The Public Establishment for Social Insurance plays an economic role that is equally important as its social role. PASI seeks to invest its surplus in different investment fields to maintain the actual value of assets and further increase these assets to enable it to meet its obligations towards the insured. In doing so, the establishment follows the regulations set in the Investment guidelines and the resolutions passed by its Board of Directors.

The Establishment has sought to diversify its investments covering all sectors of investments including investments in share capitals of local and international public stock companies, government bonds, local and international private bonds, real estate and banks fixed deposits.

Allocations of Investments Sector - wise

With the aim of increasing the profitability and lowering potential risks, the Establishment has resolved to invest its funds in different sectors. This trend has:

1. Resulted in an increase in the total investments by 10% between the years 2000 and 2001.

2. The following table illustrates the distribution of the Establishment’s investments among the various Asset classes.

3. PASI has acquired stocks in share capitals in local public stock companies either through MSM direct purchases or through subscriptions. The value of stock acquired in 2001 amounted to 56% of the budgeted provision; this was due to the unfavorable performances of stock companies during the year.

4. PASI increased its investments in foreign company’s stocks and thus utilizing alternate investment tools such as private bonds. These investments amounted to 8.3% of the Est. total investments.

5. With the exception of one bank fixed deposit, PASI refrained from making such deposits at the start of the year due to low interest rates. Instead PASI renewed its existing deposits and increased its current accounts which allowed higher interest rates compared to fixed deposits based on pre arrangements with the banks. The revenue of current deposits amounted to 13.5% of the total investments while the revenue on both fixed and current deposits amounted to 54% of the total investments by the end of the year. PASI also invested on high return bank depository certificates securing higher interest rates as compared to fixed term deposits.

6. The Central Bank of Oman (CBO) issued one bond in the last quarter of 2001. PASI did not succeed in acquiring a stake in the issue due to the severe competition and the limitedness of the issue. In 2001 the CBO’s issue number 10 issued in 1996 was redeemed securing total investment revenue of 8% per annum thereby representing the best revenue of investment for PASI. The Est.’s investment in government and private bond represented 14.6% of the Est. total investments. PASI also invested in bonds issued by a local banks which had secured excellent revenues. The balance of the loan made to Oman Housing Bank (OHB) in 1996 constituted 1.7% of the Est.’s total investments.

7. PASI investments in local real estate in 2000 and 2001 amounted to 2.6% of its total investments. However, the establishment has recently increased its appreciation of this sector due to the decrease in the performances of other investment sectors.

8. The following table illustrates the Establishment new investments made in 2001 sector wise.

Asset Allocation of New Investments in 2001