Saturday, September 19, 2020

Bifm assets spring to P12 billion and pull up BIHL along

Botswana Insurance Fund Management (Bifm), the icon of the local fund management industry, lifted up the fortunes of BIHL as new business increased by 36 percent, marking the opening of the New Year’s financial reporting period.

During this week, three blue chip companies, BIHL, FNBB and Barclays will unveil their full year and half year results.

The giant fund management company beat its peers as assets under its management reached nearly P 12 billion largely supported by retention of its mandates and the new business under the public private sector partnership.

According to the financial results to end of December last year, which will be released tomorrow (Monday), Bifm pulled by to P 11.75 billion compared to P 11 billion at half year.

“Bifm has successfully continued to maintain its dominance in the asset management market in Botswana with its assets of P 11.75 billion at the end of the year,” the statement would say at its financial presentation Monday evening which will be at GICC.

Its major competitors, African Alliance Botswana and Investec Botswana, came distant at P 7 billion each.

The company, which is a bell-weather in product development and innovation, also gained strength from the newly introduced Public Private Partnership that has given it a drive going forward.
“Bifm has ventured into Public Private Partnerships adding value not only to its clients but also a direct impetus to the economy,” BIHL will say.

So far, it has been listed as the “preferred bidder” in the pre-qualification for the office of the Ombudsman, headquarters of SADC and Ministry of Works and Transport. At the announcement of the results, BIHL is expected to tell investors that it signed the Ombudsman deal on Monday morning.
The other two are expected to follow soon.

One of the key factors that are to under-pin Bifm’s financials include its agile private equity funds, property funds, which is strategically aligned with First Merchant Rand, Bifim Capital, which recently sprang up to launch the Africa’s Mining Fund. The mining fund, which has a tag of US $ 100 million to embark on continental and international resources forays, was expected to been given an approval by government and the IFSC on Friday.
“During the period, Bifm’s performance was enhanced by its strategic ventures into private equity funds, property funds, Bifm Capital and the Zambia operations. The technical relations with Black RockÔÇöformerly Merrill LynchÔÇöand support from Sanlam, has continued to provide Bifm with a powerful and global presence,” the company will say.

In Zambia, the company runs a pension fund outfit while its international connections with other international companies such as Merrill Lynch has plugged it to the ivy-league of financial boutiques like hedge funds.

Further, BIHL is expected to praise the availability of ARV drugs which has managed to extend the life-span of the HIV/AIDS victims since its administration. However, it will warn of the possibility of an implosion which might erode its balance-sheet overnight.

All in all, it will say the embedded value of the new business hopped up by 82 percent to P 63.9 million and, at the same time, point out that the results were also supported by the strong equity markets, both locally and internationally.

The local bourse jumped up by 74 by percent on the Domestic Company Index (DCI), largely driven by the Bobcs. Further, its investments internationally, including those at AT&T, Microsoft and Sky News, among others, performed well.
Further, FNBB, the most dynamic and innovative bank, will follow with its half year to end of December results on Tuesday which are expected to show a strong loan book growth compared to its peers in the market.

Its loan book will largely be powered by the mortgage division and the retail sectorÔÇöespecially First Funding, which has been aggressive in the asset and vehicle segment with the parallel car market of imports from Asian countries.

First Funding is a dedicated division to both the second hand cars and household marketÔÇö focusing on the high risk micro-lending division but attracting higher interest rates.

On the mortgage side, it is believed to have largely gained from the mining boom in the northern parts of the country where hordes of people are lining themselves up for industrial and residential property development.

It is also expected to get a windfall from the inter-bank currency transactions and Bobcs which are the key factors to the treasury division. The expectation sprang the share price of FNBB to 23 00 thebe over the week after investors had digested its probable fortune leading to speculation that it might embark on share split before mid-year. So far, two counters, Barclays and Sefalana Holdings, have gone that route towards the close of last year. But the Sefalana’s move have been stalled by the par value issue which is expected to be resolved by April with the coming enforcement of the Companies Act. Under the new act, companies passed in 2003 institutions with a par value of less than one thebe will be allowed to embark on a share split.

Barclays, the biggest and one of the most conservative banks, is expected to show a marginal loan book growthÔÇöunder the most intense competitionÔÇöbut its results with be largely under-pinned by the treasury division as at the full year in June last year.

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