State investment company Khazanah Nasional Bhd is gearing for more innovative investment options to follow its landmark portfolios in the sukuk marketplace.
Khazanah has made it its mission to succeed in dealing with the challenging sukuk market, said Khazanah CFO Mohd Izani Ghani.
It plans to publish a coffee table book to share its success stories thus far.
“This will be about the successes and challenges faced by the industry players in the Islamic banking and finance sector,” he said at a public lecture on Islamic finance in Kuala Lumpur last Friday.
The lecture was organised by Institute of Islamic Banking and Finance, an instutite of the International Islamic University Malaysia.
Khazanah started to venture abroad after it was issued a mandate in 2004 by the government to allocate stragegic investment. It was then tasked to venture abroad and to expand beyond its national borders.
“By 2005, we were present in Indonesia, Singapore, China, India, the Middle East and Turkey, creating a historic first in promoting sukuk to these markets in order to raise funds for projects Khazanah was entrusted with,” he said.
In recent weeks, Khazanah was in the news when it selected three banks to help arrange a sale of as much as US$1 billion (RM2.98 billion) of convertible Islamic bonds. The sovereign fund said it was working with CIMB Group Holdings Bhd, Deutsche Bank AG and Standard Chartered plc on a potential offer.
The Shar iah- compl iant bonds, or sukuk, would be exchangeable into shares of companies controlled by Khazanah, which owns about 33% of Tenaga National Bhd, the country’s biggest power producer and about 29% of Telekom Malaysia Bhd (TM), Bloomberg data show.
Khazanah is also the largest shareholder in telecomunications company Axiata Group Bhd and IHH Healthcare Bhd. Since 2004, Khazanah has helped transform several government linked companies (GLCs) as it was part of the company’s mandate to help in the GLC transformation programme introduced by the government.
During the discussion, Mohd Izani spoke of Khazanah’s proactive role in promoting economic growth, thanks to its involvement in the sukuk as well as the task of making active and strategic investments in new sectors and geographies.
These included new economy investments for the nation and future plans to push the sukuk investment further, well beyond the company’s current portfolio and geographic delimitations.
“We provided the strategies and the concepts to the companies under our umbrella, we also monitored their progress and their transformation to the point that today these companies are successful.
“Take for example, TM, which was struggling with a fall in landline applications but the company was resurgent thanks to the advent of broadband and fibre optic,” he said.
Despite Khazanah’s limited annual cash infusion, having no allocation of funds except the shares transfered to it after it injected funds in the companies it helped with the transformation programme, the company worked hard and told the GLCs to deliver and that is where it earned from the dividends paid, he said.
Highlighting Khazanah success stories, Mohd Izani said the company is a unique organisation that has launched innovative sukuk across Asia including the first global sukuk in US dollars, in Singapore dollars and in the yuan exchange.
A rough estimate shows that the company has helped raise US$3.5 billion for companies based in Singapore, Malaysia and Hong Kong, among others.