Malaysian sovereign wealth fund: Low crude oil prices, weaker ringgit have advantages


KUALA LUMPUR - Sovereign wealth fund Khazanah Nasional Bhd said low crude oil prices as well a weaker ringgit has its advantages and disadvantages.

"Crude at US$50 (S$69) or below is not good for the country obviously, but there is also a flipside to it. For example, Khazanah companies that are consumers of oil and gas like Tenaga and Malaysia Airlines, they actually benefit in that sense.

"A weaker ringgit is tough in the aspect of exporters but the healthcare and tourism companies will benefit," said managing director Tan Sri Azman Mokhtar at a briefing after the graduation ceremony of Government-linked Investment Companies (GLICs) and Government-linked Companies (GLCs) under the GLC Transformation Programme.

He added that when the programme started 10 years ago, some GLCs were "on the brink of crisis".

"Some like Tenaga and Telekom, the very traditional GLCs it was the case of underperformance. But in the 2008 crisis, we found that these companies were able to withstand. And in fact we did all kinds of stress test and discovered that had they not gone through this quite a few of them would have been in trouble actually.

"So similarly the culture of stress testing and preparedness is quite high. Among Khazanah companies, of course the one company we put in the book that has not been successful was actually Malaysia Airlines. And that has its very own very intense programme. Sadly it has taken two disasters to give those conditions in a way," he said.

Azman said in the 10-year GLC Transformation Programme, GLCs have delivered better financial performance. The G20, the selection of large GLCs, their market capitalisation grew almost three times to RM386bil, since May 2004.