Latest statistics from the industry regulator Retirements Benefits Authority (RBA) show that the value of quoted equities in the industry rose by Sh61 billion to Sh241.5 billion in the one-year period, accounting for 20.7 per cent of total assets under management.
The industry benefited from the minor recovery in share prices at the Nairobi Securities Exchange (NSE) in the first half of the year, although the bearish turn from quarter three is likely to curtail the growth by the end of 2018.
Pension industry assets rose by 21 per cent to Sh1.17 trillion in the year to June 2018, driven by higher valuations of equities and government bonds.
The industry benefited from the minor recovery in share prices at the Nairobi Securities Exchange (NSE) in the first half of the year, although the bearish turn from quarter three is likely to curtail the growth by the end of 2018.
Latest statistics from the industry regulator Retirements Benefits Authority (RBA) show that the value of quoted equities in the industry rose by Sh61 billion to Sh241.5 billion in the one-year period, accounting for 20.7 per cent of total assets under management.
“Comparing with the same period last year (June 2017) the assets grew by 21.15 per cent up from Sh963.04 billion. The growth of the assets can be attributed to improved compliance, gradual recovery in the stock market after the aftermath of the prolonged electioneering period in 2017,” said the RBA in its industry report for June 2018.
The value of government securities was up Sh70.2 billion to Sh423.7 billion, representing 36.3 per cent of total industry assets.
Yields on government securities eased in the one-year period due to efforts by Central Bank of Kenya to tame the cost of domestic debt, and with prices moving in the opposite direction, the value of bond holdings has gone up.
Other asset classes whose valuation have gone up include guaranteed funds, by Sh56 billion to Sh159.6 billion, and property by Sh24.7 billion to Sh229.3 billion.
The growth in assets is, however, under threat due to the loss of value in quoted securities at the NSE in the second half of the year.
Since June, the NSE 20 Share Index has fallen by 15.8 per cent to stand at 2807 points, while the market capitalisation is down by Sh418 billion in the period to stand at Sh2.131 trillion.
State-owned National Social Security Fund (NSSF) continues to be the largest scheme in assets under management at Sh221.4 billion, ahead of Sanlam Investments EA (formerly Pinebridge) at Sh204.4 billion.
The NSSF, which had lost top spot to the private scheme in 2013, retook top spot at the end of 2016 and has consolidated its position in the last year-and-a-half.
The public pension scheme’s assets are mainly deployed in government securities, listed shares and a portfolio of prime land and property in Nairobi and other urban centres, although some of its property developments like the Hazina Towers in Nairobi’s central business district have been dogged by controversy.
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