Firms linked to Khazanah add RM3.4b in market cap

by MARK RAO / graphic by TMR

Khazanah Nasional Bhd’s investee companies posted strong gains yesterday, a day after the appointment of new directors as membership of the decision-making body at the strategic investment fund shrunk to more than half.

Ten blue-chip stocks, which have the state-owned fund as a major shareholder, added RM3.41 billion in market capitalisation yesterday.

The government acted on its promise to “clear the deck” at Khazanah by returning Tun Dr Mahathir Mohamad as the chairman.

The other new board members are Economic Affairs Minister Datuk Seri Mohamed Azmin Ali, former Petroliam Nasional Bhd (Petronas) president and CEO Tan Sri Mohd Hassan Marican, former Bank Negara Malaysia (BNM) deputy governor Dr Sukhdave Singh and investment banker Goh Ching Yin.

With the appointments effective immediately, members at the board level — the hierarchy which approves investment and policies at the fund — comprises five people, smaller than the previous over 12 people. It is not known if the government will add more people to the board.

Rumours are also swirling about the position of Khazanah MD Tan Sri Azman Mohktar. According to a source, Azman met Dr Mahathir in Putrajaya yesterday. It is not known what transpired during the meeting.

The government said on Monday that the MD at the state-owned strategic investment fund will be announced at a later date.

The fund has been engulfed in a mini scandal after reports emerged of a failed RM3 billion investment in global bank UBS Group AG in 2008.

Meanwhile, Tenaga Nasional Bhd, which is 28.08%-owned by Khazanah, rose 54 sen to close at RM15.68 yesterday, returning RM3.07 billion in market capitalisation to the fund.

Axiata Group Bhd, Malaysia Airports Holdings Bhd (MAHB) and Telekom Malaysia Bhd (TM) also ended higher yesterday at RM4.39 (up five sen), RM9.25 (+18 sen) and RM3.97 (+3 sen) respectively. The three counters added RM865.1 million in market capitalisation.

The state-owned fund has holdings of 37.17%, 33.21% and 26.21% in Axiata, MAHB and TM respectively.

Khazanah also holds 13.24% and 11.25% interests in Bioalpha Holdings Bhd and Key ASIC Bhd respectively, both of which closed 0.5 sen higher for a combined market capitalisation gain of RM8.7 million.

CIMB Group Holdings Bhd and UEM Sunrise Bhd — which Khazanah owns 27.37% and 66.06% of respectively — ended the day flat.

However, IHH Healthcare Bhd lost five sen to close at RM5.91, erasing RM412 million in market capitalisation, while TIME dotCom Bhd fell 20 sen to RM8.20 for a market capitalisation loss of RM116.72 million. Khazanah has 40.42% and 11.19% interests in IHH and TIME respectively.

The fund’s key companies lost about RM2 billion in market capitalisation after nine of its board members offered their resignations last week.

Azman had been the head at Khazanah for over 14 years since June 1, 2004. He was given a rousing send-off yesterday by his staff at Khazanah’s offices at the Petronas Twin Towers.

A few names have been speculated to replace Azman including Datuk Charon Wardini Mokhzani, Datuk Yusof Annuar Yaacob and Datuk Mohd Zafer Mohd Hashim.

Charon was the former MD of Khazanah Research Institute, while Mohd Zafer was formerly the president and MD of Bank Pembangunan Malaysia Bhd. Yusof is currently the country manager for Deutsche Bank (M) Bhd.