EPF earns RM5.5bil investment income for third quarter

KUALA LUMPUR: The Employees Provident Fund (EPF) generated an investment income amounting to RM5.5bil in the third quarter of 2009, an increase of RM696.32mil, or 14.51%, over the RM4.8bil generated in the previous quarter.

In a statement yesterday on its unaudited results, the EPF said year-over-year, investment income in the third quarter also grew by 52.71% from RM3.6bil recorded in the previous corresponding period.

Equities continued to contribute significantly to the EPF’s investment income, growing 34.67% from RM1.74bil earned in the second quarter to RM2.34bil in the third quarter.

“The continued rally in the stock market has helped to boost EPF investment income for the quarter. Provided that market recovery continues with no unforeseen disruptions till year-end, members can expect a higher dividend for 2009 compared with that of the previous year,” said EPF chief executive officer Tan Sri Azlan Zainol.

Another major contributor to EPF’s investment income in the third quarter was loans and bonds, which increased 4.07% to RM1.89bil from RM1.81bil in the second quarter. This is attributed to the regaining momentum and confidence in Malaysia’s corporate bond market, and in line with the EPF’s low risk policy to invest only in high-grade companies with credit ratings of AAA or AA.

Investments in Malaysian Government Securities (MGS) also recorded an income of RM1.14bil in the third quarter, an increase of 2.54% from RM1.11bil in the second quarter.

Income from properties also experienced a steady growth, moving up 2.69% to contribute RM21.37mil for the quarter under review compared with RM20.81mil earned in the previous quarter.

Returns generated from money market instruments, however, declined 7.38% to RM87.31mil from RM94.27mil recorded in the second quarter.

The EPF’s total fund size currently stands at RM361.09bil from RM353.93bil in the second quarter.

The EPF’s total asset allocation as at Sept 30 was as follows: MGS 26.96%, loans and bonds 41.02%, equities 26.14%, money market instruments 5.47%, and properties 0.41%.

“As the custodian of more than 12 million members’ retirement savings, the overall performance of EPF’s investment portfolios will continue to be strictly-guided by measures devoted to safeguarding their interest while pursuing better returns for members’ retirement well-being,” said Azlan. — Bernama