By H G Rahman
KOTA KINABALU, Malaysia--Amanah Saham Nasional Bhd (ASNB), the wholly-owned unit trust company of Permodalan Nasional Bhd (PNB), has declared an income distribution of RM882.49mil for Amanah Saham Malaysia 2 - Wawasan (ASM 2 Wawasan) for the financial year ended Aug 31, 2022.
PNB, in a statement, said the total income distribution payout would benefit 906,645 unit holders and as of Aug 25, the fund earned a total gross income of RM1.05bil and recorded a net realised income of RM725.10mil, local-English language daily The Star reported.
For comparison Employees Provident Fund (Kumpulan Wang Simpanan Pekerja) has consistently delivered a dividend of 6 percent and up for many years including during the 2008 financial crisis, the various oil&gas price fluctuations and even during the pandemic, posting 6.1 percent in conventional and 5.65 percent in Shariah-compliant dividends in 2021.
While EPF expects to deliver a little less this year due to various risks and disruptions, what can we say about ASNB, which has posted lower and lower dividends since the 1990’s for its ASW 2020, ASM and AS1M.
ASW 2020 is probably the biggest disappointment having paid out 10.10 percent in 1997 and a pathetic 3.75 percent this year.
Failing the Bumi-economic agenda
PNB was established on 17 March 1978 as one of the instruments of the government's New Economic Policy (NEP). It is one of the largest fund management companies in Malaysia. Its goal is to aid in the economic uplifting of Malaysia’s Bumiputera, a group which includes the country’s ethnic Malay majority.
This was to be achieved through efficient and well planned investments that would enable Bumiputera and Malay investors to increase their capital which would then translate into greater wealth for the community and greater economic parity to match the other ethnic groups in the country.
While this affirmative action policy is sound and if properly implemented would greatly aid the socio-economic development of the Bumiputera group, they seem to have been consistently shortchanged here as they have been in a great many other initiatives meant to help them.
While the reasons for the NEP’s failure are many and cannot be covered in a brief observation such as this, we can single out ASNB. While other funds and investment mechanisms in Malaysia can produce results, even if they are incremental, why is it the ASNB has failed to grow and is in fact contracting?
In fact the ASN, which was launched in the 1980’s with a value hovering around RM 1 is now worth below 60 sen. After 30 years of existence and “work” should we call this a success or failure? What do you think the Bumiputera holders have to say?
What are the chairman and the board of directors up to at ASNB and by extension PNB? Former Chief Justice of Malaysia Arifin Zakaria was appointed PNB Group Chairman on May 2 this year. What exactly his qualifications for the job are unclear and what he intends to do to turn around the situation is as yet unclear. Yet another reason these bodies should be staffed by people who know what they are doing.
Perhaps PNB President and Group Chief Executive Ahmad Zulqarnain Onn who has held the post since June 2020 will have some idea on how to turn around the steady dividend decline? But he seems satisfied enough that Maybank will move its corporate head office from Menara Maybank in Jalan Tun Perak to Menara Merdeka 118 in stages starting from the first quarter of 2025. Which brings us to…
Warisan Merdeka Tower (KL118)
This gigantic 678.9-metre-tall eyesore which can be seen from all over Kuala Lumpur is the second tallest building in the world and is funded by Permodalan Nasional Berhad (PNB)] with a budget of RM5 billion (US$1.21 billion).
“Many Malaysians have criticised this project, adding that it is unnecessary and a waste of "public funds", having been funded by the Permodalan Nasional Berhad (PNB), a state-owned enterprise of the Malaysian government. Amounting to more than RM5 billion, it is said that the money could have been better used for other practical causes, such as education and healthcare, which has been increasingly deteriorating in the country.” - VICE
How is this tower a wise and sound investment and when will it yield dividends? Or is it going to turn into another white elephant the way many other projects have turned out to be?
While KL118 is just one in a list of bad ideas (the others being Sapura Energy and FashionValet) it will for a long time remain as a monument of what the noble endeavour of uplifting the Bumiputera has turned into: Glittering glass and concrete on the outside but hollow and worthless on the inside.
Heads must roll
It is clear that ASNB has for a long time deviated from its original stated role. It has failed to grow and to pay dividends that match the funds that it has been entrusted with and yet the culture of paying huge salaries and granting perks to directors is ever present.
Perhaps the board should show some solidarity with those who feel let down and disappointed by taking a paycut and refusing any perks in favour of working hard to turn the situation around. Of course it would not be fair to single out the current leadership of ASNB and PNB but if the current leadership is unable to turn the situation around, then how are they any better than those who came before them?
Perhaps competent people from EF and Khazanah should instead be imported to turn the situation around unless of course (as we suspect anyway) that there are powerful vested interests determined to use the Bumi-economic agenda for their own ends, squandering the promises and hopes of millions of Bumis for their own agenda.