EPF special withdrawal may trigger higher net selling from local insitutional funds - research houses

Publish date: Thu, 17 Mar 2022, 02:18 PM
KUALA LUMPUR: A special Employees Provident Fund (EPF) withdrawal of RM10,000 will have an impact on the country's fund flows, as higher net selling from local institutional funds is anticipated.
 
CGS CIMB said the potentially higher net selling from local institutional funds was due to the requirement for the EPF to raise liquidity for possible withdrawals by its members.
 
"Year-to-date 2022 up to March 15, local institutional investors had been the largest net sellers of Malaysia's equities with a net sell flow of RM5.6 billion, against 2021's net sell flow of RM12.1 billion," it said in a note today.
 
The research house said the special EPF withdrawal scheme would nevertheless help boost consumer spending power ahead of the upcoming Aidilfitri festival on May 2 and 3, even as the prices of products were rising amid higher commodity, labour and freight costs.
 
"Potential beneficiaries are the consumer, travel and healthcare sectors as they will benefit from higher domestic consumer spending ahead of the festive season and the reopening of Malaysian borders on April 1," it added.
 
Meanwhile, AmInvestment bank said the withdrawal would affect the sector positively as additional liquidity will likely trickle down, spurring demand for consumer goods and provide further support toconsumer spending in the near term.
 
However, the research firm said the impact is likely to be softer compared to previous withdrawals and given the gradual pick-up in economic activities, the number of contributors that is still struggling economically from the pandemic may have been reduced while others might avoid further unnecessary withdrawal from their retirement savings.
 
"Besides, after several withdrawals in the past two years, consumers may need some time to replenish their savings. Hence, there would not be as many contributors making withdrawals this time round," it added.
 
Hence, AmInvestment maintains "overweight" on the consumer sector.
 
To recap, the special withdrawal of RM10,000 represents the fourth special EPF withdrawal scheme to have been approved by the government to help needy Malaysians since the start of the pandemic.
 
The previous withdrawal schemes of EPF contributions were namely i-Lestari, i-Sinar and i-Citra with total withdrawals amounted to RM101 billion involving 7.34 million contributors since COVID-19 hit the country two years ago.
 
These withdrawals left 6.1 million members with less than RM10,000 in their EPF accounts.
 
 
 
 - Bernama
Discussions
Be the first to like this. Showing 8 of 8 comments

The_JQuestion

exactly waiting for it to happen next month dont think market can hold 1600

2022-03-25 23:38

gohkimhock

After 3 massive withdrawals, not many people are able to make more withdrawal now..

2022-03-26 00:57

AlsvinChangan

Use own money while they still have few thousands left better than Govt feed them

Let the next Govt solves the problems created from NEP era

2022-03-26 09:59

Tobby

Actually after 100 billion taken out from previous withdrawals, i doubt there are massive EPF members who still can draw 10k! Probably few millions still have some money left!
But the impact is severe for members! You are looking at vast majority of EPF members retiring poor!

2022-03-26 11:16

stockraider

Higher withdrawl means better profit for remaining epf members mah!

Reasons for this:

1. early withdrawl means some premature forfeiture of returns on those who took out their money.
2. Epf has smaller means less pressure on continue searching for investment due to continue growth in size that lead to marginal return, thus epf can focus on more quality investment .
3. People who has small amount say Rm 1k to Rm 50k in the epf....does not have much impact to their retirement....thus it much better to allow them to try their luck by allowing to withdraw....maybe to buy a motor cycle or car to be say grab drivers so that can have better life loh!

2022-03-27 11:29

boonwei98

Tiered EPF will be the election promised in GE 15

2022-03-27 11:55

AlsvinChangan

BUT EPF have monthly deduction contributions of over 80Billion

SHOULD be able to cover puny 10k withdrawals

2022-03-27 12:23

Sslee

Stockraider,
Long time no see, how are you?
Your superman Jalil already part with Bjcorp so how you see the future of Bjcorp and bjland?

2022-03-27 13:09

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