Central Bank and EPF investments
EPF investments in the stock market were published in a recent newspaper report as saying, “The EPF is making handsome profits”.
According to these figures published in this report, had this money being invested in Treasury Bills even at a rate of 7.0%, the members of the fund would have earned Rs.4,265 million a year, exceeding the earning by investing in stocks.
On a valuation as at 20th June 2012 the members have lost a staggering Rs.2.2 billion. Of the 64 listed companies invested in, the value of 47 has fallen below cost. This fall in value for nine firms exceeds 50%.
The Central Bank says EPF is making money. True, but they can make more money by investing in Treasury Bill (TB)’s. At the current TB rate of 12.5% the EPF would have earned Rs.76 billion a year on these funds. It is obvious the EPF members do not benefit from the stock market investments. Who is benefiting from EPF investments in the stock market? Why is the fund earning less for its members when it is possible to earn more by investing in TBs? Who is responsible for depriving the EPF members what they are entitled to?
An economist has said the opposition is barking up the wrong tree. In my opinion the EPF would have continued with investments in junk stocks if the opposition parliamentarians had not intervened. The Central Bank claims that opposition law makers are abusing Central Bank officials in an unfair manner. I leave it to the readers to decide whether these officials mismanaging our money deserve to be abused.
Disgusted EPF Member
Colombo
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