BEIJING, March 9 (Xinhua) -- China's Social Security Fund, a government-run investment fund to reserve fund for the country's social security system, signed contracts with six new securities companies for contracted broker service, reported Xinhua Finance on Monday.
After a 10-year hiatus of the fund's broker service team expansion, the newly signed securities brokers are broadly cheerful as the move is expected to bring about hefty commission income for them.
The report cited the fund's operator National Council for Social Security Fund as saying that now the fund expanded its contracted broker service team to 25 ones, including the newcomers, namely Soochow Securities (601555.SH), Sinolink Securities (600109.SH), Hua Chuang Securities, TF Securities (601162.SH), Western Securities Co., Ltd. (002673.SZ) and Zhongtai Securities (600918.SH).
Generally, the Social Security Fund carries out direct investment and entrusted investment, and securities brokers provide brokerage service to the fund's securities related investment.
As the fund's 2019 annual financial results released in September 2020 showed, it owned total assets of 2.63 trillion yuan and earned 14.06 percent or 291.72 billion yuan of returns from its equity investment annually.
In 2019, total assets of the Social Security Fund increased 17.6 percent year on year and if its total assets continued to grow by 17.6 percent in 2020, its gross assets are likely to reach 3.6 trillion yuan by the end of this year, forecasted Zhang Qiyao, chief strategist with Guosheng Securities.
Calculated on basis of an assumed 20 percent A-share equity investment ratio by the fund, the potential new equity investment of the fund in 2021 may reach 100 billion yuan, according to Zhang. Statistics with Asset Management Association of China (AMAC) showed that the fund's A-share equity investment ratio was 21.4 percent in 2016.
Usually, the commission rate of securities brokerage services for the Social Security Fund is 0.05 percent and as the fund scales up its equity investment size and speeds up its equity investment paces, the contracted securities firms are expected to embrace gratifying incomes, held market players.
Data with TX Investment Consulting Co., Ltd., an investment consulting institution in China, told that the top five securities brokers by total commission incomes in the first half of 2020 were CITIC Securities (600030.SH), Changjiang Securities (000783.SZ), China Securities Co., Ltd. (601066.SH), China Merchants Securities (600999.SH) and Gf Securities (000776.SZ). (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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