Asset under management increases to N9.58trn —FBNQuest Research

The assets under management (AUM) of the regulated pension industry increased by 14.8 per cent in September to N9.58 trrillion ($31.2 billion) when compared year on year (y/y).

It also increased by 1.5 per cent in monthly comparison says FBNQuest Research.

Specifically, the research arm of First Bank noted that the increases represent just 7.5 per cent of 2018 Gross Domestic Product (GDP). This coverage lags peer emerging markets because the Nigerian industry, dating from 2004, is one of the newest, the research firm stated.

Available records show that the latest figure for Kenya is 14.0 per cent in December 2018, and its asset structure is diverse: 39.4 per cent of the total in government paper, 19.7 per cent in real estate and 17.3 per cent in listed equities.

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According to FBNQuest Research, the holdings of Nigerian PFAs of the Federal Government of Nigeria (FGN) paper totaled 70.3 per cent of AUM in September, compared with 69.8 per cent one year earlier.

This masks, however, a clear shift in their exposure to Nigeria Treasury Bills (NTBs), the share of which rose from 18.0 per cent to 23.6 per cent of the total in the period.

More recently, the CBN has restricted domestic access to its open market operations (OMOs) to the banks. The firm noted that the exclusion of non-bank participants such as the PFAs should become visible in coming monthly reports from Pencom.

The PFAs according to FNNQuest Research are core participants at the monthly auctions held by the Debt Management Office, and their holdings of FGN bonds at end-September represented 46.2 per cent of the stock of the instruments at end-June.

At the last two auctions both sales and the total bid have been strongest for the 10-year benchmark rather than the long bond, which is seen as the favourite of the PFAs for matching purposes.

FBNQuest Capital Research further noted on Friday that the proportion of AUM invested in domestic equities has declined over the past 12 months from 7.2 per cent to 5.1 per cent.

By way of providing colour, «we note that the Nigeria Stock Exchange All Share Index (NSEASI) fell by 15.7 per cent over the same period,» it noted.

That said, the month on month increase in the share of equities from 4.9 per cent in August to 5.1 per cent was the first in months.

 

Nigerian Tribune