KUALA LUMPUR: Lembaga Tabung Haji (TH) is confident of registering competitive profits and hopefully will be able to pay hibah or dividends to its depositors for the financial year 2022, despite facing a challenging year.
Group managing director and chief executive officer Datuk Seri Amrin Awaluddin said during the MIDF Conversation programme held virtually today that TH’s strategic asset allocation (SAA) or investment profile is very similar to that of Permodalan Nasional Bhd where the bulk of the returns would depend on the performance of the stock market locally and globally.
Based on the SAA for 2021 to 2023, he said TH had strategised to optimise its risk-return profile to generate steady and stable returns guided by risk appetite and liabilities requirements with considerable risk assessment.
He said focus is given towards low to medium-risk assets that generate consistent returns, optimise portfolio based on liquidity needs and returns matching the risk appetite of depositors.
As of Sept 30, 2022, TH asset positions comprised 60.1 per cent or RM52.79 billion of fixed income, property (8.7 per cent or RM7.63 billion), domestic equity 16.5 per cent (RM14.51 billion), foreign equity 5.1 per cent (RM4.49 billion), private equity 1.1 per cent (RM974 million) and money market 8.5 per cent (RM7.44 billion)
"Our target return for our profile would be 0.5 to 1 per cent above the Islamic fixed deposit rates. Our targets do not have to be competitively higher than the market and typical fund management or unit trust class. Comparatively, TH depositors have the advantage of withdrawing their cash instantaneously and it is a risk-free rate to certain aspects,” he shared.
Amrin expects 2023 to continue to be challenging for TH and is strategising and looking into ways to plan for future proofing investment systems.
He said the pandemic had some impacts on TH’s investments and deposits level.
"During the pandemic, people discovered a new way of working and do not really need physical office with TH having a significant investment in property, space rental had been challenging. Besides that, withdrawals also spiked during the pandemic.
"Profit distribution would be a challenge moving forward because we need to attract deposits as we need money to make money, but we have certain risks profile that we need to adhere to and at the same time compete against other alternative investments. So it is a challenge for us,” he said.
On another note, with the hajj cost more than double in 2022 and is expected to increase further in 2023, he said the challenge for TH is on increasing the amount of subsidy needed to be allocated for pilgrims.
Amrin said he hoped the final report of the Royal Commission of Inquiry (RCI) into issues of management and operations of TH would be made available soon with the newly formed government.
"This will set the way forward for TH’s business model, investment strategy as well as the corporate governance and best practices,” he added. - Bernama
