January 18, 2018 / 11:15 AM / a year ago

UPDATE 1-Malaysia's Khazanah posts 8.2 pct rise in 2017 portfolio value

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KUALA LUMPUR, Jan 18 (Reuters) - Malaysia’s sovereign wealth fund Khazanah Nasional Bhd said the value of its portfolio rose 8.2 percent last year, boosted by growth in core companies such as CIMB Group Holdings Bhd and utility group Tenaga Nasional Bhd.

The state fund’s portfolio value rose to 157.2 billion ringgit ($39.7 billion) in 2017 from 145.3 billion ringgit in the previous year, Khazanah said in a statement at a news conference.

Its portfolio net worth adjusted (NWA) climbed to 115.6 billion ringgit from 102.1 billion ringgit.

CIMB was the largest contributor to the 13.4 billion ringgit increase in portfolio net worth adjusted, contributing six billion ringgit. This was supported by the lender’s strong corporate earnings.

Khazanah’s investments include stakes in CIMB, Malaysia’s second largest lender by assets, telecommunications company Axiata Group Bhd and Tenaga.

“We believe our portfolio is simultaneously resilient which means we can handle a lot of downside, but at the same time we are positioned for growth,” Khazanah’s managing director Azman Mokhtar told the news conference.

The fund is also the sole shareholder of national carrier Malaysia Airlines, for which it is spearheading a restructuring exercise.

Khazanah expects the airline to return to profitability by the first half of 2019, saying that currency fluctuation and oil price have impacted the initial target for a turnaround by this year.

“The first two and a half years of the recovery plan was about cost reset. And now, we are beginning to turn around but there are certain things we cannot control like the currency, oil price and even competition,” said Azman.

Malaysia Airlines was de-listed from the Kuala Lumpur Stock Exchange in 2014, after the twin tragedies in which flight MH370 disappeared and flight MH17 was shot down over eastern Ukraine.

Khazanah also participated in several foreign technology deals such as Alibaba Group’s logistics firm, Cainiao, and fintech firm WeLab in China, as well as India’s Infosys Ltd and Singapore’s NYSE-listed Sea Ltd.

The fund also announced the launch of a $320.8 million sukuk exchangeable for Chinese securities brokerage firm CITIC Securities Co Ltd’s Hong Kong-listed H-shares earlier on Thursday. ($1 = 3.9565 ringgit) (Reporting by Liz Lee; Editing by Subhranshu Sahu/Keith Weir)

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