NMIRF may pull out major investment in Asia

The NMI Retirement Fund might be compelled to pull out its major investments in Asia due to the continued economic crisis which has been invariably affecting the status of its investment portfolio.

Fund officials already set the remaining three quarters of FY2001 to allow major Asian investments to rebound as recommended by portfolio managers although there are possible changes in terms of stocks and investments abroad by next year, NMIRF Board Chair Vicente Camacho disclosed Friday.

Should investments in Asian region fail to move up and continue its down trend movement, NMIRF has no other alternative but to re-invest its stocks somewhere else where investments are likely to prosper.

However, Mr. Camacho explained that Invesco Asia Limited, portfolio handler of NMIRF for the Asian region, advised that economy of affected countries in Asia might be able to pull it off and that investment result for this year is worth the wait.

In fact, Hong Kong and Philippines investments might do wonders this year and there is a probability that the market will do well. The NMIRF investments in Korea has dramatically improved during the last quarter of FY2000 and on the early part of FY2001.

Aside from the continued depressing state of Asian investments, NMIRF off-island investments pegged a dramatic growth early this year and the latter part of year 2000.

Based on the off-island portfolio report of the NMIRF, investments abroad have improved dramatically with $386 million for the three equity while the home loan program is doing well.

“The market in Asia remains volatile but many investors are not pulling out, so we will stay for another year as advised by Invesco though our investments has not met the time horizon,” the board chair explained.

Invesco Asia Ltd. started with $15 million capital three years ago when the economic flu hit the region. Despite the losses incurred by NMIRF, a fresh infusion of $3.5 million was ordered late last year to salvage the Asian investments.

The NMIRF board approved the infusion of fresh capital over the $9.9 million on its Asian investment being handled by the Invesco Asia Limited. The fresh capital was taken to the total portfolio asset of the NMIRF amounting to $371.1 million, Mr. Camacho explained.

Recent Fund report on its overseas investment disclosed that Funds assets have plummeted in the past two months because of the recession. The losses incurred by the overseas investments include Fund’s investments in Korea and the Taiwan market.

NMIRF holdings in Asia is presently pegged at 4 percent of the total assets of the agency wherein the 85 percent is scattered around United States and the remaining were invested in several European countries and other emerging markets.

Based on NMIRF off-island portfolio report in April last year, the Fund pegged about $28,182,538 million losses and recorded a realized gain of $10,594,986. By May, 2000, investments were down by $19,699,798 million and earned an estimated $2, 744,101 million.

Last July 2000, the report disclosed $18,665,957 million losses and an estimated $48,635,800 million realized gains, bringing the total return of investment to $37,925,409 million or an estimated 11.38 percent. The remaining portfolio balance is $371,064,313.

Invesco Asia Limited with portfolio value of $9.9 million in Asian market reported only about $819,177 return of investments or -7.67 percent for the month ending of May. Its Asia investment which originally valued at $9.9 million now cost only $630,953.00.

The total investment abroad of the NMIRF, domestic and international totaled to $371,062,949 million but rate of investment return was pegged to -4.22 percent only. Since October to fiscal year to date of May, off-island managers reported $37,925, 362 million returns compared to $371,062,949 portfolio value. (EGA)