Commenting on the impact of the BP crisis on Britain’s pensions funds, David Paterson, Head of Corporate Governance at NAPF said:
“Our understanding is that BP made up about 6% of the FTSE-100 index before the recent falls. Many pension funds are indexed and it would be reasonable to assume that something close to that figure is held. With UK equities representing 20 - 25% of total assets, this implies a 1.5% exposure to BP. With the share price down around 35%, the damage is, therefore, about 0.5% of assets. BP is one of the highest yielders in the index. But we understand from press reports that BP has undertaken to maintain the dividend this year at a cost of $10bn.
A greater uncertainty for all those with an interest in BP is the impact of the disaster on the longer term growth prospects for the business and the potential for litigation.
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