Pace of GLC divestment likely to pick up after the GE

From Star Online: Business
21st March 2013

PETALING JAYA: Analysts are expecting the pace of divestment in government-linked companies to pick up post-general election.

Maybank Investment Bank Research mentioned this in a report, adding that based on its estimates, the combined holdings of government-linked investment companies (GLICs) in Malaysian equities was at least 35% for the top-100 stocks by market capitalisation and 39% for FTSE Bursa Malaysia KL Composite Index (FBM KLCI)-linked stocks.

Being mature investments, the research house said it expected the Government’s investment arm, Khazanah Nasional Bhd, to pare down its stakes in

Astro Holdings Malaysia Bhd (ASTRO)

Malaysia Airports Holdings Bhd (AIRPORT)

IHH Healthcare Bhd (IHH)

Telekom Malaysia Bhd (TM)

Axiata Group Bhd (AXIATA)

Tenaga Nasional Bhd (TENAGA) and

UEM Land Bhd (UEMLAND)

Under the Strategic Reform Initiative (SRI) to reduce the Government’s role in business, 33 firms owned by GLICs were identified in 2011 as ready for divestment, either through a listing, stake pare-down or outright sale.

So far, 15 divestment exercises have been completed.

Some of the GLICs took additional initiatives by divesting more companies than the 33.

Khazanah pared down its stake in IHH in July via an initial public offering (IPO), raising RM6.3bil for Asia’s largest hospital operator.

It also sold national carmaker Proton Holdings Bhd to DRB-Hicom Bhd, invited tenders for the purchase of its property investment firm STLR Sdn Bhd, and sold 60 million shares in TNB worth RM406.8mil via a private placement, trimming its stake to 34% from 35.2%.

Khazanah managing director Tan Sri Azman Mokhtar told Bloomberg Television yesterday that it was planning more domestic divestment while expanding overseas, adding, however, that it was in “no hurry” to sell its assets.

Khazanah’s net worth adjusted improved by 24.3% or RM16.9bil from RM70bil in 2011, outperforming the FBM KLCI’s total return of 14.1%.

Its portfolio grew to a record RM86.9bil by net worth adjusted in 2012, lifted by mega-IPOs like IHH.

[Source]