Head of regional equity research for Maybank Kim Eng, Anand Pathmakanthan has commented that withdrawals from the Employees Provident Fund (EPF) through facilities such as i-Sinar will have a modest impact on the provident fund’s assets under management (AUMs). However, it would not cause a dislocation event for the domestic capital market.

Briefly, a market dislocation event is described as any events or developments that could result in volatility in the commodities market.

According to Anand, the withdrawals were found to be more impactful in the past two quarters.  Given the substantial money market buffers that the EPF has in its portfolio, however, it was able to absorb it.

“If we look at the EPF’s investments make-up, there are always substantial money market buffers in their portfolio. They will invest 30% in equity, 40% in fixed income, 20% in properties, but always 5% to 7% in the money market instruments, which is highly liquid and substantial at about RM70 billion the last time we checked,” explained Anand. To note, the EPF presently has AUMs that total to almost RM1 trillion.

Anand also emphasised that there is always liquidity to ease the impact of the current withdrawal stress. “If you are asking me whether the EPF has to go into the fixed income market and start selling down holdings, that is definitely not something we would expect them to do,” he reassured.

(Source: The Malaysian Reserve)

• TAGS:
• Anand Pathmakanthan
• Employees Provident Fund (EPF)
• i-Sinar
• i-Sinar Withdrawal Scheme
• Maybank
• Maybank Kim Eng