China's social security fund reported its investment returns jumped nearly sixfold last year from a year earlier, thanks to a then buoyant stock market.

The investment gains increased to 112.92 billion yuan (US$16.6 billion) in 2007 from 19.5 billion yuan in 2006, boosting the total value of the fund to 516.15 billion yuan by the end of last year, according to a statement on the Website of the National Council for Social Securities Fund.

The SSF was allowed to invest in domestic and overseas markets, including in bank deposits, treasury bonds, corporate bonds, trust funds, stocks and other forms of securities.

Last year, China's bullish stock market, whose benchmark Shanghai Composite Index surged to a record 6,124 points in October, acted as a catalyst for the rapid gains the SSF earned.

The fund's equity stake investment rose 11.7 percent to 38.1 billion yuan and it helped to lift the profitability rate of the SSF to 38.93 percent in 2007 from 9.34 percent a year earlier.

With the stock market turning bearish this year, the SSF has announced it would allow up to 10 percent of its assets in industry investment funds and private equity funds.

The regulator approved Hony Capital and CDH Venture Partners to manage its investment in private equity funds, each with a capital pool of 2 billion yuan.

Dai Xianglong, the council's chairman, said earlier the value of the SSF would exceed 1 trillion yuan by 2010 and the regulator would consider hiring more fund management firms to manage its investments.

Last month, the regulator sought a second batch of fund managers to help invest its assets in global equities, as it may invest up to 20 percent of its assets abroad. In November 2006, it appointed 10 fund managers to help it invest overseas.

(Shanghai Daily July 1, 2008)