IPEC sees growth in industry asset base

The herald

Tapiwanashe Mangwiro

Senior Business Journalist

The Insurance and Pensions Commission (IPEC) reports that the industry’s total assets increased, in nominal terms, by 123.65 percent to $ 241.65 billion, in the third quarter through September 30, 2021, compared to $ 108.05 billion during the same period last year. year.

IPEC noted that, if converted to US dollars at the official exchange rate, the industry’s asset base increased 107.52 percent to $ 2.76 billion, from $ 1.33 billion during of the period considered.

However, the distortion of the exchange rate, in particular the existence of the alternative market, would give a different growth rate in terms of the growth path of assets in real terms.

Total industry assets, at $ 241.65 billion, translates to average assets per member (including beneficiaries) of $ 264,867, compared to $ 118,147 for the same period last year.

According to IPEC, the increase in the asset base was mainly driven by listed stocks and investment properties, which accounted for a combined 82.24% share of total industry assets.

Investment property increased 54.70% to $ 84.08 billion, from $ 54.35 billion as of September 30, 2020.

However, the contribution of real estate to total industry assets decreased from 50.30% to 34.79%, due to a corresponding increase in the value of listed shares, in order to improve the liquidity of investment portfolios.

Listed and unlisted stocks rose 283.36 percent and 59.47 percent to $ 114.66 billion, $ 29.92 billion and $ 6.06 billion, respectively in the third quarter of the period under review.

IPEC said listed shares held by the pension sector represented 12 percent of the Zimbabwe Stock Exchange’s market capitalization, indicating the important role played by the sector in the capital market.

While investment in unlisted equities increased by 59.47 percent, its proportion in total assets decreased to 2.51 percent from 3.52 percent reported as of September 30, 2020. The decrease is due to the revaluation of real assets.

The pension sector continues to see an increase in contribution arrears, which increased 164.06% to reach $ 3.38 billion, compared to $ 1.28 billion reported as of September 30, 2020.

The increase in arrears of contributions is mainly due to the non-payment of contributions by some sponsoring employers, as they faced sustainability issues as well as interest penalties on the arrears of contributions, as required by the guidance document.

The proportion of arrears of contributions to total assets increased to 1.40%, compared to 1.18% as of September 30, 2020.

However, there has been a decrease in contribution arrears from 1.54% of total reported assets in the second quarter to 1.40% of total assets in the current quarter.

Michael J. Birnbaum