On Friday, Employees Provident Fund (EPF) reported total investment income of RM12.32 billion for the second quarter of the year, ending on June 30, 2019. There was drop of RM70 million compared to the earnings of the corresponding quarter last year.

Datuk Mohamad Nasir Ab Latif, EPF deputy chief executive officer (investment), cited the poor performance of the Malaysian stock market as the reason for the quarter’s lower investment income. He said that the earning went down to -1.1 per cent in Q2 2019, compared to Q2 2018. It also affected the EPF’s domestic equity portfolio, which recorded an income of RM1.51 billion.

Mohamad Nasir said in a statement, “The benefit of having a diversified portfolio is that the investment income from overseas assets helped to cushion the decline in income from the domestic equity portfolio.

“For us at the EPF, the short-term volatility gave us a chance to buy good assets to strengthen the portfolio for the long term.”

He gave a heads up that the market condition would remain volatile and unstable for the rest of the year, since the tumbling markets were strongly impacted by international forces. Global uncertainties triggered by Brexit conundrum, the on and off US-China trade talks, and increasing protectionism in nations such as Japan and South Korea, would keep the output low.

Mohamad Nasir said, “We are also keeping a close eye on the possibility of an economic slowdown and the rising risk of recession in major economies, which may have a knock-on effect on global growth.

He added, “Market conditions in Malaysia remain challenging over the short term, but provide good buying opportunities for long-term funds such as ours. Heading into the end of the year, we believe it will be very difficult for us to maintain the first half momentum as we are seeing worrying trends emerging in many global indicators. “Despite this outlook, we remain firmly confident in our ability to deliver above-inflation returns, meeting our objective of preserving and enhancing the value of our members’ savings over the long term.”

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