[ad_1]
PETALING JAYA: Permodalan Nasional Bhd (PNB) expects lower revenues for this year as companies and households are affected by the economic consequences of the coronavirus pandemic (Covid-19).
PNB group president and CEO Jalil Rasheed said that despite the challenging environment, PNB aims to distribute “competitive” annual returns to its shareholders, which should be higher than the fixed deposit rate.
He noted that the fund’s performance depends on the ability of its investees to pay dividends, and as a result of the economic slowdown, companies face weaker earnings in the coming quarters.
“We always strive to exceed the 12-month fixed deposit rate and have always maintained our conservative stance and not take excessive risks.
“Our returns will depend on market conditions and how fast the economy recovers and business activities resume, as we are not immune to what is happening now,” he told reporters at a virtual press conference.
About 60% of PNB’s RM312bil fund is invested in Bursa Malaysia, and holds majority interests in several publicly-listed companies, namely BALANCA MALAYA BHD
Sime Darby Bhd, UMW HOLDINGS BHD, SAPURA ENERGY BHD, Malaysian Chemical Company Bhd and MNRB HOLDINGS BHD.
During the press conference, Jalil and President Tan Sri, Dr. Zeti Akhtar Aziz, shared PNB’s plan to improve the return of their “strategic companies”, including more active participation in managing the fund’s strategy to diversify your sustainable long-term investment portfolio. Return.
Zeti said that as a fund, GNP should have a long-term vision and focus on fundamentals, such as identifying a mega-change in the economy.
In the immediate term, Zeti said companies are being badly affected, which affects their earnings, increases unemployment and volatility in the financial market.
“In these grim financial and economic conditions, however, there is room for optimism. While the financial pain necessary to contain the spread of the pandemic may be intense and immense, it will nevertheless be temporary.
“Once the economic shutdown is lifted, economic activity can resume. In the immediate time frame, you may feel a recession before recovery occurs. Therefore, we must look beyond the immediate term, “he said.
Zeti said that the fund’s performance capacity for this year will depend on factors such as the second wave of Covid-19, that the announced policies are implemented effectively, that address problems related to SMEs and rising unemployment, and the how quickly consumer spending increases.
“Of course, the performance of the companies in which we are invested is important. They are an important part of our effectiveness in generating income and there are measures that must be taken to increase the potential of these investments, ”he said.
Despite weakness in the financial market, Zeti said the current situation offers opportunities to buy quality stocks at lower valuations, thanks to the fund’s cash position.
As of December 30, 2019, PNB had more than 13% of the size of its cash fund, which is equivalent to RM40bil.
Zeti said PNB’s diversification plans come at the right time to take advantage of weak asset values.
The fund’s main objective was to increase its global exposure to 30% by 2022 from 8.5% at the end of 2019.
To this end, Jalil said PNB has already invested in real estate businesses abroad, such as logistics and warehouse assets, which are booming in e-commerce, as almost half of the world’s population is in some form of blocking.
“We started that type of investment in Europe and are now looking for similar opportunities in Asia,” he said, adding that PNB is also exploring to invest in the private equity space.
In 2019, PNB assets under management grew 4.5% in 2019 from a year ago to RM312bil.
PNB also disbursed a total of RM13.2bil in income distribution and bonds to its shareholders last year, reaching a total cumulative income distribution of RM200bil for the 14 funds since inception.
[ad_2]
