The National Social Security Fund (NSSF) reported significant earnings from its investments, with MTN emerging as the top performer in terms of dividend income for the year ending June, according to the Fund’s annual report.
Key Highlights:
- Top Earning Stocks: NSSF’s annual report highlighted the top-earning stocks in terms of dividend income for the 2022/23 financial year. These included MTN, Safaricom, Equity Group Holding, CRDB Tanzania, and National Microfinance Bank.
- MTN’s Strong Performance: NSSF’s investment in MTN proved particularly lucrative, with earnings of Shs31b during the period, a significant increase from Shs9.3b in the previous year. NSSF holds an 8.84 percent stake in MTN, making it the second-largest shareholder.
- Diversified Portfolio: NSSF maintains a diversified investment portfolio, with approximately 12.51 percent invested in equities, 78.4 percent in fixed income, and 9.01 percent in real estate.
- Revenue Growth: The Fund experienced revenue growth, driven by fixed income investments, which increased from Shs1.9 trillion to Shs2.2 trillion, marking a 15.11 percent increase.
- Dividend Income: Dividend income also saw substantial growth, rising by 45.42 percent to Shs145.12b from Shs99.7b in the previous year, making it the largest contributor to revenue growth among the Fund’s investment vehicles.
- Cross-Border Investments: NSSF identified cross-border equities as a valuable investment, holding stakes in at least 10 companies within East Africa, all of which yielded dividends in the year ending June 2023.
- Market Analysis: Financial markets analysts, including Andrew Mwiima, noted that the Uganda Securities Exchange is less active compared to markets like the Nairobi Securities Exchange due to a limited number of listed companies and dominant institutional investors.
- Investor Preferences: Martin Nsubuga, CEO of the Uganda Retirement Benefits Regulatory Authority, explained that investors seek markets where their investments can grow. The performance of companies listed on the USE has influenced investor preferences.
In summary, NSSF’s annual report showcases the Fund’s successful investments, particularly in MTN, and highlights its diversified portfolio. Revenue growth was driven by fixed income and dividend income, with cross-border equities playing a significant role. The report also provides insights into the local financial market’s dynamics and investor preferences.
