KUALA LUMPUR (Feb 10): Khazanah Nasional Bhd flagged further pressure on US dollar that may moderate its gains from abroad and other risks in 2026 after the ringgit’s rally last year.

The investment portfolio returned 5.2% in 2025 thanks largely to strong gains in the international markets, its annual review showed. The latest performance supported its annual returns at 6.1% for the seven-year rolling period. Profit from operations rose 9.8% in 2025 to RM5.6 billion.

“We are a long-term investor and we look at long-term growth of our funds,” managing director Datuk Amirul Feisal Wan Zahir said at a press conference on Tuesday. “Khazanah achieved resilient financial performance [in 2025] despite the volatility.”

Khazanah is the largest shareholder of some of Malaysia’s biggest and most important companies, ranging from the country’s second-largest bank by asset CIMB Group Holdings Bhd (KL:CIMB) to unlisted national flag carrier Malaysia Airlines.

A 10.3% appreciation in the ringgit against the greenback in 2025 lowered Khazanah’s international public equity returns in the year to 11.7% from 23.6% in US dollar terms, but still higher than the 10.9% recorded a year ago.

For 2026, Khazanah expects continuity as it sees stronger emerging Asia currencies and pressure on the US dollar, along with easing US interest rate cycle, while tech valuation and liquidity risks persist.

Khazanah invests in over 8,000 companies globally. More than half of its investments are on Bursa Malaysia and 20% are in global public equities. Including private markets and real assets, nearly three quarters of its total assets are in Malaysia.

The fund will diversify and strengthen its global portfolio, Amirul Feisal said. Khazanah remains sanguine towards emerging markets, with the fund also exploring other asset classes beyond its traditional investments in equities.

“We do think Malaysia will sustain its resilient growth, underpinned by private investments and foreign direct investments which will trickle down into the economy,” he said.

The sovereign wealth fund’s Malaysian equity portfolio posted a 6.7% return compared to a massive 34.3% gain in 2024. Holdings in IHH Healthcare Bhd (KL:IHH), Telekom Malaysia Bhd (KL:TM) and CIMB Group produced the largest returns for Khazanah in 2025.

In 2025, losses from private markets narrowed to 3%, from 6.6% in 2024. In US dollar terms, the segment posted a 6.9% growth. Khazanah’s real assets segment, meanwhile saw a 6.9% gain in the year.

Khazanah ended 2025 with RM156 billion in total assets, up from RM151 billion a year ago, against RM50.7 billion in borrowings. The fund declared RM2 billion in dividends to the government, up from RM1 billion in 2024.

Amirul Feisal believes that “more could be done” in the renewable energy space. At the same time, the focus is still on grid modernisation on the part of Tenaga Nasional Bhd (KL:TENAGA), he said.

“This year is about accelerating the execution of our planned initiatives,” he said, stressing the importance of having a balanced portfolio to diversify risk while providing returns to shareholders.

“We will continue to focus on national priorities, deliver sustainable returns, strengthen portfolio resilience across liquidity and risk dimensions while diversifying our global exposures,” he added.

Apart from energy transition, Khazanah also focused its Malaysian investment strategy on connectivity.

Transformation at Malaysia Airports Holdings Bhd, privatised by Khazanah and its partners last year, saw 15 new airlines starting their service in the country while passenger movement has reached 99% of pre-pandemic levels.

Khazanah’s Dana Warisan initiative, meanwhile, will restore six more heritage buildings in Kuala Lumpur.

The reopening of Seri Negara and Block 1 restoration of the Bangunan Sultan Abdul Samad Complex recently, in time for Visit Malaysia Year 2026, saw more than 14,500 visitors to the two sites.