Trust bad start 2023, only 470 thousand euros in investment return for three months

During the first three months of 2023, the gross return to Trust investments was only 427.5 thousand euros, against losses worth 60.5m euros a year ago.

According to the recent Kosovo Central Bank report on the Three-month Economics assessment, all of this comes from inadequate macroeconomic developments that have simultaneously affected financial markets and the unexpected crisis at several regional banks in the US and Credit Suisse in Switzerland in March of this year, which, despite being isolated cases, have raised concerns about possible amplification of a wider financial crisis in the world and the region.

The low gross return to investment in the first quarter of 2023 is largely the result of global markets' fluctuations following the failure of several US banks and the effects carried to Europe”, said in the BQ report.

The report notes that pension funds assets in the country increased by 5.3 per cent at the end of March 2023, but that as a value is evidently slower than in the preceding year of 14.0 per cent.

The value of pension assets by March has reached 2.47 billion euros, of which 99.6 per cent is represented by the Kosovo Pension Savings Fund ( FKPK, and the rest of the Slovenian-Kosovo Pension Fund ( The FSKP.

And while the FKPK marked annual increases in assets of 5.4 per cent, the assets of the Slovenian-Kosovo Pension Fund ( The FSKP marked annual decline of 2.2 per cent in March 2023.

The BEC report shows that both pension funds this start are characterised by reducing investment portfolios in the external market along with increased investments in the domestic one, being infected by the negative fluctuations affecting financial markets. In this context, for The FKPK highlighted increased certificates of deposit and balance/money ready with the CEC, which were declining in March of the preliminary year, while the Kosovo government's valuable letters continued growth, but at a slower rate of 1.4 per cent from 17.5 per cent growth a year ago.

On the other hand, the value of contributions collected by the FSKP for the first quarter of 2023 amounted to 156.8 thousand euros, which represents an annual increase of 5.7 per cent, according to the CEC, is influenced by the growth of the number of contributors. However, gross return from investments for the first quarter of 2023 reached 247.3 thousand euros against losses worth 295.8 thousand a year ago, resulting in turbulence created in financial markets.

The FKPK collection value for the first quarter of 2023 marked annual growth of 18.1 per cent, reaching 66.2m euros. The high durability of cashed contributions also reflects the increase in wages of civil servants, which was effective from the beginning of 2023”, the report continues.

By contrast, the assets of the Kosovo Pension Fund are mostly invested in the external market (70.9 per cent of the investment portfolio), in joint funds worth 1.75 billion euros (or 70.8 per cent of the total FKPK assets), while the rest of the investments are designed in letters worth the Government of Kosovo 549.8m euros, or 22.4 per cent of the total investment portfolio and deposit certificates in the local banking sector worth 128m euros. (52 per cent). Likewise, the structure of the Slovenian Fund's investment portfolio ( The FSKP) is similar to that of FKPK, being mainly oriented in the external market, in shares that make up 69.7 per cent of investment portfolios and valuable letters, which make up only 4.8 per cent of all investments. In contrast, investments within the country are mainly focused on letters of value to the Government of Kosovo, which make up 14.1 per cent of the total investment portfolio. /Economic Bulletin