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)
