Nordic pension investors not concerned with Chinese authorities recent regulatory actions

The Chinese authorities’ recent regulatory actions have seen some foreign investors and market participants being concerned that it could bring a change in China’s policies, but according to IPE, three major Nordic pension funds do not see it as a big concern.

Following the regulatory actions IPE writes that it led to some heavy selling of stocks this summer, the Hang Seng Index fell about 14% in July and the share prices of Alibaba and Tencent were particularly hard hit in the sell-off.

IPE writes that according to the Danish labor-market pension fund PUB, the risks of China are well-known, not less attractive because of the increased political risk and the fund views the prices as fair. PBU has however seen significant uncertainty around China’s future regulation for industries such as entertainment and education and said to IPE that PBU’s exposure to the Asian market has decreased because of market developments. CIO of PBU Carsten Warren Petersen said, “We expect to increase our exposure again but we see better value elsewhere at the moment.”

Norway’s municipal pension provider KLP Kapitalforvaltning commented on the developments saying that the company does not manage its funds according to how it sees political risk for companies.

Finnish Varma said to IPE that the mutual pension insurance company has no investments listed in China but made Chinese investments through indices and that recently the big picture has not changed as there has always been political risk in Chinese stocks. 

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