The Employees Provident Fund (EPF), which has a cautious stance on 2018, will not invest in cryptocurrencies. EPF CEO Datuk Shahril Ridza Ridzuan said the fund finds it hard to invest in anything that has no intrinsic value instead of providing an actual yield of the asset.
"Cryptocurrency is effectively buying something with the hope of selling it to someone else for a better price.
The speculative element in terms of the returns profile is too great for a fund like EPF, which we focus more on generating actual returns from assets," he told a press conference after announcing the enhancements to EPF policies and schemes on Sunday, 17 December.
He said the global and domestic equity markets have performed better in 2017 compared with 2016, but that it will exercise caution in 2018.
"The equity market has been on a bull run for a long time. There'll always be reversals and market sentiment.
So 2018, we have to take some caution, in an environment where central banks are starting to heighten interest rates and some of the euphorias in the equity markets may start to disappear and approach valuations that are more rational, "said Shahril.
He said Malaysia is dependent on the growth of corporate profits, which has been alright for 2017.
For 2018 however, Shahril opined that companies may not progress as well as expected as valuations may reflect actual earnings potential.
He said the EPF is looking at infrastructure investments in the US, subject to the right tax treatment and exemption, which is still under discussions.
On the EPF eyeing stakes in foreign-owned insurance companies, he said the pension fund is looking at whether it can reach a common valuation with the sellers.
"We have a keen interest in any assets that provide economic returns and good yield.
The foreign insurers are looking to sell off their shares so we're looking at it," he said.