EPF’s 1H 2024 total distributable income up 29 per cent to RM36.70 bil

KUALA LUMPUR: The Employees Provident Fund's (EPF) total distributable income for the six months ended June 30, 2024 (1H 2024) increased by 29 per cent to RM36.70 billion from RM28.40 billion in the previous corresponding period.

In a statement today, the EPF said the distributable income does not include mark-to-market gains of securities that have not been realised.

It said the EPF's total distributable income for the second quarter (2Q 2024) after write-downs rose 25 per cent to RM17.50 billion from RM13.98 billion in the same quarter last year.

EPF chief executive officer Ahmad Zulqarnain Onn said favourable market conditions in Malaysia and internationally contributed to the 29 per cent growth in distributable income in 1H 2024, while assets under management grew to RM1.21 trillion.

"The Malaysian market has benefited from increasing investor interest in growth-oriented policies and fiscal reforms, while the international markets such as the US benefited from continued solid macroeconomic conditions, declining inflation and anticipation of the beginning of an interest rate reduction cycle," he said.

Ahmad Zulqarnain said despite relatively calm market conditions, risks persist, as illustrated in the recent sell-down in global markets and sharp increases in volatility caused by market participants unwinding some concentrated and crowded positions.

"As a long-term investor, the EPF will continue with its strategy of constructing a highly diversified portfolio driven by its strategic asset allocation," he added.

During the quarter under review, the EPF reported that income from equity investments continued to be the main contributor to income for 2Q 2024 at RM10.75 billion after write-downs, accounting for 61 per cent of the total distributable income.

The EPF said better equity market performance, both domestically and in the global developed markets, drove income growth compared to the RM7.84 billion recorded in 2Q 2023.

It said write-downs for the period were marginal at RM690 million due to active portfolio management by the fund managers and overall better equity market performance.

"Fixed income continued to provide a steady stream of income, mitigating the impact from short-term market volatility and providing stability for the EPF's overall income.

"This asset class, comprising Malaysian Government Securities and equivalents, as well as loans and bonds, contributed 33 per cent or RM5.72 billion, to EPF's total distributable income for 2Q 2024," it said.

It said real estate and infrastructure registered an income of RM500 million, while money market instruments generated RM530 million, which is in line with the prevailing interest and profit rates.

As of June 30, 2024, the EPF's investment assets stood at RM1.21 trillion, of which 38 per cent is in overseas investments.

In 2Q 2024, the fund's overseas investments generated RM8.64 billion or 49 per cent of the total distributable income recorded.

EPF said it has allocated more than 80 per cent of its annual allocation for new investments to the domestic market and remains dedicated to supporting and contributing towards achieving the goals outlined in the Ekonomi MADANI framework.

"Of the total distributable income, RM31.34 billion was generated for Simpanan Konvensional and RM5.36 billion for Simpanan Shariah," it said.

Economic outlook remains positive

Ahmad Zulqarnain said the strong performance of the domestic economy reflects Malaysia's resilience and growth potential, which are driven by a healthy labour market, favourable government policies and the global tech upcycle.

"Malaysia's economic outlook remains positive. Bank Negara Malaysia's forecast of full-year growth between four per cent and five per cent, amid moderate inflation averaging between two per cent and 3.5 per cent, is supportive of a positive investment climate," he added.

On the global economic landscape, Ahmad Zulqarnain said growth is projected to remain stable in 2024, with more central banks expected to begin easing monetary policy in the second half of the year as inflation continues to ease.

However, he said EPF remains vigilant as the outlook remains weighed down by risks such as persistent inflation, a sharper-than-expected growth slowdown, uncertainty surrounding the US election and economic policies, China's struggling property sector and weak economic recovery, and ongoing geopolitical tensions.

During 1H 2024, EPF saw 235,032 new member registrations, bringing total membership to 16.0 million.

"A total of 8.6 million are active members, which now represent 50 per cent of Malaysia's 17.15 million labour force.

"New employer registration recorded during the period was 37,284, with the total contributions received increased to RM57.35 billion in 1H 2024 from RM50.48 billion in 1H 2023," it added.

-- BERNAMA

Read the latest news here