KUALA LUMPUR: Permodalan Nasional Bhd (PNB) is looking to increase its investments in private companies, as private equity is seen as a potential growth area for the fund going forward.
PNB’s newly appointed chairman Tan Sri Abdul Wahid Omar (pic) said while the group already has private equity investments, it only makes up a small percentage of the fund’s portfolio, compared with investments in equities and debt.
“Within the PNB portfolio, we have an entity named PERC that is already investing in many private companies. Some of these companies have been very successful overall,” he said.
According to PNB’s corporate profile, PERC’s investments are focused on high-growth technology-based companies in information and communication technologies, biotechnology, healthcare and clean technology segments.
PERC has invested in several private companies including Perusahaan Otomobil Kedua Sdn Bhd and printed circuit board manufacturer HDK Co Ltd, with the fund also partnering with green technology venture capital firm Zouk Ventures Ltd, Japan-based asset management firm SBI Holdings Inc and US-based Burill & Company.
“Moving forward, we’d like to see other opportunities being created and this is something the management will have to evaluate. Private equity is one potential growth area and with the right investments, it can catalyse further growth in the economy,” he said.
Wahid spoke at a press conference held in conjunction with the income distribution announcement for Amanah Saham 1Malaysia (AS1M) for the financial year ending Sept 30, 2016 (FY16). The fund announced a distribution of 6.10 sen per share for the year, the lowest-ever income distribution since the launch of the fund in 2009. Up to 2015, AS1M’s dividends averaged at 6.53 sen per unit per year.
“During the financial year, the KLCI gained 3.1% up to Sept 23, from 1,621.04 points on Sept 30, 2015, to 1,670.99 points. However, average daily trades for the KLCI for FY16 were lower than FY15, registering a 5% decline from 2015’s average of 1,668.39 points this year.
“As with any other ASNB (Amanah Saham Nasional Bhd) funds, the uncertain conditions affected the performance of AS1M in FY16,” said Wahid.
He said AS1M recorded gross earnings of RM777.63 million, comprising profit from the sale of shares (44.4%), dividends from invested companies (41.3%) and short-term instruments and others (14.3%).
“Based on the earnings of AS1M this year, the board of ASNB has agreed to distribute RM700.63 million, representing 6.10 sen per unit,” said Wahid.
“Going forward, the economic environment is expected to continue to be challenging, amid the various external uncertainties, including concerns over slower global economic growth, the US elections and the potential hike in the US interest rate by year end.”
However, he said there are still potentially positive catalysts for the Malaysian economy, especially with the upcoming Budget 2017.