SOUTH KOREA - South Korea's National Pension Fund has moved away from US Treasuries because of low yields, according to reports.
Kwag Dae-hwan, head of global investments at the NPS, was reported as saying: "It is difficult to buy more US Treasuries because the portion of our Treasury investment is already too big and Treasury yields have fallen a lot.
"We need to diversify our portfolio away from US Treasuries and we find asset-backed securities and corporate debt more attractive because of wider credit spreads."
Meanwhile, independent Asian equity specialist Atlantis Investment Management reported that anticipation of a US downturn had led to sell-offs across Asian markets.
However, it believed Korea's new pro-business government had the ability to stimulate the economy.
Kyueun Jeong, fund adviser to the Atlantis Korea Opportunities Fund, said the outlook for corporate investment in Korea was good given the recent inauguration of president MB Lee, former chairman of Hyundai Construction.
Lee intends to abolish regulatory measures on business, curtail the power of the labour unions, and aggressively slim down government.
Jeong said this could help counter a trend of the past five years in which an increasing number of businesses had opted not to build operational facilities on the Korean peninsula because of obstructive Government policies, such as refusing permission to build plants in metropolitan areas.
Jeong said: "The new government's key agenda item is reviving the economy. The government is likely to reduce corporate taxes gradually over the next several years and will also abolish the cross-shareholding limit of conglomerates to stimulate their facility investments. It is widely agreed that this move will spur mergers and acquisitions."
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers