Only 2% of the insurance and pension funds are invested in the stock market. The average return on those funds is double the return we have received from any other investment tool, Minister of Social Solidarity Ghada Wali announced Tuesday.
The minister noted that despite coming out a fiscal, food and fuel crises in 2010 and with the international stock markets facing many challenges, the insurance and pension funds were stable.
“In 2010, the funds’ returns produced a 16% return,” Wali said. “In 2013 and 2014, the return reached 18.5% and 29%, respectively.”
Wali added that insurance and pensions funds available for investment in the stock market are approximately EGP 100bn. She added that around EGP 400bn are not available for investment because they are “still tangled with the Ministry of Finance”.
Wali pointed out that a team that includes herself, Minister of Finance Hany Kadry Dimian and Minister of Planning Ashraf El-Araby, has set several steps during the past week to untangle that figure.
“In the US, around 57% are invested in the stock market, while in China about 25% are invested,” Wali said. She added that in Bahrain around 15% of the funds are invested in the capital market while Saudi Arabia investment is 13%.
Wali said the funds are long-term, and several conditions are placed on what type of fund the General Authority for Social Security and Pensions (GASSP) deals with. She noted that a committee of economic experts was formed to assist in the decision-making process and the selection of the investment direction.
“No investments will be made until they are thoroughly studied and have clear return,” the minister said.
The investment portfolio of the GASSP is focused on petrochemicals, water resources and construction materials, the minister said, adding that there is still room for expansion.