Author Topic: KHAZANAH  (Read 147 times)

Online king

  • King
  • ***********
  • Posts: 68,663
KHAZANAH
« on: November 29, 2017, 12:33:12 PM »




Khazanah lost RM9 bil in 2 years, under pressure to perform
FMT Reporters
ShareTweetPinMail
khazanahKUALA LUMPUR: Khazanah Nasional lost RM9 billion, in value, of public money over two years from 2014.

This has resulted in additional pressure on Khazanah to show higher returns to boost government coffers, according to a report in The Straits Times (ST).

The report said that senior state officials were lobbying for changes to the sovereign wealth fund’s management and investment strategy.

The report said the net worth adjusted (NWA) of Khazanah had dipped since 2014 from RM111 billion to RM102 billion. The NWA’s tabulation, it said, was unclear but that it largely measured the current value of Khazanah’s portfolio plus dividends returned to the treasury.

“In short, it lost 8% of its value or RM9 billion in public wealth over two years,” the report added.

The last time Khazanah declared a dividend lower than this year’s RM650 million was in 2011.

The bulk of the government’s direct business investments is managed by Khazanah, which has returned an average of just RM825 million in dividends annually over the past four years, from its RM145 billion worth of assets. This, the ST report said, amounted to less than 1% return a year between 2013 and last year.

According to the report, there is a push by some within Prime Minister Najib Razak’s “vast circle of advisers” to change Khazanah’s investment strategy, especially since the fund’s managing director, Azman Mokhtar, is due to leave in mid-2019, after a 15-year run at the helm.

Second Finance Minister Johari Abdul Ghani told ST that Khazanah’s succession plan would make increasing returns a priority. “I think that for anybody who is going to run that outfit, certainly that will be part of their KPI,” he said, referring to key performance indicators.

Umno Youth executive council member Rahman Hussin told the ST he had been tasked with raising the issue of non-performing government-linked firms at next month’s Umno asembly.

“Khazanah has so many subsidiaries, but as a custodian of public wealth, why is it not creating returns that we can channel back into the economy?” he was quoted as asking.

The ST report said the opposition believed better returns from state enterprises such as Khazanah could help ease Malaysia’s fiscal deficit, currently running at 3% of gross domestic product.

It said Pakatan Harapan’s budget committee chairman Wong Chen had estimated that the fund could and should declare RM2.5 billion in dividends yearly.

He was quoted as saying: “Although its expenditure is not transparent, we find that it spends RM4.5 billion of its revenue each year before declaring its profit before tax. One wonders why a holding company spends up to 80% of its revenue.”

Khazanah controls some of Malaysia’s biggest firms, including state electricity company Tenaga Nasional and telecommunication firms Telekom Malaysia and Axiata. It also controls CIMB. Its stakes in these four giants alone have garnered RM1.5 billion in dividends this year.

According to the report, Khazanah performs poorly when compared with the Employees Provident Fund (EPF). Since 2004, the report noted, Khazanah had returned a total of RM9 billion in dividends, which worked out to an average annual return of below 1% of the fund size, while the EPF added more than 5% annually to its members’ retirement savings.

The ST report said Khazanah’s profit before tax – not including unrealised capital gains – also lagged behind those of its peers, such as Singapore’s Temasek Holdings, China Investment Corporation, Alaska Permanent Fund Corporation, and the world’s largest sovereign fund, Norway’s Government Pension Fund Global.

The ST said Khazanah did not respond to a request for comment but that they and analysts often pointed to “national service” activities – investments in strategic industries that support government policies – as a factor that could drag down returns.

Khazanah has 458 staff in more than eight offices, including in London and San Francisco.

Malaysia's Biggest Investment Forum

KHAZANAH
« on: November 29, 2017, 12:33:12 PM »

Online king

  • King
  • ***********
  • Posts: 68,663
Re: KHAZANAH
« Reply #1 on: November 30, 2017, 06:42:34 AM »



Khazanah refutes report of ‘poor’ performance
Updated 7 hours ago · Published on 29 Nov 2017 11:01PM · 0 comments
More
A
Khazanah refutes report of ‘poor’ performance

KHAZANAH Nasional Bhd said a recent news report on its financial performance headlined Khazanah feels the heat amid push to change its investment strategy, and subsequently covered by the other media and social media outlets, was inaccurate and ultimately gave a misleading picture of the fund’s financial performance.

“This is principally due to its selective focus on a narrow and incomplete set of indicators of financial performance,” it said in a statement today.

As has been widely reported, the most representative measure of Khazanah’s financial performance is to refer to total returns that take into account realised and unrealised returns, as well as, distribution of returns through dividends.

The report, among others, claimed that the net worth adjusted (NWA) of Khazanah has dipped since 2014 from RM111 billion to RM102 billion.


Khazanah said its total return is represented by the growth in the net value of its portfolio, that is its NWA.

“As previously reported, the NWA value of the portfolio grew 3.1 times or 207% to RM102.1 billion in December 2016 from RM33.3 billion in May 2004, reflecting the period since the start of the revamp of Khazanah and government-linked companies (GLCs).

“This translated into an annual compounded return of 9.3% per annum over the 13-year period, rather than just the 1% or 2.6% return as was implied by the articles. 

“In addition, Khazanah’s audited shareholder’s funds had grown to RM37.8 billion, as at December 31, 2016, from RM13.2 billion, as at December 31, 2004, an increase of RM24.6 billion over the period,” it said.

In highlighting some of the salient aspects of the portfolio and the mandate as a strategic investment fund, Khazanah said the rate of total return as represented by NWA growth was in line with relevant benchmarks, in particular, with the FBM KLCI which posted a total shareholder return of 9.4% per annum during the same period.

The statement also said as Khazanah did not receive regular capital injections unlike most sovereign and sovereign-linked funds, it needed to ensure that its returns were achieved with an appropriate level of risk undertaken. – Bernama, November 29, 2017.

Online king

  • King
  • ***********
  • Posts: 68,663
Re: KHAZANAH
« Reply #2 on: November 30, 2017, 02:13:21 PM »



The curious race for Khazanah’s top job
Jahabar Sadiq
Jahabar Sadiq
Updated about 2 hours ago · Published on 30 Nov 2017 12:00PM · 0 comments
12
shares
More
A
The curious race for Khazanah’s top job
Khazanah chairman Prime Minister Najib Razak (centre) has yet to indicate who he wishes to succeed Khazanah managing director Azman Mokhtar (right), whose contract expires in 2019. – The Malaysian Insight file pic, November 30, 2017.

A SINGAPORE Straits Times report on the poor returns of Khazanah Nasional Bhd's investment strategy and leadership made the headlines in Malaysian media, which have been surprisingly critical of the sovereign wealth fund of late.

The criticism can be traced to one issue – the top job at Khazanah, which has been held by Azman Mokhtar for the past 15 years. His contract is expiring in 2019 and a panel has been formed to select his successor from a list of candidates, among which is Arul Kanda Kandasamy of 1Malaysia Development Bhd (1MDB).

With Arul Kanda's time at 1MDB coming to an end next month, expect frenzied campaigning by his supporters to land him the plum openingat Khazanah.

The first salvo for a change in management was fired two months ago when Peter Bellew quit as managing director of flag carrier Malaysia Airlines Bhd (MAB). Two newspapers – the New Straits Times and The Malay Mail – carried similar reports quoting sources that the Khazanah management was behind Bellew's shock resignation.


Khazanah denied it. So did Bellew.

Yesterday, the second salvo was fired when Singapore Straits Times and a Malaysian television station reported on the national sovereign wealth fund's supposed sluggish performance and misfiring investment strategy.

Khazanah hit back, alleging that the reports were misleading but with the newly-created No. 2 position at Khazanah due to be filled soon, the media campaign is likely to get more intense.

Whoever becomes the deputy will be in pole position to take over when Azman leaves in 2019. Aside from Arul Kanda, another leading contender is Tengku Zafrul Aziz, who leads Malaysia's second-biggest lender, CIMB Group, which is a unit of Khazanah.

The articulate Arul Kanda counts among his supporters several ministers and operatives in Prime Minister Najib Razak's camp. They are grateful to him for explaining the 1MDB scandal to the Umno ground

But his critics say that his record at 1MDB is patchy, with the Bandar Malaysia imbroglio the biggest sticking point. There is also a concern that political considerations will weigh heavy on Khazanah’s investment decisions with him at the helm.

But Najib, who is Khazanah chairman, has not made clear whether he wants the No. 2 to come from within Khazanah or if he prefers Arul Kanda or even CIMB's Tengku Zafrul.

It is also understood that Azman's replacement is unlikely to come from within Khazanah itself. Azman himself stepped in from outside after leading his BinaFikir consultancy to work on Malaysia Airlines' previous turnaround called the Wide Asset Unbundling.

Under then prime minister Abdullah Ahmad Badawi, Azman was mandated to run Khazanah professionally, with focus on correct processes and good governance, apart from catalysing various economic corridors.

He put in a team with its share of successes and failures but always sticking to a prudent process brought comfortable returns to the sovereign wealth fund.

But in recent months, headlines have made clear that Najib's No. 1 criterion for appointees to government-linked-companies is loyalty to him. Especially as he goes into campaign mode for the next general elections likely to be held in March or April.

That leaves him with several choices, including Arul Kanda and Tengku Zafrul. And the decision could come as early as the middle of next month when the Khazanah board meets after the Umno general assembly next week.

Hence the campaign via the media now to make the Khazanah management appear they have been less than able all these years. – November 30, 2017.

Online king

  • King
  • ***********
  • Posts: 68,663
Re: KHAZANAH
« Reply #3 on: December 01, 2017, 02:01:52 PM »



The 'High Income Nation' Was Just To Lull The Malay Leaders - It Had An Ulterior Motive. Did you know that Khazanah Nasional pays some contract staff RM70,000 PER MONTH !! Plus EPF the wage bill is over RM82,000 a month.   Just what exactly would a contract staff do that would be worth RM82,000 per month?  Just two days ago, Khazanah was reported to have made a return of just about 1% on the RM145 billion assets under their management.   If we put RM145 billion in Fixed Deposits in the banks, we could get about 4% return on our capital.  Khazanah has denied the report - coming out of Singapore's Straits Times. They say they have done 9.3%.  The nenek tua's keropok lekor stall can do better than that. Along with JAKIM can we just shut down Khazanah as well ? These are two very useless institutions. Its December now. Khazanah should be selling more of the TNB shares that Dr Mahathir gave them when Khazanah was first set up so many years ago. Without fail Khazanah has been selling TNB shares for the past FIVE or SIX years to make their KPIs and their books look good. Their MD (who is a graduate of the "slow learner" college) has been in place for 15 years.  His single greatest achievement is that he has been selling Khazanah's majority stake in TNB little by little every year to window dress his KPIs.  By the way there is another angle to that Khazanah story reported in the Singapore Straits Times.  1.  Do read on. 2. Why are these stories appearing in the Singapore Straits Times? Do read on.   Here is more news about another CEO being paid RM54,000 per month. Plus EPF, his wage bill exceeds RM60,000.  This is the "high income nation".  3. Do read on.

Cheap Offers: http://bit.ly/gadgets_cheap

Malaysia's Biggest Investment Forum

Re: KHAZANAH
« Reply #3 on: December 01, 2017, 02:01:52 PM »