EPF records total investment income of RM33.19 bln in 1H 2023

KUALA LUMPUR: The Employees Provident Fund (EPF) recorded a total investment income of RM33.19 billion for the first half year ended June 30, 2023 (1H 2023), an increase of RM9.44 billion, compared with RM23.75 billion posted in the corresponding period in 2022.

The amount was after netting off listed equity write-downs recorded for the period under review, said the EPF in a statement today.

Out of the RM33.19 billion total investment income, EPF generated RM4.79 billion from mark-to-market (MTM) gains of securities that have not been realised. The MTM gains were mainly due to the fluctuation of foreign exchange rates.

EPF chief executive officer Datuk Seri Amir Hamzah Azizan said the performance of the global equity markets in H1 2023 had been positive, led by a run-up in the developed markets, notably in the US which continued to show resilience despite the rise in interest rates.

"The EPF's agility and adaptability in its investment strategy paved the way for the investment managers to take advantage and capitalise on the market rally, which contributed to the higher return from equities during the period.

"This is in contrast to the equity market performance seen in the first half of 2022, which saw several indices suffering significant declines, with most markets including the US posting their worst first-half performance in decades," he added.

Amir Hamzah noted that for Malaysia, the 5.6 per cent gross domestic product growth in the first quarter of 2023 had surpassed expectations, driven mainly by firm domestic demand and improvement in the labour market.

"Resilient growth tempered tighter financial conditions, providing a floor for the domestic capital markets," he added.

The EPF's total investment income for the second quarter of 2023 (2Q 2023) stood at RM18.03 billion, up RM9.05 billion from RM8.98 billion recorded in the same quarter last year.

Equity investments continued to be the main contributor of income for Q2 2023 at RM9.60 billion while asset class generated RM4.07 billion in income during the corresponding quarter in 2022.

A significant portion of the improvement was due to the proactive and timely realisation of profit, supported by the MTM gains of securities. After taking into account write-downs, these numbers accounted for 53 per cent of the total investment income for the quarter, it said.

EPF's domestic investments, which accounted for 61.4 per cent of its total assets, have grown by RM57 billion compared to one year ago.

The EPF said it remained dedicated to supporting and contributing towards strengthening the domestic market by allocating more than 80 per cent of its new annual investments to domestic investment.

During 2Q 2023, a total of RM16.27 billion out of the RM18.03 billion investment income was generated for Simpanan Konvensional and RM1.76 billion for Simpanan Shariah.

Meanwhile, the EPF continues to grow its membership to 15.90 million as of 1H 2023, and out of that amount, it reached an all-time high of 8.47 million active members, which represent 50.2 per cent of Malaysia's 16.86 million labour force.

The increase of active members was 467,087, from 8.0 million in 1H 2022 to 8.47 million in 1H 2023.

New employer registrations also showed strong growth of 43,084 during the period, bringing the total number of employers registered with the EPF to 598,871.

EPF said the increase of active members and employers translated into strong growth of contribution which amounted to RM50.48 billion in 1H 2023, up 16.8 per cent from RM43.23 billion in 1H 2022.

Malaysia's steady recovery in labour market conditions and EPF's ongoing efforts to encourage members to contribute voluntarily had helped it to record a better active-to-inactive member ratio, which showed gradual improvement from 52:48 per cent in 2Q 2022 to 53:47 per cent in 2Q 2023.

In 1H 2023, EPF recorded a 36 per cent growth in the number of voluntary contributors to 535,307 from 393,966 in 1H 2022.

Total contributions accumulated was RM3.93 billion in 1H 2023, an increase of 46 per cent from RM2.70 billion accumulated in the corresponding period last year.

Meanwhile, the number of formal sector members who opted to contribute more than the statutory rate was 31,128 in 1H 2023, compared to 9,765 in 1H 2022.

-- BERNAMA