ValueCap Share Buy ‘Spree’ Starts November
Wan Kamaruzaman says the funds will be released in tranches to ensure good timing and investment climate. (Pic by Muhd Amin Naharul/TMR)
State-owned investor ValueCap Sdn Bhd is expected to start a mopping up spree of underperforming stocks on Bursa Malaysia from November, when its shareholders release the first tranche of its announced RM20 billion fund.
ValueCap’s three shareholders — Khazanah Nasional Bhd, Retirement Fund Inc (KWAP) and Permodalan Nasional Bhd (PNB) — are expected to make available RM8 billion as part of the initiative to strengthen the economy that was announced by the prime minister last month.
KWAP CEO Wan Kamaruzaman Wan Ahmad said the three shareholders will each provide an equal RM6.67 billion to ValueCap’s kitty.
“We were given an aggressive deadline of Oct 15 (to start), but we think it will be difficult due to regulatory steps and approvals as well as the nod from each shareholder’s board.
“We estimate ValueCap to commence with funds available somewhere in the second-half of November,” he told The Malaysian Reserve at the sidelines of the Khazanah Megatrends Forum 2015 yesterday.
He said all three shareholders have finalised respective funding structures and are awaiting to present the plan to their board.
Wan Kamaruzaman said the shareholders, all state-owned investment companies, may go to the bond or debt markets to raise their share of ValueCap’s fund but KWAP will likely use internal funds.
“KWAP will not go to the market. We will utilise our cash balance to fund ValueCap. KWAP usually keeps 5% or RM5 billion in cash.”
Wan Kamaruzaman said the funds will be released in tranches to ensure good timing and investment climate.
“We start with up to 40% in [the] first release. ValueCap can only request for additional drawdown from the shareholders when the time is right,” he said.
He also said that the funding will be released by all three shareholders simultaneously.
ValueCap — which was reactivated last month — was set up to invest prudently and to create value by propping up undervalued stocks in Bursa Malaysia.
During ValueCap’s previous stint from 2002 to 2013, the firm was able to generate an annual average return of 15% and accumulate RM8 billion in profits, higher than the Kuala Lumpur Composite Index’s return of 10% over the same period.
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