Wednesday, February 13, 2013

MTUC raising concern on EPF stake in FGVH

THE Malaysian Trades Union Congress (MTUC) is believed to have raised its concerns over the investment strategies of the Employees Provident Fund (EPF), including its decision with regards to the nation’s largest fund manager’s stake in Felda Global Ventures Holdings Bhd (FGVH) which went public in June 2012.

The concerns were raised in its annual meeting held at the fund’s headquarters early this week, according to a source.

When contacted, MTUC president Mohd Khalid Atan confi rmed that a meeting took place, but declined to comment on what was discussed.

“It is very confi dential. EPF will issue a statement on soon.”

The source said MTUC was worried with the lacklustre performance of FGVH shares since its listing on June 28, 2012. EPF holds a signifi -cant stake in the plantations giant, whose shares have been on a downward trend since July last year, after recording a high of RM5.55 a month after its listing.

FGVH shares at one point fell below its listing price. On Dec 3, it went to RM4.50, below its off er price of RM4.55, but managed to stay above RM4.60 in the following months. On Friday, it closed at RM4.50, down 4 sen.

Since the listing of FGVH, collectively EPF had bought 46 million shares, bringing its total shares to 275 million.

As at Feb 5, EPF held 281.74 million or 7.72% stake in FGV, according to its fi ling to the local exchange.

Felda settlers, who are considered an important vote bank for the ruling Barisan Nasional (BN) coalition, also hold stakes in FGVH. They have been actively courted by the Pakatan Rakyat alliance with allegations the listing was an exercise that saw them getting the short end of the stick.

In a recent research report, Alliance Research Sdn Bhd had lowered its target price for FGVH to RM3.10 from RM3.53 due to the tepid outlook for crude palm oil prices in 2013, relatively increased worries among FGVH stakeholders and Felda settlers.

In September, EPF had said that it was buying into FGVH as it had an extended and positive view on the plantation sector, which it described as cyclical in nature.

Another source said the pension fund had agreed to payout a dividend of above 6% for the year 2012, one of its higher payouts in recent years. It would be viewed by some quarters as a feel good handout in the run up to the 13th general elections that must be held within months.

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