Dividends will continue to be paid despite challenging year

KUALA LUMPUR: Despite anticipating a more challenging year ahead, Khazanah Nasional Bhd is ready to “play its role” when it comes to paying dividends to its stakeholders.

Its group managing director Tan Sri Azman Mokhtar said: “If you look at Khazanah’s relative strength, we have the capacity to pay our shareholders.

Khazanah paid dividends amounting to RM900mil last year and had declared cumulative dividends worth RM7.41bil since 2004.

The Prime Minister was expected to give a speech to review the budget next week on the back of declining oil revenues in order to balance the country’s fiscal position.

“Khazanah is ready to play its role even if it means having to do more... within our parameters.”

He said that would be done without compromising its target to continue its investment.

On the other end, it expected “tighter” dividends from the companies it invested in due to unfavourable macro factors such as weaker ringgit and lower oil prices.

“Generally, there will be pressure on dividends,” he said.

That said, low oil prices would bode well for some of its investments such as airline while the restructuring its investee companies had undergone during the good times would help it brave through tough times as they become resilient.

“Most of the dividend expectations are fairly constant while payout ratios are fairly sensible.”

Asked on how any possible measures to restrict overseas investments when the ringgit is weakening might affect its investment strategy, he said the fund was still seeking clarification from the Government.

“One thing to note is that Khazanah is a company, not a secretary agency. Any company incorporated in Malaysia goes by what the board approves. In our case, we have an internationalisation investment policy... so we will continue with that without neglecting our roles in investing domestically.”

He opined that the current 40:60 geographical split between foreign and local investment is considered appropriate compared to the 1:99 ratio 10 years ago.

Currently, 85% of its investee companies are Malaysian companies while its geographic exposure was 59.3% domestic and 40.7% foreign.

It is interested in life sciences and disruptive technologies in the United States.

This year its investment strategy would include inclusivity, which counts bulding affordable housing under its plans.