PERMODALAN Nasional Bhd (PNB), Malaysia’s largest fund-management company, expects to record a gross income of RM18.64 billion and a net income of RM15.18 billion with a return on net assets of 6.1 per cent this year.
Last year, PNB posted a gross income of RM18.33 billion, a net income of RM15.78 billion and return on net assets of 6.8 per cent.
The figures were shared on a slide presentation during a media briefing by PNB’s newly-appointed group chairman Tan Sri Abdul Wahid Omar on Thursday.
When asked how confident is PNB to achieve its targeted net income this year, Wahid, in his trademark gesture common to local reporters, sheepishly smiled and said: “All I can say is we are on track to achieve that this year”.
According to Wahid, PNB is now the market leader in the local unit trust industry as it manages RM220 billion in unit trust assets from 12.8 million accounts, representing 63 per cent market share in terms of total fund value.
Last year, PNB dividend payout reached RM14 billion. Wahid said this year’s dividend payout would be announced on December 22.
Wahid, who was appointed as group chairman on August 1 this year, also described PNB’s achievement as a great Malaysian story.
The former Cabinet minister replaced former chairman Tun Ahmad Sarji Abdul Hamid, who was with the company for 19 years.
PNB is a major investor in Bursa Malaysia with investments of nearly RM170 billion, or 10 per cent, of the market capitalisation of the local bourse.
PNB has strategic holdings in Malayan Banking Bhd, Sime Darby Bhd, UMW Holdings Bhd, SP Setia Bhd, Chemical Co of Malaysia Bhd and MNRB Holdings Bhd.
It also has a sizeable stake of more than 10 per cent in large-cap stocks such as Axiata Group Bhd, Tenaga Nasional Bhd, CIMB Group Holdings Bhd and Telekom Malaysia Bhd.
Since its inception in 1978, PNB has continued to deliver consistent returns to its shareholders with over RM136 billion paid out over the last 38 years.
Despite the success stories over the last three decades, PNB recognises the challenges that lie ahead.
Its president and group chief executive officer Datuk Abdul Rahman Ahmad said PNB and other companies were going through a period of global uncertainty, given the flat global economic growth and low interest rate environment.
Less than two months of taking the job at PNB, he had to come up with a strategy and did a presentation on PNB’s six-year strategic plan from 2017-2022.
The plan is devised to chart the way forward for PNB to deliver sustainable, consistent and market-leading returns as well as achieve its vision to become a distinctive world-class investment house.
The fund management company formulated PNB STRIVE-15 Programme that comprises three pillars, namely enhancing sustainable returns, effective investment management and driving operational excellence.
“We have developed a clear strategic plan to address the current and future challenges, thus ensuring PNB can sustain its performance for the next six years and beyond,” said Abdul Rahman, adding that PNB would continue to invest in high-performing Malaysian corporates.
He said PNB’s cash was sizeable and the group would continue to invest whenever the opportunity arose, including in fixed-income when “the time is right”.
Currently, PNB’s cash position is about 20 per cent and fixed-income is four per cent out of its investment portfolio. A 20 per cent cash holding is about RM50 billion in terms of absolute amount.
Abdul Rahman said PNB would redeploy some assets to reduce its cash position as the RM50 billion “is a bit too much to hold”.
Meanwhile, Wahid said many things could be done and achieved with PNB’s existing strategic investments.
He said the group would work closely with management and board of its strategic investment companies to see how the companies could maximise returns and create more value.