PNB reveals secret of how it makes money to pay high dividends


The meeting where the world class fund revealed for the first time the secrets on how it is able to make the money to give out the big dividends it has been giving out for years. (PNB president and group CEO Datuk Abdul Rahman Ahmad (right) speaking as PNB group chairman Tan Sri Abdul Wahid Omar looks on during the media briefing on PNB Strategic Plan 2017 - 2022 at Grand Hyatt Hotel yesterday. IZZRAFIQ ALIAS / The Star. November 24, 2016)

The meeting where the world class fund revealed for the first time the secrets on how it is able to make the money to give out the big dividends it has been giving out for years. (PNB president and group CEO Datuk Abdul Rahman Ahmad (right) speaking as PNB group chairman Tan Sri Abdul Wahid Omar looks on during the media briefing on PNB Strategic Plan 2017 - 2022 at Grand Hyatt Hotel yesterday. IZZRAFIQ ALIAS / The Star. November 24, 2016)

PETALING JAYA: Permodalan Nasional Bhd (PNB) hardly opens up to the media, especially when it comes to matters pertaining to its investment strategies.

But when it decided to open the doors and let out the secret on how the country’s largest unit trust has been able to return a dividend of at least 6% irrespective of the performance of the markets, PNB did it in style.

It broke away from tradition at the very onset. Members of the media were told to occupy the seats at the main table instead of the top officials. There were 10 tables and the prime seats at all the tables were for the media. That itself caught everyone by surprise.

PNB’s group chairman Tan Sri Abdul Wahid Omar used a lapel microphone on stage when briefing on the group’s five-year strategy, setting the tone for a good 90-minute discussion on the operations of the fund-management company that has 12.6 million account holders.

Wahid, who himself had served under PNB-controlled companies before taking on the assignment with the Government, started the ball rolling at 10.46am. After having completed his first 115 days as PNB chairman following his appointment on Aug 1, Wahid said his waistline had expanded.

He felt that it was an indication of him getting comfortable with his new task. But quickly, Wahid, who trained as an accountant, went for the subject matter for the day – setting the future path of the fund that has RM260bil in assets under management.

“The honeymoon period is over,” he said, as the slides started to roll in the background on how big and how much PNB has done so far. For the first time, information such as how much PNB has paid out over the years was revealed. More interesting is that the amount it needs to earn in a year to pay out a dividend of between 6% and 7% was also made known.

The numbers are staggering. PNB has distributed RM136.4bil to its account holders since its inception in 1981 and estimates making RM15.18bil this year to continue with its trend of paying dividends of about 6% or more.

As a fund, PNB is no small fish – it is among the top-five in the region and the companies under its stable commanded 10% of Bursa Malaysia’s market capitalisation of close to RM1.7 trillion as at end-September.

Wahid’s partner to chart the next five years of PNB is another well-known name in Malaysia’s corporate circles – Datuk Abdul Rahman Ahmad, who was appointed as president and group chief executive officer of PNB on Oct 1.

Only 55 days into the job, Abdul Rahman had to come up with a strategic plan.

“It is the fastest plan that I have ever devised,” he said as he took over the presentation from Wahid.

Abdul Rahman’s first message was that corporate Malaysia has got to start producing the results desired by its investors. That is obvious, as both Abdul Rahman and Wahid are known for their work in corporate Malaysia.

The duo held court until the bunch of journalists exhausted all questions pertaining to PNB, which had shied away from the media for years. At the end, many left convinced that this is indeed a new-look PNB.

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