KUALA LUMPUR (Feb 20): Malaysia's Employees Provident Fund (EPF) said the FBM KLCI at above 1,700 points augured well for the EPF as the funds' net asset impairment will drop as share prices rise.

EPF chief executive officer Datuk Shahril Ridza Ridzuan said of the RM8.17 billion impairment registered by the fund in 2016, RM8.05 billion was from listed equities.

"However this year, we are seeing signs of increased activity and interest in Bursa Malaysia; looking at the fact that the KLCI is now at 1,700 (levels), so if the (index) improves or holds steady, we may see impairments go down as we have already booked in most of the impairments.

"So if impairments go down and gross investment income remains stable, we will be okay for this year; whether it is a 6% dividend, it will depend on the performance (of Bursa Malaysia). The EPF pays out essentially all the realised income it creates, so there's no issue of keeping anything in the reserves and things like that because the payout is almost 100%," Shahril said.

He was speaking at a media briefing today on the EPF's 2016 investment performance and dividend.

Shahril said the impairment was one of the main reasons the EPF declared a lower dividend at 5.7% in 2016 compared to 6.4% in 2015.

According to him, the EPF's RM8.17 billion impairment is the highest for the fund to date. In 2015, the EPF's impairment stood at RM3.07 billion.