Friday 29 Mar 2024
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KUALA LUMPUR (Sept 9): The Employees Provident Fund (EPF) posted a 26.04% drop in second quarter investment income at RM8.44 billion, from RM11.4 billion a year earlier, mainly on RM3.58 billion worth of non-cash impairments on its listed-equity investments.

In a statement today, EPF's chief executive officer Datuk Shahril Ridza Ridzuan said its investment income drop in the second quarter ended June 30, 2016 (2QFY16), reflected a challenging global and domestic environment.

"Since late last year, the EPF has been preparing itself for a challenging global and domestic environment. The uncertainty was made worse by developments such as Brexit and continued low commodity prices.  

"We have seen and expect a further slowdown in global economies and increased volatility in equities. Markets saw lower valuations in share prices, particularly in the financial and oil and gas sectors, compared to the same quarter last year," Shahril Ridza said.

He said the RM3.58 billion worth of non-cash impairments reflected lower equity prices from a year earlier.

According to him, the EPF registered mark-to-market losses in its income statement.

"On a gross basis, the quarterly investment income in Q2, 2016 was RM12.07 billion, which was RM233.95 million higher, compared with RM11.83 billion recorded in Q2 2015. However, as a prudent fund, we continue to recognise mark-to-market losses on our income statement, while leaving gains on our balance sheet.

"This will ensure that our balance sheet remains healthy and allows us to take advantage of any market recovery. Impairments to present market values will allow us the opportunity to realise gains in the future," Shahril said.

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