A-shares may get fil­lip as 21 com­pa­nies re­ceive nod to man­age pen­sion funds

China Daily (Hong Kong) - - BUSINESS - By CAI XIAO caix­iao@chi­nadaily.com.cn

The first batch of 21 Chi­nese pen­sion-fund man­age­ment in­sti­tu­tions were ap­proved on Tues­day af­ter­noon. This move is ex­pected to shore up the A-share mar­ket greatly.

The Na­tional Coun­cil for So­cial Se­cu­rity Fund re­leased on its of­fi­cial web­site the list of ap­proved com­pa­nies, in­clud­ing 14 fund man­age­ment com­pa­nies, six in­sur­ance com­pa­nies and one se­cu­ri­ties firm. Among these are China As­set Man­age­ment Co Ltd, China Life Pen­sion Co Ltd and CITIC Se­cu­ri­ties. Pen­sion funds pre­vi­ously stayed in bank de­posits or trea­sury bonds, with low yields.

“Based on re­lated reg­u­la­tion, we se­lected the 21 quali- fied in­vest­ment in­sti­tu­tions af­ter strict ex­am­i­na­tion and ap­proval pro­cesses,” said the state­ment of Na­tional Coun­cil for So­cial Se­cu­rity Fund.

Wang Guo­jun, an in­sur­ance pro­fes­sor with the Univer­sity of In­ter­na­tional Busi­ness and Eco­nom­ics, said it’s good to have the op­tion of such man­aged in­vest­ments, or the in­vest­ment re­turn of pen­sion funds can­not be guar­an­teed.

“It shows con­fi­dence in the in­vest­ment in­sti­tu­tions’ per­for­mances and the re­lease is pos­i­tive for boost­ing the A-share mar­ket,” said Wang.

Wang said the first batch fund of 300 bil­lion yuan ($43.6 bil­lion) is ex­pected to be placed un­der the man­age­ment of the qual­i­fied in­vest­ment in­sti­tu­tions.

Hong Hao, chief strate­gist tril­lion yuan at BOCOM In­ter­na­tional, said it’s pos­i­tive for the do­mes­tic stock mar­ket and this ap­proach has been proven by in­ter­na­tional ex­pe­ri­ence.

Ac­cord­ing to Hong, pen­sion funds are man­aged by pro­fes­sional in­sti­tu­tions in the United States, and the sys­tem is sim­i­lar in Sin­ga­pore.

But, Hong said, it does not mean that now is the best time to in­vest in the A-share mar­ket, be­cause these qual­i­fied pen­sion managers will start to open po­si­tions in the next six months to one year.

In Oc­to­ber, the Min­istry of Hu­man Re­sources and So­cial Se­cu­rity said the first batch of pen­sion fund man­age­ment in­sti­tu­tions would be cho­sen by the end of this year and would of­fi­cially launch their op­er­a­tions.

China’s pen­sion fund as­sets to­taled 3.99 tril­lion yuan at the end of 2015, ac­cord­ing to data from the Min­istry of Hu­man Re­sources and So­cial Se­cu­rity.

On May 1, the na­tional guide­line to reg­u­late the man­age­ment of the pen­sion funds took ef­fect. It is the first of its kind is­sued by the cen­tral gov­ern­ment.

The guide­line al­lows the coun­try’s pen­sion funds to in­vest in more di­ver­si­fied prod­ucts with higher risks, such as stocks and pri­vate eq­uity funds.

the to­tal amount of China’s pen­sion fund as­sets at the end of 2015


Em­ploy­ees of Bosera Funds pro­vide con­sul­ta­tion ser­vices at the com­pany’s booth at a fi­nance expo in Bei­jing.

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