Credicorp: AFP prepare for a possible withdrawal authorization

The holding of sovereign bonds by the AFPs has increased in recent months according to Credicorp. The hypothesis that is being handled is that these companies are building a more liquid portfolio to be prepared for a possible approval of the withdrawal of funds, since there are eight bills that have been presented in the Congress of the Republic with this objective.

For April of this year, the possession of Sovereign bonds by the AFPs reach 16.90%. They are followed by banks (30.45%) and non-residents (39.04%). This last data reflects that foreigners have maintained their participation, but with caution.

“The AFP there have been a little more buyers on the margin in recent months. This would have to be validated with them, but the hypothesis is that perhaps the portfolios have been eventually being prepared, building slightly more liquid positions in sovereign bonds, since what one sees in the landscape is that there are several proposals for withdrawals”, said Víctor Díaz, managing director of Fixed Income at Credicorp Capital Asset Management.

The manager explained that the behavior of the AFP Today it is similar to previous years, when the possibility of withdrawing this money was handled, which is a natural strategy. He added that, on this occasion, the context is favorable for pension fund managers, since the interest rate levels in local currency assets are quite attractive with a more limited level of political risk.

“So, it can be a win-win strategy to have a portfolio with good liquid profitability and, eventually, if withdrawals come as they are liquid papers, they can be monetized without much problem. It seems to me that it could be a strategy that could be beneficial for the performance of the profitability of the portfolios”, he said.