SHANGHAI: The annual results reporting season has by now begun in earnest. But this time, investors have one more item to watch for other than bottom lines, cash flow charts and auditors' comments.
That item, touted by analysts and investors as sort of a seal of approval, is the name of China's National Social Security Fund on the list of major shareholders.
The fact that a company is deemed fit for investment by the custodian of the savings of millions of Chinese working people speaks volumes about the quality of the business and its management, analysts said.
Latest figures from the Shanghai Stock Exchange showed that the fund is a major shareholder in 24 of the 155 listed companies that have so far published their 2009 results.
The fund purchased holdings in 10 of the 24 companies in the last quarter of the year.
The fund has invested fairly evenly in several sectors, including chemicals, coal mining, non-ferrous metals, and new resources.
Its buying pattern as shown in the annual reports of the companies in which it has invested showed a bias towards new resources in the last quarter of 2009, coinciding with the Copenhagen conference on climate change.
"The social security fund's investment in the stock market is considered as a national rating of the credit of those stocks and I believe it will guide other investors in the medium and long term," said Guo Feng, a strategic analyst at Northeast Securities Co Ltd.
Guo said the fund is a long-term strategic investor in the market and its choices are often safe bets.
"But we have to note that shareholdings in the name of the social security fund are actually the decisions of different trust funds."
According to Guo, the national fund management bureau authorizes part of its investment decision-making to 10 trust funds every year.
