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LAPF cuts investments


The Local Authorities Pension Fund (LAPF) has reduced its investment portfolio for the year ending December 31 2011, as the country’s economic growth slows down.

According to the LAPF annual report, the fund significantly reduced its exposure to the property sector and the equities market during the period under review despite a 15,4% growth in total income.

The funds invested in fixed property, which in 2009 stood at 57% of total investment, declined to 39% as at December 31 2011 from 47% recorded in the prior year.

LAPF exposure to the subdued equities market, currently reeling from liquidity constraints and fears of seizure of foreign-owned firms, was reduced to 20% during the period under review from 23% in 2010.

Rental income for the pension fund marginally rose to $4,66 million from $4, 57 million, contributing 81,9% to the total investment income of $5,69 million.

Surplus for the year amounted to $20,5 million against $18,8m the prior year.

“The development of both capital and money market was subdued on the back of continued liquidity limitations.

“The country did not register significant inward investment flows to supplement and boost its internal fledgeling capital formation and industrial regeneration,” said LAPF chairman of management committee Misheck Mubvumbi.

“Debtors stood at $51,814 million accelerated by significantly material and worrisome growth of 65,77% on the prior year figure of $31,257 million. Contributions were the major arrear debtors driver constituting 92, 5% of the total debtors figure at $47,935 million.”

Market watchers say due to a liquidity crunch on the domestic market, some institutional investors have been on the market disposing equities to meet their cash obligations.

This, according to experts, has resulted in the high frequencies of special bargains on the exchange.

Despite this gloomy picture, some foreign investors with a high appetite for emerging and frontier markets have been active on the market, buying large parcels of blue chip stocks and mid-cap counters through special bargains.

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