Syg­nia’s as­sets un­der management in­crease to R162bn

The Star Early Edition - - COMPANIES - Sandile Mchunu

JSE-LISTED fi­nan­cial tech­nol­ogy com­pany Syg­nia has re­ported a 1.89 per­cent in­crease in to­tal as­sets un­der management to R162 bil­lion in the quar­ter to the end of June, up from R159bn re­ported at the end of March.

The group said the quar­ter was weighed down by po­lit­i­cal un­cer­tainty, which had a bear­ing on the econ­omy and investment re­turns.

“De­spite that, Syg­nia grew its as­sets un­der management from R159bn as at March to R162bn as at June, largely on the back of in­sti­tu­tional ap­point­ments,” Syg­nia said in a state­ment.

The group said it had also se­cured R3.7bn in in­sti­tu­tional investment administration and as­set management ap­point­ments, which were ex­pected to move to Syg­nia in the third quar­ter of this year, as well as R2.4bn in Syg­nia Um­brella Re­tire­ment Fund (SURF) ap­point­ments, which, sub­ject to reg­u­la­tory ap­proval, would be trans­ferred to SURF in the third and fourth quar­ters of this year.

Syg­nia said all ar­eas of the busi­ness were pro­gress­ing well, with SURF be­com­ing a ma­jor source of new as­set management ap­point­ments for the com­pany.

“Our in­de­pen­dent-con­sul­tant-friendly busi­ness model, our highly ad­vanced tech­nol­ogy plat­form and the fund’s su­pe­rior ben­e­fit de­sign have made SURF a highly at­trac­tive propo­si­tion for stand-alone re­tire­ment funds and par­tic­i­pat­ing em­ploy­ers in um­brella fund ar­range­ments,” the com­pany said. “We also con­tinue to look for strate­gic ac­qui­si­tions in this area.”

The group said the ac­qui­si­tion of db X-track­ers added R12bn to as­sets un­der management with ef­fect from July 1, and that this would en­hance Syg­nia’s earn­ings sig­nif­i­cantly.

“We ex­pect to un­lock more value from the ac­qui­si­tion by re­struc­tur­ing some of the out­sourced ser­vices in due course. Although more com­peti­tors are emerg­ing, of­fer­ing ex­change traded funds (ETFs) ref­er­enc­ing for­eign as­sets, most are feeder-fund struc­tures rather than di­rectly man­aged ETFs,” the group said.

Syg­nia pro­vides as­set management, stock­broking and administration ser­vices, as well as a range of sav­ings prod­ucts to in­sti­tu­tional and re­tail clients.

The group said the db X-tracker ETFs would be re­branded as Syg­nia Itrix ETFs as soon as pos­si­ble.

The group said its ETFs had the ad­van­tage of a tiered management fee struc­ture. This meant that large in­vestors paid sig­nif­i­cantly lower management fees than those pub­lished in the to­tal ex­pense ra­tio cal­cu­la­tions.

Syg­nia said it planned to broaden its range of ETFs, with the launch of off­shore and do­mes­tic ETFs planned for the third quar­ter of this year.

“This will in­clude the Syg­nia Itrix 4th In­dus­trial Rev­o­lu­tion Ken­sho ETF, which tracks an in­dex com­pris­ing com­pa­nies in­volved in the devel­op­ment of prod­ucts and ser­vices in the fields of 3D print­ing, drone tech­nolo­gies, quan­tum com­put­ing and au­tonomous ve­hi­cles,” the group said.

The group said it wanted to launch these prod­ucts with the low­est management and plat­form fees, in or­der to lower the cost of ac­cess­ing the ETF mar­ket for re­tail and in­sti­tu­tional in­vestors, and to make that seg­ment of the mar­ket more ap­peal­ing to in­vestors in­ter­ested in in­dex-track­ing investment strate­gies.

Syg­nia shares rose 3.15 per­cent on the JSE yes­ter­day to close at R11.17.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.