KUALA LUMPUR: Permodalan Nasional (PNB), Malaysia’s biggest fund manager, should remain committed to investing in local companies with global competitiveness and opportunities despite challenging market conditions, said the Malaysia Global Business Forum (MGBF).
The research team at MGBF feel that PNB would still invest heavily in companies with strategic national interests.
“PNB is now headed by former Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz who was appointed the fund’s group chairman last July. Although some analysts say that PNB may take a more prudent approach under Zeti, our research team feels that PNB will still invest heavily in companies with strategic national interests,” MGBF said in a report today.
“With stakes in some of the largest corporate players in every sector, all eyes will be on PNB’s corporate moves in the next few years under the new government. Investors will monitor any possible shifts in the fund’s investment strategy,” iot added.
About 70 per cent of PNB’s funds are invested in the local stock market and public equities. They include industry giants such as Sapura Energy Bhd (oil and gas), Malayan Banking Bhd (financial), Axiata Group Bhd (telecommunications), Sime Darby Bhd (diversified) and SP Setia Bhd (property).
They are prime examples of PNB’s investments in companies with global potential, MGBF said.
It said despite the volatile oil and gas market, PNB was still confident in Sapura Energy’s turnaround plans and its potential for returns in the long term.
Last year, Sapura Energy raised RM4 billion from a rights issue that will be utilised to pare down debts.
In November, Sapura Energy announced the proposed sale of a 50 per cent stake in its wholly-owned Sapura Upstream to Austria’s OMV AG.
The company’s original cost of investment in the assets is US$896 million (RM3.7bn).
The deal will translate into a disposal gain of RM2.5 billion (net of RM39 million proposed transaction expenses).
In 2017, Maybank achieved a historical corporate milestone with its market capitalisation crossing the RM100 billion mark.
It was the first company on Bursa Malaysia to hit the landmark.
Sime Darby, meanwhile, went through a major restructuring exercise in 2017 to create more long term growth and value for investors.
It spun off its plantation and property businesses that are now separate listed entities on the main market of Bursa.
Only about 15 per cent of group revenue comes from Malaysia, while 70 per cent of its 20,000-strong workforce is based overseas.
SP Setia is an established property giant with not only major projects in Malaysia, but also overseas such as the prestigious Battersea Power Station development in London, a joint venture with Sime Darby and the Employees Provident Fund (EPF).
Last month, it was announced that SP Setia and Sime Darby Property would be selling their stake in the Battersea Power Station project for RM8.35 billion (£1.58 billion) to PNB-Kwasa International 2 Ltd, a joint venture vehicle between PNB and EPF.
The transaction is expected to be completed in the first quarter of 2019.
Axiata Group is the country’s leading telecommunications company with almost 300 million subscribers and 25,000 employees across Asia.
In the third quarter of its financial year 2018, Axiata Group posted core net profit of RM318 million.
Its operations in Indonesia under Axiata XL sustained its growth momentum in the same quarter with 4.9 per cent and 3.1 per cent quarter-on-quarter growth in revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) respectively.
MGBF was established in 2009 to assist the global business engagement between Malaysia and the world.
It offers a range of consulting services from business matching, stakeholder engagement, strategic business development, policy development, advocacy and research services for companies and trade associations expanding their market share.