KUALA LUMPUR, July 31 — Malaysians aged 18 and above will be able to subscribe to Permodalan Nasional Berhad's (PNB) Amanah Saham 1 Malaysia (AS1M) starting from Aug 5.
A minimum investment of 100 units at RM1 per unit has been set.
During the 30-day offer period, investors below the age of 55 will be limited to a maximum of 50,000 units while those above 55 will be able to buy up to 100,000 units.
Fifty per cent of units have been reserved for Bumiputeras during the offer period, while the quotas for Chinese, Indians and others have been fixed at 30, 15 and 5 respectively.
Units not taken up under the various quotas will be opened up to all after the offer period expires.
This early commitment that units unsubscribed under racial quotas will be released for general purchase reflects Prime Minister Datuk Seri Najib Razak's resolve to open up the economy and comes after a recent decision to lift ethnic quotas in the stock market.
The move is likely to be well received by the non-Malays who have responded overwhelmingly to recent PNB offerings and fully subscribed all units that were allocated to them in the Amanah Saham Malaysia fund in April and also rushed to buy unsubscribed Bumiputera allocations offered later in July.
The time-limited ethnic quotas will also help boost the credibility of Najib's 1 Malaysia campaign which stresses national unity and after which the fund was named.
"I believe this (limited quotas) is the fairest and most sincere way for PNB to get genuine investors while at the same time giving all Malaysians an equal opportunity to invest," Najib said at the launch of AS1M this morning.
The new fund is one of the "goodies" announced by Najib to mark his first 100 days in office.
Today, he added more "goodies" when he announced that some 50,000 incoming first-year undergraduates at public universities will receive 100 units of AS1M free, courtesy of PNB, Maybank, CIMB Bank, RHB Bank and Pos Malaysia.
According to PNB president and group chief executive officer Tan Sri Hamad Kamarul Piah Che Othman, AS1M will be benchmarked against the Malaysian Government Securities average 5-year yield which is currently between 3.7 and 4 per cent.
"Of course we target to do better," he told reporters this morning.
Hamad also revealed that PNB currently manages about RM120 billion worth of funds of which RM90 billion are funds sourced from the general public. Of the general public funds, some RM7 billion is sourced from the Bumiputera community.
At 10 billion units, AS1M is PNB's biggest fund to date.
Investors can buy it at ASNB, Pos Malaysia, Maybank, CIMB Bank and RHB Bank. No sales charges will be imposed during the offer period.
source: The Malaysian Insider
Another view from Malaysiafinance.blogspot
You can establish more local funds, RM5bn here, RM10bn there, but all stocks will fall in line with a certain kind valuation parameters. Say, there is a 30% foreign funds participation now in the market, they are here because of certain growth assumptions relative to valuations offered. If you increase the amount via new local funds, yes it will create more buying, but institutional funds will also have the ability to take profit and seek out less expensive markets. So, say new funds add 5% demand for equities, that could be taking out foreign funds exiting the market by a similar quantum as the move up might look expensive.
The second assumption is that these RM10bn are new funds, these funds are from the public. Who is to say these funds would not have gone to buy equities as well on their own?
There is a danger which no one in mainstream media is saying. You are literally taking out these RM10bn from the economic system. Unless 100% of these funds are in fixed deposits, then the net effect is muted. If these funds come from disposable income, you can argue that the RM10bn is being sucked out of the system. If anyone studied the velocity of money, each RM1 circulating in the economy is actually worth about RM8 to the real economy. Too many of these funds is deflationary and slows domestic economic activity.
Why are ASM PNB funds seemingly being assumed to "guarantee" to return 6%-8% a year? That is not a true certainty. The track record is good though but its not a guarantee.
Think people, think. I do agree that the fund is ok, but we need to be aware of the wider implications and not be blinkered to think at a superficial level only. After all that, I still think this is a "good thing", but we do need to have an appreciation of how the whole thing works.
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