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DPF investment drive pays off, FUND clocks BWP8 billion mark

Debswana Pension Fund, Botswana second largest and the country’s leading private sector pension fund continues to deliver upward trajectories as it pursues its quest of diversifying its investment portfolio and cultivating wealth for its members.

Information from the fund, released late last year mirrors impressive performance for the Fund’s major investment portfolios in the first three quarters of 2019 amid the year’s challenging economic circumstances. The third quarter of 2019, ending September 2019 presented a third consecutive quarterly positive investment performance by the Fund’s assets. Performance for the quarter was characterized by satisfactory returns in the Market, Conservative, Pensioner and Contingency Channels.

The Fund’s Net Total Assets increased 2.96 percent from BWP 7.861 billion in Quarter 2 2019 to BWP 8.103 billion in Quarter 3.  The positive returns according to DPF were partially driven by the continued rally in international markets led by Developed Market equities.
Furthermore the Fund experienced positive performance in the third quarter of the year, with the Market Channel increasing 3.02 percent, the Conservative Channel rising 2.79 percent and the Pensioner Channel returning 2.92 percent.

On a twelve-month basis, the Fund generated positive returns net of investment fees, the Market Channel reporting a return of 6.43 percent followed by the Pensioner Channel at 7.64 percent while the Conservative Channel returned 7.20 percent. Executives at Debswana Pension Fund say decelerating global growth and lower inflation forecasts across developed markets have resulted in key interest rate cuts and supportive monetary policy by major central banks, which has underpinned global stocks and bonds. In addition, the local equity market marginally contributed to the positive performance as the domestic listed equity managers posted flat returns.

The top performing asset class for the Fund was property, which returned 6.31 percent (in BWP). The next top performing asset class for Quarter 3 was private equity, which returned 6.03 percent, followed by global bonds, which returned 4.14 percent. Foreign equities extended their gains as the appetite for listed stocks surged, in anticipation of further interest rate cuts and elevated corporate earnings in certain sectors of the economy. Global equities returned 4.10 percent while the Domestic Companies Index decreased 1.03 percent on a total return basis. Emerging Market equities gained 1.70 percent.

In an environment of positive performances by global equity managers, Veritas was the Fund’s outperforming manager for Quarter 3 with a return of 5.27 percent. Marathon was the second best performing manager returning 4.81 percent. The least performing global equity manager was Southeastern, posting a modest 0.55 percent. Local equities returned an above benchmark return.

The Botswana Stock Exchange Domestic Company Index, which declined 1.03 percent over the quarter, underperformed Allan Gray which returned -0.16 percent and Investec which remained flat at 0.01 percent. Of the two Local Bond managers, BIFM was the top performer, posting a return of 1.39 percent for the quarter, ahead of Investec’s gain of 1.00 percent. In 2018 Debswana Pension Fund, established a subsidiary fund administration company to which it outsources benefit administration functions, bearing the name Mmila Fund Administrators.

In her 2019 end of year message Debswana Pension Fund Chief Executive Officer, Gosego January revealed that Mmila has been granted a license as a response to regulatory changes in the Pension Fund industry, which came into effect in April 2017. “Against this background, I am pleased to advise that Mmila Fund Administrators is now fully operational and there has been a seamless transition between the two entities,” she said.

January explained that Global Markets have remained somewhat challenged largely due to the US-China Trade War that brought about market uncertainty and volatility consequently leading to loosening of monetary and fiscal policy in markets such as the US and EU.
“We are however pleased that despite these market headwinds, the fund performance has been strong and grew quarter by quarter, crossing the BWP 8 Billion mark at the end of Quarter 3 2019, Growing Returns for our members is a top priority for the fund and in so doing, we continue to identify areas of investment and pay close attention to global emerging trends.”

In 2019 The Fund commenced roll out of its 2019-2023 strategy, according to January the strategy will deliver even more returns to its members in 2020. “There are potential market challenges as has been speculated, however, I believe that DPF is poised to attain greatness in 2020 and beyond,” she said.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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