Coronation’s earnings benefit from rising markets

Coronation’s earnings benefit from rising markets


CAPE TOWN – CORONATION Fund Managers’ headline earnings a share increased by 43.5 percent to 255.8 cents after it benefited from fast-rising markets since March last year and a strong out performance of its client mandates, chief executive Anton Pillay said yesterday.

Pillay said the unprecedented stimulus that was pumped into economies by central banks globally had buoyed capital markets, resulting in record-breaking short-term returns.

As at March 31, 2021 most major indices were up well over 50 percent from their March 2020 lows.

“Market reaction to Covid-19 presented rarely-seen opportunities for active investors like us, which, in turn, we converted into strong returns for our client portfolios, which positively impacted our revenue,” he said.

However, Coronation’s management viewed this as a cyclical high for investment returns and the investment opportunities presented during the pandemic were unlikely to be repeated. Future market returns were expected to be lower than those seen in the past year.

Revenue increased by 22.5 percent to R2.2 billion in the six months to March 31, from R1.77bn in the prior corresponding period.

Fund management earnings are used by management to measure operating financial performance, which excludes fair value gains and losses, and related foreign exchange, on investment securities held. Fund management earnings per share increased by 36 percent to 244.0 cents.

The interim dividend increased by 37.1 percent to 244 cents, from 178.0 cents in the prior corresponding period. “While economic recovery is under way in developed markets, most emerging markets are lagging due to more limited policy options and slow vaccine rollouts,” Pillay said.

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