KUALA LUMPUR: The Employees Provident Fund (EPF) and Amanah Saham Bumiputera (ASB) are likely to declare commendable dividends for this year as the equity market illustrated better performance in 2024.
Experts also said that the unchanged interest rate at 3.0 per cent throughout the year enabled a stable return on investment.
Bank Muamalat Malaysia Bhd Chief Economist Mohd Afzanizam Abdul Rashid said that the EPF's dividend should be notable this year, mainly due to the growth of its gross investment income.
"The EPF gross investment income has grown 20 per cent compared to the same period last year. This is such a strong base for EPF to record stellar performance, which then would translate into a respectable dividend rate for 2024," he told Business Times.
As for the ASB, Universiti Kuala Lumpur Business School economic analyst, Associate Professor Aimi Zulhazmi Abdul Rashid said its dividend yield for 2024 is expected to maintain a positive momentum from 2023.
"ASB's performance as a mutual fund managed by PNB is closely related to the performance of the local equity market, as the majority of its fund investment is channelled to it.
"Based on the achievements of Bursa Malaysia and foreign exchanges illustrating better performance in 2024 than before, the ASB fund is in a very positive position.
"This is also supported by the OPR at 3 per cent throughout 2024 by BNM through its monetary policy, providing a major impetus in obtaining a stable return on investment as well," he added.
However, they opined that the positive sentiment may change next year due to external factors that could affect some industries in the equity market as well as the performance of the ringgit.
Mohd Afzanizam said the valuation of technology stocks has stretched to date, and it is uncertain whether the share prices of global players would be able to maintain their record high performance.
"Additionally, uncertainties over Trump 2.0, weak China's and European economies growth prospects, as well as elevated geopolitical risks, would restrain the risk appetite among the investors," he said.
Aimi Zulhazmi added that geopolitical factors and changes in financial policies by the western countries could pose risks to investment strategies either outside or within the country.
"The confirmation of the ringgit value that took place this year also has an impact on gross national product foreign exchange transactions, where various strategies and actions from the investment department are certainly active in their actions that have a good track record," he said.
For financial year 2023, the EPF announced a dividend of 5.50 per cent for Simpanan Konvensional, with a total payout of RM50.33 billion, and 5.40 per cent for Simpanan Shariah, with a total payout of RM7.48 billion, bringing the total payout for 2023 to RM57.81 billion.
The EPF recorded a total investment income of RM66.99 billion last year, a 29 per cent increase from RM51.91 billion in 2022.
Meanwhile, Amanah Saham Nasional Bhd announced a total income distribution of 5.25 sen per unit for its flagship fund, ASB, last year, outperforming the benchmark fixed deposit rates of 2.85 per cent.
The total consists of an income distribution of 4.25 sen a unit and a bonus of 1.00 sen a unit.
The total payout amounted to RM9.3 billion and benefitted 10.8 million ASB unit holders.