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PenCom investments in equities, FGN Securities drop by 7.2% to N6.7trn

By Peter Egwuatu

THE investment by the National Pension Commission, PenCom, in both equities and the Federal Government of Nigeria, FGN security instruments as at end of March, 2019 recorded a 7.2 percent decline to N6.7 trillion from N7.2 trillion in the preceding month ended February 28, 2019, a  reflection of dwindling investor confidence leading to the bearish run in the stock market in recent time.

The decline in investment by PenCom (Institutional investor) in the equities and FGN Securities may have also impacted to the decline of equities prices on the Nigerian Stock Exchange, NSE as market capitalisation, which represents investors’ worth on the Exchange had dropped by 1.3 percent  to close at N11.7 trillion at the month of March 2019 from N11.8 trillion at the month of February 2019.

Findings by Financial Vanguard from the latest report released by PenCom for the month of March indicated that PenCom invested N590.6 billion in domestic ordinary shares in the month of March, representing N11.3 billion decline or 1.9 percent from N601.9 billion recorded in February, while the foreign ordinary shares recorded positive growth, increasing by 1.2 percent to N62.6 billion in March from N61.9 billion in February.

 

Further analysis showed that the FGN securities comprising of all FGN bonds stood at N6.51 trillion in the month of March, representing a decline by 0.12 percent from N6.52 trillion recorded in the month of February 2019.

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Meanwhile, the PenCom data showed that total pension assets in the country have risen to N9.03 trillion as at March 31, 2019, up from the N7.44 trillion it was in January 2018.

The Commission said these assets have been judiciously and prudently invested in 24 major asset classes to yield interests to the contributors.

Giving a breakdown of how the assets were invested, the Commission said federal government’s securities took a lion-share of the investment as it received well over N6.51 trillion, representing 72.9 per cent of the total assets.

Specifically, Federal Government bond got N4.46 trillion of the funds, representing 49.37 per cent of the total assets; while N1.94 trillion was invested in treasury bills (21.44 per cent); N11.96 billion in Agency Bonds (NMRC & FMBN), (0.13 per cent); N94.11 billion in Sukuk (1.04 per cent) and N8.51 billion in Green Bonds, (0.09 percent.).

The Commission also said in line with the Multi-fund structure, Retirement Saving Account (RSA) Fund-1, witnessed N12.73 billion investment and RSA Fund-11, recorded N3.99 trillion investment, RSA Fund-111, saw N2.15 trillion investment while RSA Fund-IV, recorded N732.13 billion investment.

The report showed that N596.61 billion, which was 6.54 percent of the funds, was invested in domestic ordinary shares; while N62.59 billion, amounting to 0.69 percent was invested in foreign ordinary shares.

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