Tabung Haji still owns stocks worth RM6.3b in 18 companies

Pilgrim fund posts net profit of RM440m in 1Q with earnings of RM623m


LEMBAGA Tabung Haji’s (TH) participation in the equity market has now been reduced to only 18 firms, a very small exposure compared to over 100 listed companies on its list six months ago, as the pilgrim fund continues to exorcise its books of volatile and risky equities.

The fund, which was saved by the government via an almost RM20 billion capital injection late last year to balance its books, sold 106 nonperforming domestic stocks to a state-owned special-purpose vehicle (SPV) Urusharta Jamaah Sdn Bhd in a cash for asset swap valued at RM19.9 billion.

The major exit from the equity market came as the management realigned its business model.

The new management had also agreed that the state-owned government-linked investment company didn’t have the knowledge to act as a fund manager.

After moving the non-performing stocks to the SPV, the pilgrim fund’s equities in the remaining firms have a combined market value of RM6.3 billion.

A check on Bloomberg shows that TH has a 73.84% stake in TH Plantations Bhd, 68.7% (Theta Edge Bhd), 53.82% (BIMB Holdings Bhd), 14.1% (Al-‘Aqar Healthcare Real Estate Investment Fund [REIT]) and 13.03% (Southern Acids Malaysia Bhd).

Other companies include Cahya Mata Sarawak Bhd with 9.67% stake, Gas Malaysia Bhd (7.79%), Taliworks Corp Bhd (7.43%), Muhibbah Engineering (M) Bhd (6.93%) and Ranhill Holdings Bhd (6.72%).

To date, TH had disposed of a bulk of its shares in Taliworks, Axis REIT Managers Bhd, Cahya Mata Sarawak and Southern Acids.

Based on filings to Bursa Malaysia this year, the pilgrim fund had shed the biggest stake in Taliworks with 2.49 million shares worth RM2.32 million on May 2. It was the first disposal after acquiring 5.28 million shares in 2018.

This brings its current market value in the company to RM139.26 million with a total of 149.75 million shares.

Meanwhile, the disposal of Axis REIT’s shares was the latest transaction by the pilgrim fund.

TH disposed of 1.29 million Axis REIT’s shares this year after acquiring 4.98 million shares since 2018. Historically, TH had dumped 6.8 million of the investment trust’s shares in 2016.

TH’s shareholding in Cahya Mata Sarawak was reduced by 88,600 shares this year, which brings the fund’s total shares in the integrated company to 103.7 million.

Record showed that TH disposed of 16,505 million of Southern Acids’ shares worth RM63,538 on April 16. Its remaining stake’s market value now stands at RM68.71 million.

The recent acquisition activity by TH was recorded on May 10 as the fund bought 100,000 of Malaysian Resources Corp Bhd’s shares worth RM95,451.

The last KPJ Healthcare Bhd’s shares transaction by TH was recorded on Feb 28 with 113.23 million shares acquired at RM108.12 million.

TH also acquired 21,500 shares in Al-‘Aqar Healthcare REIT worth RM30,749 on April 3, which brings its shareholding to 103.73 million.

Last year, its group MD and CEO Datuk Seri Zukri Samat said about half of the pilgrim fund’s assets were in the stock market, and that it targets to reduce them to 20%.

The move was in response to the fund’s troubled financial situation, which was revealed after the change of government.

In relieving some of its balance sheets, TH is in the process of transferring RM19.9 billion of its underperforming assets, comprising equities and properties, into the SPV.

In its first quarter ended March 31, 2019 (1Q19), the pilgrim fund posted a net profit of RM440 million with earnings amounting to RM623 million.

The fund attributed the gain to the successful completion of the restructuring and rehabilitation process, which was implemented at the end of December last year.

TH’s financial position strengthened with its total assets exceeding liabilities by RM1.2 billion, contributed by the improved portfolio investment performance and quality of assets after impairment made in 2018.

Meanwhile, TH handed over business zakat totalling RM3.5 million for 2018 to Zakat Pulau Pinang in Georgetown yesterday.