Ja­pan’s big­gest pen­sion fund blocked from di­rect stock in­vest­ing

The Pak Banker - - BUSINESS -

TOKYO: A push by the world's largest pen­sion fund for per­mis­sion to by­pass as­set man­agers when do­ing busi­ness in Ja­pan's stock mar­ket has re­port­edly hit a wall. The pro­posal to al­low the Govern­ment Pen­sion In­vest­ment Fund to di­rectly buy or sell stocks was halted, Tokyo-based Ky­odo News re­ported Thurs­day. Ja­pan's $1.2 tril­lion fund had been seek­ing clear­ance to act di­rectly rather than hir­ing as­set man­agers in or­der to re­duce op­er­at­ing costs and boost the size of its in­vest­ments. While a panel hand­picked by Prime Min­is­ter Shinzo Abe rec­om­mended a com­plete over­haul of how GPIF man­ages Ja­pan's re­tire­ment money as the na­tion seeks to exit de­fla­tion, the free­dom to di­rectly buy stocks won't be among the changes as over­seers dropped the plans amid cor­po­rate-sec­tor con­cerns of govern­ment in­ter­ven­tion, ac­cord­ing to Ky­odo. GPIF has been a key player in buoy­ing Ja­panese stocks af­ter the na­tion's equity bench­marks en­tered a bear mar­ket. The fund dou­bled its al­lo­ca­tions to Ja­panese and for­eign shares in 2014, boost­ing re­turns to a record as stocks ral­lied into Au­gust last year. The share rout that fol­lowed left GPIF post­ing a 7.9 tril­lion yen loss in the three months through Septem­ber. The fund un­der­went un­prece­dented re­forms in Oc­to­ber, prun­ing back bond al­lo­ca­tion to make way for more eq­ui­ties and a foray into al­ter­na­tive in­vest­ments.

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