Namfisa Assesses Fears of Pension Loss

THE Namibia Financial Institutions Supervisory Authority (Namfisa) is still assessing the exposure of Namibian asset managers to losses they might have suffered as a result of the collapse of African Bank in South Africa in which many South African-based pension funds had invested money.

Earlier this month, the bank, commonly known as Abil, received a US$1,6 billion bailout by South Africa’s central bank as bad debts soared among its core market of low income borrowers.

“With reference to your questions about African Bank and the exposure of Namibian companies to losses, kindly be informed that Namfisa is still assessing the impact on the Namibian funds. We are therefore not in a position to provide a conclusive picture at this point in time,” said Namfisa spokesman Isack Hamata

A senior financial executive, who spoke on condition of anonymity, said any investment, whether listed or not, is based on the principle of ‘caveat emptor’ or investor beware. He said what is clear in the African Bank scenario is that some investors sold early when warning signs started appearing and some others with a higher risk appetite bought more shares.

The executive, who is well versed with pension funds, said it was unlikely that Namibian pension funds suffered losses in the collapse of African Bank as pension funds do not generally invest in short term, high risk investments.

Last week, Prudential Investment Managers South Africa, which also operates in Namibia, said some client portfolios do hold some exposure to African Bank.

The firm said as African Bank’s trading positions worsened, it took a number of steps across its unit trust portfolios to limit the impact of potential losses on any African Bank instruments.

In a notice on Friday, local investment Pointbreak said the collapse of Abil ‘has negatively affected the returns of various unit trust funds.

“Some of these funds have incurred capital losses and negative returns as a result. Pointbreak is pleased to confirm that Pointbreak’s Money Market Unit Trust Funds had no exposure, directly or indirectly, to Abil and therefore have not been affected by this event,” the firm said.

According to the Namfisa first quarter 2014 report, investment managers held assets under management of N$124,9 billion as at 31 March 2014. Assets under management based on country or geographic allocation show that Namibian domiciled assets constituted 48,5% of total assets, slightly up from 47,5% the previous quarter. Common Monetary Area (CMA) and Offshore assets accounted for 38,4% and 12,9% respectively of total assets as at 31 March 2014.

Source : The Namibian