Calpers keeps Malaysia, Thailand off investment list
www.channelnewsasia.com First created : 19 February 2003 1344 hrs (SST) 0544 hrs (GMT) Last modified : 19 February 2003 1900 hrs (SST) 1100 hrs (GMT)
Calpers, the largest US pension fund, has decided to continue to avoid stock investments in Malaysia and Thailand while remaining in the Philippines, despite a consultant's recommendation to do otherwise.
The board of California Public Employees' Retirement System, deciding on recommendations made by Wilshire Consulting, voted against investment in 12 developing countries, including China, India, Indonesia and Russia.Advertisement Also banned for investment were Morocco, Sri Lanka, Egypt, Pakistan, Colombia and Venezuela.
The decision was based on an assessment of the stability and transparency of those countries, including such criteria as accounting standards and labour law.
Calpers, which has some US$133 billion in assets, had been expected to put Thailand and Malaysia back on its list of approved markets, but voted for tighter standards than the consultant had recommended.
The board cleared 14 emerging markets for investment, including South Korea, Poland and Israel.
The others are the Czech Republic, Hungary, Taiwan, South Africa, Chile, Mexico, Jordan, Peru, Argentina, Turkey and Brazil.
The fund, which has about US$1.8 billion in emerging markets, also said it would keep the Philippines on its target investment list.
This was after Philippine officials presented information that shows the country's equity market remains an eligible investment area.
The fund said it would consider adding countries to a "watchlist" before it sold off from those markets, allowing governments to respond to perceived problems and saving transaction costs.
Wilshire Consulting had helped Calpers overhaul its standards for investing in emerging markets last year.
It recommended in February last year that Calpers pull out of Thailand, Malaysia, the Philippines and Indonesia.
In May, however, Calpers returned to the Philippines after the market was discovered to have failed the investment criteria only because of an error in scoring settlement proficiency.