Malaysia’s state wealth fund reports 61% drop in profit, warns of another challenging year

Khazanah is “rebalancing” its financial exposures

Malaysia’s sovereign wealth fund Khazanah Nasional posted a 61 per cent drop in profit for 2020 to 2.9 billion ringgit ($711.8 million) from 7.4 billion ringgit in the previous year.

Most of the fund’s profits stem from domestic and international investments and have been affected by a “rebalancing” of Khazanah’s portfolio against the backdrop of a challenging economy and the unprecedented impact of the COVID-19 pandemic, Shahril Ridza Ridzuan, Khazanah’s managing director, said in a news release on March 4.

“Despite these challenges, we were able to build on our efforts in recent years, allowing us to navigate the economic uncertainty,” Shahril said.

Dividend income rose to 5.2 billion ringgit from 3.8 billion ringgit in the previous year, but divestment gains dropped to 2.7 billion ringgit from 9.9 billion ringgit.

Despite the drop in profits, Khazanah declared a dividend payout to the government of two billion ringgit, double the previous year’s dividend.

Pandemic a big hit for fund investments

The coronavirus pandemic particularly hit the value of Khazanah’s strategic investments, which include tourism and aviation-related assets, namely Malaysia Airlines. The realisable asset value of Khazanah’s strategic fund stood at 27.9 billion ringgit as of the end of last year, down about 15 per cent from the year before.

Khazanah further said that public global assets accounted for 17 per cent of the fund’s total commercial assets last year, up from 12 per cent the year before, while Malaysian-listed assets dropped to about 50 per cent from 58 per cent.

Shahril warned that 2021 would be another challenging year, even as vaccination programs hold out hope for better times to come. Key sectors for Malaysia, such as aviation and tourism, are unlikely to enjoy a full recovery before 2023, he predicted.



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Khazanah is "rebalancing" its financial exposures Malaysia's sovereign wealth fund Khazanah Nasional posted a 61 per cent drop in profit for 2020 to 2.9 billion ringgit ($711.8 million) from 7.4 billion ringgit in the previous year. Most of the fund’s profits stem from domestic and international investments and have been affected by a “rebalancing” of Khazanah's portfolio against the backdrop of a challenging economy and the unprecedented impact of the COVID-19 pandemic, Shahril Ridza Ridzuan, Khazanah’s managing director, said in a news release on March 4. "Despite these challenges, we were able to build on our efforts in recent years,...

Khazanah is “rebalancing” its financial exposures

Malaysia’s sovereign wealth fund Khazanah Nasional posted a 61 per cent drop in profit for 2020 to 2.9 billion ringgit ($711.8 million) from 7.4 billion ringgit in the previous year.

Most of the fund’s profits stem from domestic and international investments and have been affected by a “rebalancing” of Khazanah’s portfolio against the backdrop of a challenging economy and the unprecedented impact of the COVID-19 pandemic, Shahril Ridza Ridzuan, Khazanah’s managing director, said in a news release on March 4.

“Despite these challenges, we were able to build on our efforts in recent years, allowing us to navigate the economic uncertainty,” Shahril said.

Dividend income rose to 5.2 billion ringgit from 3.8 billion ringgit in the previous year, but divestment gains dropped to 2.7 billion ringgit from 9.9 billion ringgit.

Despite the drop in profits, Khazanah declared a dividend payout to the government of two billion ringgit, double the previous year’s dividend.

Pandemic a big hit for fund investments

The coronavirus pandemic particularly hit the value of Khazanah’s strategic investments, which include tourism and aviation-related assets, namely Malaysia Airlines. The realisable asset value of Khazanah’s strategic fund stood at 27.9 billion ringgit as of the end of last year, down about 15 per cent from the year before.

Khazanah further said that public global assets accounted for 17 per cent of the fund’s total commercial assets last year, up from 12 per cent the year before, while Malaysian-listed assets dropped to about 50 per cent from 58 per cent.

Shahril warned that 2021 would be another challenging year, even as vaccination programs hold out hope for better times to come. Key sectors for Malaysia, such as aviation and tourism, are unlikely to enjoy a full recovery before 2023, he predicted.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

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Personal Info

Donation Total: $10.00

 

 

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