EPF loose Rs 17.4bn of your money?
The Employer’s Provident Fund posted a marked to market loss of approximately 17.4 billion rupees, for the shares it held in 83 listed companies.
The EPF’s equity portfolio’s marked to market loss of Rs.17.4 Bn, as at 31st December 2019, is an increase of approximately 60%, when compared with the marked to market loss of Rs.10.9 Bn in 2018.
According to EPF data, losses of the fund’s equity portfolio has been steadily increasing since 2017, when it reported a loss of 163.4 million rupees.
As at the end of 2018, the EPF’s total investment portfolio valued at 2.3 trillion rupees, consisted of 92.2% of investments in Treasury bonds, 3.3% in equity, 1.9% in corporate debt,1.5% in fixed deposits, and 1.1% in reverse repos.
During the central bank’s 1st monetary review, journalists raised questions about the possible conflict of interest that could arise between the central bank and operations of the EPF.
” There are proper procedures, firewalls and governance structure already built on the basis on what happened in the past. So we have the practices to prevent conflict of interest in several areas. This is a continuous process. In terms of responsibilities, we always change the responsibilities of the assistant governors. Such as if someone is in charge of the EPF, he will not be in charge of bank supervision. The EPF is not actively investing in banking sector shares now. It is only a passive investment. ”
– Dr. P. Nandalal Weerasinghe, Senior Deputy Governor – CBSL
— Previously when we asked are you going to divest loss-making shares, you said the market was not performing well. Over the past quarter, EPF portfolio has gained 10% and the ASPI gained 7.68%. So why was a decision not taken to divest these stocks in the past quarter?
“..That statement is wrong. Even in the last quarter, we have been in the market. But unfortunately, even though the EPF wanted to purchase certain stocks , the required parcels were not available in the market. It does not mean we have not been in the market. We have been continuously.With regard to the loss-making stocks, based on the decisions of the investment committee timely decisions will be taken..”
– H. A. Karunaratne, Deputy Governor – CBSL