EPF’s 2024 shariah savings dividend may beat conventional savings.

EPF’s 2024 shariah savings dividend may beat conventional savings.

We know EPF is doing exceptionally well thus far for 2024. Earlier article here: EPF’s Dividends may be higher! Way better than the 2023. Thus, expectations is that there is a possibility to exceed 6 percent dividends for 2024. I know, we could not touch the money until our retirement but it’s still a very good news. Last year, the dividend was very close to 6 percent. Below are EPF’s dividends over the years. Yes, we can see a 5 percent (except 2020) has been very much the theme.

Article in theedgemalaysia.com. EXPECTATIONS have built up on the Employees Provident Fund (EPF) to not only beat last year’s payout but also declare a dividend of close to 6% for 2024. This follows three successive double-digit year-on-year percentage headline outperformance indicated in all three quarterly income reports released in June, August and November this year.

Another shariah surprise

For the minority of EPF members — about 1.52 million or 9.5% of the EPF’s 16.1 million members as at the end of 2023 — who chose the shariah savings (SS) basket, a bigger positive surprise is in store.

Dividends for shariah savings would definitely come in above last year’s 5.4%.

In fact, the chances of a 6% dividend being declared for EPF shariah savings for 2024 are higher than those for conventional savings, our workings show.

This is thanks to an exceptionally strong third quarter for the shariah savings portfolio — where quarterly investment income was easily over 50% more than that in the first two quarters. The EPF typically announces its annual dividends between mid-February and early March. Article in theedgemalaysia.com

Confidence remain as we approach the day when Trump’s tariffs may start

Donald Trump will become the President of the United States of America on 20th January. That’s roughly less than 2 months from today. His plans were as follows based on what he said:

“President Trump has said he plans to install a blanket tariff of 10% to 20% on all imports, with additional tariffs of 60% to 100% on goods brought in from China. In the September Presidential debate, Trump characterized the plan as a way to extract money from rival nations.” Info Source: cnbc.com

Fortunately, by the time the tariffs start (which may cause a trade war as countries may also retaliate, especially China), the year of 2024 is over and EPF will already be starting its calculations on the dividend they will be announcing to all members. However, 2025 may be a different year depending on how the tariffs go.

Tariffs will cause goods to rise in price

Imagine something the Americans are used to buying at USD5. If it’s imported from China, it will soon be US$8. That’s a 60 percent increase. Meanwhile similar goods which was produced in America which used to be 20 percent more expensive at USD6, there’s a higher chance that it will now be priced at USD7 or USD8 instead to maximise the potential profit from this tariff measure. Of course, the government after receiving these tariffs will have to decide how best to help their citizens with potential subsidies.

Briefly, every company seeks to maximize profits. If my competitor which used to be priced lower than me is now priced higher than me, I will price it just slightly lower than them to increase both sales and profit margin. This was why when tariffs are increased, inflation usually rises too. Let’s watch what happens then.

Waiting for February / March for the announcements…

If it’s 6 percent, then it’s double the FD rate. This is a very healthy number. EPF by legislation must give a minimum return of 2.5 percent. The minimum dividend rate for the Employees’ Provident Fund (EPF) in Malaysia is 2.5% per year, as guaranteed by the EPF Act 1991. Of course, their investments have always exceeded this number so we did not get to just get the guaranteed return under EPF Act yeah. Looking forward to the announcements.

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