Pensions sector assets base increase 80% in March quarter
HARARE, Investment property and equities in the pensions sector continued to reprice faster than all other asset classes in Q1 2020 diluting exposures to these assets, Insurance 24 can report.
The industry closed the quarter with a total asset base of ZW$29,81 billion as at 31 March 2020, an increase of 80,33% in asset values recorded in Q4 2029.
Investment property increased to ZW$14,13 billion as at 31 March 2020 from ZW$7,39 billion as at 31 December 2019 hence increasing its share of total assets to 47,38% from 45,06% as at 31 December 2019.
In its Q1 pensions report, Insurance and Pensions Commission (Ipec)said the industry’s investments continued to be skewed towards equities and investment property accounting for 82,67% of total industry assets as at 31 March 2020.
“The two asset classes totaled ZW$24, 64 billion and are viewed as value preserving and a hedge against inflation. Funds’ value of investments in equities and investment property has been increasing in absolute terms” said Ipec.
The industry’s asset base in nominal terms increased by 454.09% to ZW$29.81 billion from ZW$5.38 billion as at 31 March 2019 although its worth noting that there was a decline in the real asset base given the annual inflation rate of 676.39%, for March 2020.
The industry’s asset base increased by 81.68% to ZW$ 29.81 from ZW$16.41 billion as at 31 December 2019 with the increase driven by an upsurge in the values of investment properties and equities which accounted for 82,67% of the industry’s assets.
Investment property increased to ZW$14.13 billion as at 31 March 2020 from ZW$7.39 billion as at 31December 2019, hence increasing its share of total assets to 47.38% as at 31 March 2020 from 45.06% as at 31 December 2019.
Quoted equities investment increased by 82.12% to ZW$9.78 billion as at 31 March 2020, from ZW$5.37 billion as at 31 December 2019, on account of an increase in the values of quoted equities holding on the Zimbabwe Stock exchange.
Overally Total income for the industry was ZW$5.79 billion compared to $214 million for the same period in 2019 driven by driven by interest from investments, which constituted 51.21%, and fair value gains (36.75%), whose combined share amounted to ZW$5.09 billion.
Total industry expenditures for the period under review amounted to ZW$399.09 million, of which ZW$259.54 million was for pension benefit payments.
Ipec said ,notwithstanding the increase in absolute values of prescribed assets from
ZW$1.22 billion as at 31 December 2019 to ZW$2.29 billion, compliance was still low at 7.67 % against the regulatory minimum of 20%.