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BIZCHINA / Center

Pension fund eyes investment abroad

(Reuters)
Updated: 2007-03-11 10:14

China's National Social Security Fund plans to pour more of its assets
into overseas financial markets, its chairman Xiang Huaicheng said on
Saturday.

The fund, which has already said it will have invested $1.6 billion
abroad by the end of March, would step up its activities but Xiang did
not disclose details during an interview aired on Hong Kong-based Phoenix
Television.

Asked if the fund, which had assets of some $30 billion late last year,
planned to invest more cash overseas, Xiang replied: "I believe we will
definitely increase the levels. I cannot say when we will do this or talk
about the additional amounts which would be involved."

China's National Social Security Fund was established in August 2000 by
the central government as a back-up reserve fund, or "fund of last
resort", for the country's patchwork of badly underfunded provincial
pension schemes. In November, the fund awarded global investment mandates
to 10 foreign fund managers to plough more than $1 billion into overseas
stocks and bonds, paving the way for it to venture overseas for the first
time.

Last year, the fund earned a total of 19.5 billion yuan, marking a return
on its capital of 9.3 percent, up from 3.12 percent in 2005.

A large portion of its 2006 earnings had come from activity in the
country's then-buoyant stock markets, Xiang said.

Xiang had said previously that the fund aimed to invest at most 30
percent in stocks, around 55 percent in fixed income products and about
15 percent in direct equity stakes in industrial firms.

Xiang told Phoenix television that he did not think that the proportion
of the fund's investments which could be poured into equities should rise
as such parametres were an issue of financial safety.

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