Pelaburan Mara's equity investment totals RM260m, dismisses RM1b paper losses

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KUALA LUMPUR (Jan 4): Pelaburan Mara Bhd, the investment arm of Majlis Amanah Rakyat (Mara), said its equity investment stood at RM260 million as at Dec 31, 2014.

"(Thus,) it defies logic for Pelaburan Mara to suffer paper losses of RM1 billion. Even if all investments are written off, the losses will only be to the amount of the initial investment," said its group chief executive officer Nazim Rahman in a statement today.

He was responding to a news report that Pelaburan Mara was seeing huge paper losses of as much as RM1 billion, suggesting that it could stem from its direct major shareholdings in public-listed companies as well as through its unit trust fund, managed by PMB Investment Bhd.

"The conclusion is not only factually wrong but also illogical," said Nazim.

He pointed out that Pelaburan Mara has its own governance and risk management standards for its investment activities, that include strategic asset allocation which serves as a guiding principle to achieve a diverse and balanced portfolio.

"Consequently, our investment in equity market is not more than 40% of total investments in a portfolio that also includes money market, fixed income and alternative investments," he added.

Nazim also said Pelaburan Mara has consistently registered a high return on equity (RoE) of more than 13% and profit for its business since its incorporation in 1967.

It estimates to achieve an income of RM50 million and a net profit of RM30 million for the financial year ended Dec 31, 2014, representing a 50% year-on-year growth, and the highest in its 47-year history.

"(On the part of) PMB Investment, being a licensed entity under the Capital Markets Services Act (CMSA), (it) operates separately as an Islamic fund manager and a unit trust management company, and is not a “conduit” for Pelaburan Mara as implied by the report," said Nazim.

To date, PMB Investment manages 14 unit trust funds, a wholesale fund and several discretionary portfolio accounts with investment mandates in equity, sukuk and money market.

"It has to adhere to a strict investment process as approved by its investment committee," said Nazim.

"PMB Investment has won several awards, the latest of which was the Best Islamic Equity Malaysia for three years at The Edge-Lipper Malaysia Fund Award 2014.

"PMB Investment posted a total return of 62.7% for the three years ended December 2013, while its one-year return for 2013 was 47.9%, a testimony of its strong governance and investment process," he added.