AMMAN — The Social Security Investment Fund (SSIF) is expanding its investments across the Kingdom, with a diversified portfolio of ventures, most notably a mega agricultural project to grow vegetables and animal fodder, the fund’s CEO Kholoud Saqqaf told Al-Ghad and Jordan News.
In an interview, Saqqaf noted that managing the Social Security Corporation’s (SSC) assets is a “tremendous responsibility towards all pensioners”, stressing that she and her team are applying good governance and the best international practices, “following strict and transparent procedures, as well as acceptable risk levels”, and that the fund’s investment decisions are taken based on clear and transparent guidelines and on “purely investment criteria.”
Meanwhile, she stated that the fund’s performance “has been strong despite the economy slowdown. The prudent investment policy and well-diversified portfolio enabled the SSIF to maintain its asset growth, which reached JD11.19 billion, and its profits, which reached JD497.5 million as of the end of 2020, according to the preliminary financial statements”.
These assets, she added, were distributed over different asset classes: Money market instruments by 13 percent, bonds by 58.2 percent, loans by 3.6 percent, equity by 14.5 percent, real estate by 6.5 percent, and tourism by 2.6 percent.
The JD13 million agricultural project, planned for the southern region of the Kingdom, is one of several planned in the governorates and is the first scheme in the field implemented by Daman Company for Investment and Agricultural Industries, which was established by the fund last year.
Covering an area of 25,000 dunums, the project is designed to produce vegetables and animal feed and will be managed in cooperation with specialized companies from the private sector that have the necessary expertise and track record in developing and marketing such projects.
SSIF-affiliated establishments and investments are also going green. The fund, according to its CEO, has launched two solar energy stations to provide electricity to the hotels owned by the SSC, SSC branches, and the SSIF’s headquarters. The project will reduce the SSC’s annual utility bill by JD5 million, she said, noting that the third station will be launched at the end of this week.
The SSIF is currently financing a number of infrastructure projects across the country through financial lease with a total investment of JD320 million. They include the Amman new customs center, Tafileh public hospital, Maan military hospital, and the Bus Rapid Transit project between Amman and Zarqa.
Also nationwide, the fund in 2020 expanded its real estate investments to JD717 million through buying additional real estate properties in different areas with a total value of JD60 million.
The fund, according to Saqqaf, is currently studying projects and investment opportunities in the infrastructure, health, and education sectors, in cooperation with the private sector. It is also examining offers to purchase land and real estate in various governorates of the Kingdom and opportunities for land development.
In the area of tourism investment, the establishment of a number of new tourism and leisure facilities in Aqaba have been approved. Additionally, the SSIF chief said, the renovation of the Crowne Plaza/Petra Hotel is still underway, and will be open to visitors at the end of this year, while a number of hotel rooms and suites at the Intercontinental/Aqaba Hotel are similarly undergoing renovations.
Maintaining good performance
According to Saqqaf, the fund has performed well since its inception in 2003, with a nominal rate of return on assets of around 5.3 percent. Despite the small size of the Jordanian economy and the fluctuations of the Amman Stock Exchange (ASE), the fund maintained and developed the size and value of its assets and “retained a good performance. We do expect a better performance in the coming years following the global and national economies’ recovery from the pandemic’s consequences,” the SSIF chief added.
On the pandemic’s impact, Saqqaf said some of the SSIF’s investments “were negatively affected due to the decline in the performance of the ASE and the tourism sector, in addition to some companies’ delay in distributing 2019 dividends and the decline in the interest on fixed-income instruments.”
“However, the SSIF’s strategic distribution of assets within different investment instruments and sectors and the early measures that the fund took have significantly mitigated that negative impact, especially on the most vulnerable sectors.”
The fund’s main investment is in Treasury bonds, which currently constitutes 58.2 percent of the fund’s portfolio with varying maturities and a 6.1 percent rate of return, the highest on investment instruments invested in by the fund compared with the associated low level of risk.
Asked to outline the future outlook of the fund, the CEO said that the SSIF, “as a long-term strategic investor, is keen to channel its investments to the (country’s) various vital sectors to achieve a meaningful return within acceptable risk levels and in partnership with the private sector in the agricultural, education, and health fields, in addition to the current investments in tourism, mining, telecommunications, banks, conventional and renewable energy, and development zones.”
She said that the fund “deeply believes that the best way to pursue good business is through cooperating with the private sector, based on well-structured partnerships, with an appetite to consider major projects launched at a national level.”
Accordingly, Saqqaf underlined memoranda of understanding signed with a number of investors to examine “investment opportunities and mega projects”.