Pen­sion funds to be used for ail­ing stock mar­ket

China Daily (Canada) - - NEWS CAPSULE -

China is al­low­ing its pen­sion funds to in­vest up to 600 bil­lion yuan ($97 bil­lion) in the coun­try’s strug­gling eq­uity mar­ket.

The funds will be able to in­vest up to 30 per­cent of their net as­sets in the stocks, eq­uity funds and bal­anced funds, ac­cord­ing to rules pub­lished by the State Coun­cil, or cab­i­net. The rule was pub­lished on Sun­day af­ter shares slumped by nearly 12 per­cent last week, the worst weekly per­for­mance since June.

China’s pen­sion funds ac­count for about 90 per­cent of the coun­try’s so­cial se­cu­rity fund pool and had net as­sets of 3.5 tril­lion yuan by the end of last year, ac­cord­ing to the Min­istry of Hu­man Re­sources and So­cial Se­cu­rity

The funds were pre­vi­ously only al­lowed to be de­posited in banks or in­vested in Trea­sury bonds, which give very low yields.

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