Thursday February 7, 2013
EPF may declare higher dividend for 2012 soon
By REGINA LEE
PETALING JAYA: Malaysians can expect another ang pow immediately after Chinese New Year when the Employees Provident Fund announces its dividend for 2012.
The fund's general manager for public relations Nik Affendi Jaafar said that the announcement was expected to be made on the third week of February.
He declined to speculate on the payout.
The fund's dividend for 2011 was 6% the highest in a decade.
Asset managers have speculated that this year might be a bumper year for EPF, buoyed by last year's strong equities performance and economic growth.
They, however, warned that the high dividend might not be sustainable in the long-term.
The Kuala Lumpur Composite Index closed last year with an increase of 11.59% since the beginning of the year while the market has been on the steady upswing since the first quarter of 2009.
Fortress Capital Asset Management chief executive officer Thomas Yong said the payout should not be worse than in 2011, especially with the robust market last year.
However, he said that with only about 40% of EPF's assets parked in equity, the dividend payouts would not necessarily correlate with patterns in the stock market.
“If they were able to pay out 6% in 2011, there is no reason for them to do worse,” he said, adding that the fact that the general election could be held within the next few months would also be a factor.
EPF dividend has been traditionally higher in an election year.
In 2008, the dividend for 2007 was 11% higher than previous years while the 2003 dividend saw a 5.3% increase from the previous year.
It was also reported that EPF investment income as of the third quarter of 2012 rose 3.24% to RM7.02bil from RM6.8bil recorded the previous year.
Yong also said it was unlikely that they would be experimental with their policies this year, adding that he predicted a six to 6.5% dividend.
On the other hand, Hong Leong Asset Management CEO and executive director Geoffrey Ng said that EPF had shown the ability and willingness to be more sustainable in their payout.
“The elections could be a factor, but they may face problems in trying to give out a dividend that's higher than 6% in a low interest rate scenario now.
“If they give out 6.5%, that may be pushing it, but it may not be a sustainable payout post 2014,” he said.