€38m gross return on investments for H1

Prishtina, 23 July 2015 – The Governing Board and the Management of the Kosovo Pension Savings Trust (KPST) inform the account-holders that only in the H1 2015, the value of their pension savings has been increased by €38 million. To this return on investments the global financial markets contributed by 98% and investments in Kosovo (in Government bonds) by 2%.

Both the Board and the Management reckon this result of investments as very satisfactory, considering that the change of investment strategy and adding new fund managers is giving positive results. On this occasion, we want to remind contributors that KPST continues to have a growth of the value from the investment of assets, mainly in the global financial markets, contributing to the growth of the share price value by 33% since its inception until June 30, 2015.

At the end of the H1, KPST had invested in securities of the Government of Kosovo around €80 million. The Governing Board has constantly expressed readiness to invest as much as possible in Kosovo, however, except in state bonds, there is no other real option. Public allegations that the Governing Board could have invested in Trepça and PTK are ungrounded. The Law has clearly set the investment instruments, the requirement for liquidity and tradability of these instruments, and these companies do not emit tradable financial instruments as required by the Law.

We also want to notify that the Assembly of Kosovo reviewed and approved the Annual Report 2014, which included the clean opinion of the external auditor for this year.

Investment Performance

KPST investments in the H1 were influenced very positively by the improved economic indicators in the USA, Asia and Europe until the sixth month. Decrease of oil price gave a strong drive to companies in reducing costs and increasing financial capacity, fuelling economic growth. On the other hand, the Greek debt crisis has negatively affected financial markets at the end of this H1, resulting in contraction of investment return for this period. Nevertheless, the performance of KPST during this period has never been affected to the extent needing interventions to withdraw or re-allocate investments. Last year, the Governing Board has implemented a new investment strategy, which has proved during these two years that it is responding very well to new challenges in the markets.

Only during the last three years, the value of pension assets increased by €191 million gross or €178 million net from investments.

Assets under Management

The KPST assets under management at the end of the H1 came close to €18.1b, increasing by €91 million during the H1. In addition to the investment return (amounting €38m), new contributions of around €67 million influenced also the increase of the assets under management.

During this period, €11 million pensions and €3 million fees (investment and operational) and refunds were paid.

Pension Payments

Assets received for payment of pensions during the H1 reached the value of €11 million on behalf of 4,679 contributors, whereas the value of pensions paid since the inception exceeded the figure of €64 million on behalf of 29,227 contributors.

Unallocated Assets

At the end of H1, there were €10.4 million for which KPST had no information from employers on whose behalf they had paid contributions to the KPST accounts. The KPST staff engaged, together with the TAK, to identify the owners of these assets, resulting in identification of over €30 million since 2008. Furthermore, we would like to clarify that these assets shall be treated and invested from the moment they are paid to KPST, in the same manner as all the other pension fund assets. This means that, whenever they are identified, they shall realize profit on investment as well.