It could have been a lot worse, had PNB not diversified its portfolio by increasing its international investments, says chairman
by DASHVEENJIT KAUR/ pic by MUHD AMIN NAHARUL
INCREASING international investments saved state investment fund Permodalan Nasional Bhd’s (PNB) performance from going south, according to its chairman Tan Sri Dr Zeti Akhtar Aziz.
“It could have been a lot worse, had we not diversified our portfolio by increasing our international investments as planned under PNB’s Strategic Asset Allocation framework,” she said during a PNB media briefing in Kuala Lumpur yesterday.
PNB announced an income distribution of 5.5 sen per unit for the Amanah Saham Bumiputera (ASB) scheme for 2019 — its lowest level in 29 years, dragged by weak equity markets and ongoing US-China trade tensions.
It recorded a total payout of RM13.2 billion across all funds in 2019.
The fund management company said it aims to accelerate the diversification of its portfolio by meaningfully increasing the percentage of global investments across all asset classes going forward.
“We would like to expand our foreign equity holding, that’s the intention. But, it is a gradual process.
“As of now, our international exposure has increased to 8% from 3% previously. We are going to strive to be better and it is through diversification, that is how we plan to look ahead,” Zeti stated.
PNB will continue to navigate these challenging times as it has done so for over 40 years, she noted.
“We will continue to strengthen our investment portfolio in this challenging period via our diversification strategy and tighter risk management, and enhance our internal capabilities through a progressive organisational transformation plan.”
According to PNB CEO Jalil Rasheed, diversification of the fund’s portfolio falls under the reviewing of its strategic asset allocation and optimal liquidity management, along with other key areas comprising enterprise risk management and organisational transformation.
“We are also considering investments in other geographies in developed markets such as the US, France, Germany, the UK, Australia and Japan, and emerging economies in Asia and Europe.
“However, this will be done on a gradual basis, as PNB needs to build up its expertise in these markets,” he said.
For the first 11 months of 2019, PNB’s total assets under management grew 5.7% year-on- year to RM311.9 billion.
The proforma net income of PNB and its unit trust funds stood at RM10.7 billion. Units in circulation grew by 7.5% to 253.8 billion units across its 14 funds.
The fund management company is actively recycling some of its capital for new and better investment opportunities in both domestic and international markets, Jalil added.
On the progress of the Merdeka 118, the soon-to-be tallest building in Kuala Lumpur, Zeti said the core of the Merdeka 118 tower has reached level 91, while the construction progress is at 46% of completion.
“It would reach the 80th floor by Dec 30, 2019, which makes it about two-thirds completed,” she added.
On PNB’s plan to ensure a good take-up rate following the revival of Bandar Malaysia, Zeti said the strategy is to be “distinguished and differentiated”.
“We are looking at new and different kinds of tenants, that’s our strategy since it is a Premium A building and there’s only between four to five such buildings in Malaysia that are all running at more than 90% occupancy,” she said.
Of the 118 storeys in the Merdeka 118 tower, 83 floors will be premium office space, 17 floors will house the five-star Park Hyatt hotel and four floors will be for South-East Asia’s highest observation deck, while the remaining floors will be used for mechanical and electrical systems and other functions.
* The article has been edited and rectified for clarity and correctness.