ZSE gains boost Insurance sector asset base
By Insurance24
HARARE, Total Assets for the Insurance industry reached $3.19 billion as at September 2017 compared to $1.91 billion same period in 2016 largely driven by gains on the Zimbabwe Stock Exchange (ZSE) as investors sought safe haven in the wake of risk exposure of the bond notes.
Market capitalization for the local bourse reached as high as $15 billion in December last year, but this has since started a self correction which saw market cap at $8.41 billion as at 23 February 2018.
Therefore, value has since been lost, translating to a possible decline in the assets of the industry. Nhau Chivingira, the Insurance and Pensions Commission (IPEC) Manager Pensions in a presentation at a ZimSelector mentoring programme for journalists said insurance and pension investor’s account for a 40% holding of equities listed on the ZSE.
He said during the period under review, growth in assets was largely driven by life assurers whose asset base grew 82.82% to reach $2.69 billion compared to $1.47 billion in 2016. Due to its proximity to long term investments, the life assurance became the choice for investors as they sought to hedge their investments against the uncertainties of the bond notes.
Chivingira said the insurance sector continues to suffer low confidence levels due to the hyperinflationary environment which wiped out peoples savings, thus these legacy issues compounded by poor corporate governance and foreign currency challenges continues to hamper the sector.
In addition to that, fragmented regulation has also impacted the insurance sector. At the moment, regulator IPEC cannot regulate the National Social Security Authority (NSSA) as well as the Medical AID Societies.
According to Commissioner Karonga cabinet is currently seized with the matter to see how they can address the impasse. He also added that the report on the conversion process of savings and insurance calculations that was carried out by a Commission of Inquiry is now with the President for consideration before publication of the results.
The Market
Trading on the Zimbabwe Stock Exchange opened the week on the back foot, with losses in Afdis, Delta, Econet and SeedCo dragged the Industrial Index a notable 1.30 points.
Seedco came off $0.0492 to close at $1.9008, Afdis dropped $0.0300 to trade at $1.4500 and Econet eased $0.0095 to $0.6807. Delta went down by $0.0071 to settle at $1.5900, Fidelity Life slipped $0.0060 to end at $0.0900 while mining company Bindura was $0.0044 weaker at $0.0330.
Three counters gained ground as PPC gained $0.0141 to $0.8691, Zimplow added $0.0080 to trade at $0.0900 whilst CBZ Holdings rose by $0.0017 to end at $0.1037.
Market turnover closed at $967,056 with Hippo, Innscor and Old Mutual contributing most of the value traded.
There was an influx of sellers mainly in the blue chip stocks category. The Mining Index shed 3.50 points to close at 124.89 points on the back of a loss in Bindura that closed at 3.3c.
Insurers Report
Insurer Fidelity life traded at 9c, after losing 0.60c. Old Mutual was flat at 5.20c. Other insurers ZHL, FMHL and NicozDiamond did not trade.
