South Korea’s state-run pension fund has received qualified investor status from Chinese authorities, opening the door for its investment in Chinese stock markets, its officials said Sunday.
The National Pension Service received the status of “qualified foreign institutional investor” (QFII) from the China Securities Regulatory Commission, according to the officials.
The approval comes more than a year after the NPS applied for the QFII in December 2010. Among the world’s top four pension operators, the NPS is the first one which has received the QFII status from China that will allow for investment in mainland stock markets.
The pension fund service said that it plans to start investing in Chinese stock markets within this year.
It will also seek to establish cooperative relations with local institutional investors for joint investment projects down the road.
The NPS is South Korea’s largest institutional investor, which holds about 346 trillion won ($297.5 billion) worth of assets under its management. The asset holdings are expected to reach 500 trillion won within four to five years.
The pension fund operator has been seeking to diversify its investment destinations in order to reduce the overall risks and increase profitability.
It currently invests 44.6 trillion won in overseas markets, or 12.9 percent of its total assets. The NPS plans to increase the ratio to 20 percent by 2016. (Yonhap News)
