Malaysia's Employees Provident Fund on Wednesday said the value of its investment portfolio rose to 841.94 billion ringgit ($201 billion) as of Sept. 30, a 3.5% increase over the prior quarter, on a rise in the fund's equity holdings.
Mohamad Nasir Ab Latif, the fund's deputy CEO for investment, in a news release cited the rebound by Malaysian and regional stocks over the latest quarter, with continued gains for developed market equities, as the driving factor behind the portfolio's gains.
At the same time, Mr. Mohamad Nasir, noting the spike in volatility and market declines at home and abroad in recent months, warned that keeping up the latest quarter's momentum will be a "huge challenge."
During the three months ended Sept. 30, Malaysia's benchmark Kuala Lumpur Composite Index climbed 6%, while the U.S.'s S&P 500 index rose 7.2%.
For the current quarter through Dec. 20, the KLCI has tumbled 8.1% while the S&P 500 has slumped 14%.
As of Sept. 30, the EPF's holdings of domestic and overseas equities came to 40.7% of its portfolio, and contributed 8.89 billion ringgit — or 60.8% — of the quarter's 14.61 billion ringgit of investment income.
Fixed income instruments — including Malaysian government securities, loans and bonds — accounted for 50.7% of the portfolio, as well as 4.73 billion ringgit, or 32.4%, of the quarter's investment income.
The portfolio's holdings of real estate and infrastructure assets, at 4.7% of the portfolio, and money market instruments, at 3.9%, accounted for a combined contribution to investment income of just under a billion ringgit.
Although the value of the EPF's equity holdings zigzagged during the past two quarters, the value of the ringgit against the dollar posted a steady decline. One U.S. dollar was worth 4.0316 ringgit on June 30, 4.1385 ringgit on Sept. 30 and above 4.18 ringgit during the Asian trading day Thursday.
In the news release, Mr. Mohamad Nasir thanked Malaysia's Ministry of Finance and the country's central bank for supporting "the EPF's long-term global diversification efforts."
During the administration of Prime Minister Najib Razak, who lost power in Malaysia's May 9 general election to a coalition of opposition parties led by former Prime Minister Mahathir Mohamad, Mr. Najib had called on the EPF and other government-linked investment companies to liquidate some of their overseas holdings and repatriate the proceedings.
At the time, the value of the ringgit was coming under considerable pressure in foreign exchange markets.