By P PREM KUMAR / Pic By HUSSEIN SHAHARUDDIN
Tan Sri Dr Zeti Akhtar Aziz (picture) has set the tone for a reformed Permodalan Nasional Bhd (PNB), outlining the need to enhance investment asset classes, while injecting a resilient risk management philosophy and allowing market-driven corporate deals.
The former Bank Negara Malaysia (BNM) governor, who was appointed as the chairman of the country’s largest fund manager in late June, has been tasked to transform the stateowned unit trust manager.
PNB has been aggressive over the last 20 months, pushing for corporate mergers, restructuring investee companies and injecting new funds in various deals. Core PNB companies have seen major corporate exercises.
Conglomerate Sime Darby Bhd was broken into three separate listed entities; UMW Oil and Gas Bhd (UMW-OG) was separated from conglomerate UMW Holdings Bhd; Chemical Co of Malaysia Bhd and its listed subsidiary CCM Duopharma Biotech Bhd restructured; and injection of PNB’s I&P Group Bhd into SP Setia Group Bhd.
Zeti said the fund will now take a step back and evaluate the outcomes of these aggressive corporate exercises, but will not interfere in marketdriven corporate mergers.
“There is going to be a period of consolidation. Of course, we don’t exclude any market-driven merger or demerger exercise, but not precipitated by PNB.
“We will let it be driven by market process,” she said after launching two new variable price unit trust funds by Amanah Saham Nasional Bhd (ASNB) — ASN Equity 5 and ASN Sara 2 — in Kuala Lumpur yesterday.The launch was her maiden public event as PNB chairman after taking over the helm from Tan Sri Abdul Wahid Omar in June.
Known for her iconic plain baju kurungs and straight tone, Zeti served as BNM governor for 16 years between 2000 and 2016. She is one of the members of the Council of Eminent Persons.
Zeti said PNB’s five-year transformation programme “Strive 15”, ending in 2022, is also being reviewed as part of the transformation.
The programme targets, among others, for PNB’s asset under management (AUM) to increase to RM350 billion at the end of 2022. The fund’s AUM now stands at RM288.1 billion, “The Strive 15 (initiative) is at mid-point now…Given that domestic and international environment are rapidly changing, and we are faced with many new challenges, it is very appropriate to conduct a review at this point in time and see what changes we need to make,” Zeti said.
She said the review will allow PNB to better leverage in terms of operations and income distribution.
The chairman said the fund needs to diversify into “great opportunities” in the emerging markets, to better manage risks and strengthen its buffers.
“This will be the approaches that we are taking. We will not rush into it, we will build our capabilities and then venture forward.”
Zeti said despite PNB’s encouraging performance and a high level of professionalism, the fund has to further diversify its investments, both in asset classes and footprint.
The fund manager also has to improve its capability in managing risk for the fund to withstand economic and geopolitical shocks domestically and globally.
“As we advance forward, we will need to venture into other areas to unlock value and explore new opportunities to drive our growth.
“Diversification is important for PNB simply because the size of the fund, but it will be done gradually…gradualism will be our approach in doing this.
“Diversification doesn’t mean only investing in developed economies, but as a practice we had in the central bank, the focus must also be on the emerging economies where there is growth,” she said.
PNB’s consolidated income rose 2.6% to RM10.3 billion in the January through August 2018 period.
Zeti also stressed the importance of organisational transformation.
“During my term as the governor of BNM, we had three organisational transformations. We were very ambitious to be at the frontier of central banking. So, I would like to be equally ambitious here,” Zeti said.