Kenya. NSE share rally boosts pension fund returns
Pension subscribers have begun reaping the benefits of a recovering equities market that has now boosted average returns for schemes above the rate of inflation.
An industry survey by Actuarial Services East Africa (Actserv) for the quarter ending June shows that the average return for schemes rose to 8.1 per cent from 2.5 per cent in the first quarter, buoyed by a jump in returns on equity investments to 18.3 per cent compared to 0.2 per cent in quarter one.
The NSE has been on the upswing since the end of March, with the NSE 20 share index gaining 26.1 per cent and the NSE all-share index up 29.5 per cent.
This has helped the schemes beat the 1.3 per cent increase in inflation over the three month period, indicating that the fortunes for pensioners may be changing after two difficult years when their returns were being eroded through falling below inflation.
“The high equity returns during the quarter have significantly enhanced the overall performance during the quarter posting a return of 8.1 per cent. This was a remarkable return in comparison to the previous quarter’s 2.5 per cent return,” said Actserv in the survey.
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