Pension operators get N178.21bn interest on investment in fixed income securities

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Chuks Udo Okonta

The interests/coupons received on investments in fixed income securities amounted to N178.21 billion in Fourth quarter 2020, National Pension Commission (PenCom) has said.

This was contained in the fourth quarter report released recently by PenCom. According the pension sector regulator, the amount was lower than the sum of N194.61 billion recorded in Q3:2020 due to reduction in yields on fixed income securities in the fourth quarter of 2020.

It posited that lower dividends totaling N3.91 billion were also received in Q4:2020 relative to N7.16 billion received in Q3:2020.

The commission said the net realized gains on the sale of equities and bonds in Q4:2020 amounted to N119.68 billion, compared to the realized gains of N39.94 billion recorded in Q3:2020, adding that this was mainly attributed to profit taking activities resulting from market appreciation in the prices of units held in these asset classes, during the period under review.

It maintained that the total unrealized gains on the RSA ‘Active’ Funds (Fund I, II & III) in Q4:2020 amounted to N169.18 billion compared to unrealized gains of N60.10 billion recorded in Q3:2020 and that the performance of the NSE-ASI, which recorded a growth of 50.09 per cent in Q4:2020 compared to the growth of 9.61 per cent recorded in Q3:2020 contributed to the increase in booking of unrealized gains. A significant proportion of the unrealized gains in Q4:2020 was attributed to increases in prices of the following stocks: Guaranty Trust Bank, Dangote Cement, Zenith Bank, Airtel Africa and Okomu Oil, it said.

PenCom noted that the total transfers from the RSA ‘Active’ Funds to the RSA Retiree Fund and payment of 25 per cent unemployment benefits amounted to N177.95 billion, which was lower, by 40 per cent, than the total outflows of N294.97 billion in Q3:2020.

On portfolio performance, PenCom stated that the RSA Funds I, II and III earned significant returns within the quarter under review, adding that the average rate of return for the RSA Funds I, II and III were 41 per cent, 32 per cent and 25 per cent, respectively. This, it noted was significantly higher than the average rate of returns of 20.85 per cent, 20.09 per cent and 19.87 per cent achieved by the respective Funds in Q3: 2020.

It said the Average Rate of Return on the RSA ‘Active’ Funds in Q4:2020 net of asset was based on fees and taxes.

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