THE Employees’ Provident Fund’s (EPF) annual dividend for 2020 will be higher than Permodalan Nasional Bhd’s (PNB) 4.25% for Amanah Saham Bumiputera, said Najib Razak ahead of the retirement fund’s dividend declaration.

“I also predict that EPF will say that the 2020 dividend was saved by its overseas investments which yielded better returns than the domestic returns,” the former prime minister said in a Facebook post.

For 2019, EPF declared its lowest dividend in more than a decade at 5.45%, amounting to RM41.68 billion for conventional savings.

Najib also shared screenshots to compare the performances of the Dow Jones industrial average and Nasdaq composite with the FBM KLCI since 2017 to support the claims.

“Many are unaware that the EPF’s asset size is larger than the local economy,” he said.

The cumulative market capitalisation of all public listed companies on Bursa Malaysia as of October 2020 was RM1.62 trillion while EPF’s assets are valued at RM940 billion during the same period, he said.

“In other words, if EPF invests all their assets in equal parts into Bursa Malaysia, EPF will be the largest shareholder with a 58% stake in all listed companies in Malaysia.

“Of course, this is irrational, impossible and will not give a good return to EPF.

“That is why, EPF has to look for opportunities to invest overseas as that will give better returns for their contributors.”

The United States, which is the world’s largest economy, is also a key location for EPF’s investments.

Citing the chart on the stock exchange performances, Najib said the overseas returns are higher and more consistent than its domestic investments.

This, he said, is also the reason the dividends in 2018 and 2019 were high even though the Pakatan Harapan government had “destroyed” the economy. – February 14, 2021.