KUALA LUMPUR: Permodalan Nasional Bhd (PNB) plans to accelerate investment diversification across all asset classes amid challenges in the domestic and global markets.
Chief executive officer Jalil Rasheed said PNB’s global diversification strategy had begun to show positive results, with international investments delivering the largest contribution to its gross income this year.
“Our global exposure (investment portfolio) is at 8.3 per cent year-to-date, from 3.1 per cent last year. We will continue growing the exposure... but carefully and in a judicious manner, taking into account the right level of governance and processes,” he said at a press conference to announce the income distribution for Amanah Saham Bumiputera (ASB), here, recently.
Jalil said PNB’s investment portfolio stood to record higher yields on increased exposure to fixed income and real estate.
He said international public equities contributed more than 10 per cent to PNB’s gross income this year, despite a smaller exposure of 5.7 per cent.
“However, domestic equities remain the central element of our portfolio, particularly our strategic companies, which make up more than 13 per cent of our total portfolio,” he said.
Jalil believes there are opportunities to enhance the earnings of the strategic companies.
“Our team will work closely with our strategic companies to ensure they are able to meet their operational and financial targets in the immediate and medium term.”
He said PNB would not reduce its shareholdings in companies listed on Bursa Malaysia despite the reduction in their market capitalisation.
“Those companies are the backbone of the economy. The focus is to make our strategic companies better, have better engagement with them and look at the efficiency of their board and management, in line with the strategic one-to-three year target,” he said.
PNB’s strategic companies make up a large component of the local bourse’s key index FTSE Bursa Malaysia KLCI.
“If all these companies do well, it will be a massive uplift for the FBM KLCI. If the index does well, so will PNB, which in turn will benefit our unitholders,” said Jalil.
PNB has also embarked on the mid-term review of its five-year strategic plan to reinforce its focus areas, namely refining strategic asset allocation with optimal liquidity management, tightening its enterprise risk-management and commencing organisational transformation.
“We are looking to increase our exposure in private equities within Asia (among others),” he said.
PNB group chairman Tan Sri Dr Zeti Akhtar Aziz said the fund manager planned to remain in international equity markets but the process would be done in a gradual manner as it examined opportunities and risks.
“Although it (international equity market) generates higher returns, it is also subject to a high degree of volatility.”
She said PNB would need to be cautious in its diversification as it required better liquidity management to generate higher rates of returns.
As of November 2019, PNB’s total assets under management grew 5.7 per cent to RM311.9 billion.
PNB yesterday announced an income distribution of 5.0 sen and a bonus of 0.5 sen a unit for ASB for this year.
This involves a total payout of RM9 billion to more than 10 million unitholders.
ASB’s income distribution last year was 6.50 sen per unit plus a 0.50 sen bonus, while for 2017, it was 7.00 sen with a bonus of 0.25 sen.
PNB also announced an income distribution of 2.75 sen per unit for Amanah Saham Nasional (ASN) for this year.
A total payout of RM49 million will benefit more than 1.22 million ASN unitholders.