By Majaha Nkonyane | 2018-09-16
AS an indication of strong confidence in the local economy, African Alliance (AA) Eswatini has grown its Ligcebesha Fund size significantly, primarily through local investments.
The fund size now edges at almost half a billion Emalangeni. This brisk growth is quite remarkable given the fact that the fund size was only worth E134 million in September 2015.
This was disclosed by African Alliance Asset Management General Manager Victor Langa at the relaunch of the fund held at Gigi’s Restaurant in Ezulwini on Wednesday.
The AA Ligcebesha Fund holdings include local equities, local government and corporate bonds as well as highly liquid short-term money market instruments to provide investors with a well-diversified balanced portfolio, generating returns on a reduced risk basis.
To date, Ligcebesha Fund has delivered returns averaging inflation plus seven per cent over the past five years, breaking the convention that offshore placements are better than domestic investments.
Langa said such performance was difficult to achieve under the current global market conditions and this reflects that there is value in the Kingdom of Eswatini.
The AA Ligcebesha Fund offers investors exposure to several listed instruments on the Eswatini Stock Exchange.
This being a 100 per cent Swati fund and listed in Eswatini shows the readiness of AA to help investors comply with the 50 per cent local asset regulatory requirement as per the Securities Act, 2010. The 50 per cent local asset regulatory requirement is expected to release a substantial amount of pension fund assets invested offshore back to Eswatini to support the local economy.
“African Alliance is in a very good position through the Ligcebesha Fund to find a home for this new money,” Langa said.
The fund is ideally suited and tailored for pension and provident funds who want to invest in assets domiciled in Eswatini and to those that are looking to rebalance their portfolio in order to comply with the 50 per cent local asset allocation requirement.
“Local investments generate two rates of return for investors- one directly for your portfolio, and another through the community. Evidence suggests that compared to their foreign counterparts, local businesses can generate two to four times the local economic development impact for every lilangeni spent on them. With a portfolio that includes local businesses, your Lilangeni will continue to circulate and increase prosperity throughout our community by creating new jobs, higher incomes, and ultimately supporting better schools, roads, hospitals, and safe thriving neighbourhoods,” he said.
“For example, through our indirect placement into the recently acquired Pick n Pay stores in Eswatini, every Ligcebesha Fund investor has indirectly influenced the employment of over 500 Emaswati into these stores, and as we continue to innovate and invest locally, more job opportunities will be created and this is the aspiration that has been driving our business in the past 20 years,” Langa further stated.
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