manusath-derana

EPF’s listed equity portfolio down by Rs.39 Bn end of 1Q 2020

July, 22, 2020

The country’s largest retirement fund, the Employees’ Provident Fund (EPF), which is under the custodianship of the Central Bank, posted a market loss of approximately Rs.39.08 billion, at the end of first-quarter 2020.

So far, the EPF has invested Rs.84.05 billion in 83 listed equities. As at the end of first-quarter 2020, its market value has reduced to Rs.44.97 billion. Accordingly, the EPF has lost a staggering Rs.39.08 billion by investing in the stock market.

The Employees’ Provident Fund has just made a new investment in Teejay Lanka PLC, in the first quarter of 2020. As at the end of 2019, EPF has invested in 384,849 shares of Teejay Lanka PLC and this has increased to 6,979,333 shares by 31 March 2020.

As per the Employees’ Provident Fund Act. No. 15 of 1958, the Monetary Board of the Central Bank of Sri Lanka is entrusted with the custodianship of the Fund while the Commissioner of Labour is entrusted with the general administration of the Fund.

The total value of the Fund increased by Rs.251.1 billion to Rs.2,540.4 billion at end-2019 from Rs. 2,289.4 billion recorded by end-2018 recording an 11% growth.

This increase was due to the combined effect of the net contributions of the members (contributions less refund payments) and the income generated through investments of the Fund.

The total investment portfolio (book value) of the Fund grew by 10.9% to Rs. 2,548.7 billion as at the end of 2019 from Rs. 2,298.8 billion at the end of 2018.

Accordingly, at the end of 2019, the investment portfolio consisted of 93.8 per cent in government securities, 3.0 per cent in equity, 1.7 per cent in corporate debentures and trust certificates, 0.9 per cent in fixed deposits and the remaining 0.6 per cent in Reverse Repurchase agreement.

The investment policy of the Fund focused on providing a long-term positive real rate of return to the members while ensuring the safety of the Fund and availability of the adequate level of liquidity to meet refund payments and other expenses of the Fund.

Accordingly, at the end of 2019, the investment portfolio consisted of 93.8% in government securities, 3.0 per cent in equity, 1.7% in corporate debentures and trust certificates, 0.9% in fixed deposits and the remaining 0.6% in Reverse Repurchase agreement.

The total investment income of the Fund was Rs.259.0 billion in 2019, and recorded an increase of 16.5% compared to the previous year.