK Stock Market Move | Domestic insurance stocks lead the gains, long-term assessment indicators for insurance funds are implemented, and the expansion of the southbound channel helps alleviate pressure on the asset side.

Non-life insurance stocks led the gains, as of press time, China Pacific Insurance (02601) rose by 4.8% to 29.45 HKD; China Life Insurance (02628) rose by 4.06% to 19.46 HKD; New China Life Insurance (01336) rose by 1.98% to 43.7 HKD; Ping An Insurance (02318) rose by 2.14% to 52.6 HKD. In terms of news, on July 11, the Ministry of Finance issued a notice on guiding insurance funds to invest stably for the long term and further strengthening the long-term assessment of state-owned commercial insurance companies, promoting the establishment of a long-term assessment mechanism for over three years for insurance funds. Ping An Securities pointed out that the policy further strengthens the long-term assessment of state-owned commercial insurance companies and guides insurance funds to invest stably for the long term, which will help insurance companies increase long-term stable investment returns and alleviate investment pressure. Resident savings demand remains strong, optimizing business structure will help maintain steady performance on the liability side by 2025. There is still uncertainty in the investment performance of insurance companies in 2025, but insurance stocks have significant beta attributes, stable dividend levels, low valuations, and long-term investment value. Additionally, on July 8, the People's Bank of China and the Hong Kong Monetary Authority announced a number of bond connect optimization measures at the "Bond Connect Anniversary Forum 2025" held in Hong Kong, including improving the southbound connect mechanism by expanding the range of domestic investors to include securities companies, funds, insurance, wealth management, and other four types of non-bank institutions. Soochow noted that in recent years, insurance companies' investment side has been facing continuous pressure from low interest rates and asset shortages. The expansion of the southbound connect will open up a new channel for overseas investment by insurance funds. In the current environment of relatively higher interest rates in European and American markets, investing in overseas bonds in diverse currencies and with higher interest rates can help alleviate the pressure on insurance companies' investment side.