KUALA LUMPUR: The Employees Provident Fund’s (EPF) investment income dropped 10.47% to RM3.26bil for the first quarter ended March 31 from RM3.64bil recorded in the fourth quarter of 2008.
The decline was due to lower investment returns from both fixed-income instruments and equities, EPF said in a statement yesterday.
The highest income contributor in the first quarter was loans and bonds, which contributed RM1.78bil, a drop of 2.15% against RM1.82bil in the fourth quarter of last year.
As at March 31, 36.81% of loans and bonds investments was in companies with AAA credit ratings and 49.97% in companies with AA ratings.
Malaysian Government Securities (MGS) was the second-highest income earner, returning RM1.11bil, a drop of 13.23% from RM1.28bil earned in the preceding quarter.
“Despite the drop in earnings from loans and bonds and MGS, we will continue to invest in these investments,” chief executive officer Tan Sri Azlan Zainol said in the statement.
“This is because they provide capital preservation and stable returns, which is in accordance with our investment mandate that favours low-risk instruments.”
During the quarter, equities contributed RM223.83mil after investment provisioning resulting from the decline in equity prices, compared with RM342.54mil in the previous quarter.
The EPF continued to invest in blue-chip stocks with a strong focus on two sectors. Of the funds invested in the equities market, 37.43% was in trade and services sector while 33.93% was in the financial sector.
“The market is expected to remain challenging in the near term following the impact of the global recession on the domestic economy.
“However, improving outlook on the external front, strong domestic fiscal impulse and the existence of ample liquidity are expected to help bolster market performance in the second half of 2009,” said Azlan.
The EPF’s total fund currently stands at RM348.16bil, up 1.93% from RM341.56bil in the last quarter of 2008. — Bernama
No Comments » 
----------------------------------------------------
