Malaysia: Khazanah posts more than MYR6bn in losses

  • SOVEREIGN wealth fund Khazanah Nasional Bhd on 5 Mar 19 reported losses of MYR6.27bn in 2018 from a profit of MYR2.896bn in 2017.
  • Khazanah said its portfolio value, as measured by its net worth, also declined MYR25bn, or 21.6% to MYR91bn at end 2018.
  • At Khazanah’s annual performance review in Kuala Lumpur, the company said that the poor performance was due to global and domestic developments.
  • Khazanah said the realisable asset value of its portfolio value fell to MYR136bn in 2018 from MYR157bn in 2017.
  • The wealth fund also announced a new investment strategy that classifies its portfolio into a commercial and strategic fund.
  • The rejig comes as Putrajaya seeks to raise money for government coffers, depleted by a fiscal deficit and massive debt from a multi-billion-dollar scandal at state investment fund 1Malaysia Development Bhd (1MDB).
  • Impairments stood at MYR7.3bn in 2018 compared to 2017 MYR2.13bn. It is the government’s investment arm’s first loss since 2005. Khazanah’s portfolio value declined to MYR91bn on 31 Dec 18, a 21.6% drop from MYR116bn in 2017.
  • “Khazanah’s portfolio was affected by global economic uncertainty in 2018, which saw markets underperform due to geopolitical tensions on top of pessimistic growth outlook for emerging markets,” managing director Shahril Ridza Ridzuan told the media briefing.
  • “Looking at 2019, we’re comfortable with the fact that we should be able to see profitability, given that a lot of picking up done for 2018 has gone through the books,” Shahril said.
  • He said the new government had initiated a “reset of Khazanah, which involved significant changes, including a refreshed mandate”.

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