KUALA LUMPUR: Amanah Saham Bumiputera’s (ASB) dividend distribution of 4.25 per cent for 2020 announced by Permodalan Nasional Bhd (PNB) remains competitive amid the current investment climate which was adversely impacted by the Covid-19 pandemic.
Bank Islam Malaysia chief economist Mohd Afzanizam Abdul Rashid said as investors, ones must understand the benchmarking concept in order to evaluate their investments.
“In this case, the benchmark for ASB would be the Maybank fixed deposit for 12 months return rate which stood around 1.85 percent as at Dec 20 this year, hence, against this (backdrop) and on the back of the current challenging economic situation the ASB dividend is seen competitive.
“Besides that, with the inflation rate currently at 2.5 percent, therefore, there is a real rate of return for ASB as the dividend is higher than the inflation rate,” he told Bernama.
Mohd Afzanizam noted that PNB’s global investment strategy had also come to fruition, whereby the gross contribution from the global public equity to PNB increased to 24.5 percent this year compared to 6.3 percent in 2019.
Thus, he said PNB’s investment asset geographical diversification strategy had contributed positively in cushioning the impact of the slowdown in the domestic equity.
“As investors, ones need to evaluate the current investment climate and factors affecting it and the investment rule of ‘high risk-high return’ should be applied in the current situation.
“On the back of this scenario, PNB fund managers will need to weigh the current challenges and balance the situations in order to achieve a consistent return which matches the risk they have taken,” he opined.
For investors, he viewed the ASB investment must be continued and is still a good investment option as it could still reap the benefit from a compounding factor from the investment.
Meanwhile, Professor Dr Mohd Nazari Ismail of Universiti Malaya’s Department of Business Strategy and Policy said as many businesses have closed down and others in financial difficulties due to Covid-19 pandemic, the depositors should feel very thankful for the dividend.
However, he noted that next year is expected to be another challenging year for PNB amid the uncertainties surrounding the global economy and the pandemic. — Bernama