This article first appeared in The Edge Financial Daily on October 31, 2018

KUALA LUMPUR: The Retirement Fund Inc (KWAP) sees it challenging to achieve a return of over 6% this year that was achieved consistently over the past few years, amid the current local market situation.

However, the pension fund is expected to sustain its five-year average return of 6%, said its chief executive officer Datuk Wan Kamaruzaman Wan Ahmad.

“With the local [equity] market not performing well this year, I think it’s understood that the fund is expected to not perform well this year,” Wan Kamaruzaman told reporters.

“I don’t think that there is a recession or a global market slowdown. I believe that [it’s due to] a correction in the market and ultimately, I think the market will recover,”he added.

Wan Kamaruzaman was speaking to the media on the sidelines of the presentation of the outcome of a research on retirement preparedness and productive ageing among government pre-retirees and retirees in the Klang Valley. It is a collaborative research project done together with the Malaysian Research Institute on Ageing (MyAgeing) of Universiti Putra Malaysia.

“The emerging market is experiencing a little headwinds, but it is still positive growth,” he added.

Hence, he opined that he does not foresee there will be huge downturn in the market, saying that there are chances that the market would see more positive news towards the end of the year.

Wan Kamaruzaman elaborated that many investors prefer to invest towards the year end, which will then lift the market.

“If the upcoming Budget 2019 this Friday were to be a positive, I’m sure that the market will also react positively,” he said. “Although the local market is down about 6% [in just one month], the other market is doing worst.”

Year to date, the FBM KLCI fell about 6.2% to close at 1,685.94 points yesterday, while the FBM100 fell about 9.3% at 11,437.07 points.