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New Straits Times
4 days ago
- Business
- New Straits Times
EPF posts RM18.31bil investment income in Q1, total assests at RM1.26tril
KUALA LUMPUR: The Employees Provident Fund (EPF) posted a total investment income of RM18.31 billion for the first quarter ended March 31, 2025. This was 13 per cent lower than the RM20.99 billion recorded in the corresponding period in 2024, the country's pension fund said. As of March this year, the EPF's total investment assets stood at RM1.26 trillion, up from RM1.25 trillion as at December 2024, with 38 per cent invested internationally. EPF, in a statement today, said the total investment income included RM1.02 billion mark-to-market gains on securities that have not been realised, due to foreign exchange rate fluctuations. "In line with the EPF's policy, these gains will not be distributable as dividends," it added. During the quarter under review, equities contributed RM10.81 billion, a 23 per cent decline from RM14.02 billion recorded in the first quarter of 2024 (1Q24). The fund attributed the decline to underperformance in global equity markets and a difficult investment environment. "The asset class continued to be the highest contributor, accounting for 59 per cent of total investment income," it said. Fixed income investments remained a key pillar for capital preservation by the EPF, generating RM5.99 billion to account for 33 per cent of the total investment income. "Fixed income, comprising Malaysian government securities and equivalents, loans and bonds, continues to fulfil its dual mandate of delivering stable returns and as a counterbalance to equity market fluctuations. "This underscores its strategic importance in safeguarding members' savings across market cycles," the EPF said. Real estate and infrastructure recorded an income of RM1.08 billion in 1Q25, while money market instruments generated RM0.43 billion. Of the total investment income, RM15.87 billion was generated for Simpanan Konvensional, and RM2.44 billion for Simpanan Syariah. During the quarter, international investments generated RM8 billion or 44 per cent of the total investment income, the fund said. Its domestic investment, which accounts for 62 per cent of its total assets, continues to provide long-term income stability through dividends, interests and profits from sukuk. "The EPF remains committed to supporting Malaysia's economic growth by continuing to invest over 70 per cent 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," it added. EPF chief executive officer Ahmad Zulqarnain Onn noted that global markets became volatile in early 2025 due to renewed trade tensions and policy uncertainty. He said although the US administration officially announced tariffs on April 2, the uncertainty surrounding US trade policies had already started to impact major stock markets throughout the quarter. "Despite the moderation of inflationary pressures in many economies, the pace and timing of monetary policy easing differed across regions, dampening risk appetites. "Our diversified global portfolio cushioned the impact and kept the EPF on course for long-term value creation," he said.
Business Times
5 days ago
- Business
- Business Times
Malaysia's national pension fund EPF Q1 income drops on volatility
[KUALA LUMPUR] Malaysia's state retirement fund reported a 13 per cent year-on-year drop in investment income for the first three months of the year due to volatility in global markets. Investment income for the first quarter dropped to RM18.31 billion (S$5.5 billion) from RM20.99 billion a year ago, the Employees Provident Fund (EPF) said in a statement on Tuesday (Jun 3). Contribution from equities – the biggest asset class – slid 23 per cent from a year ago. 'Whilst the announcement of tariffs was made by the US administration on Apr 2, uncertainties surrounding US trade policies had begun to affect major stock markets throughout the quarter,' EPF chief executive officer Ahmad Zulqarnain Onn said in the statement. Total investment assets stood at RM1.26 trillion as of end-March, with 38 per cent invested internationally, the fund said. EPF is adopting a cautious outlook as concerns over global political instability, fiscal imbalances and regional conflicts continue to dampen market sentiment and undermine investor confidence. The retirement fund paid out its highest dividend rates in seven years for 2024, thanks to strong domestic markets and resilient economic growth. '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,' Ahmad Zulqarnain said. As of March, EPF had 16.3 million members, with 8.88 million of them active contributors – representing 51.7 per cent of Malaysia's 17.31 million labour force. BLOOMBERG
The Star
5 days ago
- Business
- The Star
EPF registers investment income of RM18.31bil in 1Q
KUALA LUMPUR: The Employees Provident Fund (EPF) recorded an investment income of RM18.31bil in the first quarter ended March 31, 2025 (1Q25), a weaker performance from a year ago as equities contribution fell amid softer global equity markets. The pension fund said its quarterly income - which was 13% lower than RM20.99bil in the corresponding period in 2024 - was cushioned by its diversified global portfolio. It added that its portfolio remained on course for long-term value creation. "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,' said CEO Ahmad Zulqarnain Onn. Moving forward, the EPF expects global economic conditions to remain challenging amid persistent geopolitical tensions and the risk of high tariff and non-tariff barriers between major economies, particularly the US and China. "While some central banks have begun to ease monetary policy, concerns over global political instability, fiscal imbalances, and regional conflicts continue to dampen market sentiment and undermine investor confidence." The EPF's total investment assets stood at RM1.26 trillion as at March 2025. Of these, 38% was invested internationally. As for domestic investments, the EPF said they accounted for 62% of total assets, providing long-term income stability through dividends, interests and profits from sukuk. "The EPF remains committed to supporting Malaysia's economic growth by continuing 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," it said. It added that it is focused on building investment opportunities in the healthcare sector via the GEAR-uP initiative, which aims to capture long-term growth, address critical system gaps and support healthier retirement for Malaysians. By asset class, equities - the highest contributor to the EPF's income - fell 23% year-on-year (y-o-y) in 1QFY25 to RM10.81bil due to weaker performance across global equity markets and a challenging investment climate. However, fixed income continued to anchor capital preservation with a RM5.99bil contribution, representing 33% of total investment income. "Fixed income, comprising Malaysian Government Securities and Equivalents, Loans and Bonds, continues to fulfil its dual mandate of delivering stable returns and as a counterbalance to equity market fluctuations. This underscores its strategic importance in safeguarding members' savings across market cycles," said the EPF. The real estate and infrastructure segment recorded an income of RM1.08bil during the quarter under review, while money market instruments generated RM430mil, in line with return expectations. Of the total investment income, RM15.87 bil was generated for Simpanan Konvensional, and RM2.44bil for Simpanan Shariah.
The Star
27-05-2025
- Business
- The Star
Felda's offer to take FGV private seen as fair
TA Researc said Felda's offer price of RM1.30 per share was 26% above its target price of RM1.03 per share for FGV. PETALING JAYA: The Federal Land Development Authority's (Felda) renewed takeover offer of FGV Holdings Bhd 's (FGV) remaining shares that it does not already own at RM1.30 per share has been deemed fair in terms of valuation and the prospects for FGV, analysts say. Research houses such as BIMB Research, Hong Leong Investment Bank Research (HLIB Research), TA Research and MIDF Research have advised FGV shareholders to accept the offer price. The latest takeover offer marks the second attempt by Felda to privatise FGV, following a similar offer made in 2020 that also proposed RM1.30 per share. Felda, together with persons acting in concert (PAC), including the state government of Pahang, now collectively control 86.93% of FGV's issued share capital. BIMB Research said in a report it believes the likelihood of the shareholding crossing the 90% threshold is high. 'While the offer premium is relatively modest, we believe it is sufficient to attract acceptance given FGV's subdued earnings outlook, prevailing plantation sector volatility and lack of foreseeable near-term re-rating catalysts,' said the research house. TA Research, meanwhile, said Felda's offer price of RM1.30 per share was 26% above its target price of RM1.03 per share for FGV. Based on FGV's forecast earnings for this year (FY25), the offer implies an acquisition at 15 times FY25's price-earnings ratio (PER). Notably, the offer is priced at a steep 71.4% discount to FGV's initial public offering price of RM4.55 per share in 2012. Since Felda's initial privatisation attempt in December 2020, FGV's share price has been volatile. It rose to RM1.46 in May 2021 after the first bid failed but steadily declined thereafter to RM1.13 by March 14, 2025, and RM1.01 by April 9, 2025, a 22% drop from the offer price. 'The current attempt would also be the second time investors are presented with an opportunity to realise the value of their investment through a cash offer,' TA Research said. Given the potential price risk post-general offer, TA Research has advised FGV minority shareholders to accept the offer. 'We also advise investors to switch to other undervalued plantation stocks with more compelling stories and potentially higher earnings growth,' said the research house. Similarly, HLIB Research also advised existing shareholders of FGV to accept the latest offer, as 'the offer price is higher than our sum-of-part derived target price of RM1.26'. The research house maintained its 'hold' rating on FGV with a revised target price of RM1.30 from RM1.26 earlier, based on Felda's latest offer. MIDF Research said in a note to clients that Felda's RM1.30 offer price represents a 12% premium over its fair value of RM1.16. Currently, the stock is valued at 16.7 times PER based on forecast for FY25 earnings per share of 7.60 sen, 8.6% below the integrated plantation sector average PER of 18.3 times. According to MIDF Research, the latest development reaffirms Felda's objective to fully privatise FGV and consolidate its ownership and strategic control over the group. Felda has clearly stated that it does not intend to maintain FGV's listing status upon completion of the offer. 'Should Felda and its PAC reach the 90% ownership threshold, Bursa Malaysia will suspend the trading of FGV shares within five market days, after which the delisting process will be initiated in accordance with Bursa's listing requirements,' it said. If successful, the privatisation is also expected to streamline Felda's operational oversight, align FGV's strategic direction with broader national interests and potentially unlock long-term value through improved efficiency and coordination across the group.
The Sun
06-05-2025
- Business
- The Sun
Investment banks positive on MR D.I.Y. outlook after strong 1Q results
KUALA LUMPUR: Investment banks were positive on MR D.I.Y. Group (M) Bhd, given its improved outlook after posting strong results for its first quarter ended March 31, 2025 (1Q 2025). The group's 1Q 2025 net profit rose to RM174.15 million from RM144.88 million in 1Q 2024, while revenue jumped to RM1.26 billion from RM1.14 billion in the previous year. In a note today, Maybank Investment Bank Bhd (Maybank IB) said further margin accretion may materialise in the financial year 2025 estimate (FY2025E) if MR D.I.Y. is in the position to negotiate for better prices with its China suppliers, combined with savings from favourable Chinese Yuan and the Malaysian ringgit. 'Our earnings estimates are unchanged, but we lifted the forward payout ratio assumptions to 75 per cent per annum (from 60 per cent). 'The overall uplift in disposable income, after the minimum wage was increased to RM1,700 per month (+RM200 per month, effective Feb 1, 2025), is also expected to sustain MR D.I.Y sales momentum in FY2025 positively,' it said. Maybank IB added that it upgraded MR D.I.Y. to a 'Buy' call with a target price (TP) of RM1.85 and an unchanged price-to-earnings ratio of 24 times. RHB Investment Bank Bhd (RHB IB) said MR D.I.Y's 1Q 2025 results are deemed within expectations thanks to a robust gross profit margin (GPM) expansion and same-store sales growth recovery (SSSG). It said the rising wages and upsized government assistance packages to the lower-income groups are expected to lift disposable income and discretionary spending. 'This should benefit MR D.I.Y. as the beneficiaries of the above-mentioned measures fall well within its customer group. 'Meanwhile, the GPM upside should serve as another key earnings driver with 70 per cent of its cost of goods sold imported from China, whilst the tariff situation could render MR D.I.Y. more bargaining power,' it said in a separate note. The investment bank opined that MR D.I.Y. is on the right track to expand its total addressable market to appeal to female and Gen Z consumers. 'This will be facilitated by the strategies to broaden its product portfolio by offering beauty and wellness, lifestyle, and fashion products as well as the KKV partnership,' it added. RHB IB maintained its 'Buy' call on the counter with a TP of RM1.87 and a 12 per cent upside. Meanwhile, Hong Leong Investment Bank Bhd (HLIB) said MR D.I.Y. plans to add over 20 KKV stores in FY2025, citing strong performance. In May 2024, MR D.I.Y. invested in a 49 per cent stake in Chinese retail brand KKV's operations in Malaysia. HLIB said KKV stores generate three times higher monthly revenue than standard MR D.I.Y. outlets due to their premium product mix. 'We applaud the positive 0.6 per cent SSSG recorded during the quarter after seven consecutive quarters of negative SSSG. 'We remain optimistic on the group's strategy of store expansion to defend its market share as the leading home improvement retailer,' it said. HLIB maintained its 'Buy' call on MR D.I.Y. with an unchanged TP of RM2.30. 'We remain optimistic about the group's strategy of store expansion to defend its market share as the leading home improvement retailer,' it added. At 11 am, MR D.I.Y's share price rose by nine sen to RM1.76 with 15.23 million unit shares transacted.
