Malaysian sovereign fund Khazanah Nasional Berhad (Khazanah)
is anticiping another challenging year ahead of below trend global growth on the back of monetary policy shift to combat inflation, and persistent geopolitical tensions.

Khazanah said in a statement that the fund will continue to remain vigilant in its investing activities with the aim of maintaining portfolio resilience through diversification.

Despite the uncertainties, Khazanah said it remains optimistic in identifying investment opportunities within emerging global trends – structural changes to the multipolar global system and the growing challenges of climate change, energy transition and sustainability.

It said Khazanah remains firmly committed in its role as an active steward and shareholder of its portfolio companies in Malaysia as it seeks performance, value creation and long-term shareholder value.

Meanwhile, Khazanah said it will continue its quest to seed new growth areas and ecosystems via Dana Impak.

In line with Malaysia’s Budget 2023, Khazanah launched the Future Malaysia Program, an initiative under Dana Impak, to support the local ecosystem of entrepreneurs, start-ups, venture funds, and corporate venture initiatives, which is an essential source of innovation, employment and investment for the nation.

The programme involves working with domestic and international partners to fund high-growth and innovative Malaysian companies with sustainable business models that delivers socioeconomic impact and benefits for our country.

To this end, Khazanah believes that the availability of talent is crucial to the continuous development of any industry, especially the rapidly evolving digital industry which is facing increasing talent demand.

Khazanah said it will invest, via its Future Malaysia Skills initiative, in upskilling and reskilling initiatives with the aim to generate a sustainable pipeline of talent, and in the process, provide Malaysians with in-demand skills for access to high quality jobs, leading to improved livelihood and spurring competitive industries that drive economic growth for the nation.

“Khazanah will continue to deliver on our mandate and remain committed to Advancing Malaysia, that is to drive Malaysia’s success in the global arena and continue to focus on value creation initiatives while staying ahead of the curve in a rapidly changing market environment,” Khazanah Managing Director Amirul Feisal Wan Zahir said.

According to him, Dana Impak initiatives will remain focused to increase Malaysia’s economic competitiveness and build national resilience via innovative partnerships and new growth areas.

“This, along with our efforts in building on our financial strength, focus on sustainability and developing a winning team would complement our purpose for the country,” he added.

It is noted that on Dana Impak, MYR500 million ($111.71 million) worth of projects have been identified across various impact areas, aiming at building national resilience and new growth opportunities.

Key areas include agrifoods and work force digital upskilling as well as a commitment to support entrepreneurs and venture capital (VC) ecosystem.

Meanwhile, Khazanah announced that it recorded an improved profit in 2022 mainly contributed from monetization activities and lower impairment in the portfolio.

The group’s profit from operations rose to MYR1.6 billion ($360 million) in 2022 from MYR670 million ($150 million) in 2021.

Its net asset value (NAV), however, saw a decline of 5 percent from MYR86 billion ($19 billion) in 2021 to MYR81 billion ($18.1 billion) in 2022 attributed by the global market downtrends.

Khazanah said the firm is focused on building long-term financial return and continued its portfolio rebalancing towards the target strategic asset allocation with deployments into public equities, private equities and real assets.

According to Khazanah, MYR6.6 billion ($1.5 billion) was deployed in new investments and MYR2.5 billion ($560 million) raised from monetisation of assets.

Khazanah declared a dividend of MYR500 million ($112 million) for 2022 to the government of Malaysia, with cumulative dividends declared since 2004 amounting to MYR17.1 billion ($3.82 million).

According to Khazanah, 2022 was a challenging year for Khazanah and the global markets, with rising inflationary pressure, aggressive monetary tightening and energy crisis due to the Russia-Ukraine conflict.

“Despite the challenging market conditions globally, we delivered a satisfactory performance in the first full year of implementing our refreshed strategy,

“Our nation building mandate of delivering long-term sustainable value remains unchanged and we will ride through the short-term market volatility and remain focused on our long-term goals,” said Amirul Feisal.

“There are ongoing concerns that the inflationary environment and tightening monetary conditions will lead to a global recession, exacerbated by continuing geopolitical risks,

“However, Khazanah’s disciplined investment approach, as guided by our long-term Strategic Asset Allocation (SAA) and active portfolio management helped navigate the volatility in the markets as we maintained discipline in our value creation and monetization efforts,” he added.

Khazanah launches Future Malaysia Program to spur the local start-up ecosystem