One question from my RM5bn for Valuecap post has been answered. Datuk Seri Najib Tun Razak has said that the RM5bn additional investment in Valuecap will be provided by the Employees Provident Fund (EPF). But that answer creates even more questions:
- EPF is actually making a competitor stronger! Valuecap is going to take the money and buy shares. EPF also buys shares. What if Valuecap wants to buy the same shares as EPF? Both will end up competing and paying a higher price than necessary. The result? A very happy seller, but less profit for EPF which means smaller dividends for all us contributors.
- “The value of shares can go up as well as down.” The standard disclaimer in all prospectuses. Will that RM5bn sum extended to Valuecap be guaranteed? If not, EPF should be charging a very high interest rate to compensate for the risk. Which brings me to the last question:
- What interest rate will Valuecap be charged and how long will the loan be for?