Pensions fund facing RM75 mil loss

(The Sun Daily) - PKR has claimed that two pension funds, the Employee’s Provident Fund (EPF) and Retirement Fund Incorporated (KWAP), have collectively suffered an estimated paper loss of RM75 million as a result of buying Felda Global Ventures Holdings (FGVH) shares. :x

The party’s trade and investment bureau chairperson Wong Chen said this is because the pension funds had bought the shares despite market analysts generally recommending against the stock since Aug 9 last year.

He said the funds should not be allowed to invest in risky deals as it involved the public (EPF) and civil servant (KWAP) retirement funds which should be guarded by the government.

“We (PKR) believe that EPF holders and the civil servants have a right to know whether these buys, a significant portion of which is against analyst recommendations and market views, are politically motivated,” he told a press conference at the PKR headquarters today.

Wong provided a data from financial news broadcaster “Bloomberg” detailing the FGVH price and market analyst regarding the share trends.

Almost all financial firms analyse that the shares which were now valued at RM4.60 could go lower.

In the opening Initial Public Offering in June 2012. the shares were valued at RM5.39.

Wong said EPF originally brought 185 million shares valued at (RM842 million) before increasing its share by 46% or 90 million shares valued at RM455 at the average price of RM5.05 after the analysts’ warning.

He said the current trading loss of EPF is now RM40 million.

KWAP, meanwhile, increased their initial 194 million shares (RM 880 million) in December to another 59 million (RM 5.19 million) or 35% and is facing a RM35 million loss.

“The situation could get worse. If the price drops to the Alliance Research target of RM3.53 (the second lowest among the 12 most recent recommendations on the stock), EPF and KWAP would have paper loss of about RM327 million and RM295 million,” he said. … shares-pkr