LTAT’s downturn due to gloomy market

Uncertainty in the local stock exchange has pushed LTAT to explore new investment areas

By P PREM KUMAR & DASHVEENJIT KAUR / Pic By BERNAMA

The gloomy stock market was the primary factor for the armed forces fund’s dwindling performance over the last three year, said Defence Minister Mohamad Sabu (picture).

The uncertainty in the local stock exchange has pushed Lembaga Tabung Angkatan Tentera (LTAT) to explore new investment areas to guarantee steady returns.

Mohamad said dividends declared by LTAT each year is based on the profits it managed to generate that year, with a large part of that return generated from companies’ dividends invested in as well as share-selling activities.

“Over the past three years from 2015, 2016 and 2017, LTAT’s returns from investment in companies and sales were jeopardised due to the uncertainty of performances in the local stock market.

“The board of directors and management of LTAT will identify new investments that are profitable and review the investments from time to time to ensure LTAT’s investments are safe and bring opportunity (for returns),” Mohamad told the Dewan Rakyat yesterday.

The minister was responding to Kuala Terengganu MP Ahmad Amzad Mohamed who asked the factors behind the decrease in LTAT’s net profit and dividend in the past three years.

Mohamad said LTAT currently generates returns from other investments such as sale of property, interest on deposit, monthly rental from buildings and land.

The minister also said LTAT will declare dividend payout for the financial year ending Dec 31, 2018, in February next year and will be based on the economic conditions and current investments, without revealing the dividend payout expected.

For 2017, LTAT had declared a 12.5% dividend and bonus, which was higher than the average annual payout of 11.3% since the board was set up 45 years ago.

However, the payout comprised a 6% dividend as well as a 6.5% special bonus in the form of unit trusts.

Mohamad assured that the government will continue to give a 6% bonus in cash and unit trust to members of the military through LTAT.

He said the dividends, namely cash and unit trusts, are for its contributors who are saving for their future.

“But the government and LTAT think that it is for the long term. That’s why the unit trust is credited to them for their future,” he said, adding that when the armed forces retired, they would gain the profit from the investment and from the unit trusts that are invested.