SSF investment returns jump nearly six times

By Wang Yanlin  |   2008-6-30  |     ONLINE EDITION

CHINA'S social security fund reported its investment returns jumped nearly six fold last year from a year earlier thanks to a then buoyant stock market.

The investment gains increased to 112.92 billion yuan (US$16.6 billion) in 2007 from 19.5 billion yuan in 2006, pushing the fund's total value to 516.15 billion yuan by the end of last year, according to a statement on the Website of the National Council for Social Securities Fund.

The country's SSF was allowed to invest in both domestic and overseas markets, including areas such as bank deposits, treasury bonds, corporate bonds, trust funds, stocks and securities.

Last year, China's bullish stock markets led to the big increase. The benchmark Shanghai Composite Index surged to a record of 6,124 points in October before tapering off at the end of the year.

The fund's equity stake investments rose 11.7 percent to 38.1 billion yuan and produced assets of 439.7 billion yuan by the end of last year.

It helped to raise the SSF profit rate to 38.93 percent in 2007 from only 9.34 percent a year earlier.

With the stock market turning bearish this year, the SSF has announced it would allow up to 10 percent of its assets to enter industry investment funds and private equity funds.

Last month, the regulator approved Hony Capital and CDH Venture Partners to manage its investments in private equity funds, each with a capital pool of 2 billion yuan.

Dai Xianglong, chairman of the council, said earlier that the value of SSF would exceed 1 trillion yuan by 2010 and the regulator would consider employing more fund management companies to oversee the fund.