Funds News
- $42 fund keeps investing despite global turmiol
Date: 20-Aug-2007 Sources: (Shenzhen Daily)
CHINA'S US$42 billion National Social Security Fund will be cautious as it continues to invest overseas amid the rising global financial turmoil triggered by defaults on U.S. subprime mortgages, Xinhua reported yesterday.
'The impact from this financial storm should not be underestimated,'Xinhua's Web site quoted the fund's chairman, Xiang Huaicheng, as saying.
'But the Social Security Fund will not stop investing because of this financial storm,'he said.
Xinhua had earlier reported that the fund planned to invest US$12.9 billion in 2007, while limiting equity investments to 30 percent of that total.
The fund will further increase the proportion of fixed-income investment to between 50 and 70 percent, including bank deposits and treasury bonds, the agency said.
The fund was set up in 2000 to help boost returns and make up for a shortfall in China's pension system, which could amount to US$1.2 trillion by 2035.
In a bold bid to turn back a rising financial storm, the U.S. Federal Reserve on Friday cut a key bank lending rate and signaled a willingness to take more dramatic action to cushion the economy from tightening credit.
The surprise move sparked a rally in Wall Street and European stocks but came too late for the battered Asian markets to react.
With global stock markets reeling as shock waves from rising U.S. mortgage defaults spread around the globe, there were rising fears that the world's largest economy could fall into recession.
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