China’s pension fund to flow into stock market

Beijing, March 28 (IANS) China’s pension fund may begin investing in the nation’s share markets, a move that will channel approximately 600 billion yuan ($92 billion) into the equity market and likely improve its liquidity, the media reported on Monday.

The target date comes after China’s State Council published an investment guideline that would allow the country’s pension fund to invest in more diversified and risker products, with the maximum proportion of investments in stocks and equities set at 30 percent of total net assets, the People’s Daily reported.

China’s pension fund, which accounts for approximately 90 percent of the country’s total social security fund pool, had net assets of 3.98 trillion yuan by the end of 2015.

By the end of last year, total investible pension fund nationwide reached approximately 2 trillion yuan, according to data from the ministry of human resources and social security.

According to a survey by the Shenzhen Stock Exchange, which polled 3,874 small investors from 219 cities around China, more than 77.5 percent of respondents said they had been anticipating the pension fund investments and that the move will bring a wave of liquidity.

Provinces that have already piloted their local pension funds to be invested in the equity market have reported positive yields. Guangdong province reportedly accrued a combined yield of 17.34 billion yuan from a 100-billion-yuan investment.

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