Pension Pillar II recovered in July total assets decline recorded in June

The Pension Pillar II recovered in July the decline in total assets of RON 23.28 million it recorded in June due to the volatility of shares traded on the Bucharest Stock Exchange (BVB), president of the national association of private pensions APAPR Iulius Postolache said. 

Compulsory private pension funds had assets worth around RON 36.08 billion on 30 June 2017, down by 0.07 percent compared to 31 May 2016, according to the Financial Supervisory Authority (ASF) data.

According to the ASF, the net asset value of privately managed pension funds on 30 June 2017 was lower by 0.07 percent compared to 31 May 2017. The main reason for this difference is the volatility of the shares traded on the BVB, as can be seen by analyzing the evolution of BET and BET-FI indices in June 2017 as follows: BET recorded a decrease of 10.42 percent and BET- FI dropped by 2.48 percent.

The state securities had the largest share among the assets, namely RON of 23.53 billion, respectively 65.22 percent in June 2017. On 31 May 2017, their value was RON 22.97 billion.

Shares occupied the second place, with RON 7.006 billion (19.42 percent), and on May 31 2017 were valued at RON 7.541 billion. Bank deposits were ranked third in this respect, with  RON 2.289 billion and 6.35 percent of total assets respectively. At the end of May pension funds on Pillar II had bank deposits amounting to RON 2.331 billion.

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“The decrease in the level of assets […] was mainly caused by a temporary deterioration in the price of listed shares. Such a development is a relatively normal fluctuation for the beginning of the summer season and is also boosted by some tensions on the international financial markets and amplified by the local political context.This type of fluctuation is normal on both the local and international financial markets.

In fact, the negative fluctuation recorded in June has already been fully assimilated at the level of the assets managed.Today, both the level of assets (taking into account the contributions sent in the meantime as well as the level of fund units are already higher than those at the end of May. In other words, the June fall was temporary and was already covered by positive market developments in July, leading the assets administered to a new historic high,” Postolache said.