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Khazanah Net Assets Jump 24% After IHH Healthcare, Astro IPOs

Khazanah Nasional Bhd., Malaysia’s state investment company, said the value of its holdings rose 24 percent last year after making gains from divesting shares in companies, including Asia’s biggest hospitals operator.

The net asset value of Khazanah’s investments climbed to 86.9 billion ringgit ($29 billion) at the end of 2012 from 70 billion ringgit a year earlier, the Kuala Lumpur-based fund said in a statement today. It outperformed a 10 percent gain in the benchmark FTSE Bursa Malaysia KLCI Index, which closed the year at a record.

Khazanah cut its stake in hospitals operator IHH Healthcare Bhd. (IHH) through a $2 billion initial public offering in Kuala Lumpur and Singapore in July. The fund also reduced its stake in Malaysian pay-TV operator Astro Malaysia Holdings Bhd. (ASTRO) during a $1.5 billion share sale in October, and divested national carmaker Proton Holdings Bhd.

“We believe the portfolio is balanced and well-positioned to benefit from exposure into the Asia-Pacific growth region,” Khazanah Managing Director Azman Mokhtar said in the statement. “The outlook will be steady. It will be harder to scale new highs when your base gets bigger,” he later told reporters in Kuala Lumpur.

The fund’s returns outpaced a 13 percent increase in the MSCI World Index (MXWO), the biggest gain since 2009, and a 15 percent increase in the MSCI Emerging Markets Index. (MXEF)

Khazanah owns stakes in some of Malaysia’s biggest listed companies, including electricity producer Tenaga Nasional Bhd. (TNB), mobile phone company Axiata Group Bhd. (AXIATA) and lender CIMB Group Holdings Bhd. (CIMB) which all reported higher quarterly profits last year. Its holdings in the telecommunications and power sectors contributed to portfolio growth, according to today’s statement.

CIMB Aviva

The fund said pretax profit fell to 2.1 billion ringgit in 2012 from 5.3 billion ringgit in 2011 and paid a 1 billion- ringgit dividend to government, according to the statement.

Khazanah and Sun Life Financial Inc. agreed to buy 98 percent of Aviva Plc and CIMB Group Holdings Bhd.’s Malaysian insurance joint venture for 1.8 billion ringgit, according to a joint statement in London today.

“This is a very good deal,” Azman said. “We are able to enter a sector in Malaysia and eventually build a footprint into the region of a very good sector, which is life insurance. This is a good way to play rising incomes.”

Direct investments by sovereign wealth funds around the world picked up in the fourth quarter of 2012 from a year earlier, signaling a rebound after spending dropped to a six- year low in 2012, according to the Sovereign Wealth Fund Institute.

Full-year direct spending, which excludes money outsourced to other funds or asset managers, slumped 36 percent to $57.3 billion, the Las Vegas-based institute said in a statement yesterday. That’s the lowest since 2006, when direct investments amounted to $14.8 billion, it said.

To contact the reporter on this story: Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net

To contact the editors responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net; Andreea Papuc in Hong Kong at apapuc1@bloomberg.net

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