Thursday, 10 May 2012

KWAP's fund size increases to RM82.61b in 1Q2012

KUALA LUMPUR (May 10): The Retirement Fund Inc's (KWAP) fund size increased by 12% or RM8.85 billion to RM82.61 billion in the first quarter 2012 compared to RM73.76 billion in the same quarter of last year.

Its chief executive officer Datuk Azian Mohd Noh in announcing the first quarter 2012 unaudited financial results, said the company's gross investment income increased to RM1.20 billion in the first quarter, which is 6.8% higher than the RM1.13 billion over the corresponding period of 2011.

She said the KWAP achieved a gross return on investment of 1.50%, with net investment income totaling RM1.61 billion.

"The increase is mainly attributed to the strong stock market performance in the first three months of the year, as indicated by the FBM KLCI Index, which surpassed the 1,600-point level.

"In addition, the low interest rate environment also created opportunities for KWAP to intensify the trading activity of its fixed income portfolios, translating into higher capital gains," she in a statement here on Thursday.

She said fixed income assets, namely Malaysian Government Securities, Loans and Private Debt Securities and Money Market instruments, contributed RM299.19 million, RM273.29 million and RM119.18 million respectively, while the remainder came from alternative investments.

Azian said equity investment also contributed RM501.42 million or 42% from the total investment income.

"Some 96% of KWAP's fund are invested domestically with the remaining four%, internationally. International investments are distributed across various asset classes namely fixed income, equity and alternatives which consist of private equity and property," she added.

She said the KWAP has identified various strategies that will add more value to its investments.

"Among others, more funds shall be channeled to external fund managers under the international investment programme covering equities and fixed income. With the set-up of our UK Office, Prima Ekuiti (UK) Limited this year, KWAP's own in-house managers can take the opportunity to build up their expertise beyond the domestic market," she added.

Despite the difficult global environment, Azian said KWAP remains optimistic as domestic demand is anticipated to provide the necessary buffer.

"This, coupled with positive government policies and ample liquidity in the banking system, points towards a potential increase in KWAP's return on investments for 2012," she said. — Bernama

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