KUALA LUMPUR: The latest acquisition by Norges Bank, the Norwegian central bank and the world's largest sovereign wealth fund, of a local company's shares means Malaysia has what it takes to attract quality investments from abroad.
"Certainly, it means Malaysia can offer good values for long-term investments, one that can provide sustainable long-term investment returns which suits the risks appetite of the global institutional investors," Bank Muamalat Malaysia Bhd chief economist and head of social finance Mohd Afzanizam Abdul Rashid told Business Times.
He was responding to reports that Norges Bank had become a substantial shareholder of Cahya Mata Sarawak Bhd.
Norges Bank has acquired 54.05 million shares which represents a 5.03 per cent stake in Cahya Mata, based on notice of interest of a substantial shareholder dated Sept 14.
According to its website, Norges Bank investments has a value of 15.3 trillion kroner or equivalent to US$1.43 trillion as at June 30 this year.
It presently stands as the largest single owner in the world's stock markets, owning almost 1.5 percent of all shares in the world's listed companies.
Afzanizam said the government has always been pro business along with robust regulatory framework which adhere the international standard will safeguard the interest of foreign investors.
"In a nutshell, Malaysia has what it takes to attract quality investment from abroad," he remarked.
Malaysia University of Science and Technology economist Dr Geoffrey Williams said given the size of the Cahya Mata acquisition, it is unlikely that it is made on a purely commercial basis of investment returns.
"According to media reports, the investment by Norges Bank is around US$12 million which is a marginal investment for them. Their fund is US$1.42 trillion. It may be a more strategic investment to promote Norges Bank's involvement in ESG (environmental, social and governance) in Sarawak across the 35 Cahya Mata companies.
"It may also be related to the new Sarawak Sovereign Wealth Fund which is built around the Norwegian model. On that basis, it signals very little in terms of investment considerations but more in terms of ESG considerations and attention on sustainability in Sarawak," Williams added.
In its website, Norges Bank noted that it has invested in 156 listed companies in Malaysia.
They included Axiata Group Bhd, Berjaya Corp Bhd, Genting Malaysia Bhd, Hong Leong bank Bhd, Inari Amertron Bhd, Malaysia Airports Holdimngs Bhd, Malaysian Pacific Industries Bhd and MISC Bhd.
But the central bank's three biggest investments here are in the banking sector namely Public Bank Bhd, Malayan Banking Bhd and CIMB Group Holdings Bhd.