CORONATION Fund Manager yesterday released positive maiden results in a tough trading environment that characterised its first five months as a publicly listed company.
The company emerged from the originally listed Coronation Holdings entity this year, and reported annualised headline earnings of R60,9m and a maiden dividend of 12c a share for the five months ending September.
Coronation also reported an 11,6% increase in assets under management to R53,7bn from R48,1bn in April. The market showed its appreciation via a 9% jump in the fund manager's counter, which closed at R3,50.
CEO Thys du Toit said although his company held more than over a 10% share in the private retirement fund market, its share in government and parastatal retirement fund markets was low and this presented a growth opportunity.
Du Toit said Coronation endorsed the recently released Financial Services Charter and aimed to achieve an A rating .
He said Coronation was to provide a status report on its black empowerment progress by September next year.
On the retail side of Coronation's business, the fund manager reported subdued new net inflows into the group's traditional focus areas of managed equity and foreign funds. This was attributed largely to growing interest in money market funds, which absorbed 90% of the unit trust industry's net inflows in the six months to September.
Du Toit said the institutional savings industry had been characterised by a lack of growth in the total asset pool and a greater emphasis on absolute returns. He said that in this context it was encouraging that Coronation's institutional assets under management remained steady during the period.
Coronation's absolute return products attracted good inflows and grew from R3,5bn in April to R6bn in September.
The CEO said the increased interest in absolute returns was driven by fear of loss of investment.
Although local equity markets had shown a 25% to 30% return in the last six months, investors would only begin to change their behaviour once a trend was firmly established. This was also the reason why the rand would stay stronger for longer.
And although a strong rand should be prompting investors to buy off-shore, new business into foreign funds had remained subdued.
Du Toit said rand strength and global market volatility had affected Coronation's large offshore component of assets under management.
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
