The NSSF has opened an account with the CCASS to hold their allocation of H shares in the future. The NSSF receives 10% of the funds raised by floating state owned shares. In the past, this had been paid out in cash. By starting now, the NSSF is entitled to receive shares. The first company to fall under this is Hunan Non Ferrous Metals (#2626) which will be listed on Friday 31 March 2006.
This is a good thing for the HKG stock market because we have always lacked a big local long term investor. Now with the MPF and the NSSF, we should start to see steadier markets. Also, pensioners, current and future, will be able to benefit from dividends and capital gains on the HKG market.
The NSSF bought RMB 10 billion of Bank of Communications in July 2004 at $1.80. This is now trading AT $4.65 and the stake is now worth $25.8 billion. The NSSF has RMB 191.7 billion under management mostly in cash earning 3% interest. Some of it will find its way into the HKG market.
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