Expert disputes claim 80 percent of EPF funds in govt securities
An expert has cast doubt on a statement by an Employees Provident Fund board member that 80 percent of the funds investment is in Malaysian government securities.
Definitely not. There wouldnt be enough Malaysian government securities to go around, said Gan Kim Khoon, head of research at Arab-Malaysian Securities today.
He was responding to a statement by Cuepacs president N Siva Subramaniam in The Star on Jan 30 where the latter had attempted to justify the proposed five percent dividend payout by the EPF Board for 2001, one percent lower than that for 2000.
Siva, who is an EPF board member, had said in the news report that EPF could only invest about 20 percent in the equity market while the rest must be in government securities.
Gan told malaysiakini that EPFs proposed dividend for 2001, one of the lowest ever announced, could probably be attributed to the weak stock market, amongst other factors.
The fact that the stock market didnt fair too well in the last financial year is the most obvious reason, as 20 to 25 percent of EPFs investments are in the local stock market.
Another major explanation would be the very low interest rates affecting local returns for fixed deposits in the banks, he said.
Recent media reports have revealed that the EPF is expected to announce a 5.0 to 5.2 percent dividend for 2001.
A comparison of dividends issued by the various major funds in the country EPF, Tabung Haji, Lembaga Tabung Angkatan Tentera (LTAT), Amanah Saham Nasional (ASN), Amanah Saham Bumiputera (ASB), Amanah Saham Wawasan (ASW) and Amanah Saham Malaysia (ASM) shows LTAT as the most consistent trust fund in its dividend yield, while Tabung Hajis 3.25 percent for 2001 puts it below the standard fixed deposit rate.
| Year | Dividends in percentage | ||||||
|---|---|---|---|---|---|---|---|
| EPF | Tabung Haji | LTAT* | ASN | ASB (bonus) | ASW | ASM | |
| 1994 | 8 | 9.5 | 13 | 14 | 9.5 (4.5) | - | - |
| 1995 | 7.5 | 9.5 | 13 | 13 | 10 (3) | - | - |
| 1996 | 7.7 | 9.5 | 13.25 | 13.75 | 10.25 (3) | - | - |
| 1997 | 6.7 | 9.5 | 11.5 | 10.5 | 10.25 (1.25) | 10.1 | - |
| 1998 | 6.7 | 8 | 10.5 | 6.5 | 8 (2.5) | 9.8 | - |
| 1999 | 6.84 | 8 | 12 | 8.25 | 10.5 (1.5) | 10.2 | - |
| 2000 | 6 | 5.5 | 10 | 8 | 9.75 (2) | 8.8 | - |
| 2001 | 5 (indefinite) | 3.25 | 10 | 5 | 7 (3) | 7.25 | 7.8 |
* including bonuses
Unfair comparison
However, this comparison of EPF to other different trust funds may not necessarily be justified, another local research company expert said.
The divergence of figures between the different funds now may merely reflect the fact that other trust funds had been issuing much higher dividends previously anyway, said Terence Wong, head of research at GK Goh Research.
The New Straits Times reported today that MTUC secretary-general G Rajasekaran had made a comparison between LTAT and EPF and their respective dividend issues.
Rajasekaran had reportedly asked why LTAT was still able to declare a much better dividend and bonus when compared with EPF.
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