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KUALA LUMPUR: Permodalan Nasional Bhd (PNB) will tactically increase its global investments to 30% by 2022, from its current global exposure of 8.5% in late 2019 after the conclusion of its Mid-Term Review.
He said Monday that he will continue to accelerate portfolio diversification through investments in new asset classes and geographies, including global real estate opportunities with attractive returns.
This was one of the key strategies in the plan, known as “Focus 4,” which would streamline STRIVE-15 initiatives after its Mid-Term Review.
Under its diversification strategy, it would accelerate portfolio diversification through investments in new asset classes and geographies, including global real estate opportunities with attractive returns.
Regarding value creation, it would establish a proposed management framework for strategic companies;
PNB also said that its risk management would instill a strong risk culture by improving the key elements of business risk management.
Under its organizational transformation, it would focus on improvements in people and culture, governance and processes, digital and structure, and KPI.
In its first virtual media briefing, PNB also announced its performance for the financial year ending December 31, 2019 (fiscal year 2019) and shared its perspectives for next year.
PNB Group President Tan Sri Dr Zeti Aziz said: “The extensive Mid-Term Review allowed PNB to gather insights and critical analyzes of our current dynamics, strengthening our strategic direction as PNB moves forward.
“This has formed the core of Focus 4, which articulates four priority areas for GNP to facilitate sustainable growth and unlock value, namely diversification, value creation, risk management and organizational transformation.”
The Chairman and CEO of the PNB group, Jalil Rasheed, explained that Focus 4 reflects a strategic transition from STRIVE-15, so PNB was able to strengthen the general foundations and establish the necessary frameworks, up to Focus 4, which focuses on areas high impact targets that are more in tune with the market environment.
“Taking a three-year, shorter-term approach also gives PNB the flexibility to be more responsive and adaptable to take advantage of opportunities in today’s fast-paced context,” said Jalil.
Diversification
PNB will continue to accelerate portfolio diversification through investments in new asset classes and geographies, including global real estate opportunities with attractive returns. A key goal is to tactically increase global exposure to 30% by 2022, from GNP’s current global exposure of 8.5% in late 2019.
At the same time, to optimize returns amidst the persistent low-yield environment, PNB continually reviews its portfolio to invest in accountants with better prospective returns and long-term return potential, to drive more efficient use of capital. In the short term, this includes taking advantage of the prospects offered by current market prices.
This strategy would also allow PNB to strengthen its cash position in anticipation of market volatility. This will be supported by strengthening their existing investment processes and improving efficiency in decision-making, with an emphasis on responsiveness to opportunities and risks, taking into account the longer-term nature of their investment horizon.
Value creation
In order to reinforce the performance of its investees and create more value, PNB has established the Stewardship Framework which aims to articulate the companies’ philosophy and expectations of PNB within their stable investment, in order to promote a culture based on performance and improve the organizational health of the respective companies.
In addition to positioning PNB as a value-added investor, the framework also establishes the PNB Voting Guidelines that have been developed to institutionalize best governance practices in Malaysia and set clear expectations for investee companies.
Risk management
In line with its five-year Enterprise Risk Management Plan (ERM), PNB aims to instill a robust risk culture and infrastructure by focusing on four key elements of ERM, namely governance, framework and processes, digitization and resources .
This includes expanding its scope to manage cross-organization risks across the organization, in view of the increasing complexity of the current environment and to further improve operational efficiency.
Organizational transformation
As part of its long-term aspirations for organizational transformation, PNB established 10 elements for greater effectiveness and institutional excellence, which are grouped into four key areas interconnected for the immediate term: People and Culture, Government and Process, Digital and Structure & KPI.
People & Culture emphasizes the acquisition, development, and retention of talent through a highly conducive work environment and a talent management framework to promote wellness and career growth, while instilling a more open culture with better communications. and outreach initiatives.
Governance & Process focuses on robust corporate governance and creating a knowledge management framework to build an efficient knowledge-based organization.
Through PNB’s five-year IT plan, digital technology is used as a key enabler to enhance efficiency, supporting the establishment of an optimal structure and KPIs aligned with the organization’s goals to drive performance.
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