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Pension Funds Shun Bonds Just as Southeast Asia Needs Them Most

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Dan Edwards
Dan Edwards has been with Alpha Southeast Asia since 2013 and edits both print and online versions of the magazine. He wrote the award-winning story ‘spotlight on unclarity’ soon as after joining Alpha Southeast Asia. He is based in Singapore.

The biggest state pension funds in Thailand and the Philippines are shifting money from bonds to stocks, which could push up the cost of government stimulus programs.

The Social Security Office and Government Service Insurance System said they’re increasing holdings of shares, while the head of Indonesia’s BPJS Ketenagakerjaan said he sees the nation’s stock index rising 14 percent by year-end. Rupiah, baht and peso notes have lost money since the end of January, after handing investors respective returns of 13 percent, 9.9 percent and 6.6 percent last year, Bloomberg indexes show.

“There has been frustration among domestic institutional investors about the falling returns on bonds,” Win Phromphaet, who manages 1.2 trillion baht ($37 billion) as Social Security Office’s head of investment in Bangkok, said in a March 19 interview. “Large investors including SSO must quickly expand our investments in other riskier assets.”

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