KUALA LUMPUR: Total distributable income of the Employees Provident Fund (EPF) for the six months ended June 30, 2024 (H1’24) increased 29% to RM36.7 billion from RM28.4 billion in the corresponding period last year.
In a statement today, EPF said distributable income did not include mark-to-market gains on securities that were not realized.
It said EPF’s total distributable income for the second quarter (Q2’24) after depreciation and amortisation rose 25% to RM17.5 billion from RM13.98 billion in the same quarter last year.
EPF CEO Ahmad Zulqarnain Onn said favourable market conditions in Malaysia and internationally contributed to the 29% growth in distributable income in the first half of 2024, while assets under management increased to RM1.21 trillion.
“The Malaysian market has benefited from increasing investor interest in growth-oriented policies and fiscal reforms, while international markets such as the US have benefited from continued solid macroeconomic conditions, falling inflation and expectations of the start of a rate-cutting cycle,” he said.
Ahmad Zulqarnain said that despite the relatively calm market situation, risks remained, as shown by the recent wave of selling in global markets and the sharp increase in volatility as a result of the unwinding of some concentrated and crowded positions by market participants.
“As a long-term investor, EPF will continue its strategy of building a highly diversified portfolio based on its strategic asset allocation,” he added.
For the quarter under review, EPF reported that equity investment income of RM10.75 billion after depreciation continued to be the main contributor to earnings in 2Q2024, accounting for 61% of total distributable income.
EPF said better equity market performance both domestically and in global developed markets led to income growth compared to the RM7.84 billion recorded in the second quarter of 2023.
It said write-downs for the period were marginal at RM690 million, reflecting active portfolio management by fund managers and an overall better performance of the equity markets.
“Fixed income continued to provide a steady income stream, mitigating the impact of short-term market volatility and providing stability to the EPF’s total income. This asset class, which consists of Malaysian government bonds and equivalents, and loans and bonds, contributed 33% or RM5.72 billion to the EPF’s total distributable income in the second quarter of 2024,” it said.
It said the property and infrastructure segment recorded income of RM500 million, while money market instruments generated RM530 million, which is in line with prevailing interest and earnings rates.
As of 30 June 2024, the EPF’s assets stood at RM1.21 trillion, of which 38% were overseas. In the second quarter of 2024, the Fund’s overseas investments generated RM8.64 billion, or 49% of total recorded distributable income.
EPF said it has reserved more than 80% of its annual allocation for new investments in the domestic market and remains committed to Economy Madani Frame.
“Of the total distributable revenue, RM 31.34 billion was generated for Conventional Simpanan (conventional savings) and 5.36 billion RM for Simpanan Sharia (Sharia-compliant savings),” it said.
Ahmad Zulqarnain said the strong domestic economic performance reflects Malaysia’s resilience and growth potential, driven by a healthy labour market, favourable government policies and the global boom in the technology sector.
“Malaysia’s economic outlook remains positive. Bank Negara Malaysia’s forecast of full-year growth of between 4% and 5% with moderate inflation averaging 2% to 3.5% supports a positive investment climate,” he added.
Commenting on the global economic landscape, Ahmad Zulqarnain said that growth is expected to remain stable in 2024. With inflation continuing to decline, more central banks are likely to begin easing monetary policy in the second half of the year.
However, he said the EPF remains vigilant as the outlook continues to be weighed down by risks such as persistent inflation, a sharper-than-expected slowdown in growth, uncertainty surrounding the US election and economic policy, China’s faltering real estate sector and weak economic recovery, and ongoing geopolitical tensions.
In the first half of 2024, 235,032 new members were registered with the EPF, bringing the total number of members to 16 million.
“There are a total of 8.6 million active members, who now account for 50% of Malaysia’s 17.15 million workforce. During this period, 37,284 new employers were registered, with total contributions increasing from RM50.48 billion in H1 2023 to RM57.35 billion in H1 2024,” it said. – Bernama
