Bloomberg News

China Life Franklin Asset Venture Begins Operating

June 07, 2007

Franklin Templeton Investments and China Life Insurance Co., the nation's biggest insurer, began operating their fund management company in Hong Kong.

The new venture, China Life Franklin Asset Management, will initially manage the Beijing-based insurer's overseas assets, according to an e-mailed statement from Franklin Templeton. It plans to offer investment management and advisory services to other Chinese institutions in the future, the statement said.

China announced on June 1 that it plans to issue rules allowing the nation's insurers to diversify investments by putting more money overseas. China's insurers are trying to bolster returns on 1.89 trillion yuan ($247 billion) of assets while spreading risk after the nation's CSI 300 Index almost doubled this year, sparking concerns of a stock bubble.

China's banking watchdog also announced on May 11 it will let the country's banks buy shares overseas for the first time.

``The recent relaxation of foreign investment restrictions on Chinese banks is just the latest step in a broader trend among government and corporate entities in China'' of seeking investment opportunities abroad, said Guang Yang, a Hong Kong- based portfolio manager at Franklin Templeton, in the statement.

China's insurance regulator approved the new fund management company in January. China Life Insurance Asset Management Co. holds a 50 percent stake in the venture, and affiliate China Life Insurance (Overseas) Co. owns 24 percent. Franklin Templeton holds the remaining 26 percent.

To contact the reporter on this story: Josephine Lau in Beijing at jlau22@bloomberg.net

To contact the editor responsible for this story: Ben Richardson at brichardson8@bloomberg.net


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