China's national pension fund said yesterday it's "unaware" of a
government plan to give it shares from initial public offers, using
the fund as a repository for state shares and a cap for limiting
the country's soaring stock market.
China's National Council for Social Security Fund will be given
10 percent of all state companies' IPOs starting from the end of
2007, China Securities Journal said yesterday, citing
unidentified sources. The Beijing-based pension "hasn't heard of
and is unaware" of the plan, spokeswoman Jin Yingzi told
Bloomberg News yesterday by telephone.
Owning these shares can help the 460-billion-yuan (US$61
billion) fund, set up in 2000 to earn money for the nation's
retirees, boost returns in a stock market that's almost tripled in
value this year.
The plan can also cap gains in the world's most expensive
primary stock index, as a sale by the fund will flood the market
with shares and drag prices down, analysts said.
"It's a way to boost the pension's returns because IPOs often
trade at premiums to their offer prices," said Fan Dizhao, who
helps manage the equivalent of US$1.8 billion at Guotai Asset
Management Co in Shanghai. "It's also the government's intention to
cool the market by adding to the supply of stocks."
The Chinese government in June 2001 issued rules for selling the
shares of state-owned companies. Under the plan, the Ministry of
Finance allocates proceeds from the stock sales to the pension fund
to boost its capital.
(Shanghai Daily September 27, 2007)
