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ENPF LOCAL INVESTMENTS DOUBLE

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MBABANE – Local is lekker! The decision by government to have retirement funds investing at least 50 per cent of their assets in the local market is proving profitable for the Eswatini National Provident Fund (ENPF).


This has seen the Fund’s local investment portfolio grow by almost double from E588 541 000 in 2015/2016 to E899 787 000 in the 2016/2017 financial year.
The hike in the investment has been caused by the acquisition of shares in two local companies; Eswatini Mobile and Lojaf.
An amount of E120 million has been invested in Eswatini Mobile and E37 million has been invested in Lojaf.


There has also been an increase in the Fund’s investment in the Industrial Development Company of Eswatini (IDCE) from E287 105 000 to E408 639 000.
Other investments are E143 883 million at Happy Valley Hotel and Casino; E38 273 000 at EMPROP; E25 804 000 at Agri-Fund Old Mutual; E7 988 000 at Old Mutual Swaziland; and E2 730 000 at Lower Maguduza.


Prince Lonkhokhela, the Fund’s Chief Executive Officer, said despite the tough economic conditions, he was pleased with the organisation’s performance.
He said the Fund was pleased that their persistent and careful strategy of investing in Eswatini had not only contributed to the organisation’s investment returns but had more importantly stimulated local economic growth and employment.


Effect


“These returns and the consequential positive effect on the country supports our view and indeed our obligation to develop Eswatini as this is our home, hence as a Fund we have placed more emphasis and effort on promoting Eswatini as an investment destination,” he said.


The prince stated that the results at hand proved that the fund’s position was not only patriotic but also economically sound.
“The Fund’s investments remained highly cash generative, we have a robust balance sheet, good liquidity and a high quality capital base.


“Our asset to liability ratio exceeds the regulatory solvency ratio by a significant margin. The strong balance sheet has perfectly positioned us to deliver on our strategic priorities, as outlined in our 2015 – 2020 Strategic Business Plan,” he said.
He said the Fund’s local investments performed better compared to those in South Africa where the CEO said the organisation’s political and economic challenges were mainly imported from.


Affected


“This economy was affected by the sluggish global growth and lackluster commodity markets, thus negatively affecting our largest trading partner. South Africa experienced a technical recession for the first time in years after recording two consecutive quarterly economic growth contractions during the period to the first quarter of 2017,” the prince said.


He stated that at the beginning of the financial year, the Fund’s portfolio was 56 per cent invested in South Africa (Johannesburg Stock Exchange).
He said despite all these challenges, the Fund returned an average of 8.5 per cent on members’ funds.


“The Fund therefore offered members a positive real return well in excess of the inflation rate of 6.5 per cent.
“This resilient performance was mainly assisted by the fact that the local investments performed exceptionally well delivering a 14.8 per cent return on investment with the South African portfolios delivering only 1.7 per cent. The weighted average return being 8.5 per cent,” the CEO said.


Retirement


The prince noted that when the retirement funds regulator promulgated changes stating that Eswatini retirement funds should invest 50 per cent of their portfolios in Eswatini, his organisation had already invested in the country.
He said at the end of the 2017 financial year, the Fund had invested in excess of 50 per cent of the fund’s assets in Eswatini.

 

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