Government confident of capital market growth

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  • Friday, 02 May 2008

MALACCA: The government is confident that Permodalan Nasional Berhad (PNB) is capable of repeating the success achieved through the ‘blue ocean’ strategy to ensure continued growth of the nation’s capital market.

Deputy Prime Minister Datuk Seri Najib Tun Razak said PNB adopted this proven strategy when it made its first foray into the capital market when the Amanah Saham Nasional unit trust was launched in 1981.

“The results were beyond our expectations as we thought that we would get an initial investment for 200 million units but was shocked when it hit 540 million units within nine months of its launch,” he said.

He said this in his speech read on his behalf by Chief Minister Datuk Seri Mohd Ali Rustam during the closing ceremony of the Amanah Saham Malaysia week celebrations in MITC, Ayer Keroh on Tuesday.

In this respect, he expressed confidence that PNB’s proposed RM3 bil Structured Investment Fund (PNB SIF), open to local and foreign individual and institutional investors, would increase PNB’s standing.

Earlier, Najib noted that the nation’s investment trust industry, which is closely tied to economic growth, has continued its vigorous expansion.

As of Feb 29, he said there were 39 investment trust companies managing 533 types of approved funds.

He added that the collective investment in the funds amounted to 216.3 billion units with a net value of RM169.6bil, representing 16.49 % of Bursa Malaysia’s capital market of RM1.028tril.

Nevertheless, Najib said, there is room for growth in the industry as compared to some countries where trust funds make up a sizable portion of the capital market.

(54 % of the US capital market,78 % in Australia, 58 % in Brazil, 21 % in Germany and 38 % in Hong Kong).

Earlier, in his speech, PNB’s chairman Tan Sri Ahmad Sarji Abdul Hamid proposed that, as part of their corporate social responsibility, companies could provide loans to employees to allow them to invest in PNB’s trust funds.

He also suggested that the government and sport bodies reward athletes and workers who excel with PNB’s trusts unit.

If this is done, he added that PNB would stand to increase its funds by RM109.1mil annually if 10% of the total government workforce of 10.91 million and the private sector’s 1.14 million invest RM100 in their trust units.

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