KUALA LUMPUR: Amanah Saham Bumiputera (ASB) is expected to announce higher dividends for the 2024 financial year, boosted by positive global and domestic stock market performance.
Bank Muamalat Malaysia chief economist and social finance officer, Dr. Mohd Afzanizam Abdul Rashid, said major stock markets such as Nasdaq, S&P 500, Nikkei 225, Hang Seng, and Bursa Malaysia have all recorded increases, which should translate into better dividends for the year.
"Nasdaq, S&P 500, Nikkei 225, Hang Seng, and Bursa Malaysia grew by 32.3 per cent, 27.7 per cent, 16.8 per cent, 16.5 per cent, and 10.9 per cent respectively. Given that a significant portion of ASB's investment portfolio is in equities, it is anticipated that dividends will at least match last year's or be higher," he said.
Based on ASB's annual report, its equity exposure was 83.13 per cent in 2023, as such, the rise in stock prices is expected to result in better dividends for 2024, he told Berita Harian (BH).
At the end of last year, Amanah Saham Nasional Bhd (ASNB), a wholly-owned subsidiary of Permodalan Nasional Bhd (PNB), announced a total income distribution of 5.25 sen per unit for its flagship fund, ASB, for the financial year ending December 31, 2023.
This comprised an income distribution of 4.25 sen per unit and a bonus of 1.00 sen per unit.
Meanwhile, the 2023 dividend was better than that for 2022, which included an income distribution of 3.35 sen per unit, a bonus of 1.25 sen per unit, and an additional bonus of 0.50 sen per unit for the first 30,000 units held by ASB unitholders.
Afzanizam said companies such as Maybank Bhd, Sime Darby Bhd, and Tenaga Nasional Bhd performed well in 2024, positively influencing stock prices and potentially yielding good returns for ASB.
"ASB's exposure to fixed-income securities was 7.45 per cent in 2023. While interest rates have a limited direct impact compared to equities, sentiment around interest rates, especially in the U.S., significantly affects global and local stock prices."
"For instance, the U.S. interest rate environment influences foreign fund flows. We observed a net foreign outflow of RM1.8 billion in October and RM3.1 billion in November," he said to BH.
Afzanizam further explained that Malaysia's economy has grown at an average rate of 5.1 per cent over the first three quarters of 2024.
"A strong economy translates to higher profitability among listed companies, which positively impacts stock prices," he added.
ASB's investment strategy emphasises strong company fundamentals, comprehensive macroeconomic research, and disciplined decision-making.
However, he warned that global economic uncertainties, such as trade wars or geopolitical tensions, could impact market sentiment and contribute to stock price volatility.
"Investment research plays a crucial role in maintaining discipline and identifying opportunities, acting as a safeguard for investment capital. Fixed-income investments, being low-risk, consistently deliver stable returns," he explained.
Meanwhile, economic analyst Dr. Mohamad Khair Afham said that as one of Malaysia's largest investment funds, ASB, with a significant portion of its portfolio in local equities, is poised to benefit from the 15 per cent increase in the Malaysian stock market by the third quarter of 2024, with a total market capitalisation reaching RM2.05 trillion.
"The Overnight Policy Rate (OPR) remains a key factor in determining ASB's investment returns, enabling fixed-income instruments within the portfolio to maintain stable yields."
"With stock market gains and a recovery in key sectors among listed companies, ASB's 2024 dividends are anticipated to surpass last year's distribution," he concluded.