Manulife Net Profit (2017) Skyrocket

For its first quarter ended March 31, 2017 (1QFY17), Manulife Holdings Bhd saw its net profit skyrocket nearly 41 times to RM4.62 million from a mere RM113,000 a year ago, boosted by its investment holding and life insurance segments, and lower net foreign exchange losses.

Quarterly revenue grew 13% to RM323.05 million from RM286.18 million a year earlier, boosted by an increase in other income, fee income, and higher net fair value gains, according to the group’s filing on Bursa Malaysia today.

It said though operating revenue was relatively stable for its investment holding business, it recorded a lower loss before tax (LBT) of RM400,000 versus RM700,000 a year ago, due to higher investment gain from disposal of equities.

Its life insurance business, however, reported lower operating revenue, mainly due to lower premium of investment-linked funds. However, PBT improved to RM8.6 million from RM3 million a year ago, mainly due to higher new business gains and favourable impact from last year's medical repricing exercise.

As for its asset management services, operating revenue grew 34.5% to RM19.5 million from RM14.5 million on higher initial service fee from higher gross sales and higher management fees. But LBT remained at RM800,000 for both 1QFY17 and 1QFY16, mainly due to higher management expenses.

Going forward, Manulife said it expects both the insurance and wealth businesses to record higher contributions to their topline.

“In addition, we believe there is a secular growth trend in Malaysia, supported by the under-penetration of life insurance coupled with a growing affluent population, which creates a need for investment and retirement solutions,” it said, targeting to outgrow the market.

EPF Investment Income Jumped 73.9%

The Employees Provident Fund’s (EPF) investment income jumped 73.9% to RM11.79 billion in the first quarter (Q1) ended March 31, 2017 from RM6.78 billion in the same period a year ago, supported by significant improvement in the domestic and global markets.

Citing the 6% growth in Bursa Malaysia’s FBM KLCI, driven by the banking sector, and the improvement in global indices by as much as 12%, EPF CEO Datuk Shahril Ridza Ridzuan said the positive market condition was conducive for profit-taking, leading to higher gross investment income in Q1 2017 and lower net impairment.

Net impairment fell to RM775.92 million in the quarter, from RM1.64 billion in the first quarter in 2016.

The EPF’s investment assets rose 2.2% to RM747.17 billion from RM731.11 billion as at Dec 31, 2016. Out of the total, RM352.73 billion or 47.2% was in syariah-compliant investment assets and the balance in non-syariah investment assets.

Despite the encouraging performance in the first quarter, Shahril said, the EPF remains cautious as the recovery in commodity prices is still weak coupled with continued currency volatility.

Equities contributed RM7.1 billion or 60.2% of the EPF’s total investment income, more than double the RM2.55 billion in the corresponding quarter in 2016 as the recovery in the banking sector contributed to about 30% of the trading and dividend income for the portfolio in Q1.

“In addition to improvement in the domestic equity market, the global market also continued to provide opportunities for the EPF to realise its gains despite volatility arising from the elections in eurozone countries, US President Donald Trump’s healthcare bill, the US interest rate hike and negotiations surrounding Brexit. These market-moving factors were alleviated by the positive economic numbers, including the revised growth forecast for major economies,” said Shahril.

The EPF’s overseas investment accounted for 29% of its total investment assets, with a 37% contribution to the total investment income recorded in Q1 2017.

As at March 2017, 49.08% of the EPF’s investment assets were in fixed-income instruments, which recorded an income of RM4.07 billion, equivalent to 34.6% of the quarterly investment income.

Income from Malaysian Government Securities & Equivalent increased 3.67% to RM1.94 billion in Q1, while income from loans and bonds was up 14.4% to RM2.14 billion.
Investments in money market instruments and real estate & infrastructure generated investment income of RM372.79 million and RM246.27 million respectively in Q1.

Following the launch of Simpanan Shariah on Jan 1, 2017, a total of RM952.1 million out of the total gross investment income of RM11.79 billion was generated for Simpanan Shariah and RM10.84 billion for conventional accounts.

Shahril said the performance of both Simpanan Shariah and Simpanan Konvensional would depend on market performance, thus making short-term differences between the two inevitable. In the long run, the performance of the two should be similar following similar strategies implemented for both accounts.

Nonetheless, the EPF remains focused on delivering a real dividend target of at least 2% above inflation over a three-year rolling period for both syariah accounts and conventional accounts.

Ass Neighbours

I would like to respond to Cheah from Klang, whose letter “G-and-G should not burden residents” (see link at end of story) was published in StarMetro on May 27.

I live in the same neighbourhood as Cheah in Bandar Bukit Tinggi 2 but share a very different point of view. When we moved to this neighbourhood, it was neither gated nor guarded. Access to and from our homes was far easier before the G-and-G system was implemented.

What used to be a short walk to the shops for some of us now requires driving because of the fencing. Despite anticipating inconveniences, the majority of the residents decided to fence up the neighbourhood as we could no longer take the sleepless nights worrying about our houses being broken into. We also had enough seeing the children’s playground littered with broken alcohol bottles each morning.

A residents association (RA) was formed and a series of meetings was held among us and with the authorities, including the police and the Klang Municipal Council (MPK). Therefore, Cheah’s suggestion that the G-and-G was set up without approval is unfounded. The initiative to gate and guard the neighbourhood was fully funded by the majority of residents.

Cheah and others in the neighbourhood who refused to pay for security services, were asked to use a different lane as they did not have the security tags needed to open the boom gates. Since the G-and-G was set up there were no break-ins, and the parks were in better shape.

But fears of robbers and vandals have now been replaced with fear of neighbours. Cheah seems to suggest that those who do not subscribe to the G-and-G are victims of a heavy-handed residents’ committee.

There have been numerous CCTV footage showing non-paying residents damaging the boom gates, as they insist on using the access lanes that require security tags. They also verbally abuse the guards and block the access roads with their cars during peak hours.

The RA was forced to lodge police reports against these neighbours. The rest of us will most likely have to pay the security fees for the sake of our families’ safety. I strongly feel this problem can only be resolved if MPK is decisive. It appears to want to please people on both sides of the issue.

While it has given permission for the fences to be put up, the local council also appears to tie the hands of the RA by expecting the committee to give in to the disgruntled residents, who are damaging property and making life for the majority of residents very unpleasant.

I urge the authorities to consider the fact that the fencing exercise was carried out legally. A majority of the residents supported the decisions of the democratically elected RA committee. We are paying for our own security, allowing the police to focus on criminal activities beyond our neighbourhood.

Do not allow the minority to take away our right to peace of mind. They are behaving this way assuming that the local authorities are not going to act against their unruly behaviour. Allow the RA to set rules for access into our neighbourhood and encourage the minority to engage in a proper dialogue.

Source: Paying Neighbour