National Social Security Fund head office in Nairobi. PHOTO | FILE
What you need to know:
NSSF bought an additional 125.5 million shares of Safaricom between January and December 2015 to take its holdings to 296.9 million shares.
These additional shares coupled with the fact that Safaricom’s stock gained in price from Sh14.05 to Sh16.30 during the year helped the holding double in value.
The value of Safaricom shares held by the National Social Security Fund (NSSF) rose by Sh2.75 billion in 2015, sparing the fund capital losses on its equities portfolio against the backdrop of a bear run.
The NSSF’s latest financial filings published in the Kenya Gazette show that it bought an additional 125.5 million shares of Safaricom between January and December 2015 to take its holdings to 296.9 million shares.
These additional shares coupled with the fact that Safaricom’s stock gained in price from Sh14.05 to Sh16.30 during the year helped the holding double in value.
The NSSF’s portfolio of quoted equities was thus valued at Sh57.03 billion at the end of 2015 up from Sh56.38 billion at the end of 2014, even with a majority of the remaining counters the fund holds aside from Safaricom ending the year in the red.
The NSE 20 share index meanwhile contracted by 21 per cent during the year, revealing the extent to which the State pensions fund was able to outperform the market.
The NSSF did, however, cut the share of its assets held in form of quoted securities from 41.8 per cent to 40 per cent between 2014 and 2015.
NSSF’s largest stock portfolio in terms of value is held in KCB Group and was worth Sh10.3 billion at the end of 2015.
This was a drop of Sh1.2 billion from 2014, with the filings showing the NSSF sold 138.4 million shares of the bank to remain with a holding of 87.5 million during the year.
At the same time, KCB’s share price shrunk from Sh57 to Sh43.75 during the year, further eroding the value of the portfolio, and has lately deepened losses.
The value of the holdings in East Africa Breweries Limited stood at Sh7.54 billion at the end of last year, down Sh1.15 billion from Sh8.69 billion in 2014.
The brewer’s share price fell from Sh308 to Sh273 in 2015, while the NSSF sold 5.9 million shares during the year to remain with a holding of 24.8 million shares.
At National Bank of Kenya, where NSSF is the majority shareholder with a 48.05 per cent stake, a price erosion of Sh9 a share (to Sh15.75) in 2015 saw the value of the holding fall by Sh1.15 billion to Sh2.85 million.
The NSSF, however, raised the number of shares it holds in the troubled lender by 13.5 million to 148 million during the year.
Two thirds of NSSF funds are managed by five contracted fund managers, namely Old Mutual, ICEA, Genesis Africa, Stanlib and Britam Asset Managers. The remainder is internally managed.
By maintaining its equities portfolio value, NSSF was able to outperform the rest of the pension industry on this asset class.
Data from the Retirement Benefits Authority for the year ending December 2015 shows the total value of equities held by the pensions industry fell to Sh186.8 billion during the year from Sh203.7 billion at the end of 2014.
This year, the stock market has continued on its bearish run with the NSE 20 share index 19.8 per cent down year-to-date. This means that pension funds are unlikely to reverse their negative return from quoted equities.
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