First Mu­tual takes cau­tious ap­proach in man­ag­ing in­vest­ments

Chronicle (Zimbabwe) - - Business - Oliver Kazunga Se­nior Busi­ness Re­porter

FIRST Mu­tual Hold­ings says it will main­tain a cau­tious ap­proach in man­ag­ing its in­vest­ments port­fo­lio with core fo­cus on value preser­va­tion, the chair­man Mr Oliver Mtasa has said.

In unau­dited in­terim fi­nan­cial re­sults for the six months ended June 30, 2016, he said the group’s re­newed fo­cus has been placed on the risk man­age­ment frame­work across the com­pany driven by vul­ner­a­bil­i­ties in key sec­tors of the econ­omy to pro­tect stake­holder value.

“The macro-eco­nomic en­vi­ron­ment is pro­jected to re­main tough as ev­i­denced by the ad­verse bal­ance of trade po­si­tion, de­fla­tion­ary pres­sures and the debt over­hang.

“How­ever, the board is de­ter­mined to pre­serve and cre­ate value for the stake­hold­ers through fur­ther process ef­fi­cien­cies, ro­bust cost man­age­ment and con­tin­ued in­no­va­tion.

“Re­newed fo­cus has been placed on the risk man­age­ment frame­work across the group in view of vul­ner­a­bil­i­ties in key sec­tors of the econ­omy to pro­tect stake­holder value,” said Mr Mtasa.

He said fair value gains were ex­pected to come un­der pres­sure ow­ing to bear­ish trends on the Zim­babwe Stock Ex­change.

This, he said, was a re­flec­tion of the gen­eral trends in the econ­omy as well as down­ward re­vi­sion of in­vest­ment prop­erty val­ues.

“Fur­ther­more, money mar­ket in­ter­est rates are ex­pected to de­cline as banks move to con­tain cost of funds in the wake of re­duced lend­ing and de­cline in fee and trans­ac­tional in­come.

“The fixed in­ter­est mar­ket is ex­pected to par­tially counter the pres­sure on in­vest­ment in­come as in­ter­est rates have re­mained rel­a­tively high,” said Mr Mtasa.

He said op­er­at­ing profit, be­fore the out­turn on the in­vest­ment port­fo­lio, im­proved to $4,9 mil­lion com­pared to prior pe­riod profit of $1,9 mil­lion largely due to lower claims in the in­sur­ance busi­ness.

Dur­ing the pe­riod un­der re­view, the group in­curred a net in­vest­ment loss of $300 000 com­pared to net in­vest­ment losses of $2,7 mil­lion last year mainly due to the de­crease in fair value losses quoted on eq­ui­ties rel­a­tive to prior, in­creased in­ter­est in­come from money mar­ket in­vest­ments and held to ma­tu­rity in­vest­ments.

“The group achieved an over­all profit of $2,6 mil­lion for the pe­riod com­pared to $400 000 in the pre­vi­ous pe­riod,” he said — @okazunga.

First Mu­tual chair­man Mr Oliver Mtasa

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