KWAP chief executive officer Datuk Nik Amlizan Mohamed.
KUALA LUMPUR: The Retirement Fund Inc (KWAP) is positive of a continued upward bias that would support investor sentiment on Bursa Malaysia.
The asset manager, which helps pay part of the government’s pension liabilities, is a government agency and an active investor in the local bourse.
Some 47.9% of its total assets are invested in public equity markets, while 75.6% of its total portfolio resided in domestic assets as of end-2023. “There is no crystal ball for market movements but if you look at the consensus in Malaysia, analysts are putting the FBM KLCI target at 1,700 and it is at about 1,623 points now.
“I am quite positive as so far the signals (indicators) are good. The valuations are still okay, some sectors are still cheap in Malaysia,” chief investment officer Hazman Hilmi Sallahuddin said on the sidelines of KWAP’s financial year 2023 (FY23) results announcement.
“There are some downside risks. Geopolitics is a risk, like in the United States – who will win the presidential elections and how that will affect policies eventually.
“While this is present, we are long-term investors and always focus on fundamentals. We have simulations if Donald Trump or Kamala Harris wins, what kind of policy outcomes we can anticipate will come after,” Hazman Hilmi added.
He said these models will simulate the potential gaining or losing sectors in the case of wins by either presidential candidate in the United States.
“Once the outcome is known, we can then act based on the (data) from this simulation,” he said.
Earlier at the press briefing Hazman Hilmi said this was the first time its local market portfolio holdings had beaten foreign ones.
“Our view on the ringgit is that the currency would strengthen eventually and this is still subject to how the rate cuts in the United States pan out,” he said.
For FY23 ended Dec 31, KWAP said its fund size grew from RM158.1bil in 2022 to RM169.8bil last year, which marked a 7.4% growth.
This takes into account withdrawals totalling some RM3bil of KWAP funds that are used to partially finance the government’s pension liabilities.
It received funds amounting to some RM2.7bil last year, which were from three main sources – the federal government contributions, government shares and employer contributions (which include contributions from statutory bodies, local authorities and secondment agencies), it said.
The fund also saw its net income jump to RM9.7bil, a significant near 37 times year-on-year increase from RM263mil in 2022.
KWAP delivered a total fund investment return of 8.2% last year, it said.
“Our performance in 2023 builds on our strong track record in meeting both our financial and social objectives. We are also structuring our investment effort and initiatives around the Madani framework, and this approach allows us to deliver positive returns for our beneficiaries while contributing to Malaysia’s sustainable development,” KWAP’s chief executive officer Datuk Nik Amlizan Mohamed said.
