EPF bullish on Malaysia’s recovery, allocates RM1bn to pre-IPO companies

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KUALA LUMPUR (2 Mar): The Employees Provident Fund (EPF) is optimistic about its investment prospects in Malaysia this year due to the low base in 2021, as indicators point to a recovery in economic activities.

This includes the rebound in total monthly ETH membership dues in the fourth quarter of 2021, which exceeded pre-pandemic levels, in addition to encouraging vaccination rates and economic growth trends, the director said. General of the EPF, Datuk Seri Amir Hamzah.

In December 2021, the number of active EPF members increased by 1.3% to 7.7 million, compared to 7.6 million in December 2020, while active monthly contributors increased by 3.6% to peak at 5.8 million, down from 5.6 million.

“You can have points for improvement… Regularity of contributions means for us that companies come back,” said Amir during the briefing on the performance of the EPF for the financial year 2021 (FY21).

He previously alluded to the sideways performance of Bursa Malaysia, which fell 1.31% in the pandemic years of 2020 and 2021, compared to other benchmarks of the period, including the FTSE World Developed ( up 36.24%) and the MSCI Asia Ex-Japan (up). 13.96%).

“Specifically for Malaysia, we are optimistic because we are starting with a low enough base,” Amir said later.

“The generic trends we have to deal with [are] like ESG, companies also need to start addressing it,” he commented, adding that the pension fund could release its ESG framework by the end of this month, from the objective initial end of 2021.

At the end of 2021, ETH’s domestic investment assets fell by around 2.4% to RM639 billion from RM655 billion at the end of 2020.

The latest count represented approximately 63.4% of the group’s total investment assets of RM1.008 billion at the end of 2021, and contributed 44% to overall returns in 2021, compared to 56% for assets at the end of 2021. ‘foreigner.

According to EPF figures, its domestic assets under management by external fund managers stood at 7.67% of total domestic assets, or RM49 billion as of December 2021.

As of December 2020, EPF has outsourced 15.55% of its total investment assets or RM155.18 billion to external fund managers.

Looking for companies in the pre-IPO phase

This year, EPF plans to allocate RM1 billion to invest in companies that are at the initial public offering (IPO) stage.

This will bring more businesses to Bursa Malaysia, while curbing the flight of Malaysian companies that might otherwise seek investors elsewhere by providing them with the capital they need, Amir said.

“We haven’t seen enough stimulus in Bursa [Malaysia]. We have seen investment pitfalls [in the space between] where companies go from VC (venture capital market) to pre-IPO. There is a void in this market [for investors].

“Towards the last stage of the pre-IPO, there is a stage that EPF can play, because we see that we can manage the element of risk and we see quite good returns there,” he said. -he declares.

“We work with specific funds to promote this, and we look at companies that are at [that] scene,” he added.

EPF, the country’s largest institutional fund, owns 15% of Bursa Malaysia’s market value. It also owns 25% of the face value of Malaysian government securities and government investment issues in the market.

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