Latest news with #Afzanizam
The Star
2 days ago
- Business
- The Star
EPF hit by global challenges
PETALING JAYA: Subdued global markets due to geopolitics and economic uncertainty led the Employees Provident Fund (EPF) to record a 13% year-on-year decrease in investment income in the first quarter of the (1Q25). The retirement fund made total investment income of RM18.31bil in the period, compared with the RM20.99bil it recorded for the same quarter last year. It's worth noting that the last time EPF recorded a lower investment income was in 1Q22, where RM15.85bil was recorded as opposed to the RM19.29bil recorded in 1Q21. EPF chief executive officer Ahmad Zulqarnain Onn said the decrease in the latest quarter was due to global markets turning volatile early in the year from trade frictions and policy volatility. 'While the announcement of tariffs was made by the US administration on April 2, uncertainty surrounding US trade policies had begun to affect major stock markets throughout the quarter,' he said in a release yesterday. Even as inflationary pressures in many economies began to moderate, the pace and timing of monetary policy easing differed across regions, thus dampening risk appetites. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told StarBiz the decline in global equity markets, especially over US policies on trade, was likely the main contributing factor for a weaker period for the fund. He said the 1Q25 numbers were hardly surprising since equity investments were EPF's main income driver, accounting for 59% of total income for the quarter. 'Nonetheless, we have seen global equities rebound during the month of May and perhaps it may continue in June,' he said. 'This may help the fund performance going forward.' According to Ahmad Zulqarnain, EPF's diversified global portfolio cushioned the impact and kept the institution on course for long-term value creation. Afzanizam agreed, saying well diversified portfolios have ensured EPF investment performance will continue to be mitigated through large exposure in the fixed income markets, constituting 48% of total assets that will act to ensure capital preservation. 'To some degree, it can also play a role as capital appreciation in light of the expected decline in global interest rates and the inverse relationship between bond prices and interest rate where bond prices will rise as interest rates go lower,' he said. So, what can Malaysians expect for the rest of the year? Afzanizam said there is bound to be some improvement in returns for the fund in the second half of this year. EPF's performance will hinge on predominantly US trade policies particularly as the 90-day pause comes to an end in July. 'The situation is extremely fluid, concerns over US government finances along with elevated geopolitical risks will result in cautious sentiment in the global equities market,' he said. Likewise, Rakuten Trade head of equity sales, Vincent Lau believes financial markets will rebound in the second half of this year. He said as tariff tensions are being ironed out, there will be a higher chance that economies globally, including Malaysia's economy, will pick up and recover. 'We can expect the White House to come up with a statement of some sort soon, and by the time that happens, things will get better,' he said. Despite some analysts cutting valuation on the FBM KLCI, Lau said bond yields have come down a little and even bitcoin is at an all-time high. 'This shows that people are still willing to take risks. To add to that, the EPF's portfolio is very diversified. Backed by last year's high dividends, there's a good chance for EPF to make a stronger comeback.' Economist Geoffrey Williams said judging by how the FBM KLCI has somewhat recovered after the 90-day tariff pause, causing it to gain 13% in the middle of May – this however was not sustained. Williams said the reason behind it was profit taking and continued uncertainty. 'So if the tariff issue improves, then there could be a rebound but Malaysian equities remain volatile,' he opined. As for EPF's earnings results, Williams said both domestic and global market volatility impacted results. However, he reckons a domestic focus on investments are holding back returns, thus more options for overseas investment would be better for EPF members. During the period, international investments generated RM8bil or 44% of the total investment income. EPF said its domestic investments, which account for 62% of total assets, have continued to provide long-term income stability through dividends, interest and profits from sukuk. As of March 2025, EPF's total investment assets stood at RM1.26 trillion, with 38% invested internationally. The FBM KLCI is down around 8% this year and has fallen around 14% since highs in 2018 so this is a long-term trend in domestic equities. By contrast the Dow Jones is flat for the year so far having fallen around 16% from its peak in January to lows in April. It has recovered some of its losses, its long-term performance is much better and it is up more than 75% since 2018. Hence, overseas equity markets do offer better returns than local equities. Meanwhile, as the International Monetary Fund has lowered its global growth forecast for this year to 2.8%, Malaysia's real gross domestic product growth forecast for 2025 is expected to be slightly lower than the original forecast of 4.5% to 5.5%. The fund is prepared for this. 'In a more challenging and uncertain market environment, the EPF maintains a dynamic and well-diversified portfolio to help safeguard value and manage downside risks. 'We continue to actively explore investment opportunities across both domestic and international markets to strengthen our portfolio and support long-term, sustainable returns for our members,' Ahmad Zulqarnain concluded. Of the total investment income, RM15.87bil was generated for Simpanan Konvensional and RM2.44bil for Simpanan Syariah. The fund added it is committed to invest over 70% of its annual allocation in the domestic market. This reflects its role as a long-term investor and aligns with the government's Ekonomi Madani framework. 'Through the GEAR-uP initiative, the EPF is focused on building investment opportunities in the healthcare sector,' it added.
New Straits Times
3 days ago
- Business
- New Straits Times
Trump's steel tariff hike raises alarm for Malaysian exporters
KUALA LUMPUR: The United States' plan to double steel tariffs under President Donald Trump could have far-reaching effects on global trade and hit Malaysian steel exporters hard. Economists warn that the steep increase signals a renewed push for protectionism and could erode Malaysia's competitiveness unless exemptions or adjustments are secured. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the move reflects the Trump administration's persistent reliance on import tariffs, despite recent legal setbacks. "This clearly shows that fixation on import tariffs as a policy instrument as a way to fix industry imbalances by the Trump administration has never receded," he told Business Times. Last week, the US Court of International Trade ruled against Trump's earlier tariff move, citing inconsistencies with US trade laws. However, Afzanizam noted that the administration remains unmoved. "It remains to be seen how the domestic capacity would be able to meet the domestic demand for steel and if there is any gap, it would result in disruption to various industries that rely on steel as their input," he said. Trump is also pushing a proposed US$14 billion investment in domestic steel production through a partnership between US Steel and Japan's Nippon Steel, though the deal still awaits review. On May 30, Trump announced that tariffs on steel and aluminium imports will be doubled from 25 per cent to 50 per cent, effective this Wednesday. He said the move is meant to protect local steelmakers, ensure supply security and reduce dependence on Chinese imports. Malaysia's steel exports to the US are limited, but local players such as Ann Joo Resources Bhd and Hiap Teck Venture Bhd have warned that diverted steel could flood Southeast Asia, worsening oversupply. Prices of domestic billet and steel bar prices had already dropped to four-year lows at end-2024, with dumping risks rising, especially from China and Vietnam. Industry players fear the latest hike could deepen existing market imbalances, leaving Malaysia more exposed to price pressures and trade volatility. Looking ahead, Afzanizam said Malaysia could still work toward securing a more favourable universal tariff rate, possibly around 10 per cent. He also urged a broader review of Malaysia's growth plans to prepare for global trade instability. "In the best case perhaps Malaysia could get the universal tariff rate of 10 per cent. In a nutshell, it is best to put a higher tariff rate as a basis to recalibrate growth strategy going forward," he added. Clock ticking on 90-day window Meanwhile, the new tariff hike comes as several countries face mounting pressure under Trump's "reciprocal tariff" framework. In April, the US offered a 90-day pause to negotiate new country-specific rates based on trade imbalances. The window is expected to close early next month. With a RM136.88 billion trade surplus with the US last year, Malaysia is likely to come under review. Economist Dr Geoffrey Williams said the tariff hike shows Washington's growing impatience, especially with the European Union's reluctance to engage. "The EU in particular has been stalling, and they represent significant steel exports to the US. Unfortunately, this belligerent stance in Europe has implications for everyone else, especially in Malaysia," he said. As the 90-day pause nears its end, Williams warned that Malaysia may still be affected, even if its own talks with Washington are progressing. "We are almost halfway through the 90 day pause period and unless negotiations speed up the deadline will be missed. So the signal is to get serious or pay the consequences," he stressed.
Malaysian Reserve
28-05-2025
- Business
- Malaysian Reserve
Ringgit rebounds against US dollar on improved risk appetite
KUALA LUMPUR — The ringgit rebounded to close higher against the US dollar today, supported by improved risk appetite for the local note despite prevailing global uncertainties. At 6pm, the local note rose to 4.2215/2275 versus the US dollar from Tuesday's close of 4.2345/2430. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the greenback is looking weaker at the moment despite stronger United States (US) economic data and the recent tariff-related trade policy shifts. 'Concurrently, foreign investor confidence in Malaysia has been gradually improving, underpinned by a pragmatic fiscal consolidation strategy that supports a cautiously optimistic outlook. 'The government remains prudent in advancing fiscal reforms, targeting a reduction in the budget deficit to approximately three per cent of gross domestic product (GDP) and maintaining the statutory debt limit at 65 per cent of GDP over the medium term,' he told Bernama. Afzanizam noted that US economic data looked favourable last night with the US Conference Board Consumer Confidence Index climbing to 98.0 points in May from 85.7 points in April. 'The postponement of the US tariff on the EU to July 9 also implies that the US President Donald Trump's administration is receptive and willing to negotiate for better terms,' he added. At the close, the ringgit traded higher against a basket of major currencies. It rose against the Japanese yen to 2.9271/9315 from Tuesday's close of 2.9425/9486, gained vis-à-vis the euro to 4.7838/7906 from 4.8053/8150 yesterday and appreciated against the British pound to 5.7028/7109 from 5.7352/7467 previously. The local note also traded higher against its ASEAN peers. It strengthened against the Singapore dollar to 3.2776/2825 from 3.2894/2963 on Tuesday and inched up against the Thai baht to 2.9355/9614 from 12.9365/9676 yesterday. The ringgit edged higher vis-à-vis the Philippine peso to 7.60/7.62 from 7.62/7.64 at yesterday's close and rose versus the Indonesian rupiah to 259.0/259.5 from 259.9/260.6 previously. — BERNAMA
The Star
28-05-2025
- Business
- The Star
Ringgit rebounds against US dollar on improved risk appetite
KUALA LUMPUR: The ringgit rebounded to close higher against the US dollar today, supported by improved risk appetite for the local note despite prevailing global uncertainties. At 6 pm, the local note rose to 4.2215/2275 versus the US dollar from Tuesday's close of 4.2345/2430. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the greenback is looking weaker at the moment despite stronger United States (US) economic data and the recent tariff-related trade policy shifts. "Concurrently, foreign investor confidence in Malaysia has been gradually improving, underpinned by a pragmatic fiscal consolidation strategy that supports a cautiously optimistic outlook. "The government remains prudent in advancing fiscal reforms, targeting a reduction in the budget deficit to approximately three per cent of gross domestic product (GDP) and maintaining the statutory debt limit at 65 per cent of GDP over the medium term,' he told Bernama. Afzanizam noted that US economic data looked favourable last night with the US Conference Board Consumer Confidence Index climbing to 98.0 points in May from 85.7 points in April. "The postponement of the US tariff on the EU to July 9 also implies that the US President Donald Trump's administration is receptive and willing to negotiate for better terms,' he added. At the close, the ringgit traded higher against a basket of major currencies. It rose against the Japanese yen to 2.9271/9315 from Tuesday's close of 2.9425/9486, gained vis-à-vis the euro to 4.7838/7906 from 4.8053/8150 yesterday and appreciated against the British pound to 5.7028/7109 from 5.7352/7467 previously. The local note also traded higher against its ASEAN peers. It strengthened against the Singapore dollar to 3.2776/2825 from 3.2894/2963 on Tuesday and inched up against the Thai baht to 2.9355/9614 from 12.9365/9676 yesterday. The ringgit edged higher vis-à-vis the Philippine peso to 7.60/7.62 from 7.62/7.64 at yesterday's close and rose versus the Indonesian rupiah to 259.0/259.5 from 259.9/260.6 previously. - Bernama
New Straits Times
28-05-2025
- Business
- New Straits Times
Ringgit rebounds against US dollar on improved risk appetite
KUALA LUMPUR: The ringgit rebounded to close higher against the US dollar today, supported by improved risk appetite for the local note despite prevailing global uncertainties. At 6 pm, the local note rose to 4.2215/2275 versus the US dollar from Tuesday's close of 4.2345/2430. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the greenback is looking weaker at the moment despite stronger United States (US) economic data and the recent tariff-related trade policy shifts. "Concurrently, foreign investor confidence in Malaysia has been gradually improving, underpinned by a pragmatic fiscal consolidation strategy that supports a cautiously optimistic outlook. "The government remains prudent in advancing fiscal reforms, targeting a reduction in the budget deficit to approximately three per cent of gross domestic product (GDP) and maintaining the statutory debt limit at 65 per cent of GDP over the medium term," he told Bernama. Afzanizam noted that US economic data looked favourable last night with the US Conference Board Consumer Confidence Index climbing to 98.0 points in May from 85.7 points in April. "The postponement of the US tariff on the EU to July 9 also implies that the US President Donald Trump's administration is receptive and willing to negotiate for better terms," he added. At the close, the ringgit traded higher against a basket of major currencies. It rose against the Japanese yen to 2.9271/9315 from Tuesday's close of 2.9425/9486, gained vis-à-vis the euro to 4.7838/7906 from 4.8053/8150 yesterday and appreciated against the British pound to 5.7028/7109 from 5.7352/7467 previously. The local note also traded higher against its ASEAN peers. It strengthened against the Singapore dollar to 3.2776/2825 from 3.2894/2963 on Tuesday and inched up against the Thai baht to 2.9355/9614 from 12.9365/9676 yesterday. The ringgit edged higher vis-à-vis the Philippine peso to 7.60/7.62 from 7.62/7.64 at yesterday's close and rose versus the Indonesian rupiah to 259.0/259.5 from 259.9/260.6 previously.
