Submitted by freenet on Sat, 18/12/2010 - 16:42
CHANNELS:
Pretoria - National Treasury has announced the further easing of exchange controls in order to allow local institutions to invest more abroad.
Treasury raised the limit on the amount institutional investors can take offshore by five percentage points. The limit will be between 25 and 35 percent for investors.
"National Treasury would like to alert investors that the announced increase in prudential foreign asset limits should also be regarded as a mechanism for absorbing current holdings of inward listed instruments not having a domestic classification," said Treasury.
Treasury said the Reserve Bank will provide further details on the announcement.
In the Medium Term Budget Policy Statement (MTBPS) in October, Finance Minister Pravin Gordhan announced that "the prudential framework for foreign investment by private and public pension funds, including the Government Employees Pension Fund, will be reviewed to support portfolio re-alignment and offshore diversification of these funds, especially in the rest of the African continent and into other emerging markets."
Retirement funds, particularly which represent a significant portion of the industry investable assets, could be constrained by the current prudential foreign asset limit, according to current analysis.
Additionally, Treasury delayed the release of the discussion paper on the financial sector to February 2011.
"To allow for more time for internal consultations within government, the release of the comprehensive discussion document entitled Strengthening the financial sector to better serve South Africa is postponed and will now be released for public comment in February next year," it said. - BuaNews