Listed Equities Portfolio Increases By 22.5%
The Public Investment Corporation (PIC), South Africa’s largest asset manager, has announced a 22.5% rise in its listed equities portfolio, reaching R999 billion for the year ending March 2025, as detailed in its latest annual report.
As of March 31, the PIC managed assets totalling R3.049 trillion, serving various public sector clients, including pension funds for South African civil servants. The impressive returns for the 2024/25 financial year were largely driven by the South African stock market’s remarkable 31.3% dollar return, significantly outpacing the 8.6% gain seen in emerging markets, according to MSCI. This growth was primarily fueled by cyclical and resource-heavy sectors.
Notably, PIC’s investments in non-life insurers led the sub-sector growth with a substantial 62% increase. Stocks in construction and materials also performed well, rising by 44% amid expectations of an infrastructure recovery. Additionally, precious metals and mining shares gained 42.5%, bolstered by geopolitical tensions that heightened demand for gold and platinum as safe-haven assets.
However, the report highlighted a stark contrast in performance among sectors. PIC’s alternative energy stocks plummeted by 51.3%, impacted by regulatory challenges and low natural gas prices. The chemicals sector also faced difficulties, falling by 36.5% due to weaker ammonia and gas markets, while industrial metals experienced a drop of 24.2%, driven by declining commodity prices and rising production costs.
This divergence in performance underscores the broader challenges faced by emerging markets as they strive to balance economic growth with climate commitments. South Africa aims to achieve net-zero greenhouse gas emissions by 2050 and is actively seeking financial support from wealthier nations to transition from coal to renewable energy sources.
The PIC noted that regulatory constraints hindered its ability to increase exposure to financial sectors, which negatively affected overall performance. While the fund has expressed a commitment to early-stage and sustainable investments, these initiatives remain relatively small compared to its substantial holdings in listed equities.