Banco BiG Moçambique recently released the first edition of its market study on Institutional Investment in Mozambique – 2024. The aim of this study is to provide the Mozambican market with information on the macroeconomic outlook and the opinions of the main players in the sector on the current and future context of investments in Mozambique.
Services such as Fund or Financial Asset Management Companies, Pension Funds, Pension Fund Management Companies and Insurance Companies were surveyed, and the respondents were CEOs, CFOs and Investment Managers, respectively.
The conclusions on the various indicators included in this study are presented in aggregate form, in order to convey the opinion of the sector as a whole.
A mixed profile of participants took part in the study, including investment managers or those responsible for similar positions in insurance companies, pension fund management companies, fund or financial asset management companies, social security institutes and others.
The most common benchmark used by managers to assess the returns on their investment portfolios is the treasury bill rate (69% of managers). On the other hand, 15% of respondents mentioned not using any benchmark.
When choosing investments, managers consider factors such as the profitability of investments, the consistency of returns and the level of risk to be the most important factors.
On the other hand, the applicable taxation, the maturity of the investments and the associated costs proved to be of less importance when choosing investments.
It can also be seen that ESG criteria are becoming a relevant criterion when it comes to choosing investments.
For 2024, respondents plan to increase their exposure to BTs (69%), Commercial Paper (38%) and real estate (38%). On the other hand, 77% of respondents intend to decrease their exposure to unlisted shares, 62% to OT’s and 46% to listed shares and cash and Demand Deposits.
For 2024, the majority of respondents (77%) said that they expect the yields on BTs and OTs to remain the same or fall in 2024.
85% of managers were optimistic about business growth in 2024. On the other hand, the remainder expected business to slow down or stagnate.
69% of managers expect an increase in the number of competing companies in the sector. 67% of those who expect an increase are insurance companies.
Summary of Conclusions
For the year 2024, 54% estimate GDP growth of between 5% and 7.5%, while almost half of managers estimate that Net International Reserves (NIR) will remain at current levels in 2024.
On a different note, over 80% of those surveyed consider political instability and high public debt to be the main risks to the economy, and around 50% of the participants expect the “force majeure” of TotalEnergies to be lifted in the second half of 2024.
The study also shows that 38% of investors expect the MIMO rate to fall by 150bps in the 3rd quarter of 2024. The average rate of Treasury Bills (BTs) is used as a benchmark when assessing the profitability of their investment portfolio by around 69% of participants.
Return on investment and taxation were selected as the most relevant and least relevant factors, respectively, when selecting investments. For the next 12 months, 69% of respondents intend to increase their exposure to BTs. On the other hand, 62% intend to reduce their exposure to OTs.
Finally, 85% of managers consider 2024 to be a year in which the turnover of their business is expected to grow and 69% predict an increase in the number of competing companies in their respective sector.
Read the full study at: Estudo de Mercado do Investimento Institucional
