CCM disposal strategic move, gains for new investments: PNB

KUALA LUMPUR: Permodalan Nasional Bhd’s (PNB) divestment of Chemical Company of Malaysia Bhd (CCM) is done through disciplined and much scrutiny to realise a competitive return, group president and chief executive officer Ahmad Zulqarnain Onn clarifies.

He assured that Bumiputera interests in asset ownership would not be affected because the profit generated from such disposal would be reused for new investments.

The group, Ahmad Zulqarnain said, had always been disciplined in its investments. Every investment decision and disposal was done carefully and covered the governance process at various levels to ensure that it met PNB’s strict investment policies and objectives.

“The decision to buy or sell is usually through a proper evaluation and approval process and it is based on our core which is to ensure the generation of long-term returns to our unit holders,” he said during an interview with the New Straits Times and Berita Harian recently.

He was responding to allegations that the Bumiputera ownership had been affected by PNB’s move to dispose its 56.3 per cent CCM stake to Batu Kawan Bhd (BKB) for RM292.8 million.

Ahmad Zulqarnain said the disposal at RM3.10 per share was significant in terms of premium, given the price of CCM shares which had hovered around RM1.50 per share in the middle of this year.

The disposal price represented a 69 per cent premium to CCM’s three-month volume weighted average share price.

On its future investment plans, Ahmad Zulqarnain said PNB would continue its portfolio diversification strategy in ensuring a sustainable return to its unit trustees.

PNB, one of Malaysia’s largest fund management companies with assets under management (AUM) exceeding RM300 billion, could address the uncertain volatility challenges in the economy, industry and asset class it invested, through portfolio diversification.

Ahmad Zulqarnain said PNB was very active in diversifying its portfolio.

The group has spent three years in the development of internal capacity and will continue to do so by increasing the types of assets invested including fixed income, real estate, private equity and increasing the number of different geographical markets that PNB invested.

PNB did not rely on one type of investment alone to generate returns and the diversity would continue to be its strategy for the next three to five years, he said.

“We invest in as many different types of assets as possible, (so that) the returns will be more sustainable. We also participate in international initial public offerings (IPO).

“We are investing in various property portfolios both domestically and overseas. We are also increasing our exposure to fixed income through sukuk in the local and overseas markets. Insya-Allah, this will provide a sustainable return to our unitholders,” he said.

Ahmad Zulqarnain said the group could not give any indication of the expected income distribution of Amanah Saham Bumiputera for 2020, which would be announced next month.

He said portfolio diversification strategy implemented by PNB had borne fruit in ensuring sustainable returns.

Source: NST