NSSF Uganda set to post best performance in five years

 

NSSF chairman Ivan Kyayonka (2nd R) chats with Mr Elly Karuhanga (R), Tullow General Manager Jimmy Mugerwa (L) and Ms Olive Lumonya , the NSSF head of Marketing and Communication, at the general meeting in Kampala yesterday. PHOTO BY Faiswal Kasirye 

 

By DAVID MUGWE, The EastAfrican

The Ugandan National Social Security Fund’s equity portfolio is set to post its best annual performance in more than five years in 2012/13.




Data released by the national saving scheme shows that assets under management in the equity portfolio rose by 29.31 per cent in the half year to December 2012 boosted by the acquisition of Umeme shares — Uganda’s power distributor.

The NSSF, which is also expecting its dividends for the full year to June 2013 to exceed what has been received over the past five years, said that it is looking for other equity investments at the Nairobi Securities Exchange to further boost its performance. It already has shares in Safaricom.

“We will participate in the NSE but as for the specific stocks, it depends on our strategy. There are some stocks that we trade and others that we hold,” said Richard Byarugaba, managing director of NSSF Uganda.

Its latest performance statement shows that NSSF Uganda’s assets under management in the equity portfolio rose to Ush216.3 billion ($83.93 million) as at December 2012 from Ush167.2 billion ($64.9 million) at the end of June 2012.

Provident funds in Uganda, Kenya and Tanzania tend to shy away from the stockmarket, whose returns fluctuate with share prices, preferring other investments especially property.

With its current investment portfolio valued at $627 million in Tanzania, NSSF plans to invest nearly $282 million in East Africa’s real estates industry in the next three years.

NSSF Kenya is a major investor in the country’s real estate sector, with an investment portfolio worth billions of shillings in residential and commercial properties in Nairobi.

Dividends

Uganda’s provident fund earned Ush3.66 billion ($1.4 billion) in dividends for the 12-month period ended June 2012 from its equity investments, which included Stanbic Bank Uganda, Bank of Baroda, New Vision
Printing and Publishing, DfCU Ltd, Safaricom and equity investments managed by Kenya’s Stanbic Investments Management Services and Pinebridge Investments.

In the 12-month period ended June 2011, NSSF Uganda earned Ush2.68 billion ($1.04 million) from its equity portfolio.

Dividend income from four Uganda Securities Exchange-listed companies included in its equity portfolio, is set to be in excess of Ush4 billion ($1.5 million).

The provident fund bought 131.5 million Umeme shares, which were valued at Ush36.16 billion ($13.45 million) as at the end of last year and was holding 954.8 million shares of Stanbic Bank Uganda, 14.7 million shares of DfCU Ltd and 15 million shares of New Vision Publishing.

The Umeme shares will have earned NSSF Uganda Ush1.97 billion ($733,782) before taxes, Stanbic Bank Uganda shares Ush1.3 billion ($486,608), DfCU Ltd shares Ush546.9 million ($203,483) and New Vision shares Ush315 million ($117,180) for the period ended June 2013.

“The return has been good because over a three-month period, NSSF has earned about Ush1.9 billion,” said Patrick Mweheire, executive director at CfC Stanbic Financial Services Uganda.

In the prior period ended June last year, the provident fund made Ush1.6 billion ($604,442) from Safaricom shares and an additional Ush28.75 million ($10,698) from funds managed by Stanbic Investments Management Services and Pinebridge Investments.

Meanwhile, Tanzania’s National Social Security Fund in March this year announced that it was planning to invest $75 million in infrastructure and agriculture as it seeks to diversify its portfolio, which has traditionally been biased towards government securities, bank deposits, equities, corporate bonds and real estate.

The pension fund said that it was eyeing the establishment of a $40 million inland container depot in Kisarawe area, nearly 85 kilometres outside Dar es Salaam port and a $35 million cashewnut processing plant in Mtwara.