Malaysia’s Permodalan Nasional Bhd (PNB) plans to optimise its liquidity management and continue diversifying its asset classes to further contribute to a more stable condition in the domestic financial market, says group chairman Tan Sri Dr Zeti Aziz.
Established in the late Seventies, PNB is Malaysia’s largest fund management company and owns the country’s largest unit trust management company, Amanah Saham Nasional Berhad (ASNB). PNB also owns and is involved in the management of several major properties in strategic city centres.
The company detailed its plans to invest more overseas as it announced that assets under management (AUM) had reached a record high of 301.4 billion ringgit (MYR) – equivalent to US$72.7 billion – against MYR 3.5 billion in PNB’s early years.
“PNB has an important role to contribute to the financial market and given the fact that we have inflow of funds from our unit holders, we can invest in new funds therefore we are diversifying our assets into better liquidity management,” commented Zeti.
Asia a growth centre
The former Bank Negara governor said that the size of the local financial market is significant and Malaysia benefits from a flexible exchange rate and an increasingly resilient economy, with the corporate sector showing greater activity and growing in capital inflows.
“The world recognises that Asia and Southeast Asian is a growth centre in the global economy so eventually funds will gravitate back,” Zeti noted, adding that the fund is beginning to see many things happen in the economy that would prompt economic activity.
“We are dealing through a period where we see outflows, and this is the time when an institution like PNB steps in to contribute to stabilise the market condition, and that has been happening for over more than two decades. This is the resilience of our market.
Asked if she sees rising volatility in the current domestic market, she said: “Having observed the market for more than two or three decades, I don’t see this as being very significant volatility in relative terms.”
In a briefing with reporters, Zeti said that as part of PNB’s focus for 2019, the company’s diversification strategy would be accelerated across asset classes in order to optimise returns and minimise risk exposure.
Following this initiative, PNB’s portfolio allocations into fixed income securities and global assets stood at 7.4% and 4.9% respectively at the end of May, compared with 5.8% and 2.4% two years ago.
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