KUALA LUMPUR (Nov 20): More than 60% of government-linked investment companies' (GLICs) funds are invested locally, with 15.8% to 62.7% invested in Malaysian-listed equities from Jan 1, 2019 to Aug 31, 2023, according to Deputy Finance Minister II Steven Sim.

This is led by the Employees Provident Fund (EPF), with an average of 64.9% of its RM1.096 trillion fund invested in the domestic market. Of its entire fund base, 24.4% is invested in local listed equities.

For Permodalan Nasional Bhd (PNB), whose total investment is RM332 billion, an average of 84.3% is invested domestically, where 74.4% is in domestically listed equities, Sim said.

"Kumpulan Wang Amanah Pencen (KWAP) holds RM167 billion, with an average investment of 79.3% in the domestic market, where 45.2% is in domestically listed equities.

“Lembaga Tabung Haji (LTH) has RM91 billion, and the average investment in the domestic market is 90.1%, with 18.3% in domestically listed equities.

“Lembaga Tabung Angkatan Tentera (LTAT) manages RM10.5 billion, with the entire fund invested in the domestic market, of which 52% is in domestically listed equities," said Sim, in response to Jimmy Puah (PH-Tebrau) during the oral question and answer session at Dewan Rakyat on Monday.

GLIC participation in the Malaysian equity market represents 7.7% of the total average daily traded value, focusing on sectors such as banking, commodity-related industries, and others, according to Sim.

"The Ministry of Finance believes that based on the allocation of their respective strategic assets, GLICs will remain committed to making investments in the country, including in Bursa Malaysia, where GLIC participation is seen to strengthen the local equity market," says Sim.

On Khazanah Nasional Bhd, Sim said the sovereign wealth fund manager has made domestic investments of RM9.2 billion from 2019 to 2022, equivalent to 32.5% of the total investment worth RM28.3 billion.

"As of Dec 31, 2022, Khazanah's total investment portfolio with realisable asset value is as much as RM122.5 billion. Of this amount, the market value of Khazanah's holdings in the country amounted to RM81.2 billion or 66.3%," said Sim.

In total, the six funds held RM451.3 billion in local listed equities, or 25.6% of the Malaysian listed equities' market capitalisation as at Sept 30, 2023, he said. 

Meanwhile, touching on government investments in Minister of Finance (Incorporated) (MOF Inc) companies, Sim said the purpose is to serve as “a catalyst for the market and filling market gaps in certain sectors that cannot be explored or lack private sector involvement due to high investment costs”.

“Additionally, MOF Inc companies' investment aims to provide basic infrastructure and services to the people, such as utilities and public transport, where these services receive less attention from the private sector," Sim added.

Sim added that as of Sept 23, 2023, the Malaysian equity market size increased by RM42.68 billion or 2.5% to RM1.78 trillion, compared to RM1.74 trillion on Dec 31, 2022.

In terms of transacted units, Sim stated that up to Aug 31, 2023, the total number increased by 14.4% from 489.4 billion units to 559.6 billion units, with the average daily transactions also increasing by 15.1% from three billion units to 3.5 billion units.

On government-linked companies (GLCs), Sim mentioned that these companies' investments are more focused on domestic capital expenditure for company expansion, including the purchase of assets for their business and operations.

Most of the capital expenditures are concentrated in companies such as Tenaga Nasional Bhd, Malaysia Airports Holdings Bhd, and Telekom Malaysia Bhd, all of which are under the portfolio of Khazanah.

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