Stable Investment Result
According to advance financial statement figures, Tapiola Pension’s investment income at current value was about 4.1 percent in 2007 (6.8 percent in 2006).
Tapiola Pension’s Managing Director Olli-Pekka Laine is satisfied with the investment return in 2007. ”We reached a reasonable and stable investment return considering the instable markets. Stable and good return in the long run is Tapiola Pension’s trademark”, Laine says.
The solvency ratio of Tapiola Pension was about 21.4 percent (24.3) and the solvency margin was 1.8-fold (2.2) the solvency limit. According to preliminary figures, the customer bonuses and rebates are estimated to amount to about 20 million euro (18 mn euro).
Tapiola Pension’s Investment Activities Focus on Perseverance
According to Tapiola Pension’s Investment Director Hanna Hiidenpalo, the result 2007 was positive in each asset category, i.e. fixed-income, equity and real estate investments. ”However, the general return level on the equity market 2007 was clearly lower than in 2006 which resulted in decreased total investment income in comparison with 2006. The return level of Tapiola Pension’s equity and fixed-income investments exceeded the return of the market indexes.”
Especially investments in developed markets and capital investments were profitable. The allocation was changed towards the end of the year. The amount of equity investments were decreased to under 30 percent in order to budget for the shaky market development in the beginning of 2008.
“The global economic outlook dimmed significantly in the end of 2007. Especially the recession risk in the USA has increased substantially due to the problems on the real estate and banking market as well as the weakening consumer demand. On the equity market, the biggest wild card during 2008 is the result development in corporations”, says Hiidenpalo.
An examination based on valuation indicators shows, that the equities are not all that expensive when valuation levels are put in relation to the low interest rates. However, the unreliable result forecasts and the high risk of recession in the USA are significantly dimming the short-term equity market outlook. The decelerating real economy growth makes state bonds more attractive.
The figures are preliminary. The annual results 2007 (unaudited) of the Tapiola Group companies are published on 5 March 2008 at 9.30 am. At the same time Tapiola Group holds a press conference at the head office, Revontulentie, 7, Tapiola.
Additional Information:
Tapiola Pension
Managing Director Olli-Pekka Laine
Investment Director
Hanna Hiidenpalo