KUALA LUMPUR: Following its lowest dividend payout since Amanah Saham Bumiputera’s (ASB) inception in 1990, Permodalan Nasional Bhd (PNB) is looking to increase investments abroad, enhance risk management and push for “transformational” changes at its investee firms.
PNB has a target of boosting foreign investments to 30% of its portfolio by 2022, from its current 8%.
During a press briefing yesterday, PNB group chairman Tan Sri Zeti Aziz said: “We will continue to strengthen our investment portfolio in this challenging period via our diversification strategy, tighter risk management and enhancing our internal capabilities through a progressive organisational transformation plan.”
While the fund management company intends to increase its foreign equity holdings, Zeti explained that this would be a gradual process as it is vital to practise caution.
“While foreign investments generate higher returns, it is also subject to volatility.
“No market is immune from these increased volatility due to global developments that are taking place, so we have to be very cautious in this process of diversification.
“We also aim to generate a higher rate of return as a result of better liquidity management, going forward, ” she said.
At present, PNB’s geographical exposure for its foreign investments are mostly in the United States and Europe, through real estate, real estate funds and private equity (PE).
PNB president and group chief executive Jalil Rasheed said the fund is looking to increase its geographic exposure, particularly through PE firms in Asia.
“All our investments abroad are done via co-investments with PE firms.
“We are not just focused on developed markets, but are looking at emerging economies in Asia, which are more dynamic, ” he said.
PNB’s wholly-owned unit trust company Amanah Saham Nasional Bhd (ASNB) declared a distribution payout of 5.5 sen per unit for its flagship fund ASB for the financial year ending Dec 31,2019 (FY19).
This entails an income distribution of 5 sen per unit and a bonus of 0.5 sen per unit, which was achieved on the back of a challenging market environment.
Despite that, ASB outperformed the FBM KLCI one-year price return as at Dec 16,2019, by 12.7%.
ASB also outperformed its benchmark, Maybank 12-month fixed deposit by 2.4%.
The total payout amounts to RM9bil, which will benefit 10 million unitholders who own 167.2 billion units in ASB.
For the first 11 months of FY19, PNB’s assets under management grew 5.7% to RM311.9bil in FY19.
Meanwhile, its proforma net income and unit trust funds remained stable at RM10.7bil.
Jalil, who has been at the helm of PNB for two-and-a-half months, said the fund will be drawing up a comprehensive strategy for 2020.
“Our mandate is to enhance the wealth of unitholders and help distribute that wealth, and we will work on how we are going to tackle challenges ahead and make the organisation nimble, ” he said.
The intensified diversification process will see the fund recycling some of its capital to new investment opportunities within the domestic environment as well as international financial markets.
PNB will also strengthen its risk management, by better positioning itself to identify as well as manage and mitigate risks to remain resilient.
Additionally, PNB will strengthen its organisation and institutional development, which Zeti said will “involve significant transformation, which will cut across every aspect of the organisation, from adoption of technology to talent development and management”.
In line with the growing megatrend of sustainability, PNB will undertake an assessment of the impact of its investments through its strategic and core companies.
The impact to be assessed shall entail economy, community, society and environmental sustainability.
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