Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the EPF’s gross investments for the first nine months of 2021 were already 7.7% higher year-on-year at RM48.02 billion, compared with the same period in 2020.
“In that sense, there could be a chance that the dividend rate could be better than in 2020. I think it should at least match the 2020 level, if not better,” he told Bernama and estimated that the dividend would likely be between 5.2% and 5.4% for 2021.
In 2020, the retirement fund manager declared a dividend of 5.2% with a payout amounting to RM42.88 billion for conventional savings and 4.9% for shariah savings, with a payout totalling RM4.76 billion.
Afzanizam said the chance for a better dividend rate in 2021 would be higher should corporate earnings in the fourth quarter turn out better.
Furthermore, the EPF has also been diversifying its portfolios into overseas markets and incomes from foreign equities have made a significant contribution to its total income, he noted.
“So their portfolio diversification strategy has really paid off and it could be translated into a sustainable dividend rate going forward,” he said.
On special withdrawals under the EPF’s i-Sinar, i-Lestari and i-Citra facilities, Afzanizam reckons that the withdrawals would likely not have a severe impact on the dividend performance.
He observed that the economy had been able to grow in 2021 and the unemployment rate had trended downward to 4.2% in December 2021 from as high as 5.3% in the middle of 2020.
Therefore, fresh contributions from the EPF members, along with maturing investment assets, would help to offset the withdrawal trend.
Professor of economics at i-CATS University College Kuching, Shazali Abu Mansor, expects the EPF dividend rate to be between 5.5% per and 6.0% in view of the better investment performance.
“Dividends should increase in tandem with income. It should be more than 5.2% for 2021, if less than that then it is not justified,” he said.
Ambank Group chief economist and research head Anthony Dass said despite some domestic challenges, the overall performance of the local capital market was favourable, hence the dividend payout is expected to hover between 5.45% and 6%.
“With the economy starting to rebuild, more people will be employed and at the same time more jobs would be created from new lines of businesses that will rebuild EPF savings,” he said.
“However, for the savings level to reach the 2019 status, it will depend on how much of the future contributions they can place in the EPF.”