Urusharta Jamaah continues portfolio reengineering

The SPV ceases to be a substantial shareholder in 22 companies over the past 22 months, according to Bursa Malaysia filings


URUSHARTA Jamaah Sdn Bhd (UJSB) has trimmed its stake and reduced the size of its portfolio to 60 listed companies since taking over shareholdings in some 106 listed companies from Lembaga Tabung Haji (TH) in late 2018.

Its total current equity assets under management to date worth about RM885.3 million, with its largest exposure being the communications (27.5%) and consumer staples (19.7%) sectors, according to recent Bloomberg data.

By market capitalisation, UJSB’s largest current exposures are in small-cap (46.6%) and mid-cap (35.3%) stocks.

Market transaction data indicated that UJSB had shed its stakes in 49 companies within its portfolio and acquired new holdings in at least five companies over the past 22 months.

The special-purpose vehicle (SPV) also ceased to be a substantial shareholder in 22 companies during the period, Bursa Malaysia filings showed.

They included MMC Corp Bhd, Icon Offshore Bhd, Mah Sing Group Bhd, Hap Seng Plantations Holdings Bhd and WCT Holdings Bhd, among others.

Its initial shareholding of 233.82 million shares in MMC Corp was reduced to 103.5 million shares, which accounted for a 3.4% equity interest in the utility and infrastructure conglomerate as of April 30, 2020.

UJSB disposed of a total of 130.32 million shares between Feb 18, 2020, and April 15, 2020, and ceased to be a substantial shareholder on the final date of transaction.

The fund also sold 106.7 million shares in Mah Sing between February and March this year, ceasing to be a substantial shareholder on March 20. UJSB currently holds 33.3 million shares or a 1.37% stake in the property developer.

To recap, UJSB acquired 106 of TH’s non-performing stocks at 120% above market value at end-2018. The entire portfolio was transferred to UJSB for a total of RM16.85 billion based on the pilgrim fund’s entry point in each respective stock, instead of their collective market value of RM7.47 billion as at Dec 31, 2018.

TH’s shares in MMC, which were valued at RM194.07 million at the time, were acquired by UJSB for RM583.46 million — a 240% premium.

Meanwhile, shares in Mah Sing were transferred to UJSB from TH at a 77.3% premium for RM227.12 million.

UJSB also reduced its shares in Icon Offshore, which it acquired for RM139 million. As at April 15, 2020, its shares in the offshore support vessel player stood at 14.1 million shares or 0.53% stake.

Former UJSB CEO Izad Shahadi Mohd Sallehuddin, who quit unexpectedly in July after a change in the federal government, said the ongoing portfolio management is within its ordinary course of business.

Izad Shahadi said as with any trading cycle, the only way to get exposure to its preferred sectors or stocks would be by selling some of its holdings that are non-profitable. Proceeds raised from the sale of shares will then be reinvested back into the stock market.

Bloomberg data showed that UJSB has since acquired stakes in Greatech Technology Bhd, Kelington Group Bhd and SAM Engineering and Equipment (M) Bhd.

The fund has also increased its shareholding in TH Heavy Engineering Bhd by 1.06 billion shares, YTL Power International Bhd (3.1 million shares) and Velesto Energy Bhd (27.45 million shares), among others.