Malaysia - EPF, PNB, BNM, Khazanah etc

Re: Malaysia - EPF, PNB, BNM, Khazanah etc

Postby winston » Fri Mar 29, 2019 11:05 am

PNB looks to further diversify investments

by Ahmad Naqib Idris

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) is looking to diversify its portfolio across different asset classes, including fixed income and real estate investment trusts (REITs) as well as across different geographies, as it conducts the mid-term review of its Strategic Plan 2017-2022.

PNB group chairman Tan Sri Dr Zeti Akhtar Aziz said the 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.

The fund went through a challenging period in 2018, amid moderating growth and uncertain financial markets, both domestically and globally, with the difficult conditions continuing into the first two months of 2019.

Zeti said the FBM KLCI continued to record negative returns in 2018, with the benchmark index again lagging behind other markets in the region which have since rebounded.

She said the diversification of the fund’s investment portfolio will be among the key priorities as PNB transitions into the second quarter of the year, to optimise its risk-return profile.

“Our strategy going forward is to further diversify our portfolio, not only to go into global financial markets, but also to diversify within our domestic market.

For example, our bond market is one of the most developed in Asia and right now we have about 6% invested in that market.

“We will also look at other asset classes which include REITs and other investments in the domestic market,” she said at the launching of the fund’s 2018 annual report yesterday.

Besides that, the fund is also considering investments in other geographies in both 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, Zeti said, as PNB needs to build up its expertise in these markets.

PNB president and group chief executive officer Datuk Abdul Rahman Ahmad said the fund historically has been focused on domestic equities, noting that 70% of its asset allocation comprises listed companies in Malaysia.

“We want to increase our exposure in investments such as private equity, fixed income and real estate. We don’t have any particular targets for each of the asset classes as it will be based on the economic environment and the timing. We will do it gradually,” he said.

He added that the fund has a private investment framework in place and has identified six global fund managers for PNB to commence its outsourcing programme.

Abdul Rahman declined to reveal details on these global fund managers, but said that they are renowned global private equity firms which were picked after a very rigorous selection process.

The diversification efforts are ongoing, he said, pointing out that its portfolio allocation in fixed income increased to 6.6% as at end-February 2019, from 5.8% a year earlier, while private investments accounted for 2.3%, compared to 1.9% in the previous year.

Meanwhile, international investments accounted for 4% of its portfolio as at end-February 2019, compared to 2.7% as at February 2018.

Abdul Rahman said despite the soft performance of the domestic equities market the fund remains positive and believes in the long-term value of the local market.

PNB expects the market will, in the mid- to long-term, reflect the strong economic fundamentals of the country.

The fund expects the country to post economic growth of between 4.5% and 4.9% for 2019, which Zeti said was “slightly more optimistic”.

For comparison, Bank Negara Malaysia forecast growth of between 4.3% and 4.8% for the year.

For 2018, PNB recorded a 6.9% increase in its assets under management to RM298.5 billion from RM279.2 billion a year earlier and saw a 7.9% increase in units in circulation to 236.6 billion, versus 219.3 billion in 2017.

Its consolidated conterminous pro forma net income came in slightly lower at RM17 billion for the year, compared to RM17.7 billion in the previous year.

The fund announced the income distribution for two of its fixed price funds, namely ASB 2 and ASM, with distributions of six sen and 5.5 sen per unit respectively. The total income distribution payout for the funds amounted to RM610.7 million for ASB 2 and RM1.1 billion for ASM.

It also announced the income distribution for three of its variable price funds, namely ASN Equity 3, ASN Imbang 2 and ASN Sara 1, with distributions of 4.1 sen, 4.2 sen and five sen per unit respectively.

In total, the fund paid out RM15 billion in dividends in 2018, the largest amount ever paid since its inception.

Source: The Edge

https://www.theedgemarkets.com/article/ ... nvestments
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Re: Malaysia - EPF, PNB, BNM, Khazanah etc

Postby winston » Sat Mar 30, 2019 11:31 am

Malaysia dumps assets to cope with US$245b debt

Source: SCMP

https://www.scmp.com/week-asia/politics ... llion-debt
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Re: Malaysia - EPF, PNB, BNM, Khazanah etc

Postby winston » Sat Sep 21, 2019 10:05 am

‘Khazanah can sell assets’

By ZAKIAH KOYA

KUALA LUMPUR: Khazanah Nasional will sell off its assets which are not useful, to pay off its debts but not everything, said Prime Minister Tun Dr Mahathir Mohamad.

He said this was pending a decision on whether the sovereign wealth fund would be selling all of its assets.

“They are just studying it whether they should, but no decision has been made, ” he said, adding that it was better for Khazanah to sell assets which were not useful.

“Those that are not useful to us, we will sell to raise funds to overcome our debts.

“We must remember that the previous government borrowed more than RM1 trillion. That is a burden for us because they borrowed and the money isn’t invested but it is hidden.


He also reiterated that he had created Khazanah to buy shares allocated to the bumiputra but they went beyond that.

“This isn’t the original mandate for Khazanah but now, we are trying to go back to the original objective, ” he added.

On another issue, Dr Mahathir said the East Coast Rail Link (ECRL) would continue as planned unless the company could negotiate with China, adding that it was also up to the Malaysian Anti-Corruption Commission (MACC) to investigate the ECRL.

He said if the company could renegotiate the deal and suspend the project, he was willing to follow.

“ECRL has to negotiate. If they are willing to negotiate with the Chinese and tell me that they can suspend, I will follow them, ” said Dr Mahathir.

He was asked to respond to prominent economist Prof KS Jomo calling on the government to re-look the ECRL project after a witness in the 1MDB trial testified in court that the project was a possible bailout.

Jomo had said that the Federal Government must not be complicit in continuing to cover up what the previous administration had been trying to do with public funds.

He also said the government would have to continue subsidising the railway unless this was built to be left unused, which would defeat the purpose.

Dr Mahathir said although Jomo was entitled to his opinion, the government stood by what the Chinese government stated.

“That is his (Jomo’s) thought but the Chinese government has not told us anything.

“Well, it may have a contract to construct it and as you know, we have reduced the scope and the cost. That’s for them to investigate; we don’t ask them (MACC) to do anything, ” he said.

Source: The Star

https://www.thestar.com.my/news/nation/ ... ell-assets
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Re: Malaysia - EPF, PNB, BNM, Khazanah etc

Postby winston » Sat Sep 21, 2019 10:05 am

‘Khazanah can sell assets’

By ZAKIAH KOYA

KUALA LUMPUR: Khazanah Nasional will sell off its assets which are not useful, to pay off its debts but not everything, said Prime Minister Tun Dr Mahathir Mohamad.

He said this was pending a decision on whether the sovereign wealth fund would be selling all of its assets.

“They are just studying it whether they should, but no decision has been made, ” he said, adding that it was better for Khazanah to sell assets which were not useful.

“Those that are not useful to us, we will sell to raise funds to overcome our debts.

“We must remember that the previous government borrowed more than RM1 trillion. That is a burden for us because they borrowed and the money isn’t invested but it is hidden.


He also reiterated that he had created Khazanah to buy shares allocated to the bumiputra but they went beyond that.

“This isn’t the original mandate for Khazanah but now, we are trying to go back to the original objective, ” he added.

On another issue, Dr Mahathir said the East Coast Rail Link (ECRL) would continue as planned unless the company could negotiate with China, adding that it was also up to the Malaysian Anti-Corruption Commission (MACC) to investigate the ECRL.

He said if the company could renegotiate the deal and suspend the project, he was willing to follow.

“ECRL has to negotiate. If they are willing to negotiate with the Chinese and tell me that they can suspend, I will follow them, ” said Dr Mahathir.

He was asked to respond to prominent economist Prof KS Jomo calling on the government to re-look the ECRL project after a witness in the 1MDB trial testified in court that the project was a possible bailout.

Jomo had said that the Federal Government must not be complicit in continuing to cover up what the previous administration had been trying to do with public funds.

He also said the government would have to continue subsidising the railway unless this was built to be left unused, which would defeat the purpose.

Dr Mahathir said although Jomo was entitled to his opinion, the government stood by what the Chinese government stated.

“That is his (Jomo’s) thought but the Chinese government has not told us anything.

“Well, it may have a contract to construct it and as you know, we have reduced the scope and the cost. That’s for them to investigate; we don’t ask them (MACC) to do anything, ” he said.

Source: The Star

https://www.thestar.com.my/news/nation/ ... ell-assets
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Re: Malaysia - EPF, PNB, BNM, Khazanah etc

Postby winston » Thu Oct 10, 2019 9:58 am

Malaysia’s Khazanah says divestments part of ordinary course of business

So far this year, Khazanah’s asset sales have yielded around 15.9 billion ringgit ($3.78 billion) mostly from the partial reduction of its stake in IHH Healthcare Bhd (8 billion ringgit), Alibaba Holdings (2 billion ringgit) and Tenaga Nasional Bhd (1 billion ringgit).

Furthermore, Khazanah also raised 1.5 billion ringgit from full divestment of its holdings in the Philippines’ BDO Unibank and 771 million ringgit from UK’s Farfetch.com Ltd.

Meanwhile, the wealth fund is targeting a pre-tax profit this year of at least 5 billion ringgit ($1.2 billion), which would be its highest in eight years, after posting its first loss in a decade in 2018, Reuters reported.

Earlier this year, the $39-billion sovereign wealth fund also unveiled a refreshed mandate classifying its assets into separate commercial and strategic funds.

The commercial fund is an intergenerational wealth fund to meet Khazanah’s commercial objective. It includes public assets such as CIMB Group, Axiata Group, IHH Healthcare and Alibaba.com; and private assets such as The Holstein Milk Company, Sun Life Malaysia, WeLab and Palantir.

The strategic fund targets a return of 10-year Malaysian Government Securities yield on a five-year rolling basis and measurable economic benefits. This fund includes strategic assets such as Telekom Malaysia, Tenaga Nasional, Malaysia Airlines, Malaysia Airports, and PLUS Malaysia; and developmental assets such as Silterra, Iskandar Investment Berhad, Themed Attractions Resort & Hotels, Pinewood Iskandar Malaysia Studios and Medini Iskandar Malaysia.


Source: Deal Street Asia

https://www.dealstreetasia.com/stories/ ... 69cc61b4c8
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Re: Malaysia - EPF, PNB, BNM, Khazanah etc

Postby winston » Thu Oct 10, 2019 9:58 am

Malaysia’s Khazanah says divestments part of ordinary course of business

So far this year, Khazanah’s asset sales have yielded around 15.9 billion ringgit ($3.78 billion) mostly from the partial reduction of its stake in IHH Healthcare Bhd (8 billion ringgit), Alibaba Holdings (2 billion ringgit) and Tenaga Nasional Bhd (1 billion ringgit).

Furthermore, Khazanah also raised 1.5 billion ringgit from full divestment of its holdings in the Philippines’ BDO Unibank and 771 million ringgit from UK’s Farfetch.com Ltd.

Meanwhile, the wealth fund is targeting a pre-tax profit this year of at least 5 billion ringgit ($1.2 billion), which would be its highest in eight years, after posting its first loss in a decade in 2018, Reuters reported.

Earlier this year, the $39-billion sovereign wealth fund also unveiled a refreshed mandate classifying its assets into separate commercial and strategic funds.

The commercial fund is an intergenerational wealth fund to meet Khazanah’s commercial objective. It includes public assets such as CIMB Group, Axiata Group, IHH Healthcare and Alibaba.com; and private assets such as The Holstein Milk Company, Sun Life Malaysia, WeLab and Palantir.

The strategic fund targets a return of 10-year Malaysian Government Securities yield on a five-year rolling basis and measurable economic benefits. This fund includes strategic assets such as Telekom Malaysia, Tenaga Nasional, Malaysia Airlines, Malaysia Airports, and PLUS Malaysia; and developmental assets such as Silterra, Iskandar Investment Berhad, Themed Attractions Resort & Hotels, Pinewood Iskandar Malaysia Studios and Medini Iskandar Malaysia.


Source: Deal Street Asia

https://www.dealstreetasia.com/stories/ ... 69cc61b4c8
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Re: Malaysia - EPF, PNB, BNM, Khazanah etc

Postby winston » Sun Dec 22, 2019 6:44 am

Wither the funds

By INTAN FARHANA ZAINUL

Challenging year for funds: The EPF declared 6.15% dividend last year. This year it says its performance may be affected by market conditions.

THE news this week that Permodalan Nasional Bhd (PNB) declared its lowest ever return sent reverberations among many households in Malaysia.

After all, PNB is the largest fund management house in the country and there are more than 14 million Malaysians who own Amanah Saham units.

Its flagship fund, Amanah Saham Bumiputera (ASB) unitholders have been enjoying returns of 7% to 8% over the past 29 years.

This week PNB declared a dividend of 5.5% including bonus.

PNB attributed the weak performance on the local stock market, which is down more than 7% this year and currently trading at its lowest in three years.

To be sure, it is not only PNB which is suffering. The country’s largest fund, the Employees Provident Fund (EPF), just last week warned that 2019 has been a difficult year for the fund and the uncertainty in the market would affect the performance of the fund.

The EPF is expected to declare its annual dividend early next year when it announces its full-year results.

For its third quarter of 2019, EPF saw a 7.6% drop in total investment income compared to a year earlier. It said this was due to the uncertain and volatile capital market that has worsened since 2018.

What is also clear is that the entire privately run unit trust industry is also in the doldrums, returns-wise.

According to data from Lipper Fund Performance tables, funds focused on buying Malaysian stocks made an average return of about 2.24% over the last 12 months.

The FBM KLCI, which gauges the performance of the top 30 companies on Bursa Malaysia based on market capitalisation, has been the worst-performing index in the region.

The index has declined by more than 7% this year after it fell almost 8% a year earlier. While the US-China trade war is one of the main reasons often cited for the weak market, it is worth noting that Malaysian corporate results have also suffered.

Many equity analysts covering the Malaysian market have been continuously lowering their corporate earnings growth forecasts since the beginning of the year. For example, MIDF Research is targeting a mere 1% growth in corporate earnings for 2019.

Meanwhile, the MSCI Emerging Markets index, which tracks big stocks in markets like China, Taiwan, Indonesia and India, rose by 8.5% over the first 11 months of 2019.

Also, major equity indices in the United States, United Kingdom, Europe, Japan and Asia made returns of between 9% and 23.4% over the same period.

This has led to the few local funds that invested in overseas equities to perform better.

The Lipper Fund tables showed that on average, funds focused on Asia-Pacific equities made 8.23% return for the last 12 months.

Meanwhile, funds that invested in global stocks made an average return of between 10% and 11.7%.

State of local unit trusts

Malaysia has one of the largest unit trust industries in the region. At last count, there were 39 licensed fund management companies, managing a total of 683 funds with a total asset value of a RM482bil.

Investors from Malaysia have more than 20 million accounts with these funds. These funds make up around 30% of the entire RM1.03 trillion market capitalisation of the local bourse.

Most of these funds, especially those that focused on local equities, have performed poorly this year with some having showed negative returns.

Compounding matters for holders of local unit trusts is the fact that these funds do not guarantee their capital. It is worth noting that both the EPF and some of PNB’s funds guarantee the capital of their investors and in EPF’s case, there is an additional guarantee of a minimum dividend rate of 2.5% per year.

Notably, for the last 20 years, the EPF and PNB annual dividends have been generally higher than the inflation rate and banks’ fixed deposits.

Back to unit trusts, it should be noted that fees imposed are not cheap. Aside from fund management fees, it is well-known that unit trust sales personnel pocket commissions ranging from 1.5% to 2.75%.

As for PNB, it is worth noting that the fund is susceptible to the local equity market performance because 65% or RM202.7bil of its funds are invested in equities and the bulk of that in locally listed stocks.

In comparison, EPF, which is currently managing more than RM800bil, has a more diversified portfolio, with 38% in equities, 51% in fixed income, 6% in money market and 5% in real estate and infrastructure investments.

Acknowledging the weakness in the local equity market, PNB has shifted some of its investments to the overseas market and plans to do more of it.

“If we had invested entirely in the domestic equity, we would have been experiencing losses, according to our local benchmark index. We could be having negative returns, ” said PNB chairman Tan Sri Zeti Aziz during ASB’s announcement on Wednesday.

For the coming years, PNB is targeting to raise its overseas exposure from 8% to 30%.

However, will this strategy work?

“The US market is trading at an all-time high. Also, if you are talking about private equity, the gestation for returns is usually about five-years, ” points out a fund manager.

Meanwhile, for PNB to increase its allocation into overseas assets, the fund may need to divest some of its positions in the local stocks. That said, PNB has cash and money market holdings to the tune of RM43.5bil, which it could deploy in overseas investments.

Its major holdings are in companies such as the country’s largest bank by assets namely MALAYAN BANKING BHD (Maybank), Sime Darby Group, UMW, Velesto, SP Setia, SAPURA ENERGY, Chemical Co Malaysia, and Duopharma Biotech, among others.

“There is some fear in the market that PNB may sell at a time when the market needs support from government-linked investment companies (GLICs) to support the local stock market, ” says an analyst.

Are lower returns the new norm?

For decades, unitholders of ASB have come to expect high returns from PNB that was once feted as the ideal product for investors afraid of market conditions.

ASB funds were promoted by many local banks offering loans to invest in these funds. The promise of a set level of returns above interest rates was the selling point.

However, the recently announced lower returns jeopardises that situation.

“Bear in mind that most ASB loans provided by banks come in at slightly above 5%, as such some investors may need to top up their own cash to cover the bank interest, ” says a fund manager.

In the past though, PNB had managed to pay higher dividends. In 2008 for example, despite the market dropping by some 40%, PNB managed to declare a dividend of 7%. The fund had explained that it had reserves to tap into then.

Nonetheless, that model has to change as the market has been down in the past five out of six years. Hence it will be a challenge for the fund to maintain high dividend payouts.

Nonetheless, the decline in dividend is not only unique for PNB.

Last week, the EPF had informed that its performance could be affected by the market conditions. The fund had posted lower income for the third-quarter this year, which indicates a lower dividend for the year is a high likelihood.

Last year, EPF declared a dividend of 6.15% for conventional savings and 5.9% for syariah savings, slightly lower than the 6.9% and 6.4% respectively for 2017.

Recall that in 2008, the FBM KLCI fell by almost 40%. That year marked the biggest decline in EPF’s dividend from 5.8% in 2007 to 4.5% in 2008. Meanwhile, another government-linked fund, Lembaga Tabung Angkatan Tentera (LTAT), in September, declared its lowest-ever dividend of 2% for 2018, compared with a minimum of 6% paid over the past four-and-a-half decades.

The fund, which had gone through a major shake-up following the change in government, had said that the previous dividend payouts were not sustainable for the fund.

Equity investors in Malaysia, whether through direct investments or via funds that invest in Malaysia, are in for a rough period.

Similarly, lower returns are to be expected from from like PNB.

Hence, it is likely that lower returns are going to be the norm in the foreseeable future should the markets remain challenging.

Source: The Star

https://www.thestar.com.my/business/bus ... -the-funds
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Re: Malaysia - EPF, PNB, BNM, Khazanah etc

Postby winston » Sun May 03, 2020 8:58 am

Urusharta Jamaah rebalances portfolio

By GURMEET KAUR

UJ, which is the Finance Ministry’s SPV set up in late 2018 to take over the non-performing assets of Lembaga Tabung Haji (LTH).

Previously, UJ was a substantial shareholder in many companies such as EASTERN AND ORIENTAL BHD, WCT Holdings Bhd, Lion Industries Corp Bhd, CSC Steel Holdings Bhd, ALAM MARITIM RESOURCES BHD and Puncak Niaga Holdimgs Bhd.

The SPV started disposing of its stakes in these companies to less than 5%, hence no longer a substantial shareholder.

Following the takeover of LTH’s non-performing assets, which was part of the rescue and restructuring plan for the pilgrim fund, UJ landed with stakes in 106 listed companies at end-2018, .

This included a 29.8% interest in TH Heavy Engineering Bhd, which has been under the PN17 status for three years, and 26% stake in Pelikan International Corp Bhd.

The government-guaranteed SPV issued debt of RM19.9bil to LTH for the assets, far above the book value of only RM10bil.

UJ has taken positions in a series of syariah-compliant counters in various sectors such as utilities, healthcare, finance and insurance, ports, electronics manufacturing services and construction.


Source: The Star

https://www.thestar.com.my/business/bus ... o#cxrecs_s
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Re: Malaysia - EPF, PNB, BNM, Khazanah etc

Postby winston » Sun Sep 20, 2020 8:11 am

EPF records RM15.12b gross investment income for Q2 2020

The retirement fund said equities contributed 54 per cent, or RM8.11 billion, to total gross income.

Fixed income instruments contributed RM6.17 billion while real estate and infrastructure accounted for RM0.47 billion and money market instruments RM0.37 billion.

Its SAA allocates 51 per cent to fixed income instruments, 36 per cent to equities, 10 per cent to real estate and infrastructure, and three per cent to money market instruments.

As at end-June 2020, its investment assets stood at RM929.64 billion, of which 30 per cent was invested in overseas investments.

As of Q2 2020, 39 per cent of the total gross investment income recorded was contributed by the EPF’s overseas investments.


Source: Bernama

https://www.malaymail.com/news/malaysia ... 20/1904784
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Re: Malaysia - EPF, PNB, BNM, Khazanah etc

Postby winston » Sat Feb 06, 2021 7:35 pm

Malaysia's pension fund weighing sale of up to RM450m of real estate assets

[KUALA LUMPUR] Malaysian pension fund Employees Provident Fund (EPF) is considering the sale of at least seven real estate assets around the country, with a total estimated value of RM350-450 million (S$114.9-S$147.7 million), The Edge Weekly reported, citing sources.

The assets include office buildings it currently occupies, a retail property and a seaside hotel.

EPF, which manages close to one trillion ringgit in assets, told the newspaper that any acquisition or disposal or assets is part of the ordinary course of managing its investments as a long-term strategic investor for its 14.8 million members.

"The decision to buy or sell real estate will also take into consideration the fund's overall portfolio strategy and the long-term health of the fund," it said.

Source: REUTERS

https://www.businesstimes.com.sg/bankin ... ate-assets
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