PNB to consider boosting overseas investments after ringgit strengthens

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) yesterday announced its Strategic Plan 2017-2022 to address challenges in this period of global uncertainty, and said it will consider increasing its investments abroad when the ringgit strengthens.

Currently, PNB chairman Tan Sri Abdul Wahid Omar said, only 2% of its investments are overseas.

“This is not the right time to invest abroad. At the opportune time, after the ringgit strengthens, we may consider increasing our allocations abroad,” he told a media briefing yesterday.

The briefing was to announce a strategic plan to increase its assets under management (AUM) to RM350 billion by 2022. Its AUM currently stands at RM260 billion.

PNB has investments in six properties in London and one in Australia, which was invested at a time when the ringgit was stronger.

“In terms of percentage, it’s relatively small but it’s a sizeable investment so we’re comfortable with that portfolio,” said PNB president and CEO Datuk Abdul Rahman Ahmad.

Currently, 98% of PNB’s investments are in Malaysia and the country remains its core investment destination.

The global market environment remains difficult with growth forecast to remain flat, coupled with the low interest rate environment, exacerbated by lacklustre domestic equity performance, as the FBM KLCI, Bursa Malaysia’s key index, has been on a negative trend for the past three years.

“The immediate issue is to take advantage of the historical low position that we’re in,” Rahman said.

About 20% of its portfolio is in cash (RM50 billion), which will give PNB the flexibility to invest in stocks and other investments at the right time.
PNB’s net income is estimated at RM15.18 billion in 2016, compared with RM15.78 billion in 2015.

PNB’s Strategic Plan 2017-2022 comprises 15 key initiatives across three pillars – enhancing sustainable returns, effective investment management and driving operational excellence.

“We believe we’re on track for 2016, and for 2017 and beyond, our strategies will enable us to achieve the target,” said Wahid.