Coronation expects fewer people to save as retrenchments rise
The group reported net outflows of about 5.8% for SA institutional assets, and expects further pressure as Covid-19 batters the economy
Coronation Fund Managers expects SA’s pool of savers to shrink further as employers lay off staff and cut salaries during the Covid-19 pandemic.
The group reported net outflows of 5.8% for its SA institutional assets in its six months to end-March, while assets under management fell 11% to R508bn as Covid-19 battered global markets.
The group said profit rose 8% to R624m, adding it had “meticulously” managed costs, while also seeing a relatively good short-term performance in its equity portfolios.
Coronation declared a dividend of 178c per share, up from 165c previously.
“Net outflows were in line with our estimate of those experienced by the SA asset management industry and represented 5.8% of our opening balance for local institutional assets,” the group said in a statement.
“We expect outflows to continue to be impacted as the ongoing local savings pool shrinkage is exacerbated by financially distressed employers having to retrench employees or cut their earnings.”