China has approved the second batch of companies to arrange
securities investments for the country's occupational pension
funds.
The initiative comes, after a two-year halt, partly to bolster
the stock market.
Six firm were appointed as investment managers - Guotai Asset
Management Co Ltd, ICBC Credit Suisse Asset Management Co Ltd, GF
Fund Management Co Ltd, Taikang Asset Management Co Ltd, China
People's Insurance Asset Management Co Ltd and Changjiang Pension
Insurance Co - according to a notice published on the the Ministry
of Labor and Social Security Website yesterday.
Seven fund-management firms, insurers and securities companies
will work as account managers for the pension, including China
Construction Bank, Industrial and Commercial Bank of China Ltd and
Shanghai International Trust Co Ltd.
Four commercial lenders, China CITIC Bank Corporation Ltd,
Shanghai Pudong Development Bank Co Ltd, Agricultural Bank of China
and China Minsheng Banking Corp Ltd, will serve as custodians,
while seven insurers and trust firms were chosen as the fund's
trustees.
The first batch of firms, including 15 investment managers, 11
account managers, six custodians and five trustees were appointed
in August 2005 in a bid to boost the then-lagging stock market.
"The resumption of approving pension-fund managers may help save
the stock market from declining further," said Li Maoyu, an analyst
with Changjiang Securities Co Ltd.
Under regulatory rules, pension-fund managers can invest the
maximum amount of 20 percent of the funds into the stock market.
The funds can allocate as much as 50 percent of their assets to
invest in deposits, government bills and corporate bonds.
By the end of last year, China's pension fund was worth more
than 90 billion yuan (US$12.14 billion). It may grow to more than
500 billion yuan by 2010.
Guo Tehua, general manager of ICBC Credit Suisse Asset
Management Co Ltd, said: "The pension fund is a potential growth
point for fund businesses and the company will put a high priority
on the development of the pension fund."
The move came after China's securities regulator resumed
approving sales of mutual funds last week after a two-month halt,
also with a goal to cushion the stock market.
China's benchmark Shanghai Composite Index tumbled 4.41 percent
to 4,984.16 points yesterday after a 2007 bull run.
(Shanghai Daily November 23, 2007)
