CONSISTENT PERFORMER
Retirement fund says consistent performance driven by positive growth at domestic and Asean markets
THE Employees Provident Fund’s total investment income jumped 9.2 per cent to RM12.9 billion in the first quarter. However, the pension fund remains cautious for the year due to increased global trade tensions and weaknesses in key emerging countries.
THE Employees Provident Fund’s (EPF) total investment income rose 9.2 per cent to RM12.9 billion in the first quarter ended 31 March, from RM11.79 billion in the same period last year.
Investment assets grew 0.53 per cent to RM814.38 billion. Of this, RM321 billion, or 40 per cent, were syariah-compliant investments while the balance were invested in the conventional portfolio.
The pension fund remains cautious for the rest of year due to increased global trade tensions and weaknesses in key emerging countries.
“Despite developed markets experiencing a decline in the first quarter following higher-thananticipated inflation in the United States, EPF managed to record consistent performance, driven by domestic and Asean markets, which recorded positive growth,” said EPF chief executive officer Datuk Shahril Ridza Ridzuan in a statement.
“Coupled with diversification into various markets, geographies and sectors, we have been able to cushion the decline in developed market equities and this has resulted in consistent performance in our overall portfolio with domestic equities emerging as an outperformer.”
Equities, which accounts for 41.59 per cent of EPF’s total investment assets, contributed RM7.93 billion, or 61.58 per cent, to total investment income in the first quarter.
Fixed-income instruments, which make up 50.53 per cent of the pension fund’s investment assets, recorded an income of RM4.76 billion for the quarter.
Meanwhile, income from Malaysian Government Securities and equivalent rose to RM2.24 billion.
Loans and bonds generated an investment income of RM2.5 billion while investments in money market instruments contributed RM292.91 million.
Real estate and infrastructure investments, however, recorded negative income of RM107.38 million, on the back of weakening US dollar against other major currencies, including the ringgit, which had impacted valuations on the investments.
This negative impact is expected to be offset by income inflows in the coming quarters.
Shahril said there would be some changes in EPF’s financial reporting in accordance with the implementation of the Malaysian Financial Reporting Standards 9 (MFRS 9), which came into effect on January 1.
“Capital gains on disposals of equities amounting to RM6.19 billion will now flow directly to retained earnings from the Statement of Other Comprehensive Income as opposed to the Statement of Profit or Loss under the previous MFRS 139.
“Nonetheless, we expect the impact of MFRS 9 on our financials to be minimal,” he said.
Shahril also said additionally, under MFRS 9, the EPF would no longer recognise any impairments on its equity holdings.
Overseas investments, which accounted for 27.3 per cent of the pension fund’s total investment asset, contributed 33.6 per cent to the total investment income in the first quarter.