Alexander Forbes keeps equities on list of major bets despite slow growth
A man walks past the Nairobi Securities Exchange board. Pension schemes are keen on Safaricom, KCB, and EABL at NSE. Photo/FILE
What you need to know:
Pension manager identifies attractive counters to put funds this year.
The stock market has recorded slower growth this year compared to 2012 and 2013.
The NSE 20 Share index is down 0.5 per cent over the first six months, compared to a gain of 11 per cent in a similar period last year.
Pension managers Alexander Forbes (AF) says it will continue to put funds in equities this year, despite a slowdown in growth of returns at the stock market compared to last year.
The firm is one of the largest managers in the country with 28,000 members of retirement schemes.
Speaking ahead of the firm’s AGM in Nairobi on Friday, Alexander Forbes retirement fund chair Lucy Kambuni said the firm would only shift investment from non-performing counters instead of moving into other investment classes.
“Equities got us the best returns last year, and even though this investment class has not performed collectively as well this year we still see some counters which continue to do well, and we are moving funds into them,” said Ms Kambuni.
The pension manager disclosed that returns from its pensions section stood at 18 per cent and that of the provident section 21.5 per cent in 2013, from 15 per cent and 16 per cent respectively in 2012. It has Sh14 billion in assets under management.
The industry’s investment in quoted equities rose by 20.12 per cent from Sh147.69 billion in June 2013 to Sh177.41 billion in December 2013, according to the latest industry report by the Retirements Benefits Authority (RBA).
Equity investments constituted 25.5 per cent of all assets under management, while banking and manufacturing took the lion’s share with 66 per cent of all investment in quoted equities.
“The most stocks held by schemes were KCB and EABL and Safaricom Limited at Sh23 billion, Sh20.4 billion and Sh14.7 billion,” said RBA in its industry report for 2013 released on July 1.
Of these three stocks, KCB and EABL have recorded price gains of five per cent each this year, with Safaricom making double-digit gain at 15 per cent.
The stock market has recorded slower growth this year compared to 2012 and 2013. The NSE 20 Share index is down 0.5 per cent over the first six months, compared to a gain of 11 per cent in a similar period last year.
The All Share index, which also incorporates the smaller counters has gained 11 per cent this year to June, though this is much lower than the 23 per cent gain last year.
Industry assets under management grew by 27 per cent from Sh548.7 billion in December 2012 to Sh696.68 billion in December 2013, says RBA.
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