Urusharta Jamaah turns net seller in MCO period

The SPV now has stakes in 57 listed companies compared to 106 in late 2018


URUSHARTA Jamaah Sdn Bhd (UJSB) has been actively managing its portfolio and trimming stakes in some companies since April as the local market retraces losses triggered by the Covid-19 pandemic and amid heightened volatility and volumes traded.

A check on Bloomberg reveals that the special-purpose vehicle (SPV) of the Ministry of Finance (MoF), which took over Lembaga Tabung Haji’s (TH) non-performing assets, now has stakes in 57 listed companies compared to 106 in late 2018.

Its total current equity assets under management to date are worth about RM3.9 billion, with its largest current exposures are in the communications (29.7%) and consumer staples (18%) sectors.

By market cap, UJSB’s largest current exposures are in small-cap (47.9%) and mid-cap (37.2%) stocks.

Notably, since April the market benchmark FTSE Bursa Malaysia KLCI has gained over 15%, trading between 1,322 and 1,523 points.

Market transactions data during the Movement Control Order (MCO) period reveals that UJSB reduced stakes in 18 companies within its portfolio and raised stakes in six in the period.

By number of shares, its biggest sale of shares was of Icon Offshore Bhd; 94.2 million shares sold on April 15.

After ceasing to be a substantial shareholder in the offshore sup- port vessel player on Jan 23 and surfacing again on Feb 18, the MoF’s wholly owned entity now holds only 14.1 million shares in the company.

The fund sold 74.76 million shares of Mah Sing Group Bhd on May 8 and 35.9 million shares or 3.46% stake in KSL Holdings Bhd on May 6. The block represented half of the SPV’s 6.92% stake in KSL, which it took over from TH.

UJSB also sold 27.07 million shares in Hap Seng Plantations Holdings Bhd on May 29 and 22.46 million shares in Naim Holdings Bhd on April 30.

In an interview with a local media recently, UJSB CEO Izad Shahadi Mohd Sallehuddin said the ongoing portfolio management is within the ordinary course of business.

Izad Shahadi also stated that as for any trading cycle, there are some sectors and stocks the SPV prefers, and the only way to get exposure to the sectors or stocks would be by selling some of its holdings as it is not receiving any cash injection for reinvestment purposes.

Proceeds raised from the sale of shares are being reinvested back into the stock market.

UJSB had been hiving off shares in MMC Corp Bhd as well. On April 30, it hived off 44.2 million shares, trimming its stake to 103.47 million shares, or 3.4% equity interest.

This came after it sold off 21.35 million MMC shares between March 5 and 10.

During the four trading days in March and one trading day in April, MMC’s stock averaged 80 sen. In contrast, last year, MMC’s average trading price was RM1.02.

TH was a substantial shareholder in MMC from December 2014 before UJSB took over, and received 15.3 sen in dividends. UJSB, meanwhile, received a four sen per share payout in 2019.

UJSB sold 53.8 million shares in Boustead Plantations Bhd on April 30, trimming its stake to 21.53 million shares, or 0.96% equity interest.

Last year, Boustead’s average share price was 74.4 sen compared to 38.5 sen yesterday, a decline of 53% in the past one year.

After ceasing to be a substantial shareholder in Star Media Group Bhd upon selling 2.89 million shares between March 5 and 12, UJSB continued to trim its stakes by another 32.9 million shares on May 6.

Now, the SPV only holds a 0.52% stake in the media group. Between March 5 and May 6, Star Media traded at an average price of 30.6 sen. In contrast, Star Media’s share price averaged 62 sen last year.

TH had surfaced as a substantial shareholder in Star Media in June 2014, and made close to RM1 per share in dividends before it gave up its shares in December 2018 to UJSB.

In contrast, UJSB has bought an additional 629,300 more shares in FGV Holdings Bhd on June 5, bringing its stake in the integrated edible oils group to 295.3 million shares or 8.09% equity interest, an exchange filing by the latter revealed.

The transactions reveal that UJSB’s portfolio remains confined to Shariah-approved stocks with a marked absence of banking or other dividend-paying counters like the brewers or fast-moving-consumer-goods counters.