KUALA LUMPUR: The Employees Provident Fund (EPF) yesterday reported total investment income of RM12.32 billion for the second quarter ended June 30, 2019 (Q2 2019), RM70 million less than the RM12.39 billion recorded in the corresponding quarter last year.
EPF deputy chief executive officer (investment) Datuk Mohamad Nasir Ab Latif put the lower earnings mainly down to the weak performance of the Malaysian stock market (-1.1 percent in Q2 2019 compared to the same period last year), which resulted in the EPF’s domestic equity portfolio recording an income of RM1.51 billion.
Most global equity markets, however, saw a recovery from the lows seen in Q4 2018, partly due to some indications of progress in the US-China trade talks, steadying the income contribution from international equities.
Nonetheless, with the exception of the US, many major markets remained below their peaks in 2018, and trading conditions were difficult in Q2 2019.
“The benefit of having a diversified portfolio is that the investment income from overseas assets helped to cushion the decline in income from the domestic equity portfolio.
“For us at the EPF, the short-term volatility gave us a chance to buy good assets to strengthen the portfolio for the long term,” said Mohamad Nasir in a statement.
Equities, which made up 39.2 percent of the EPF’s total investment assets, continued to be the main revenue driver, contributing RM6.33 billion, equivalent to 51.4 percent of total investment income, for Q2 2019.
A total of 50.6 percent of EPF’s investment assets were in fixed income instruments, which continue to provide a consistent and stable flow of income, returning RM5.12 billion, equivalent to 41.6 percent of the quarterly investment income.
Income from Malaysian Government Securities (MGS) and equivalent in Q2 2019 reached RM2.69 billion, while Loans and Bonds generated an investment income of RM2.43 billion.
During the quarter under review, Real Estate and Infrastructure, representing 4.9 percent of total investment assets, recorded RM460 million in investment income. Investments in Money Market Instruments, which represent 5.3 percent of total investment assets, contributed RM410 million.
A total of RM890 million out of the RM12.32 billion gross investment income was generated for Simpanan Shariah, and RM11.43 billion for Simpanan Konvensional. – Bernama
