EPF Declares 5.45% Dividend For Conventional Savings; 5% For Syariah

The Employees Provident Fund (EPF) has declared a dividend of 5.45% for Conventional Savings and 5% for Syariah Savings for 2019.

Lowest dividend rates since 2008

The dividend rate declared for Conventional Savings is the lowest in 12 years.

This is partly due to the poor performance of the local stock market. Last year, the FTSE Bursa Malaysia KLCI fell more than 6%, making it one of the worst Asian stock markets in 2019. EPF revealed that 70% of its fund’s assets are in Malaysia, with a major portion in domestic equities.

Last year was also a volatile year, thanks to trade wars and global uncertainties.

“There were three rate cuts made by the US Federal Reserve, the US-China trade spat escalated and continues to be unresolved, and there were uncertainties surrounding the Brexit negotiations. On top of this, we did not expect the Hong Kong protests to be prolonged and that certainly added pressure on an already fragile far-east market,” said Chief EPF Officer Alizakri Alias.

In light of this, EPF considers the dividend rates to be a reflection of “solid performance” in terms of operational and financial results.

Diversification key to EPF’s performance

Alizakri added that EPF delivered results that were better than their initial projections, thanks to long-term diversification strategies, which includes investing in overseas assets.

EPF plans to continue these diversification efforts to reduce concentration risks.

Looking forward

Alizakri expects 2020 to be “even more challenging”, with COVID-19 likely to drag down global growth, and a continuing trade war that shows no sign of stopping.

[Source]

Main image reference: The Star