A higher dividend may be expected from the Employees Provident Fund (EPF) this year as it recovers the bulk of its investments overseas after a 14% year-to-date improvement in the Dow Jones Industrial Average, which closed above 10,000 points on Wednesday.
With the Dow Jones recovering to the 9,000-plus level since July, EPF equity investments in the overseas markets are now above costs.
As a result, a higher dividend for 2009 compared with the previous year can be expected, provided that the markets do not experience any erratic disruptions in the next three months.
Last year, the EPF declared a dividend of 4.5% compared with 5.8% in 2007, mainly due to the increase in provisioning resulting from the sharp decline in global equity prices.