Written by Joe Chin
Monday, 16 March 2009 19:16
KUALA LUMPUR: The Employees Provident Fund (EPF) Board had on March 16 declared a dividend rate of 4.50% for 2008, but this was lower from 2007 due to higher investment provisioning resulting from the sharp fall in global equity prices. In 2007, the dividend was 5.8%.
“Despite the financial meltdown, the EPF recorded the highest ever earnings of RM20 billion in gross income for 2008. This represented an increase of 9.36% over the previous year’s gross income of RM18.29 billion,” said a Bernama report.
EPF chairman Tan Sri Samsudin Osman said EPF’s investment portfolio for the year performed better at the gross income level compared to 2007.
“However, due to the sharp decline in the equity markets, a large provision had to be made resulting in a marked reduction in net income,” he said.
Net income for 2008 was RM14.26 billion, after deducting allowances for diminution in value of equities and doubtful debts, dividends for withdrawals, investment expenses, operational expenses, and death and incapacitation benefit payments.
This represented a decrease of 15.47% over 2007 net income of RM16.87 billion.
Equities accounted for 34.82 per cent of the EPF’s total gross investment income. The EPF earned RM6.67 billion from equities which was the second largest contributor to income in 2008 compared to RM5.37 billion in 2007.
“Up until September last year, the EPF was doing well in equities. However, following the effect of the global financial meltdown, our performance in equity investments recorded a drop of less than 20%, which impacted our dividend payout.
“This, however, compares better with that of the KLCI which was down approximately 40% from end of December 2007 to December 2008,” said Samsudin.
As a result of the sharp fall in global equity prices and following a conservative provisioning policy in accordance with accounting best practices, the EPF made allowances of RM4.69 billion for diminution in value of both overseas and local equities, compared to only RM520 million in 2007.
Out of the 2008 provision, RM3.20 billion was allocated for overseas equities.
“The fundamentals of the companies we have invested in remain strong and we are confident that this provision will be written back once recovery takes place,” he said.
Monday, March 16, 2009
Tuesday, March 03, 2009
Dell's net income dips 48 pct; may cut jobs
New Delhi: IT giant Dell reported an 48 per cent decline in net income and said it could cut jobs in the Asia-Pacific region as its plans to save USD four billion to tide over the economic slowdown.
The US-based firm's net income dipped 48 per cent to USD 351 million for the quarter ended January 31, 2009, against USD 679 million in the same period last year.
Without specifying the quantum of job cuts and the geography, Dell President (Small and Medium Business) Steve Felice said in a teleconference, "The job cuts were minor in South Asia as this region has a professional talented pool and going ahead though I can't comment on the exact number, I anticipate it to be minimal."
Asked if the company was looking at cutting workforce at its Bangalore facility, Felice said, "I cant comment on the specifics. The Bangalore facility has the second largest population (headcount) globally."
The company's revenue stood at USD 13.42 billion in the quarter ended January 31, 2009 as against USD 15.98 billion during the same period a year ago, a decline of 16 per cent.
The US-based firm's net income dipped 48 per cent to USD 351 million for the quarter ended January 31, 2009, against USD 679 million in the same period last year.
Without specifying the quantum of job cuts and the geography, Dell President (Small and Medium Business) Steve Felice said in a teleconference, "The job cuts were minor in South Asia as this region has a professional talented pool and going ahead though I can't comment on the exact number, I anticipate it to be minimal."
Asked if the company was looking at cutting workforce at its Bangalore facility, Felice said, "I cant comment on the specifics. The Bangalore facility has the second largest population (headcount) globally."
The company's revenue stood at USD 13.42 billion in the quarter ended January 31, 2009 as against USD 15.98 billion during the same period a year ago, a decline of 16 per cent.
HSBC's profit slumps 70%, 6,100 US jobs cut
LONDON - Asian and European banking titan HSBC revealed on Monday that it needs nearly 18 billion dollars of new capital to withstand the financial crisis and announced 6,100 US job cuts after a profits collapse.
The bank reported a 70-percent plunge in annual net profits last year and said it hoped to raise 12.5 billion pounds (17.8 billion dollars, 14.2 billion euros) in a record British rights issue.
HSBC, based in London, had been regarded as one of the more robust global banks as crisis devastated many top lenders around the world, and has refused British government financial assistance in contrast to some of its rivals.
"The world today faces exceptionally challenging economic circumstances," HSBC chief executive Michael Geoghegan said in the earnings statement.
"2008 was a very difficult year for the financial sector, and 2009 will be no less so, as the global downturn intensifies."
The bank also said that its bad debts surged to almost 25 billion dollars (20 billion euros) last year, mainly as a result of the collapse of the US subprime housing market. HSBC added and that it would shut most of its HFC and Beneficial branches in the United States.
Global markets have been in the doldrums for more than a year on worries about access to credit, stemming from the dire state of the US housing market and unwise lending.
HSBC was one of the first banks to warn of the problems among products linked to the subprime or high-risk US mortgage sector. Last September, it scrapped a six billion dollar deal to buy a major South Korean bank after the financial crisis cut asset values worldwide.
On Monday, HSBC said net profits tumbled to 5.728 billion dollars in 2008 compared to 19.133 billion dollars in 2007 as the global financial crisis took its toll.
HSBC added that it was slashing its annual dividend by 29 percent to 64 US cents per share.
The group's share price plunged 12.2 percent to 431.25 pence in London morning trade, mainly on news that the bank had to go cap-in-hand to raise fresh capital from shareholders.
"After talk of the need for raising cash was dismissed as recently as December last year this is a rather large slice of humble pie, and investors will wonder why such a supposedly well-capitalised bank is slashing the dividend and choosing to raise more cash of record-breaking proportions," said Martin Slaney, head of derivatives at GFT in London.
"If nothing else this serves to underline just how severe the global economic contraction is."
HSBC said it would offer investors five new shares at a heavily-discounted 254 pence each for every 12 they already owned.
"In this difficult environment, we missed our profitability targets," HSBC chairman Stephen Green said on Monday.
"The coming 12 months will be difficult. We expect parts of Asia, the Middle East and Latin America to continue to outperform Western economies, but to be constrained by the global downturn."
HSBC's difficult past year was largely a result of losses totalling 15.5 billion dollars at the group's American personal finance unit.
"The significant deterioration in US employment and economic outlook in the fourth quarter of 2008 were the primary factors in causing us to write off all the remaining goodwill carried on our balance sheet in respect of our Personal Financial Services business in North America," it said.
"It is now clear that models of direct personal lending that depend on wholesale markets for funding are no longer viable.
"In light of this, we have taken the difficult decision that, with the exception of credit cards, we will write no further consumer finance business through the HFC and Beneficial brands in the US and close the majority of the network," added HSBC.
- AFP/ir
The bank reported a 70-percent plunge in annual net profits last year and said it hoped to raise 12.5 billion pounds (17.8 billion dollars, 14.2 billion euros) in a record British rights issue.
HSBC, based in London, had been regarded as one of the more robust global banks as crisis devastated many top lenders around the world, and has refused British government financial assistance in contrast to some of its rivals.
"The world today faces exceptionally challenging economic circumstances," HSBC chief executive Michael Geoghegan said in the earnings statement.
"2008 was a very difficult year for the financial sector, and 2009 will be no less so, as the global downturn intensifies."
The bank also said that its bad debts surged to almost 25 billion dollars (20 billion euros) last year, mainly as a result of the collapse of the US subprime housing market. HSBC added and that it would shut most of its HFC and Beneficial branches in the United States.
Global markets have been in the doldrums for more than a year on worries about access to credit, stemming from the dire state of the US housing market and unwise lending.
HSBC was one of the first banks to warn of the problems among products linked to the subprime or high-risk US mortgage sector. Last September, it scrapped a six billion dollar deal to buy a major South Korean bank after the financial crisis cut asset values worldwide.
On Monday, HSBC said net profits tumbled to 5.728 billion dollars in 2008 compared to 19.133 billion dollars in 2007 as the global financial crisis took its toll.
HSBC added that it was slashing its annual dividend by 29 percent to 64 US cents per share.
The group's share price plunged 12.2 percent to 431.25 pence in London morning trade, mainly on news that the bank had to go cap-in-hand to raise fresh capital from shareholders.
"After talk of the need for raising cash was dismissed as recently as December last year this is a rather large slice of humble pie, and investors will wonder why such a supposedly well-capitalised bank is slashing the dividend and choosing to raise more cash of record-breaking proportions," said Martin Slaney, head of derivatives at GFT in London.
"If nothing else this serves to underline just how severe the global economic contraction is."
HSBC said it would offer investors five new shares at a heavily-discounted 254 pence each for every 12 they already owned.
"In this difficult environment, we missed our profitability targets," HSBC chairman Stephen Green said on Monday.
"The coming 12 months will be difficult. We expect parts of Asia, the Middle East and Latin America to continue to outperform Western economies, but to be constrained by the global downturn."
HSBC's difficult past year was largely a result of losses totalling 15.5 billion dollars at the group's American personal finance unit.
"The significant deterioration in US employment and economic outlook in the fourth quarter of 2008 were the primary factors in causing us to write off all the remaining goodwill carried on our balance sheet in respect of our Personal Financial Services business in North America," it said.
"It is now clear that models of direct personal lending that depend on wholesale markets for funding are no longer viable.
"In light of this, we have taken the difficult decision that, with the exception of credit cards, we will write no further consumer finance business through the HFC and Beneficial brands in the US and close the majority of the network," added HSBC.
- AFP/ir
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