EPF rejigs portfolio ahead of i-Sinar disbursal

The bulk of its disposal is attributed to CapitaLand Malaysia Mall Trust with over 237.3m shares sold


THE Employees Provident Fund (EPF) disposed of over 667.3 million shares in the last three months, nearly triple the amount of shares it unloaded in the preceding quarter as it prepares to disburse up to RM45 billion in cash to depositors next year.

The bulk of the disposal was attributed to CapitaLand Malaysia Mall Trust with over 237.3 million shares sold in the current quarter, which left the EPF with a 1.3% direct interest in the trust comprising 26.88 million shares.

Other counters that saw heavy selling during the three-month period were Inari Amertron Bhd, with the disposal of 70.3 million shares, Axiata Group Bhd with 50.9 million shares disposed and Top Glove Corp Bhd with 38.2 million shares unloaded.

The disposals have left the EPF with an 8.08% stake in Inari Amertron, 17.22% stake in Axiata and 5.13% stake in Top Glove, the world’s largest glovemaker.

To compare, the EPF disposed of 242.75 million shares in the third quarter (3Q) and 1.82 billion shares in 2Q, data compiled by Bloomberg showed based on company filings to Bursa Malaysia.

The fund added 572.45 million shares over the October-December period, with the largest position change seen in Hartalega Holdings Bhd with 128.8 million shares added, bringing its shares to 199.77 million shares or a 5.85% stake.

Heavy buying in stocks was also seen across 48 other counters during the quarter, including in

MISC Bhd with 77.1 million shares added, KLCCP Stapled Group with 58 million shares added and Sunway Real Estate Investment Trust with 56.4 million shares added.

This is against 997.4 million shares the EPF added in 3Q and 1.56 billion shares in 2Q.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said while it is difficult to determine if the heavier selling recently was motivated by the expected increase in withdrawals from its latest i-Sinar facility, the EPF would certainly respond accordingly based on their internal parameters.

“This is because they have diverse asset classes which command different levels of liquidity. Apart from that, they would have to adhere to their strategic asset allocation (SAA) in order to achieve optimum level investment returns,” he told The Malaysian Reserve recently.

Earlier last month, EPF CEO Tunku Alizakri Raja Muhammad Alias said the fund will be forced to liquidate its assets and rebalance its portfolio to make billions of ringgit in funds available to depositors in need of cash.

The EPF estimated that both its i-Lestari and i-Sinar emergency schemes will see roughly RM45 billion in withdrawals by the end of next year.

Additional reductions in contribution rate will also see the EPF lose a further RM9 billion in 2021, in addition to the RM8 billion lost earlier this year, bringing the total cashflow implication on the retirement fund to RM60 billion.

Bloomberg data also showed some movement in EPF’s equity investments abroad over the same three-month period, with heavy buying seen in UK stocks.

The EPF, which has RM960 billion in assets under management, added 278.6 million shares in Lloyds Banking Group plc, 21.6 million shares in Vodafone Group plc and 19.5 million shares in BT Group plc.

The fund increased its shares in Singapore-listed Riverstone Holdings Ltd by 27.8 million shares and AEM Holdings Ltd by 13.9 million shares over the same period. Its shareholding also grew in companies listed in Indonesia, Chile and the Netherlands.


Read our previous report here

i-Sinar online application opens today