Roundtable meeting during Trade and Development Bank’s 33rd annual general meeting |30 August 2017

Pension Fund, Sacos, share experiences with African investors

Sacos Insurance Group and the Seychelles Pension Fund have joined other institutional investors of the eastern and southern Africa region in a roundtable meeting designed to bring the whole range of African investors together to share experiences.

Seychelles Pension Fund (SPF) chief executive Lekha Nair and Sacos Insurance Group chief executive John Esther were among the roundtable panelists during yesterday’s session at the Savoy Resort & Spa.

The roundtable meeting is part of activities organised by the 33rd annual general meeting of the Eastern and Southern African Trade and Development Bank (TDB) formerly known as PTA Bank (Banque de la ZEP).

Speaking to Seychelles NATION, Trade & Development Bank president and chief executive Admassu Tadesse said: “Today (Tuesday) we have been heavily engaged in an institutional investor roundtable meeting designed to bring together the whole range of African investors – pension funds, insurance companies, sovereign wealth funds – to share experiences on where they have invested successfully, where they see the opportunities ahead, what are some of the challenges and how can they strengthen their partnerships among themselves, also with the Trade and Development Bank which works closely with African financial institutions and African institutional investors.”

He added that Sacos Insurance Group and the Seychelles Pension Fund are shareholders of the bank and have done very well.

“Seychelles Pension Fund’s shares were at US $6,000 some two years ago and today they are worth almost US $10,000. They have done rather well. We work very well with the Sacos Insurance Group and Seychelles Pension Fund as well as other institutional investors to look at opportunities and see how we can raise the level of investment in the region of eastern and southern Africa,” added Mr Tadesse.

SPF chief executive Nair explained to Seychelles NATION that it is important for the fund to diversify its investment, adding that “the domestic market is good but we also need to do some currency hedging as a backup in case there are issues with our local currency. It is like having a lot of eggs in different baskets”.

She pointed out that SPF’s international investment is just 9% for now but its strategy allows it to go up to 20%.

“We also have 46% in real estate, a bit in equities, banks and treasury bonds which is the most secure. It is equally important to invest in equities internationally.  The 9% investment is nothing compared to other African countries which have cross border investments and equities in a big way. We get between 12 and 15% return on investment from Sacos, Seychelles Breweries, Al Salaam Bank and Seychelles Commercial Bank locally. We want to invest more but the opportunities are limited, so this is why we opted for equities in a foreign bank. We get between 4 and 5% return annually and internationally on a dollar we get 2%. TDB is growing and making remarkable profits every year,” pointed out Mrs Nair.

As for Mr Esther, he explained that when he first joined the Sacos Insurance Group as chief executive in November 2015, they made an assessment on the company’s portfolio and decided to what degree they needed to diversify and what return they would opt for.

“As a responsible company, we have to make sure we have an investment portfolio which gives us the return on average that we want. As we were not investing in equities, we found that TDB was a very attractive proposal and in 2016 we bought shares for more than US $1 million. For the first year, we got a 24% return on our investment,” Mr Esther told Seychelles NATION.

Institutional investors, which comprise pension funds, insurance companies and collective investment schemes, mobilise the savings of individuals, pool them together and invest them to provide specific outcomes – income in retirement, protection against risks and savings, respectively.

They have become major players in the financial markets, with substantial investments in equities and bonds, as well as a wide range of other instruments. Institutional investors are increasingly important suppliers of investable funds, as they accumulate contributions or premiums over time. As a result, they help to promote the development of capital markets both by helping people to use their savings efficiently and by providing funds to governments and companies who need them to finance deficits or expansion.

Other than the investor round table, the planned activities of the annual general meeting include the board of governors’ meeting, the Central Bank roundtable, the eminent panel and a gala dinner.

The high-level international event gathered government and private sector leaders, investors, ministers of finance and other development finance partners to discuss trade and investment opportunities on the continent and challenges in managing investments and achieving development impact from a practitioner point of view.

The 33rd annual general meeting of the Trade and Development Bank is also an opportunity to reflect on the bank’s achievements and look at sustainable ways of tackling future challenges in the diverse industries and sectors of the region.

“In recent years, we have been giving a big boost to our financing of trade, enterprise and infrastructure, which is evidenced in the tripling of our loan assets in the past five years. Cumulatively, the bank has provided close to US $16 billion in financing for trade and socio-economic investment in the region,” said Mr Tadesse.

Established in 1985, TDB is a multilateral, treaty-based financial institution with immunities and privileges, and currently with a balance sheet of about US $4 billion, has as shareholders 21 member countries from the tripartite region (Comesa, EAC and SADC), the African Development Bank, the National Pension Fund of Mauritius, Mauritian Eagle Insurance Company Ltd, Rwanda Social Security Board, Africa Re, ZEP RE, Seychelles Pension Fund, Banco Nacional Investimento (BNI), the National Social Security Fund of Uganda and Sacos Group as institutional shareholders, while the People’s Republic of China and the Republic of Belarus (Paritetbank) are its non-regional member countries.

The bank provides the opportunity for investors to gain exposure to fast growing economies through a profitable development finance institution (DFI) with a sound balance sheet and strong growth prospects, and aims to be a preferred and leading regional DFI in eastern and southern Africa.