Institutional investors have become the top movers and shakers in China's securities markets, with investment funds, stock brokerages, insurance companies and government sanctioned foreign institutional investors (QFII) holding 44 percent of the total capitalization of A-share markets by the end of July.

The latest statistics from the China Securities Regulatory Commission said that the proportion of institutional investment in A-share markets has risen 25 percentage points from that in 2004.

Qi Bin, director of the CSRC's research center, said that "institutional investors have established their status in the market. With the maturing of China's capital market, institutional investors will surely play an even bigger role."

Investment funds are the biggest institutional investors in China's capital markets. In the first half of this year, the net asset of 347 funds under 59 fund management companies hit 1.67 trillion yuan (about US$ 219.74 billion), accounting for 31 percent of the tradable value of A shares.

Figures from the China Securities Depository and Clearing Corporation Ltd. said that 306,000 fund investment accounts were opened daily on average in the first half year, sharply higher than the opening of A-share accounts.

Policy adjustment has made insurance capital an increasingly important player in capital markets. In July, the China Insurance Regulatory Commission (CIRC) allowed insurance companies to invest up to 10 percent of their total assets in stock markets, compared with the original five percent.

CIRC figures show that in the first half of this year, insurance companies have made profits totaling 137.4 billion yuan, up 260 percent year-on-year, of which funds, stocks and equity investment accounted for 72.9 percent of the total profit.

China's opening policy has offered increasingly more opportunities for overseas institutional investors. In the second half of this year, China will resume the ratification of stock brokerages, and will expand the investment quota of QFIIs (qualified foreign institutional investors) to US$ 30 billion.