Wed | Jan 16, 2019

NHT investment portfolio peaked at $44 billion last year

Published:Sunday | December 21, 2014 | 12:00 AM
National Housing Trust building in New Kingston. - File

Tameka Gordon, Business Reporter

The National Housing Trust (NHT) said it invested $44.2 billion for the 2013/14 financial year in various projects spanning housing developments and financial investments.

The state housing agency, which came under criticism for spending $180 million on the Trelawny-based Outmeni property, said its investments are funded from interest earnings on investments it holds with several local intuitions and bolstered by money from contributors.

The embattled board of the NHT, in addressing a media briefing in November to address the controversy, said its investment portfolio remained intact even after the Outameni investment, which it said had no impact on the on the housing budget.

"Each year, the NHT budgets a certain amount for housing developments. In addition to that, other funds are made available for investments in government bonds, etc.," the NHT said.

There was public outcry over the use of NHT funds to acquire the Trelawny property, with private sector interests calling for an investigation into the purchase.

The Jamaica Chamber of Commerce, Jamaica Manufacturers Association and the Private Sector Organisation of Jamaica questioned the $180 million investment and expressed concerns whether the NHT will be able to bring the company to profitability given that the Government "generally has fewer management resources than the private sector".

But the board said "all $180 million would possibly have been from GOJ (government of Jamaica) paper or other investments".

Interest on the NHT's investments stood at $1.3 billion for 2013/14, the NHT said in emailed responses to Sunday Business queries.

It said that up to March 31, 2014, it held bank deposits of $4 million with government paper investments of $13.9 million.

Equities held by the NHT for the period stood at $346 million with corporate paper investments of $273 million and pooled funds held by Sagicor of $204 million for a total investment package of $18.7 billion.

"The Trust's investment portfolio is predominantly invested in Government of Jamaica and Bank of Jamaica (BOJ) instruments, or repurchase agreements secured by these instruments," the NHT said.

It said that repurchase agreements and BOJ certificates of deposit provide liquidity support to the company's operations which is further supplemented by interest or dividend payments on its other investments.

The NHT's corporate paper investments were split between the University of the West Indies and National Water Commission notes valued at $234.9 million and $37 million respectively.

Of the $13.9 million in government paper, $3.5 million were invested in the National Road Operating and Construction Company.

Among the NHT's investment portfolio were euro bonds worth $1.7 million, $811,000 in fixed rate investments, as well as $263,000 in certificates of deposit.

For the 2012/13 financial year, the NHT investments totalled $38 billion with an average investment yield of 4.5 per cent.

The Trust made $1.7 billion in interest for 2012/13.

The 2011/12 financial year saw an average investment yield of 4.8 per cent of the $35 billion invested with $1.6 billion of interest realised.

"The yields realised on the NHT's investments are used to fund the operational and capital expenses of the Trust," it said.