EPF: Consolable 5.65% 2009 Dividend

It may not be the best rate but 5.65% is consolable for most EPF contributors. This dividend rate for 2009 was up  115 basis points over the 4.50 per cent paid out for 2008.

The dividend rate was declared on the back of the highest ever net income achieved of RM19.63 billion, increasing 34.82 per cent from RM14.56 billion recorded in the previous year.

“2009 was a significant year for the EPF as it rode out the impact of the global financial crisis. While the EPF continues to be challenged by the fragile economic environment, our investment nonetheless delivered a sound performance for the year,” chairman Tan Sri Samsudin Osman said in a statement today.

During the year under review, 72.53 per cent of the total investment were devoted to fixed income instruments in line with EPF’s prudent approach, while 27.05 per cent was in equities and the remainder in property.

As at Dec 31, 2009, EPF’s investment portfolio grew 8.55 per cent or RM29.25 billion to RM371.26 billion from RM342.01 billion in 2008.

On prospects for 2010, Samsudin said “baring any unforeseen circumstances, prospects for 2010 are greatly dependent on the economic performance of the country and internationally.”

He said globally, financial markets continued to be volatile and this might have an impact on the price performance of EPF’s investments and future income.

“We will continue to focus on our key goals of preserving the capital of our contributors and ensuring a satisfactory real rate of return,” he added.

Any More Concessions and Back-Pedaling?

Wow, it was certainly good news that the government has withdrawn the Mycard tiered subsidy scheme for petrol. Now, they are telling us that petrol will be increased gradually.

I have also heard that traffic fines and compounds for traffic offenses have been reduced comfortably as seen in the latest web-site of our local Police.

Also Socso recipients have got an increase of their payout from below 1% to 11%. A bonanza for some, I guess in the current times when interbank interest rates have just been increased to 2.25%

I wonder what else is coming our way? A better dividend for EPF as well as for Amanah Saham Malaysia which will be announced in March?

Hey, I also heard civil servants are awaiting news of the new pensionable age at 60!

Is it because of the impending Sarawak State elections or is it because of a possible snap elections at the federal level late this year or in 2011 that we are getting these goodies?

We are pregnant with expectation.

China: Cautious about 2010

It looks like public welfare and rural spending is the way the government will spend its way to keep China's economy healthy. This was confirmed by  Premier Wen Jiabao  as the government tightens its belt after a burst of feverish spending. in 2009.

Wen told the country’s parliament that China’s economy faced a clouded international outlook in 2010 and would stick to a steady policy course this year, shifting tack if needed to counter the lingering impact of the global credit crunch.

China would maintain an appropriately easy monetary stance and an active fiscal policy, he added, showing no sign of a break from current settings.

Wen also signalled continued caution towards the yuan, reiterating standard language that Beijing would seek to keep the currency basically steady at a reasonable and balanced level.

To the dismay of Washington and Brussels, China has frozen the yuan’s exchange rate at around 6.83 per dollar since mid-2008 to preserve the international competitiveness of its exporters.

In his annual “State of the Union”-style report to the National People’s Congress, Wen unveiled increases in spending for China’s poorer citizens and 700-million strong farming population that outstripped the planned rise in military outlays.

China wants to slow spending and bank lending after pumping out cash to counter the global downturn, but Wen said improvements in social welfare, healthcare and rural services were needed to secure the nation’s economic health and the ruling Communist Party’s hold over an increasingly fractured society.

“We can ensure that there is sustained impetus for economic development, a solid foundation for social progress, and lasting stability for the country only by working hard to ensure and improve people’s well-being,” Wen told the nearly 3,000 delegates of the Communist Party-controlled legislature.

China escaped the worst of the global slump by ramping up credit, slashing interest rates and launching a 4 trillion yuan (RM2 billion) infrastructure programme in late 2008.

The economy grew 8.7 per cent last year as a result, by far the fastest pace of any major country, but Wen played down the achievement.

More domestically-driven growth, fueled by consumers more confident about their health, incomes and welfare protection, was needed to keep the world’s third-biggest economy growing at a solid pace, he said.

“We must not interpret the economic turnaround as a fundamental improvement in the economic situation,” Wen said in the cavernous Great Hall of the People.

“There are insufficient internal drivers of economic growth,” he added, reading aloud the 36-page report in a practiced, steady voice, occasionally pausing for effect and applause.

Wen said China was targeting 8 per cent growth in gross domestic product — the goal it traditionally sets every year — and an inflation rate of about 3 per cent.

Wen announced increases of 8.8 per cent on social spending and 12.8 per cent on rural outlays — more than the rise of 7.5 per cent in the military budget — to narrow the yawning wealth gap that economists blame for dampening domestic consumption.

China’s parliament is a party-run spectacle that affirms policy, rather than making or challenging it.
But the gathering offers an opportunity for the party leadership to sell their policies, which face growing doubts from wealthier taxpayers and from local officials who see little wrong with the country’s traditional recipe of industrial growth.

“We will continue to give preference to agriculture, farmers and rural areas, and to improving people’s well-being and developing social programmes,” said Wen, whose second and final five-year term running the Chinese government ends in 2013.

Still, the projected growth in welfare and agriculture spending is much slower than in 2009 when the financial crisis was raging.

Reflecting the conservatism of China’s financial planners, the budget deficit will again be kept below 3 per cent of national income, Wen said.

Last year the deficit was just 2.2 per cent of GDP despite massive government spending on infrastructure and job creation.