Financial Stability Report No1 20 December 2010 - Banka Qendrore ...

Number 1Financial Stability Reportissued by microfinance institutions, it is noticed a slowdown in the growth rate. Until June2010, the value of MFI loans amounted at euro 113.9 million, which represents an annualgrowth of 9.4 percent, compared to the annual growth rate of 21.5 percent registered inJune 2009 (Figure 43). Consequently, the share of loans issued by MFI to total loans issuedby Kosovo's financial sector declined to 7.5 percent in June 2010, from 8.9 percent in June2009.7.3. Pension fundsIn the first quarter of 2010, the performance of Kosovo Pension Savings Trust (KPST) waspositive, given the positive returns on investments. However, in line with the decline of theperformance of international financial markets, also the performance of KPST investmentsstarted to have a slight decline. 9 These developments led to a decrease of the share pricefrom 1.00 euro in the first quarter to 0.95 euro in the second quarter. However, the shareprice of 0.95 euro, which was recorded in June 2010, was higher compared with same periodof last year when the share price was 0.88 euro (Figure 48).The value of KPST assets in June2010 reached at euro 407.6 million,recording an annual growth of 35.5percent. KPST investments continueto be concentrated in shares and otherforms of capital, which shows the highsensitivity of the overall KPSTinvestments against the fluctuationsof share prices in internationalmarkets.Figure 48. Share price of KPST, in euro1.41.210.80.60.40.20June 2007 June 2008 June 2009 June 2010For this reason, due to theKPST share priceturbulences in international financialmarkets as a result of the financial Source: KPST (2010)crisis, in the first half of 2009, KPST reduced its investments in shares and other equity inthe international markets and increased its deposits at the CBK in order to avoid potentialrisks. As a result, in June 2010, 23.7 percent of KPST assets were kept as deposits in theCBK (2.6 percent in June 2008), while shares and other equity represented 43.5 percent oftotal assets (59.5 percent in June 2008). The recovery of international financial marketsduring the first half of 2010 led to an increase of KPST investments in shares and otherequity, which in June 2010, represented 61.2 percent of total KPST assets, while the shareof deposits at the CBK declined to 8.5 percent of total KPST assets. The rest of the KPSTassets were invested in bonds (23.4 percent) and commercial banks (6.2 percent).9 International financial markets during the second quarter of 2010 were characterized with negative performance, due to debt problems in Greece, thedevaluation of euro, the flow of oil in the Mexico Gulf, reforms in financial and other markets, etc.56 |