PETALING JAYA: Investing in the domestic capital markets remains a priority for Permodalan Nasional Bhd (PNB) and it will continue to look for investment opportunities here.

       President and group chief executive officer Ahmad Zulqarnain Onn said the domestic capital market was an important market to the fund, which comprises 68% of its investment portfolio.

       PNB is the country’s largest fund management company with RM338bil in assets under management.

       “We are not moving away from Malaysia. We will continue to deploy capital into Malaysian companies via initial public offerings, subscription to sukuk, investment into real estate and into private companies,” he told reporters after the virtual announcement of Amanah Saham Bumiputera’s (ASB) 2021 dividend yesterday.

       Ahmad Zulqarnain pointed out that PNB will also continue with its asset diversification to overseas markets and other asset classes to ensure the fund is resilient and sustainable.

       “For us, it is about constructing the right ‘all weather’ portfolio with the right asset allocation to generate the sustainable returns that are required,” he said.

       In the past, PNB was known for its “over-concentrated” investments that were mainly in the local stock market, and it only started to diversify overseas in 2018.

       PNB group chairman Tun Arifin Zakaria said the fund’s efforts to diversify its portfolio have been fruitful and yielded positive results.

       In 2021, PNB’s international assets increased to 16% of its overall portfolio, which Arifin said had generated a much larger contribution to the fund’s return by 30%, compared to 24.2% last year.

       Meanwhile, ASB’s allocation in international investments increased from 5.9% in 2020 to 8.2% this year.

       “The stronger performance of our global equity investments has managed to cushion the impact of the challenging domestic market.

       “This exemplifies the importance of a well-diversified portfolio in managing portfolio risks and delivering sustainable returns,” he said.

       The FBM KLCI is the worst-performing index in the region this year, declining by more than 7% year-to-date.

       Despite the weak index performance, Ahmad Zulqarnain said PNB’s strategic investment companies in Malaysia had done very well this year, declaring RM5bil in total dividends, which was 35% more than the RM3.8bil declared in 2020.

       For this year, PNB declared a five-sen dividend income for its flagship fund ASB, which is higher than last year thanks to its diversification effort to invest in overseas assets.

       The dividend comprises an income distribution of 4.25 sen per unit and a bonus of 0.75 sen per unit.

       Last year, the country’s largest fund manager declared a dividend of 4.25 sen per unit for ASB unitholders due to market weakness caused by Covid-19 pandemic uncertainties.

       PNB said the total income distribution amounts to RM8.9bil and will benefit 10.4 million ASB unitholders.

       This brings the fund’s total cumulative income distribution and bonus to RM168.5bil since it was first introduced in 1990.

       Moving forward, Ahmad Zulqarnain said PNB will be focusing on highlighting environmental, social and governance (ESG) factors in its investment activities.

       Towards this end, he said the fund was planning to launch its sustainability framework next year.

       “We have defined our sustainability aspirations across three pillars. On the environment, there will be great focus on transitioning both PNB and its portfolio companies towards lowering greenhouse gas emissions and meeting Malaysia’s net zero carbon emission by 2050.

       “On social and governance, we will be making commitments on improving sound governance practices that we believe are right for this market and also reducing inequality and improving diversity.

       “We really look forward to launching the sustainability framework in the first quarter next year and we will be releasing more details over the next few months,” he said.

       Separately, Ahmad Zulqarnain said the Merdeka 118 tower is 100%-owned by PNB’s wholly-owned subsidiary PNB Merdeka Ventures Sdn Bhd.

       He stressed that the project was not funded by the ASB unitholders, and that it was funded through debt programmes.

       “In 2016, we launched Sukuk SRI Hijau Merdeka Asean programme and Sukuk Murabahah Merdeka,” he said.

       The Merdeka 118 tower is reported to be worth about RM5bil and could be the world’s second tallest building. It is slated to be completed by the third quarter of next year.