ZSE slump hits pension funds

PENSION funds’ aggregate holdings in stocks almost halved in 2022 following a slump on the local bourse, a new industry report shows.
The Zimbabwe Stock Exchange All-share index advanced 80,1 percent during the year compared to 310,5 percent in the prior year.
The bourse also saw its longest slump since 2016 last year, which analysts say was triggered by measures instituted by the government to “curb speculation”.
“While there was a nominal increase in quoted equity investments by 100 percent for the period under review, its share to the industry total assets shrank from 50 percent to 28 percent,” the Insurance and Pensions Commission (Ipec) said in a recent report.

On the other hand, the aggregate proportion of the sector’s property holdings increased to 44 percent during the period compared to 30 percent prior year.
“The negative revaluation of listed equities also explains the increase in the proportion of investment property to total assets,” Ipec said.
“This proportion of investment property to total assets exceeded the regulatory investment threshold of 40 percent, increasing concentration risk.”
The sector’s investments in unquoted equities increased by 567 percent from $10,95 billion to $73,03 billion, the regulator said. The proportion invested in the asset class increased to seven percent from three percent in 2021.
“While the asset class share was within the regulatory cap of 15 percent, the commission will continue to monitor developments on the asset class’ performance,” Ipec said.
Meanwhile, investments in prescribed assets amounted to $73,84 billion, constituting seven percent of the industry’s total assets. This was a nominal increase of 467,82 percent from the prescribed assets investments of $13 billion, which constituted 4,08 percent of total assets reported in December 2021.
“The increase was attributed to the additional investments, returns and fair value gains in prescribed assets investments.
“Apart from the returns and capital appreciation, there was an increase in prescribed asset investments following the issuance of gold coins, which have prescribed asset status.”
According to the report, at the end of the year, the industry had acquired 1 762 bullion coins of varying denominations with a value of $2,29 billion, up from the initial investment of ZW$170 million since their introduction in Jun