Lower dividend anticipated for PNB’s funds

by NUR HANANI AZMAN/ pic by TMR FILE

PERMODALAN Nasional Bhd’s (PNB) dividends for its funds would likely fall short of last year’s figures as the country’s equity market is hammered due to the coronavirus crisis.

Malaysia’s main index has already shed 143.53 points in the past one week alone, erasing billions in market capitalisation.

Economic analyst Dr Aimi Zulhazmi Abdul Rashid said fund managers are expected to face pressure due to the persistently slower economic growth since last year.

“Dividends from shares or funds are mainly affected by GDP that grew only 3.6% due to falling crude palm oil prices, moderate oil prices and the ongoing trade war between the US and China,” he told The Malaysian Reserve (TMR).

In March 2019, PNB declared income distributions of six sen per unit for its Amanah Saham Bumiputera 2 (ASB2) and 5.5 sen per unit for Amanah Saham Malaysia (ASM), with a total payout of RM1.71 billion.

Distributions of 4.1 sen, 4.2 sen and five sen were also announced for variable price funds Amanah Saham Nasional (ASN) Equity 3, ASN Imbang 2 and ASN Sara 1 respectively, for a total payout of RM236.1 million.

This brought the total payout to RM15 billion in 2018, the highest since 1981, taking into consideration the distributions for ASB and ASN that were announced earlier in December last year.

PNB, which managed RM298.52 billion in assets and 13.8 million accounts in 2018, is expected to announce the latest dividend for ASB2 this month.

“PNB’s 2019 performance 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,” PNB chairman Tan Sri Dr Zeti Akhtar Aziz said.

PNB has also outlined plans to accelerate the diversification of its portfolio by meaningfully increasing the percentage of global investments across all asset classes, going forward.

Meanwhile, the EPF declared a dividend of 5.45% for its Conventional Savings and 5% for Shariah Savings in 2019. The amount is the lowest dividend rate for the Conventional Savings declared by the pension fund since 2008.

Putra Business School Associate Prof Dr Ahmed Razman Abdul Latiff said the dividend for ASB2 should reflect the current economic situation and, as such, it is possible for the dividend to be lower than 2019.

“I believe PNB will continue to strengthen its investment portfolio in this challenging period,” he told TMR.

Academy of Sciences Malaysia fellow Dr Madeline Berma said a lower dividend is only logical as a reaction to Malaysia’s weak economic performance.

“Even in an economic scenario that has been challenging, the fund management company would seek to accelerate the diversification of its portfolio and find the right companies that would continue to grow,” she said.