KWSP’s dividend payout this year is not good! The dividend payout rate may be below 6%.
According to the data released by the Employees Provident Fund Board (KWSP), total investment income as of March 31, 2022 fell 17.83% to RM15.85 billion, down from RM19.29 billion last year. Economists predict that this will affect the dividend payout ratio of the CPF Board as its investment income declines.
The U.S. erupted in severe inflation and the Fed’s tough approach to raising interest rates has also plunged the U.S. into recession. The Fed announced a 75 basis point rate hike in June and does not rule out another 75 basis point hike in the coming months. The U.S. stock market has entered a technical bear market, which has dragged down the global stock market as well.
The Kuala Lumpur Composite Index (KLCI) has fallen to 1,436.70, a one-year low level. As of March 31, 2022, the Employees Provident Fund Board (EPFB) had total invested assets of RM1.02 trillion, with 37% of overseas assets.
Equity investments contributed RM10.46 billion, or 66%, of revenue in the first quarter. Fixed assets contributed RM4.75 billion, or 30%. Infrastructure and industrial investment income contributed RM360 million and money market instruments contributed RM280 million.
The CPF Board paid 6.10% dividend for conventional accounts last year while Islamic accounts paid 5.65%. The stock market rebounded strongly last year after the epidemic, which allowed the CPF Board to pay out high dividends last year.
