6 Oct 2014
GPIF may announce new basic portfolio next month - Nomura
FXStreet (Bali) - GPIF may announce its new basic portfolio
next month, notes Nomura.
Key Quotes
"Local media (Jiji) reports that the GPIF investment committee discussed the draft of its new basic portfolio at the meeting on 3 October. The article says that the draft is likely to have higher shares for domestic equities, foreign equities, and foreign bonds as expected. The draft will be discussed further by the committee, and the Ministry of Health is going to approve it, according to the article."
"These processes are as we expected, but the announcement may now come in November or later, even though it was initially scheduled to be in October. The GPIF has not released its agenda or the minutes of the investment committee meeting yet."
"But if the announcement is delayed to November as the article reports, that would be a slight disappointment for our scenario, as we had expected the announcement to come by mid-October. Nonetheless, the new basic portfolio is still likely to be announced over the next one to two months, which should limit the downside risk of USD/JPY."
"Pension funds have accelerated their portfolio shifts from domestic bonds to risky assets in August, but we still see more room for them to shift into foreign assets and domestic equities after the GPIF introduces its new basic portfolio."
"Trust banks, which manage pension fund money, bought JPY2.3trn ($20.9bn) this fiscal year, but we estimate the GPIF and three public pension funds need to purchase JPY15trn of foreign assets under the new basic portfolio. Trust banks‟ investment in domestic equities has been also muted in September, according to TSE."
"We get September data for investment flow into foreign assets and domestic equities by investor type this week, which will give us better sense of pension funds’ investment activity."
next month, notes Nomura.
Key Quotes
"Local media (Jiji) reports that the GPIF investment committee discussed the draft of its new basic portfolio at the meeting on 3 October. The article says that the draft is likely to have higher shares for domestic equities, foreign equities, and foreign bonds as expected. The draft will be discussed further by the committee, and the Ministry of Health is going to approve it, according to the article."
"These processes are as we expected, but the announcement may now come in November or later, even though it was initially scheduled to be in October. The GPIF has not released its agenda or the minutes of the investment committee meeting yet."
"But if the announcement is delayed to November as the article reports, that would be a slight disappointment for our scenario, as we had expected the announcement to come by mid-October. Nonetheless, the new basic portfolio is still likely to be announced over the next one to two months, which should limit the downside risk of USD/JPY."
"Pension funds have accelerated their portfolio shifts from domestic bonds to risky assets in August, but we still see more room for them to shift into foreign assets and domestic equities after the GPIF introduces its new basic portfolio."
"Trust banks, which manage pension fund money, bought JPY2.3trn ($20.9bn) this fiscal year, but we estimate the GPIF and three public pension funds need to purchase JPY15trn of foreign assets under the new basic portfolio. Trust banks‟ investment in domestic equities has been also muted in September, according to TSE."
"We get September data for investment flow into foreign assets and domestic equities by investor type this week, which will give us better sense of pension funds’ investment activity."