THE Government today launched a three-year programme to reform and future-proof the government-linked investment companies (GLICs) to ensure the mammoth holding companies remain relevant over the long term.
Malaysia’s GLICs involved in the programme consists of four sovereign wealth funds (SWFs) and four institutional investors.
The SWFs in question are Khazanah Nasional Bhd, Kumpulan Wang Persaraan (KWAP), the National Trust Fund (KWAN) and Ministry of Finance Inc (MoF Inc).
The institutional investors, meanwhile, are the Employee Provident Fund (EPF), Permodalan Nasional Bhd (PNB), Lembaga Tabung Haji (LTH) and Lembaga Tabung Angkatan Tentera (LTAT).
Prime Minister Tan Sri Muhyiddin Yassin said that this move under the Perkukuh Pelaburan Rakyat (Perkukuh) programme was to reflect GLICs unique mandates better, strategies and asset-liability management.
“Stalling investment returns in the past decade with the exposure in ‘matured’ industries and constant changes within the global investment climate had posed a threat to some GLICs,” he said during the virtual launch of the initiative this afternoon.
“This could be a significant investment risk to Malaysia if GLICs fail to keep up with such change, emphasising environmental, social, and governance (ESG) related matters.
“Inevitably, lower returns had trickled down and affected the rakyat due to plateaued wages, hindering the country’s vision of becoming a high-income nation.
“Inequality, on the other hand, had remained high, undermining social cohesion while stressing the pandemic has certainly aggravated these vulnerabilities.”
The mandate comprises 20 key initiatives with five key objectives to sharpen clarity on the mandate of each GLIC, enhance focus on developmental and catalytical investments to spur new growth and enhance socio-economic impact, as well as crowd-in the private sector while streamlining the role of the government and its agencies in the business.
Muhyiddin said the programme would also allow the Government to future-proof GLICs with best-in-class governance, capabilities and strategies while strengthening social safeguards and fiscal resilience.
“These mammoth holding companies by the GLICs and their entities control about RM1.7 tril of assets under management, making up more than a quarter of the market capitalisation of Bursa Malaysia, while directly and indirectly employ nearly half a million people,” he acknowledged.
Muhyiddin further announced that the programme will be overseen by a New Growth Coordination Council chaired by the prime minister himself.
As Perkukuh will push GLICs to optimise capital allocation and focus on new growth areas, the council will ensure these are aligned with key policies comprising the National Fourth Industrial Revolution Policy, MyDIGITAL, the National Investment Aspirations framework, the Twelfth Malaysia Plan, and the Shared Prosperity Vision 2030.
“In formulating Perkukuh, we drew on the deep expertise of the GLICs’ ecosystem, regulators, ministries as well as industry captains, including those involved in the first GLC Transformation Programme,” said Muhyiddin. – Aug 12, 2021
