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November 2022
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Malaysia’s haj pilgrimage fund income drops as inflation, rate hikes roil markets

For the first six months, more than 200,000 new savings accounts were opened
By Goh Thean Eu   
September 26, 2022

Malaysia's haj pilgrimage fund saw its income drop 3.29% in the first half of 2022 compared to a year ago amid bearish sentiment in global markets amid concerns that central bank rate hikes to battle inflation will dampen economic growth.

The fund, Lembaga Tabung Haji (TH), reported total income of 1.47 billion ringgit (US$321.66 million) in the six months to June, down from 1.52 billion ringgit in the same period of 2021.

The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index slid 7.85% in the first half of 2022.

Financial markets have been slammed as central banks around the world raise interest rates to try to rein in soaring inflation. There is growing concern that higher borrowing costs will lead to a recession.

Last week, the US Federal Reserve raised its benchmark interest rate by 75 basis points for a third consecutive time, its fifth increase this year.

In spite of the lower income, TH reported total deposits of 88.09 billion ringgit as of June 30, the highest level in the fund’s 59-year history, and up 7.5% from the end of 2021, as more than 200,000 new accounts were opened in the first half of the year. The number of depositors rose to 8.6 million from 8.4 million at the end of last year.

“This achievement reflected TH's resilience despite facing the after effects of the Covid-19 pandemic which has not ended, among which were the effects of inflation, market uncertainty, and global economic weaknesses,” TH says in a statement on September 23.

According to Group Managing Director and Chief Executive Officer Amrin Awaluddin, the fund will continue efforts to "increase income through investment and manage operational costs more efficiently".

“TH will also continue to focus on a high level of governance, compliance and integrity for the benefit of TH and its depositors,” he says.