Former prime minister Najib Abdul Razak predicts that state funds like the Amanah Saham (ASB), Employees’ Provident Fund (EPF), Armed Forces Fund (LTAT), and Tabung Haji will be paying far less in dividends this year.
This is due to the loss of investor confidence in Malaysia following the 14th general election, which in turn caused foreign investment inflows in the stock market earlier this year to turn into outflows.
In a Facebook post today, he said the price of the unit trust managed both by private financial institutions and the government had fallen anywhere between five to 25 percent compared to the beginning of the year.
“This is a sign that ASB, EPF, LTAT, and Tabung Haji dividends for this year may be far lower compared to last year.
“Certainly, the EPF dividends for this year will be far lower than the 6.9 percent rate given last year, which is the highest in 20 years.
“The price of fuel and the cost of living has not been reduced, but now share prices and the people’s savings are being reduced instead?”
Najib said there had been a net inflow of foreign capital into Bursa Malaysia for each month from January to April, but the trend reversed from May onwards. In total, RM14.2 billion in foreign investment had been divested since May.
The worst hit, he added, are government-linked companies (GLCs) which have all suffered losses, and this is worrying because many of the largest shareholders of these GLCs are state investment funds.
Najib said Telekom Malaysia alone saw its share prices fall by 63 percent from RM6.17 per share on Jan 2 to RM2.26 per share on Nov 19, while Khazanah has lost RM3.9 billion, EPF RM2.5 billion, and ASB RM1.8 billion compared to pre-election prices.