See More on Facebook

Business, Economics

Malaysia state fund Khazanah records pre-tax loss of $2 billion

Khazanah declared RM1.


Written by

Updated: March 6, 2019

5 billion dividends to the government, up from the 2017 dividends of RM1 billion announced before last May’s general election.

Malaysia’s sovereign wealth fund Khazanah Nasional announced its first pre-tax loss in a decade amounting to RM6.27 billion (S$2 billion) in its annual review presentation on Tuesday (March 5).

The company pinned last year’s losses on global market challenges, with half of its impairments due to Malaysia Airlines, the national carrier it owns.

Its new managing director Shahril Ridza Ridzuan said the fund had to contend with short-term losses in order to actualise long-term gains it projects to achieve within five years.

“Key thing to focus on is restructuring our portfolio to look at long-term returns … based on a five-year rolling basis. You’ll have fluctuations. You’re going to have years like 2018 where market severely under-performed, there’s a dip and years like 2017 where markets grew really well,” he added.

5 billion dividends to the government, up from the 2017 dividends of RM1 billion announced before last May’s general election.

The fund practises a conservative accounting of its profit and loss statement, which explains its first pre-tax loss in a decade due to market depreciation of some assets.

Mr Shahril said the fund has profitable assets too, but those are not realised “until we dispose of it”.

Mr Shahril was hired to run Khazanah after Pakatan Harapan took power last year, having previously led Malaysia’s pension fund.

Under the new leadership, Khazanah’s refreshed mandate includes a relook at its investments and diversification of portfolio across geographies and sectors globally. Three-quarters of the fund’s investments are with Malaysian companies.

“With portfolio re-balancing (what) we’re doing is to take out the imbalances. For instance we have large concentration risks, driven by the fact that in Malaysia at least, a big chunk of our assets is tied up in just a few companies,” Mr Shahril said.

Khazanah’s  underperforming companies last year were Malaysia Airlines and telecommunications network Telekom Malaysia (TM). The high impairment stemming from the airline was due to the carrier’s inability to meet its objectives, with Khazanah adjusting the carrier’s book value. The airline is conducting a review of its current strategy.

Khazanah recorded an impairment of RM7.3 billion for 2018, RM5 billion more than 2017’s figure.

TM meanwhile suffered losses from the government announcement last year to reduce internet costs for consumers. Communications and Multimedia Minister Gobind Singh Deo had instructed telcos to lower broadband prices, as part of the ruling pact’s promise to slash prices and increase broadband speed.

“You’ll see fluctuations due to regulatory changes… Most important for regulators is to make sure you have a regime where while safeguarding consumer public interests, you have to also make sure there’s enough incentive (for investors) to invest in the industry and get a profitable return,” said Mr Shahril.

Khazanah is placed 25th worldwide in terms of asset size on the sovereign wealth fund rankings published by the Sovereign Wealth Fund Institute.



Enjoyed this story? Share it.


About the Author: The Straits Times is Singapore's top-selling newspaper.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Business, Economics

S. Korea, Japan to hold working-level talks

The two countries have not pursued diplomacy since a high level talk failed earlier this month. South Korea’s Foreign Ministry announced Thursday that an official handling Asia-Pacific affairs will visit Japan to meet his counterpart amid mounting tensions between the two countries. Kim Jung-han, director general for Asian and Pacific Affairs at Seoul’s Foreign Ministry, will meet Shigeki Takizaki to discuss matters of mutual interest, the ministry said in a press release. This is Kim’s first one-on-one meeting with Takizaki, who replaced Kenji Kanasugi as head of Japan’s Foreign Ministry’s Southeast and Southwest Asian affairs departmen


By The Korea Herald
September 20, 2019

Business, Economics

China demands US drop bill on HK

China has accused the United States of meddling in the past. China on Thursday demanded the United States stop advancing a Hong Kong-related bill and its interference in Hong Kong affairs on Thursday, after US lawmakers held a news conference to back the bill. US House of Representatives Speaker Nancy Pelosi and a bipartisan group of members of Congress held the media event on the “Hong Kong Human Rights and Democracy Act of 2019”. Hong Kong separatists, including Joshua Wong Chifung and Denise Ho Wan-see, attended the event. China is strongly dissatisfied and firmly opposed to the move, Foreign Ministry spokesman Geng Shuang said on Thursday. Pelosi and other US politicians “failed to distinguish right from wrong” despite China repeatedly expressing its solemn stance over US meddling in Hong Kong affairs, Geng said. They were “brutally interfering in China


By China Daily
September 20, 2019

Business, Economics

S. Korea to revamp workforce system amid population decline

Government vows to increase manpower in schools, military, lower barriers for qualified foreign workers. South Korea’s fiscal chief on Wednesday announced proposals to improve the supply of key workforce amid a declining population and aging society. The government’s latest blueprint announced Wednesday focuses on recruiting teachers, soldiers and foreign workers in nonmetropolitan areas, as well as improving the employment conditions for seniors. “With its record-low birth rate and fast aging society, Korea is now facing critical demographic changes,” said Deputy Prime Minister and Finance Minister Hong Nam-ki in an economic revitalization meeting held at Seoul Government Complex.


By The Korea Herald
September 19, 2019

Business, Economics

India bans e-cigarettes

The decision has been met with criticism and charges of favouritism. The Union Cabinet’s move on Wednesday clearing an ordinance for banning production, import, distribution and sale of electronic cigarettes and proposing a jail term and fine for its violators evoked mixed reactions among a section of Delhi doctors and other stakeholders. The Centre’s decision was slammed by trade bodies and certain stakeholders related to e-cigarettes, who reportedly alleged that it was a “draconian” move taken hastily in the interest of the conventional cigarette industry. They also charged that the government was depriving people of a safer alternative to smoking. Dr Gyandeep Mangal, senior consultant in Respiratory Medicine, Sri Balaji Action Medical Institute, said, “We are glad with the ban on e-cigarettes by Union Cabinet as these are as harmful as regular cigarettes. It is true that e-cigarette doesn


By The Statesman
September 19, 2019

Business, Economics

Hey men, women don’t want to be told to be like a woman

Nepali women still grapple with sexist language and expressions that most men easily dismiss. Throughout her time as a Deputy Inspector General of Nepal Police, Bimala Thapa was referred to as “Sir” by her subordinates. She tried several times, during her initial days in the role, to explain to officers that she would prefer to be referred to as “madam”— not sir. But she eventually gave up and stopped correcting people. “It seemed futile to discuss the issue because even those who should have understood why it matters treated it lightly,” says Thapa, whose superiors would also acknowledge her as sir. “Many probably don’t see why this is demeaning, but it used to feel like they thought that those in power were always supposed to be men.” It’s no surprise that Nepali society s


By The Kathmandu Post
September 19, 2019

Business, Economics

Challenges loom for Asia’s digital landscape

An overview of digital strategies across Asia in light of the first ever annual Digital Economy Report released by UNCTAD last week. Last week, the United Nations Conference on Trade and Development (UNCTAD) released its first ever annual Digital Economy Report (2019). It came at a time when countries across Asia have been grappling with a complex digital future. Digital technologies help cut costs, enable delivery of services without leakages, reduce opportunities for graft, promote ease of doing business, leverage an increasingly non-tactile world, grow economies, have the potential to create millions of new jobs and, it appears, even help fight fake news. On the flip side, there are concerns of the cost of the emerging digital economy in terms of loss of traditional employment sectors, eroding the right to privacy, abetting authoritarian state-control of citizens’ lives, causing a s


By Ishan Joshi
September 19, 2019