Treasury moves more public money into stock market

Tuesday 28th July 2009, 3:00PM BST.

States Treasurer Ian Black

THE States Treasury is putting more public money into stocks and shares as part of a revision of investment strategy.

The Treasury Department oversees more than £2.7 billion of public funds including the States Strategic Reserve, the Stabilisation Fund, the Consolidated Fund, the Social Security Fund, the Public Employees Contributory Retirement Scheme, the Jersey Teachers’ Superannuation Fund, currency notes and coins funds, and around 250 trust, bequest and confiscation funds.

The stock market has recently begun to show signs of recovery from the severe downturn of the past year or so, with share prices rallying.

States Treasurer Ian Black said that before 2006 there had been no investment strategy for the Strategic Reserve but that over the past three years advisers had been allocating up to 30% of the fund in equities.

That allocation has now been increased to 50%, with around ten per cent in property and 40% in bonds and cash.

He said the changes had been made to increase the longer term value of the fund, on the basis that is was a permanent reserve which the Island should draw on only in exceptional circumstances.

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1
Spring Heeled Jack

July 28, 2009 at 3:40 pm

Lets hope that none of OUR money is in foreign exchange speculation!

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2
dave

July 28, 2009 at 8:20 pm

Markets are now at a 6 month high.

Whats the betting that they lose some of our money in this adventure?

Are they ‘buying local’ when appointing investment advisors?

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3
James Deale

July 28, 2009 at 8:42 pm

Equities are volatile, this is a bad move. Above average returns are only certain over a period of many decades – and that alone is based on past market performance which is dangerous in itself.

Despite the proposals, it is likely they will have to ‘draw on’ these funds in the medium term. It’d be better sat in a high interest earning account (5% right now).

Also who will be managing the increased equity portfolio? No doubt this will create another high paid job.

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4
Mogit

July 28, 2009 at 9:16 pm

What can you say – God help us !!!!

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5
Oh Dear

July 29, 2009 at 9:10 am

I don’t think this is a good idea. The time is not right either. If you read around, you may find that another big fall has been participating. Don’t be fooled.

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6
geno

July 29, 2009 at 12:24 pm

James Deale

Where on earth do you think the government could get 5% on a risk free account when the UK Base Rate is 0.5%. Landersbanki perhaps

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7
James Deale

August 1, 2009 at 1:41 pm

6. geno

…In goverment bonds and/or bonds issued by part nationalised UK banks.

Are you asking a question or countering my view? In which case I ask you to justify wuch high risk to the taxpayer.

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8
Carl

August 3, 2009 at 12:31 pm

This is lunacy. The stock market is having a bear market rally fuelled by Government printing of money worldwide. Sooner or later (we could be talking of a very short time period) there will be a bond market dislocation and interest rates will rise substantially. Equity markets will fall sharply and the investments made will lose considerable value. This is a major depression, at least similar to The Great Depression of the 1930′s, where equities lost 95% of their value and purchases made during that time did not recover their value for years.

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9
bella

August 3, 2009 at 6:11 pm

I agree it is the wrong time to invest in stocks and shares at the moment.
i don,t think the market has bottomed out yet and there will be many more rises and falls before this settles.
Last time this happened in the same scale was about october 1987 same year as the great storm and it took quite a few years to recover.

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