Better ASB dividend on the horizon

FY21 dividend expected to be higher than the 4.25 sen recorded in FY20, higher than 5 sen but may not be more than 5.5 sen


PERMODALAN Nasional Bhd (PNB) is expected to announce a slightly higher income distribution for its flagship fund, Amanah Saham Bumiputera (ASB), for the financial year ending Dec 31, 2021 (FY21).

Putra Business School Assoc Prof Dr Ahmed Razman Abdul Latiff foresees that ASB’s FY21 dividend will be higher than the 4.25 sen recorded in FY20, higher than five sen but may not be more than 5.5 sen.

“This is because our country is still in economic recovery. Even though our second-quarter (2Q) GDP growth recorded a 16.2% increase, the 3Q recorded a 4.5% contraction and that will make the overall growth for 2021 probably in the region of 2%-3%.

“Since the majority of PNB’s investments are tied to domestic investment, the dividend will be higher than 2020 but probably will not be higher than the dividend announced in 2019 (5.5 sen),” he told The Malaysian Reserve (TMR).

PNB recorded a total distribution of 4.25 sen per unit for ASB unitholders, comprising 3.5 sen distribution and a 0.75 sen bonus for FY20.

In conjunction with ASB’s 30th anniversary, unitholders will also receive a special one-off “Ehsan” payment of 0.75 sen per unit for up to the first 30,000 units.

The income distribution for FY20 was lower than FY19’s total distribution of 5.5 sen per unit, comprising a five sen distribution and a half-a-sen bonus. It was also the lowest distribution in ASB’s 30-year history.

Universiti Kuala Lumpur Business School’s Assoc Prof Dr Aimi Zulhazmi Abdul Rashid said the dividend payout of 4.25 sen per unit was a fair payout considering the turmoil that undergone in the last 22 months, with the mutiple closures and reopening of the economy since March 18, 2020.

He said it was a really tough time as reflected by the local bourse as well as ringgit’s performance. A majority of listed companies reported lower profitability except for those in the global chain of electronics and electric, safety gloves, e-commerce, pharmaceutical and logistics.

“Nonetheless, the global economy slowly opened up with demand for commodities on an upswing, such as crude oil and palm oil, providing the needed support for our export.

“This is reflected in the negative GDP output of 5.6% last year and for this year, all the three quarters reported contraction of the economy,” he told TMR.

As the economy underwent a recession, Aimi Zulhazmi believed it was expected that many would have to withdraw their savings even from their PNB funds in order to make their ends meet, this meant they will receive a lower amount of dividends.

However, he said those who managed to keep their investment intact may still enjoy a better investment percentage than the lower fixed deposit rates or savings in the bank.

“The international market did quite well especially in the developed market, due to their respective governments’ fiscal and monetary policies to uplift the reeling economy.

“There were also portfolios doing well globally due to the pandemic like pharmacy, chemical, oil and gas, safety equipment and especially electronic equipment. But the retail, property, tourism and travelling industries had a sluggish result for the last 22 months globally.

“PNB’s overseas investment is quite balanced including in both the money market and capital market,” he added.