Reuters launches new pension index to reflect investors’ demand in China
18 December 2006 - Shanghai – Reuters (LSE: RTR, NASDAQ: RTRSY) today launches a second benchmark index, the Reuters China Pension Index 2 (RCPI-2), in response to investor demand and China’s capital liberalisation programme. Under this programme China is taking steps to put the nation’s huge pool of savings to work in global capital markets.
Alex Hungate, Reuters Asia Managing Director said: “To facilitate this process, Reuters continues to provide China, one of the world’s biggest potential growth markets for pension funds, with new industry benchmarks to meet the requirements of different investment preferences.”
Stuart Leckie, Chairman, Stirling Finance Limited, said: "The introduction of the Reuters China Pension Index is a major step forward in the development of China’s private sector pension system.”
Reuters China Pension Index 2 (RCPI-2) will form a benchmark for the investment performance of Enterprise Annuity funds that do not have equity investments. The newly created Index takes a more conservative approach and complements the existing Index.
The move will give plan sponsors, trustees and investment managers two benchmarks they can refer to according to their investment styles. Both indices will be updated daily.
Reuters China Pension Index 1 (RCPI-1) was launched on 31 March 2006 and was the first benchmark index in China to measure the investment performance of China’s Enterprise Annuity (EA) funds. RCPI is an investment benchmark for China’s Enterprise Annuity (EA) system one of the three pillars of the Chinese pension system.
At the same time as today’s launch China’s National Social Security Fund (NSSF) is awarding its first mandates to foreign fund managers, entrusting eleven firms with investments of more than $1 billion in international stocks and bonds on its behalf.
Note to Editors
After consultation with market participants and the RCPI Advisory Committee, Reuters has made a number of decisions to enhance the existing Index:
• Create an additional benchmark index to track the investment performance of EA funds that do not have equity investments. Therefore, the RCPI series is now composed of two indices: RCPI-1 and RCPI-2:
• Increase the calculation frequency of the RCPI series from monthly to daily
• Utilize the Shanghai/Shenzhen 300 TR (“total return”) Index.
Reuters has built the RCPI series in response to strong demand from both Chinese and foreign investors for benchmark indices in the developing pension industry in China. The Enterprise Annuity market, currently estimated to be over USD 10 billion in size, is expected to grow exponentially to USD 100 billion in size in the next five years.
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