PNB to gradually increase foreign equity holding

KUALA LUMPUR,  Permodalan Nasional Bhd (PNB) is planning to gradually increase its foreign equity holding, especially in the United Kingdom, the United States and Europe, as well as looking into emerging markets.

PNB group chairman Tan Sri Dr Zeti Akhtar Aziz said it was important to understand that no market is immune to volatility and that geopolitical developments have a huge impact on the world economy.

“We do plan to increase our diversification in line with greater globalisation investment as we can see for this financial year, it has generated higher returns compared with the local equity,” she told a press conference after announcing the total income distribution for its flagship fund, Amanah Saham Bumiputera, for the financial year ending Dec 31, 2019 (FY19).

As of November 2019, PNB’s international exposure stood at 8.3 per cent, while the balance of 91.7 per cent remained in the local market.

Its international exposure includes public equity, real estate, private investment as well as cash.

On the local bourse’s performance, Zeti said that the benchmark FTSE Bursa Malaysia KLCI had declined 7.2 per cent so far, making it among the weakest performing indices in the world.

“This marked the fifth year out of six consecutive years that the market has posted negative returns,” she said.

Asked whether PNB has plans to reduce its local equity holding due to the weak market performance, PNB chief executive officer Jalil Rasheed said the asset manager had no plans to do so.

“Our holdings in the local companies are strategic and they act as the backbone of the local economy,” he said.

For the first 11 months of FY19, PNB’S asset under management increased 5.7 per cent to RM311.9 billion compared with FY18.

Meanwhile, Zeti stressed that 2019 had been a challenging year and moving forward to 2020, the international environment would present yet another challenging year for business.

“In 2019, the commodity segment has remained volatile and the price of crude oil has dropped in the last two months.

“Adding the continuous global trade uncertainty, the ringgit has remained undervalued,” she said.

However, she said that the second half of 2020 was expected to be better due to global sentiment risk off.

“Despite the global moderate economic trend, the local front is expected to remain resilient backed by strong domestic support,” she said.

 

Source: BERNAMA (News Agency)