Exteriors of Maybank and CIMB Headquarters/Bloomberg
Permodalan Nasional (PNB) is seeking capital in foreign currencies so it can boost its overseas investments.
Thursday 21, March 2019
(Bloomberg) --Malaysia’s biggest state-owned fund manager, which owns more than 10 per cent of the local stock market, is considering its first sale of exchangeable bonds as it seeks to raise funds for overseas investments.
Malaysia’s biggest state fund is exploring all options including an offering of exchangeable bonds, or notes backed by shares in a listed company. PNB recently asked investment banks to submit proposals for the potential deal.
The asset manager hasn’t made a final decision about what the underlying stock would be, according to the people, who asked not to be identified because the information is private. It holds a 48 per cent stake in Malayan Banking, the country’s biggest lender, valued at more than $12 billion.
PNB also owned about 18 per cent of Axiata Group, the $9.4 billion wireless carrier, at the end of 2017. Other major holdings include stakes in Sapura Energy, Sime Darby and Tenaga Nasional.
PNB is following in the footsteps of Malaysian sovereign wealth fund Khazanah Nasional , which usually hits the market once a year with a sale of US dollar exchangeable bonds backed by some of its stock-market holdings.
If PNB decides to proceed, it would likely issue Sukuk as it prefers financing methods complying with Islamic principles. It could still opt for another form of fundraising.
PNB managed MYR 279 billion ($69 billion) of assets at the end of 2017, with around 70 per cent invested in equities and it plans to diversify its global assets to ensure sustainable returns as part of its five-year strategy.
PNB recently joined hands with Malaysia’s biggest pension fund to buy the commercial property assets at the Battersea Power Station project, where Apple plans to have its UK headquarters.