Datuk Seri Amir Hamzah Azizan.
PETALING JAYA: Economists and analysts are largely bullish about the cabinet reshuffle carried out by Prime Minister Datuk Seri Anwar Ibrahim, in particular to the ministries tasked with steering the country’s economy and capital markets.
Anwar announced a number of major changes to his cabinet yesterday, and perhaps the most eye-catching one of all is the appointment of former chief executive officer (CEO) of the Employees’ Provident Fund (EPF) Datuk Seri Amir Hamzah Azizan as the second Finance Minister.
With that, the question that naturally arises is who would take over Amir Hamzah’s all-important job of heading the federal statutory body that manages the compulsory savings plan and retirement planning for private sector workers.
Other noteworthy switches made by the Prime Minister is the appointment of Steven Sim to the post of Human Resources Minister, Lim Hui Ying as Deputy Finance Minister, and the move of Datuk Seri Fadillah Yusof to the newly-created energy transition and public utilities ministry while remaining as the co-deputy Prime Minister.
In a congratulatory note to Amir Hamzah yesterday, the EPF said the CEO has played a pivotal role in the growth and success of the entity throughout his tenure, demonstrating an unwavering commitment to excellence and innovation.
“Among his key achievements include steering the EPF through various economic cycles and challenges, consistently achieving positive growth in investment income.
“His strategic direction and adept decision making have been crucial in maintaining the EPF’s investment and operational resilience, ensuring that it stands as a steadfast pillar of retirement security for EPF members,” it said.
With Amir Hamzah leaving for the Cabinet, the now-vacant EPF CEO position has led chief investment officer for Tradeview Capital Nixon Wong to remark that a successful candidate for the role of EPF CEO should demonstrate a robust background in finance and investment management.
These traits, he said, are in addition to possessing crucial leadership and communication skills, which are imperative for leading the nation’s pension fund.
“Essential attributes include a deep understanding of financial markets, adeptness in investment strategies, proficiency in risk management, and expertise in portfolio optimisation.
“Furthermore, the ideal CEO should exhibit innovation and adaptability, staying attuned to emerging changes, including advancements in technologies for both administrative and non-administrative purposes,” he pointed out.
For perspective, as of December 2022, the EPF holds approximately RM1 trillion in assets under management, and its latest results for the quarter ended Sept 30 this year saw investment income grow by a third year-on-year to RM47.9bil.
Wong said a competent CEO for the EPF should also be capable of developing and implementing long-term strategies aligned with the fund’s objectives, ensuring sustained financial viability over time.
Prioritising the best interests of pension fund members is paramount, which necessitates a commitment to investment strategies that secure retirement benefits, coupled with a comprehensive understanding of relevant regulations and compliance requirements which is essential to ensure the fund operates within legal and ethical boundaries, he told StarBiz.
He said: “It is noteworthy to emphasise that the EPF plays a pivotal role as the anchor and cornerstone of the local capital market, so the ideal candidate should possess a thorough understanding of governmental operations, ensuring effective capital deployment from the pension fund into the capital market to foster national economic growth.”
At the same time, chief economist at Bank Islam Malaysia Bhd Firdaos Rosli agrees with Wong that the next person to head the EPF would need to be someone with vast exposure of the financial, banking and capital markets, while also being familiar with employment and social protection matters.
“At present, it is difficult to pinpoint such a candidate, as the ones we have in mind are probably more well versed with one part of the equation over the other,” he commented.
Having said that, he said that while it is still unclear whether the next CEO of the EPF would be an internal promotion or sourced externally, the retirement fund management body possesses a sound internal structure.
Firdaos believes previous CEO’s have done well in making sure the EPF is managed as smoothly as possible, and that with its solid foundation the next appointment should not raise any issues.
Separately, touching on the effect of the reshuffle itself on the Malaysian economy and capital markets, the economist is of the view that expectations would be even higher among the public for policies to be implemented effectively.
“With Anwar willing to have a reshuffle a year into his administration, it could show that if things do not work well from here, he may be open to ring in similar changes in the future,” he said.
Interestingly, Firdaos mentioned that with previous finance ministers having focused more on government expenditure, attention should now be paid to how the government can increase its revenue, in light of Malaysia having one of the lowest tax-to-gross domestic product (GDP) ratios in South-East Asia.
Meanwhile, economist at the Malaysia University of Science and Technology Prof Geoffrey Williams applauded the appointment of Amir Hamzah to the post of Second Finance Minister, noting that the latter had displayed impressive leadership at the EPF especially during the challenging withdrawals period. Calling Amir Hamzah’s appointment a professional one, he said: “Improvement in the investment environment and the management of government funds is also essential and well within Amir’s expertise. It will be hugely positive for investor confidence because he is a well respected leader in the investment community as head of the largest institutional investor in the country.”
Commenting that the cascade of patronage has been slowed by Anwar’s focus on cutting wastage, leakages and corruption, Williams expects Amir Hamzah to continue on the same path as it is essential for good fiscal governance and investor confidence.
“He is non-political and will be focusing on the details of policy, fiscal management and good governance. This is exactly what we need now,” he added.
Tradeview’s Wong, while acknowledging that the reshuffle could have occurred sooner, nevertheless views it as a positive step in fostering a more collaborative environment in parliament, which should facilitate the advancement of all initiatives in a more promising manner.
“There is a possibility of witnessing increased emphasis on digital initiatives following the restructuring, given that the Communication and Digital Ministries are now divided into two standalone branches,” he said.
Wong said the move indicates a heightened focus on the nation’s objective to become a high-income economy with a strong emphasis on digitalisation, reaffirming the commitment to the MyDigital Economy Blueprint, bringing a positive impact on the economy and the investment climate.
Market sentiment, however, seem to be unmoved if indications on the FBM KLCI are anything to go by. The index closed at 1,447.12 yesterday, inching up by a mere 0.73 points or 0.05%, with 3.28 billion shares traded.
