EPF posts RM9.16bn investment income for Q2

KUALA LUMPUR, Sept 3 (Bernama) -- The Employees Provident Fund (EPF) posted RM9.16 billion or 20 per cent increase in investment income for the second quarter ended June 30, 2013 (Q2 2013), driven by contribution from equities.

Equities generated RM5.60 billion or a 45.7 per cent hike during the quarter under review compared with RM3.84 billion in the same quarter last year.

"This increase was predominantly attributed to gains realised in domestic equities when we capitalised on the opportunities arising from improved trade liquidity and market prices in the domestic equity market in May and June following the completion of General Election 2013," Chief Executive Officer Datuk Shahril Ridza Ridzuan said in a statement today.

Real estate and infrastructure continued to register strong growth of RM296.28 million during the period under review from RM14.38 million previously.

Interim dividends received from Kwasa Global (Jersey) Ltd UK, a subsidiary that manages the fund's overseas property investments, contributed significant income during the second quarter of 2013.

In Q2 2013, income from Malaysian Government Securities and Equivalents was RM1.53 billion, up RM34.21 million compared with the corresponding quarter in the previous year while money market instruments contributed RM215.20 million for the quarter under review.

Income from loans and bonds was lower at RM1.53 billion compared with RM2.06 billion in the second quarter of 2012, due to recognition of a one-off gain achieved last year that were not repeated in second quarter this year.

As at June 30, 2013, EPF's investment assets increased by RM59.30 billion to RM554.14 billion from RM494.84 billion in the second quarter of last year.

Total contributions of RM13.88 billion received in Q2 2013 exceeded the total amount withdrawn of RM9.73 billion, resulting in a RM4.15 billion net inflows of funds for the quarter under review.

For Q2 2013, an additional US$2.51 billion of overseas investments were made in global equities, bonds and real estate.

Out of the amount, US$2.15 billion was channelled into the global equity mandates to take advantage of opportunities particularly in developed markets.

As of June this year, EPF's total exposure in global investment assets constituted 18.97 per cent of its total investment assets based on book value.

During the period under review, the EPF injected US$1.20 billion to the external fund managers for global equity mandates while a total of RM1 billion and RM850 million were also outsourced into domestic fixed income and equity mandates, respectively.

On the outlook for the rest of the year, Shahril Ridza said EPF's increased allocation to global assets in particular would help to balance against any short-term drop in value in the Malaysian market or in the ringgit, allowing it to better weather volatilities and downside risks.

"We will continue to remain vigilant on the development of the global and local market conditions to safeguard the investments for the interest of our members," he added.