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KWAP’S FUND SIZE GREW BY RM9.17 BILLION FOR 2Q 2012
Monday 15/10/2012
KUALA LUMPUR, Oct. 15 (Bernama) --
Kumpulan Wang Persaraan (Diperbadankan) [KWAP]’s fund size grew by RM9.17 billion or 12% to RM84.92 billion in the 2nd Quarter 2012 compared to RM75.75 billion in the same quarter last year. Despite the less visible growth prospects and lingering uncertainties in the advanced economies, KWAP continues to strive for better investment returns that consistently meet our stringent investment guidelines.
In a statement released today announcing their 2nd Quarter 2012 unaudited financial results, KWAP’s Chief Executive Officer, Dato’ Azian Mohd Noh said, “The company’s gross investment income increased to RM2.84 billion in 2nd Quarter 2012, which is 21% higher than RM2.34 billion registered over the same period in 2011 which is translated into a gross return on investment of 3.48%. On the other hand, net income registered over the same period was RM3.07 billion after incorporating the writeback of allowances for diminution in value and operating expenditures.”
The increase was mainly attributed to stronger stock market performance during the first half of the year. Higher capital gains were also recorded from the increased trading activity in government securities, on the back of declining yield trend.
“Investments in equity contributed RM1.37 billion or 48% of the total investment income. Fixed income assets, namely Malaysian Government Securities, Loans and Private Debt Securities, and Money Market instruments contributed RM532.17 million, RM553.07 million and RM207.84 million respectively, while the remaining balance was contributed by alternative investment,” said Dato’ Azian.
As at 30 June 2012, 94% of KWAP’s funds are invested domestically whilst the remaining 6% are invested internationally. International investments runs across various asset classes namely fixed income, equity and alternatives which comprise of private equity and real estate.
KWAP’s gross Investment Income as at 30 June 2012 in comparison to 30 June 2011 are as follows:
Asset Class / Q2 2012 - RM million / Q2 2011 - RM million
Equity : 1,370.48 / 1,179.76
Loans & Private Debt Securities : 553.07 / 455.38
Malaysian Government Securities : 532.17 / 398.68
Money Market : 207.84 / 247.99
Alternatives : 180.92 / 63.01
Total : 2,844.48 / 2,344.82
According to Dato’ Azian, government policies across the globe are geared towards resuscitating the growth engines by prescribing extensive liquidity measures. At the same time, Asia’s domestic pillars continue to provide necessary buffer against weaknesses in the external environment. While it is comforting to note such developments, these uncertainties are expected to exert higher volatility in the financial markets.
“Therefore, against such backdrop, KWAP continues to engage in a more defensive and capital-preserving strategy and at the same time leverage on the resilience of the Malaysian economy which continues to benefit from positive domestic demand factors,” she added.
For more information about KWAP, visit their website: www.kwap.gov.my.
BACKGROUND OF KWAP
The Pensions Trust Fund Act 1991 (Act 454) was enacted to assist the Federal Government in funding its pension liability. With the enactment of this Act, the Pensions Trust Fund was established on 1 June 1991 with a launching grant of RM500 million from the Federal Government.
The Pensions Trust Fund was administered by the Pensions Trust Fund Council with the Accountant General of Malaysia being responsible for the day to day administration and management of the affairs of the Pensions Trust Fund.
On 1 March 2007, the Retirement Fund (Incorporated) (“KWAP”) was established under the Retirement Fund Act 2007(Act 662) replacing the repealed Pensions Trust Fund Act 1991 (Act 454). With the incorporation of KWAP, all powers, functions, activities, assets and liabilities of the Pensions Trust Fund were taken over in totality by KWAP.
OBJECTIVES
The objective of KWAP is to manage the fund (“the Fund”) established under Section 13 of Retirement Fund Act 2007 (Act 662) towards achieving optimum returns on its investments. The Fund shall be applied towards assisting the Federal Government in financing its pension liability.
FUNCTIONS
The functions of KWAP are as follows:
· Management of contributions from the Federal Government, Statutory Bodies, Local Authorities and other Agencies; and
· Administration, management and investment of the Fund in equity, fixed income securities, money market instruments and other forms of investments as permitted under the Retirement Fund Act 2007 (Act 662).
The diagram above illustrates Malaysia’s provident / pension fund value chain with
KWAP’s roles in the context of pensionable civil service as follows:
· Managing contributions
The Federal Government contributes 5% of the total annual budgeted emolument of the Federal Government employees while Statutory Bodies, Local Authorities
and Agencies contribute 17.5% of the basic salaries of their pensionable employees respectively to KWAP on a monthly basis.
· Setting investment policy and guidelines
The Investment Panel is responsible to set, approve and review periodically KWAP’s Investment Policy and Guidelines and subsequently recommend to the Board for approval. The Investment Policy and Guidelines is a document which governs KWAP’s investment activities.
· Investment management and monitoring
The Fund is invested in asset classes in accordance with KWAP’s Strategic Asset Allocation and the Investment Policy and Guidelines as recommended by the Investment Panel and approved by the Board. The investment activities of the Fund are carried out by a team of competent and experienced investment professionals.
The status and performance of KWAP’s investments are reported monthly to the Investment Panel and the Board. The performance analysis includes relative performance against benchmark indices as well as absolute target return for each of the asset classes.
SOURCE: Kumpulan Wang Persaraan
FOR MORE INFORMATION, PLEASE CONTACT:
Phone : 03 2174 8084
Fax : 03 2163 2050
Email : corpcomm@kwap.gov.my
--BERNAMA
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