Comparable analysis of activities of Kazakhstani APF and PAMC based on Conditional Pension Unit dynamics

25.06.01 00:00
/IRBIS, June 25, 01/ - Agency IRBIS has made the first attempt to compare the effectiveness of the activities of Accumulative Pension Funds (APF) of Kazakhstan and the companies managing their assets (PAMC) based on the results of the analysis of the Conditional Pension Unit (CPU) dynamics based on the results of 2000, from January 1, 2000 through June 1, 2001 and in May 2001. As it has been informed earlier, the values of CPU were presented to the agency IRBIS by the Accumulative Pension Funds Regulatory Committee of the Ministry of Labor and Social Protection of Kazakhstan (Committee). The data has been published by IRBIS earlier. When compiling the resulting table, shown below, the IRBIS has also used the data of the National Securities Commission of Kazakhstan (NSC) on the coefficients of real and nominal incomes of APF calculated for May 2000 - May 2001, as well as data of NSC on the proportion of each APF assets as of June 1, 2001. The value of the Increment of CPU Per Day of the Period (IPDP) was used as a basis for compiling the next table, which is expressed in terms of tenge. Actually, this figure reflects average growth rate of CPU during the period. It is a quotient obtained by dividing the difference of CPU value at the beginning and end of the period by the number of days in the period. Based on this figure each fund was assigned a position during a certain period in the order of descending IPDP. In this table the data was sorted in descending order of IPDP for the longest period - 2000 - 2001, namely, from January 1, 00 through June 1, 01. In the opinions of IRBIS analysts, such approach was the most correct one. Also, by sorting the data this way, the dynamics of each fund can be traced separately for the year 2000, for the first 5 months of 2001 and for the last month. ---------------------------------------------------------------------------------------- In 5 months In May For 2000 For 2000-2001 of 2001 2001 Propor- Brief ------------ ------------- ------------ ------------ tion title in the Date of of the IPDP, Posi- IPDP, Posi- IPDP, Posi- IPDP, Posi- sys- first fund KZT tion KZT tion KZT tion KZT tion К3 К2 tem, % deposit ------- ------ ----- ------- ----- ------ ----- ------ ----- ---- ----- ------- -------- Umit 0.1362 1 0.1278 1 0.1085 2 0.0740 11 7.73 18.18 8.7 13.03.98 HPF 0.0977 4 0.0992 2 0.1034 3 0.1901 1 6.89 17.26 1.5 22.03.98 Kaz-mys 0.1005 2 0.0986 3 0.0948 6 0.0894 4 6.00 16.29 3.8 19.04.98 HBK 0.0932 5 0.0952 4 0.1006 4 0.0762 8 6.14 16.43 20.6 24.02.98 NGD 0.0875 8 0.0949 5 0.1133 1 0.0750 9 NA NA 2.1 07.06.98 VTF 0.0981 3 0.0943 6 0.0857 9 0.1196 2 6.65 17.00 1.9 20.03.98 Ular 0.0921 6 0.0910 7 0.0889 7 0.0833 7 5.34 15.56 8.1 20.04.98 Kaz-n 0.0875 9 0.0907 8 0.0991 5 0.0862 5 6.56 16.90 2.5 28.04.98 Kunaev 0.0911 7 0.0893 9 0.0857 8 0.0937 3 6.06 16.35 0.3 24.03.98 Kurmet 0.0688 11 0.0733 10 0.0846 10 0.0666 12 5.63 15.88 3.3 01.01.99 SAPF 0.0746 10 0.0726 11 0.0682 11 0.0744 10 4.50 14.64 34.9 15.01.98 AAKMG 0.0594 12 0.0611 12 0.0657 12 0.0839 6 4.35 14.47 6.2 03.03.99 SENIM 0.0499 13 0.0491 13 0.0473 13 0.0558 13 5.59 15.83 4.9 20.07.99 Korgau 0.0376 14 0.0403 14 0.0472 14 0.0406 14 NA NA 0.9 01.12.99 PMK 0.0086 15 NA NA 0.1 07.04.01 ---------------------------------------------------------------------------------------- For simplicity, following abbreviations have been used in the table: Umit - APF Umit CJSC; VTF - PAPF Valut-tranzit fund CJSC; Kunaev - PAPFOT after Kunaev CJSC; HPF - OAPF Halyk Pension Fund CJSC; Kaz-n - PAPF Kazakhstan CJSC; HBK - APF Halyk Bank of Kazakhstan; Kaz-mys - APF Kazakhmys CJSC; Ular - OAPF Ular CJSC; NGD - PAPF NefteGas-Dem; Kurmet - POAPF Kurmet; AAKMG - APF ABN AMRO - KaspiiMunaiGas CJSC; SENIM - OAPF SENIM CJSC; Korgau - APF Korgau CJSC; PMK - KAPF Philip Morris Kazakhstan CJSC; SAPF - State Accumulative Pension Fund CJSC; K3 - coefficient of real income on assets; K2 - coefficient of nominal income of the fund; NA - (not available) data not presented; "-" - no data on the coefficients of the assets of PAPF NefteGas-Dem CJSC and APF Korgau CJSC because during the period being analyzed the assets of these funds were being transferred from one PAMC to another, for KAPF Philip Morris Kazakhstan CJSC - because the fund started working on February 1, 2001 (license was obtained). It should be also noted that OAPF Federation of Trade Unions of Kazakhstan CJSC was reorganized on September 29, 2000 by merging with APF Umit CJSC; APF KaspiiMunaiGas CJSC was reorganized on February 16, 2001 by merging with APF ABN-AMRO CJSC with subsequent change in the title of the latter into APF ABN AMRO - KaspiiMunaiGas CJSC. When analyzing the table, it should be kept in mind, that the funds, who have started working prior to the currency regulatory regime in Kazakhstan (till early April 1999), have certain advantages over other funds, since they have received an income from exchange rate difference due to tenge devaluation due to the measures taken by the government and the NSC to protect the assets of the depositors from devaluation. It is clear from the table thanks to a one-time first deposit. Not many funds, who were the leaders in 2000, were able to maintain the CPU growth rate. The table illustrates the main pattern observed in the pension assets management activities under a total decline in the returns of instruments available to PAMC. In last months traditional leaders of IPDP are losing their positions, since their portfolios had been formed earlier from more profitable securities. When these securities mature or get sold on secondary market, the result is a profit fixing and high value of IPDP, however, it certainly leads to subsequent sharp decline of this value due to impossibility of investing the money received this way into high return instruments. In this context, in the opinions of IRBIS analysts, the funds, whose positions remained almost unchanged and in the first lines of the list, deserve a special attention. Such dispositions of these funds indicate that the PAMC of these companies react (somewhat better than others) to the change in market situation on time and conduct restructuring of the portfolios of their APF in order to reach the optimal and stable return on the assets. These are the following funds: - OAPF Halyk Pension Fund CJSC (PAMC ABN AMRO Asset Management); - APF Kazakhmys CJSC and OAPF Ular CJSC (PAMC JETYSU); - APF of Halyk Bank of Kazakhstan CJSC (Halyk Bank of Kazakhstan pension assets management company). Unfortunately, very solid positions of APF Umit CJSC (PAMC Ak nyiet) were lost in May 2001 (average monthly IPDP in 2001 = 0.11, in May - only 0.07). Although, it does not mean that CPU growth rate has been lost for this company. The table also illustrates a number of other patterns. It should be noted that the analysis of IRBIS concerns only the dynamics of CPU - one of the main indicators of a fund's profitability and not more. The positions obtained this way can not be used as ratings, since such assessments should be made based on the analyses of a number of indicators. As an example, PAPFOT after Kunaev D.A. can be used, whose IPDP let the company to become the third in the list in May 2001. Also, it has been said previously, that it had been a single fund, whose assets fell in May (from KZT424.2m as of May 1, 01 to KZT421.3m as of June 1, 01). As the Pension Reforms Department of the NSC informed the IRBIS, on April 6, 2001 the license of this fund was suspended by the Committee for one month, and on May 11, 2001 - for another month. These facts certainly do not speak in favor of this APF. The volume of assets has an important role in rating assessment of the fund. Therefore, the agency IRBIS found it necessary to put the data on the proportion of assets of each fund in a whole pension system of the country. The comments of the NSC specialists also deserve an attention, who mention that APF received investment income as a result of dividend payments for the year 2000 made by the issuers, whose shares had been in the portfolios of the funds, which has sharply affected the IPDP rating of the funds in May. Considering the specifics of accounting of the transactions related to the reception of investment income as dividends, some PAMC achieved an increase in the profitability figures of pension assets during the period, when these payments were made. However, no payments will be made till the next year, which will have certain impact on the dynamics of IPDP in the next months. Comments of IRBIS: the agency had not double checked the data presented by the Committee and the NSC, therefore, the agency IRBIS does not assume any liability on the reliability of the data by referring to original sources. The agency IRBIS is open to publishing any analytical work on pension system of Kazakhstan, which can be presented to the agency by the participants of the system and independent experts. Information agency for financial markets "IRBIS", 67, Aiteke Bi St., Almaty, Kazakhstan, office 110; tel. (3272) 638892, fax (3272) 638980; e-mail: an@kase.kz; http://www.kase.kz/market/fmnews/