The national pension fund has pledged to invest in the mainland's moribund stock markets, a move that reflects Beijing's determination to help shore up investor confidence and lift the falling indices.
The National Social Security Fund said it would increase stock purchases in order to seek long-term, stable returns, while reinforcing the central government's efforts to stabilise the market, Xinhua reported yesterday. Xinhua did not elaborate on how much the pension fund would invest in stocks.
The fund, which had 516.2 billion yuan (HK$585.94 billion) in assets at the end of last year, said it would also invest strategically in China Development Bank and Agricultural Bank of China to support financial reform.
The announcement coincided with a 2.44 per cent drop in the Shanghai Composite Index yesterday as the central bank's massive 108 basis point interest rate cut failed to convince investors of a coming economic turnaround.
The benchmark gauge has plunged 64.44 per cent this year and was 69.29 per cent off its record high set in mid-October last year.
'The stock market will go nowhere in the remaining year,' said Essence Securities analyst Liu Jun. 'Worries of a bad economy haunted investors who unanimously bet on a further downturn.'
