Malaysia's pension fund investment income down 21 pct in H1

Kuala Lumpur [Malaysia], October 8:Malaysia's pension fund Employees Provident Fund (EPF) said Friday that its total investment income fell 21 percent to 27 billion ringgit (5.81 billion U.S. dollars) for the first half of this year from 34.06 billion ringgit (7.32 billion U.S. dollars) a year ago.
The fund said in a statement that the lower investment income was due to market reaction to the elevated risk of both slower global growth and high inflation, not experienced by major economies since the 1970s.
Underlying risks include the protracted Ukraine-Russia conflict, which disrupted global supply chains that sent prices soaring, rise in global inflation rates hitting multi-decade highs, and in-step interest rate hikes by numerous central banks, in response partly to U.S. Federal Reserve rate hikes and partly to inflationary pressures, it said.
The fund also said these risks had been flagged at the beginning of the year, but the rate at which they materialized was unprecedented, like the magnitude and speed of U.S. Fed rate hikes.
All these factors had intensified and resulted in most markets posting their worst first half of a year in decades, with U.S. stocks recording their worst in more than 50 years, it added.
Not insulated from global market events, the EPF's total gross investment income for the second quarter was 11.14 billion ringgit (2.4 billion U.S. dollars), down from 14.77 billion ringgit (3.18 billion U.S. dollars) recorded in the same quarter last year.
The EPF remained cautious about key risks that continued to rattle markets and the investor sentiment, such as soaring global inflation rates, geopolitical tensions and tightening of monetary policies.
It noted crude oil prices have witnessed a decline amid the growing threat of an economic recession, while further aggressive interest rate hikes by central banks are also expected to slow economic growth and impact equity and fixed income markets.
"Markets are still very volatile, and while we are deeply concerned by these developments, we maintain our long-term and balanced approach in our investment decisions as there are pockets of opportunities which we can capitalize on during this challenging time," said the fund.
Source: Xinhua