This article first appeared in The Edge Malaysia Weekly on October 23, 2023 - October 29, 2023

SINCE the start of the year, Khazanah Nasional Bhd has accrued RM5.44 billion from the dividend payouts of 10 public-listed companies (PLCs) in which the sovereign wealth fund holds a 20% stake or more, plus proceeds from stake disposals in several PLCs.

Based on the companies’ bourse filings, a back-of-the-envelope calculation shows Khazanah received RM3 billion in total dividends from the 10 PLCs so far this year.

CIMB Group Holdings Bhd, Tenaga Nasional Bhd, TIME dotCom Bhd, IHH Healthcare Bhd and Axiata Group Bhd are the five biggest dividend contributors.

CIMB, in which the sovereign wealth fund has a 23.01% stake, was the largest contributor with a payout of RM763.12 million — accounting for over a quarter of total dividends received for the January-September period.

The equity interest in Tenaga and TIME dotCom enabled Khazanah to receive RM620.67 million and RM620.78 million respectively. Khazanah owns a 22.56% stake in Tenaga and 35.73% in TIME dotCom.

The bumper dividend from TIME dotCom was mainly driven by the divestment of partial stakes in its data centre business under AIMS Data Centre Holding Sdn Bhd and AIMS Data Centre (Thailand) Ltd earlier this year for RM2 billion cash. Khazanah via Pulau Kapas Ventures Sdn Bhd (PKV) remains TIME dotCom’s largest shareholder, with a 25.1% stake after the share divestment, compared with a 28.8% stake previously.

Notably, Khazanah has pared down its stake in the trio recently. Cumulatively, the share divestments are estimated at RM2.45 billion based on Bloomberg’s available off-market data or respective closing prices with a 1.5% discount assumption.

Indeed, there has been talk that the fund is looking to sell its stake in IHH Healthcare as well. Khazanah, however, refuted the rumour when contacted. 

It owns a 25.94% stake in IHH. Based on last Friday’s closing price of RM5.95, Khazanah’s stake in the healthcare group is worth RM13.6 billion. It is the second-largest shareholder after Mitsui & Co Ltd, which holds a 32.8% equity interest. 

Since March, Khazanah has sold 159.81 million shares in Tenaga — equivalent to a 2.76% stake — for approximately RM1.49 billion.

As for CIMB, it has disposed of 112 million shares in the bank this year. The shares, representing a 1.05% stake, are valued at RM599.59 million.

Meanwhile, Khazanah has offloaded 67.5 million shares (3.65% stake) in TIME dotCom for RM357.08 million.

Shares in Tenaga ended the week at RM9.82, valuing the utility giant at RM56.83 billion. CIMB shares finished at RM5.62, giving the bank a market capitalisation of RM59.94 billion.

Meanwhile, shares in TIME dotCom closed three sen or 0.57% lower at RM5.23, valuing the group at RM9.66 billion.

The sale of TIME dotCom shares was considered timely as its share price climbed to an all-time high of RM5.56 early this month.

The shares changed hands at RM5.29 per share on Oct 10, according to Bloomberg data. 

Khazanah also disposed of 47.1 million shares (10.06% stake) in TT Vision Holdings Bhd — which was listed on the ACE Market of Bursa Malaysia on Jan 18 this year — valued at RM53.53 million.

A look at Khazanah’s latest financial statement as at end-2022 shows its cash and cash equivalent stood at RM12.33 billion, up 2.86% from RM11.99 billion a year earlier. The fund paid the federal government RM1 billion in dividends in 2023 and is expected to fork out another RM1 billion for its obligation to Putrajaya for 2024. Both payouts are double its RM500 million dividend payout in 2022.

Other PLCs in Khazanah’s portfolio include 69.56% and 69.14% stakes in UEM Sunrise Bhd and UEM Edgenta Bhd respectively via UEM Group Bhd, 36.73% in Axiata Group Bhd, 33.24% in Malaysia Airports Holdings Bhd, 20.65% in Astro Malaysia Holdings Bhd and 20.1% in Telekom Malaysia Bhd.

Pay-TV operator Astro, whose share price hit an all-time low of 40 sen, recently announced a shift in dividend policy. It will now calculate its dividend payout ratio annually, based on consolidated profit after tax, amortisation and minority interest (Patami) instead of maintaining a fixed dividend payout ratio of 75% of Patami. This casts uncertainty on its dividend payout.  

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