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Social Security Fund Gets Go-ahead
The expected launch of a national social security fund adds another impetus for the fund industry, which has been put in the limelight by the accelerated process of the first open-ended fund debut.
The media reported on Tuesday that the State Council has decided to set up the national social security foundation soon and a foundation council to supervise the operation of the fund.
Liu Zhongli, vice-minister of the State Development Planning Commission, was appointed chairman of the board.
The council will manage the fund with government finance as well as that gathered from liquidizing State assets.
It is also authorized to choose professional and qualified asset management companies to operate the fund assets to ensure its maintenance and increase of value.
Analysts said the market-boosting news will heighten confidence of investors and will bring stability and long-term benefits to the stock market.
They expected it to be a strong engine to push up the market indices that have been on a downward trend in the past few weeks.
Meanwhile, a number of fund management firms are increasing their preparation to set up open-ended funds.
Reports said that the outlays of such funds designed by the Southern Fund Management Co and Hua'an Fund Management Co are waiting final approval from the securities regulators and the funds could soon be put into the market after receiving approval.
Analysts said the open-ended funds might purchase domestic stocks with better liquidity and performance records, which will infuse fresh funds to the market that helps prop up the indices.
Insiders said the fund management firms have also hired some professionals with rich fund management experience abroad to lead the management of the new fund.
They will put more focus on investment decisions on companies that enjoy stable and healthy growth to guarantee returns.
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