PNB to help laggard stocks of core companies soar

KUALA LUMPUR: Permodalan Nasional Bhd (PNB), which saw net income rise 2.6% to RM10.3 billion for the first eight months of the year, will focus on working with its core companies whose stock performance has been lagging, its president and group CEO, Datuk Abdul Rahman Ahmad, said today.
On Tuesday PNB agreed to take up its rights issue entitlement as well as mop up excess shares and warrants in Sapura Energy Bhd's RM4 billion fund raising exercise, which may result in PNB Group holding up to 40% of the company. PNB Group will also subscribe in full to the RCPS-i of RM1 billion.
"If you look at the KLCI, some of these stocks that we have, performance to date has been lagging. For instance, TM (Telekom Malaysia Bhd) has declined nearly 45% year to date," he told reporters at a press conference.
He said some of the other companies such as telcos and construction companies have also been affected and while it understands the external challenges that these companies are facing, PNB's focus now will be to engage with them to transform their performance.
PNB defines core companies as companies in which it holds more than 10% stake or RM1 billion value such as TM and Sapura Energy Bhd while strategic companies are companies in which it has controlling stakes such as Malayan Banking Bhd and Sime Darby Bhd.
"Our focus last year was with our own strategic companies, so now we are moving towards our core companies and it started effectively with our support in the participation of Sapura Energy's transformation exercise, which we believe if it is executed well, will deliver very positive results in the future," he added.
Meanwhile, the proposed stake acquisition in the Battersea Power Station project may be further delayed with the possibility of another extension.
"We are still in the process of finalising the transaction. At the moment we are nearly completing our due diligence exercise so we hope this is something that we can agree to some form of finalisation. But it is still subject to a final review of terms and negotiation of terms. We will probably have better clarity in the fourth quarter," said Abdul Rahman.
Recall that PNB, together with the Employees Provident Fund, had proposed to acquire the commercial assets in Battersea Phase 2 Holding Co Ltd worth over RM8 billion. The acquisition was proposed early this year.
For the first eight months of 2018, PNB's net income rose 2.6% to RM10.3 billion from RM10 billion a year ago while total assets under management grew 7.3% to RM288.1 billion from RM268.6 billion in the same period last year.
As at August 2018, PNB had 13.6 million accounts with 231.5 billion units in circulation. Cumulative income distribution stood at RM176.4 billion as at September, including RM4.3 billion distributed year to date.
The asset manager yesterday launched two new forward pricing variable price funds, namely, Amanah Saham Nasional (ASN) Equity 5 and ASN Sara 2, as part of its efforts to expand its variable unit trust products.