KUALA LUMPUR: The Employees Provident Fund (EPF) reported a 19.34% year-on-year increase in total investment income to RM14.67bil in the third quarter of the year after netting off write downs.
For the nine months to Sept 30, 2023, the investment income came to RM47.86bil, which was 33% higher than RM36.04bil recorded in the same period in 2022 after netting off listed equity write downs, said the retirement fund.
Some RM4.62bil of the investment income was generated from mark-to-market (MTM) gains of securities that have not been realised, due to the fluctuation of foreign exchange rates, it added.
EPF CEO Datuk Seri Amir Hamzah Azizan said global equities made a negative turn in the third quarter after strong gains in the first half, with expectations the Gaza-Israel war and Russia-Ukraine conflict will contribute to uncertainty and market volatility.
"We anticipate geopolitical risks will continue to amplify the already turbulent economic situation.
"Market sentiments also experienced various changes, influenced by multiple factors, such as the concerns about the health of China’s economy, rising energy prices, and increasing government bond yields, all against the backdrop of the potential for an extended period of high interest rates," he said.
In the third quarter, equity investments accounted for 63% of the total investment income with RM9.17bil generated after netting off write downs, up from RM5.89bil in 3Q22.
Write downs during the current quarter were minimal at RM100,000 compared to RM36mil in the same quarter in 2022.
"Cost write down is an internal policy adopted by the EPF on its listed equity investments as a prudent measure to ensure the portfolios remain healthy," said the EPF.
Fixed income instruments contributed 32% or RM4.76bil to the total investment income during the quarter, while real estate and infrastructure registered an income of RM290mil and money market instruments generated RM450mil.
As at September 2023, the EPF’s investment assets stood at RM1,092.32bil, of which 37.7% was invested in overseas investments.
In 3Q23, the EPF’s overseas investments generated RM6.55bil, or 45%, of the total investment income recorded.
On new member registrations, the fund said there were 365,519 new members, bringing the total number of EPF members to 15.99 million as at Sept 30, 2023.
A total of 8.53 million or 50.4% of Malaysia's labour force are active members, it said.
During the quarter, new employer registrations were recorded at 63,902, bringing the total number of employers registered with the EPF to 603,326.