Khazanah Malaysia Portfolio

Khazanah seeks more resilient portfolio

Khazanah Nasional is taking action to enhance the resilience of its investment portfolio amidst market volatility. This news is according to its managing director.

Khazanah’s net asset value declined by 5% to 81 billion ringgit ($17.4 billion) in 2022 due to global market downtrends. The fund, headquartered in Kuala Lumpur, allocates more than half of its portfolio to public markets.

“We are focused on bolstering our resilience in the market,” said Khazanah’s managing director, Amirul Feisal Wan Zahir. He said this during an interview at the Energy Asia conference in Kuala Lumpur.

Acknowledging market volatility, he added, “We are currently in the process of rebalancing our portfolio.”

In 2022, Khazanah achieved a net profit of 1.6 billion ringgit ($343 million). It more than doubled its previous year’s net profit. This marked the fourth consecutive year of profitability after a significant downturn in 2018.

In contrast, the MSCI World index experienced an 18% decline in 2022. Even the MSCI Emerging Markets index plunged by 20% during the same period.

Khazanah Portfolio Breakdown

As of the end of 2022, Khazanah disclosed that 55.9% of its portfolio was invested in public markets within Malaysia. Khazanah also disclosed that overseas public markets made up 13.4% of its portfolio. Khazanah has allocated nearly a quarter of its portfolio to private markets. More than half of these private markets are outside Malaysia. Khazanah has also invested 8% of its portfolio in real assets.

Amirul Feisal highlighted the potential for asset deployment, particularly in a volatile market environment.

“Amidst ongoing industrial consolidation and a rising interest rate environment, corporates, especially those in the consumer or highly leveraged sectors, will face challenges,” he explained.

Persistently high inflation rates, despite multiple interest rate hikes globally, have led to difficulties for many companies due to rising yields.

The Khazanah MD suggested that CEOs and corporates should explore cost reduction strategies, mentioning business services as an area where private equity opportunities may arise.

Khazanah is Malaysia’s sovereign wealth fund.

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