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30 Jun 2015
Japan: Net sales of foreign securities by pensions? – DB
FXStreet (Barcelona) - Taisuke Tanaka, Strategist at Deutsche Bank, offers the Flow of Funds data released by the Bank of Japan, and further explains that there is no concern over Japanese pension funds being net sellers of foreign securities.
Key Quotes
“According to the Flow of Funds (FoF) released by the BoJ, outstandings for foreign securities investments as of end-March 2015 (mark-to-market estimation) stood at ¥34.3trn for private pensions (¥34.4trn at end-Dec 2014), ¥52.7trn for public pensions (¥52.8trn), ¥62.5trn for life insurers (¥62.9trn), ¥80.7trn for investment trusts (¥79.0trn), and ¥10.2trn for households (¥9.4trn).”
“Flows (“-“ indicates net selling, “+” net buying) for Jan-Mar were -¥29.5bn for private pensions, -¥92.4bn for public pensions, +¥262.5bn for life insurers, +¥3.5181trn for investment trusts, and +¥830.5bn for households.”
“The focus is on public pensions, which were net sellers to the tune of ¥92.4bn according to the FoF data. However, according to international securities flows statistics released by the Ministry of Finance (MoF), pensions mainly covered in “trust banks” bought a net of ¥2.28trn in foreign equities and ¥1.03trn in foreign bonds in Jan-Mar.”
“The FoF data are based on a lot of estimates while many pension funds have yet to release their end-March financial results. At present, we take the MoF’s data on international transactions in securities as better for seeing what actually happened in the market. Therefore, we do not think there is a need to be concerned over pensions being net sellers of foreign securities in Jan-Mar.”
Key Quotes
“According to the Flow of Funds (FoF) released by the BoJ, outstandings for foreign securities investments as of end-March 2015 (mark-to-market estimation) stood at ¥34.3trn for private pensions (¥34.4trn at end-Dec 2014), ¥52.7trn for public pensions (¥52.8trn), ¥62.5trn for life insurers (¥62.9trn), ¥80.7trn for investment trusts (¥79.0trn), and ¥10.2trn for households (¥9.4trn).”
“Flows (“-“ indicates net selling, “+” net buying) for Jan-Mar were -¥29.5bn for private pensions, -¥92.4bn for public pensions, +¥262.5bn for life insurers, +¥3.5181trn for investment trusts, and +¥830.5bn for households.”
“The focus is on public pensions, which were net sellers to the tune of ¥92.4bn according to the FoF data. However, according to international securities flows statistics released by the Ministry of Finance (MoF), pensions mainly covered in “trust banks” bought a net of ¥2.28trn in foreign equities and ¥1.03trn in foreign bonds in Jan-Mar.”
“The FoF data are based on a lot of estimates while many pension funds have yet to release their end-March financial results. At present, we take the MoF’s data on international transactions in securities as better for seeing what actually happened in the market. Therefore, we do not think there is a need to be concerned over pensions being net sellers of foreign securities in Jan-Mar.”