KUALA LUMPUR (June 5): The Employees Provident Fund's (EPF) investment income for its first quarter (1Q) ended March 31 this year rose 18.52% — or RM1.21 billion — to RM7.74 billion, compared to the corresponding period last year.
"The fund's performance was primarily driven by gains realised in equities when we capitalised on the positive equity market during the quarter by taking profits early in the year. The results for the quarter reflect the success of our active but disciplined investment approach that allows the fund to react when opportunities present themselves," said EPF CEO Tan Sri Azlan Zainol.
Investment income from equities for 1Q 2012 amounted to RM3.62 billion, a 12.08% increase compared to RM3.23 billion a year earlier.
Loans and bonds were the second largest income contributor, bringing in RM2.49 billion for the quarter compared to RM1.77 billion in the same period in 2011.
One of EPF's major investment transactions during the quarter was its subscription to the global sukuk issued by PLUS Bhd following the privatisation of PLUS Expressways Bhd in December 2011.
At the end of the quarter under review, EPF's total overseas exposure constituted 13.96% of its total investment cost.
In 1Q 2012, an additional US$1.2 billion (RM3.84 billion) of investments were made in global equities and real estate.
"In addition to global equity holdings, we plan to step up our investments in overseas real estate and infrastructure deals as well as Islamic and conventional bonds, taking into consideration the right opportunities, market movements and directions, with an intention to gradually increase our overseas exposure to between 18% and 19% of our total investments by the year-end,” he said in a statement on Tuesday.
However, Azlan assured members that the EPF is very selective and cautious in its global ventures and only invests in countries appropriate for the fund's risk-return profile.
"The move into international assets also does not mean that the EPF is shifting domestic investments out of the country as our domestic assets in terms of absolute amount has and will continue to experience positive average growth of about 4% per annum,” he added.
"Uncertainties surrounding the global economy, especially the ongoing sovereign-debt crisis in Europe, will continue to have a bearing on EPF's investment performance. While we predict a tough year going forward, we will hold firm to our long-term strategic asset allocation approach that provides the resilience necessary in the present challenging market conditions," Azlan said.
The Edge
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