HK Stock Market Move | According to reports, a 20% individual income tax will be levied on the returns of Hong Kong's insurance policies. AIA (01299) dropped over 8%, while PRU (02378) fell over 5%.

Hong Kong insurance stocks are under pressure, as of the time of writing, AIA (01299) is down 7.85%, trading at HKD 71.65; PRU (02378) is down 5.36%, trading at HKD 107.6. In terms of news, according to a Caixin report on August 5, Chinese tax authorities have begun to levy a personal income tax of 20% on the gains from overseas insurance policies. The report cites tax lawyers and industry insiders, indicating that Beijing and Hangzhou have started to implement relevant measures to impose a 20% tax rate on the gains from Hong Kong policies, including dividend distributions and interest generated from prepaid premiums. Jefferies analysis points out that taxing gains from overseas policies will weaken the attractiveness of Hong Kong insurance products compared to mainland products, putting pressure on sales, but it may also alleviate extreme market concerns about a possible comprehensive ban on overseas insurance sales by the mainland. JPMorgan's prior research report indicated that business from mainland visitors accounts for only about 21% of AIA's new business value, with nearly 80% of performance coming from non-mainland visitor business remaining largely on track. Tata AIA from India has become a long-term growth engine. Additionally, PRU attributed the 12% growth in new business profit in its annual results announced in March this year to sales growth from local customers and mainland visitors.