Saturday, 24 December 2016

EPF exits Felda

Article in The Edge: Felda Global falls 3.70% on EPF exit as shareholder, one snippet:

"Shares in Felda Global Ventures Holdings Bhd (FGV) fell 3.70% this morning after the Employees Provident Fund (EPF) said it no longer has any stake in FGV, as it assures members that the EPF practises high standards of corporate governance in its investments, with robust policies on risk control and asset allocation.

At 9.17am, FGV fell 6 sen to RM1.56 with 2.31 million shares traded.

"In line with these best practices, we have been closely monitoring the equity performance of FGV over the years and have gradually sold down our shareholding," the retirement fund said in a statement yesterday."

Investing one's own money in shares is risky, and needs proper analysis.

Investing OPM (Other People's Money) requires more diligence and responsibility.

Investing in IPO's even more so, due to all the hype.

EPF invested OPM in FGV's shares during its IPO, even became "cornerstone investor". In February 2012 it owned 185 Million shares in FGV valued at about RM 1 Billion.

Now EPF said it sold all shares in FGV, which must have resulted in a loss of a several hundred million RM, apart from the opportunity cost.

Would this not be a good time for EPF to clarify why it invested in FGV in the first place, what changed along the years, if there were any corporate governance concerns regarding FGV, and if EPF actively tried to do something about those?

Sentences like "best practices" and "closely monitoring" don't add any information, that is simply boilerplate text.

This is a concrete case in which EPF most likely has lost a substantial amount of money. When an investment takes off, and generates a nice amount of profit EPF is entitled to boast about it, but if the opposite happens, surely its members deserve a proper explanation.

I wrote before about FGV.

1 comment:

  1. probably cornered into cornerstone haha.