Malaysia's biggest institutional investors paid lip service last week to Prime Minister Najib Razak's call to support Malaysia's economy by bringing some of their overseas allocations home.
It's less clear how enthusiastic the country's top pension and sovereign wealth funds — including the 667.2 billion ringgit ($154 billion) Employees Provident Fund; the government's 145.5 billion ringgit strategic investment arm, Khazanah Nasional Berhad; and Kumpulan Wang Persaraan, the 110 billion ringgit pension fund for public officials — will prove to be in pausing or reversing their push into overseas markets in recent years.
At a Sept. 14 news conference to announce “proactive steps” to stabilize Malaysia's battered financial markets, the prime minister said they should do so.
In transcribed remarks on his official website, Mr. Najib encouraged government-linked investment companies “to take profits on their overseas investments” in favor of making relatively “high multiplier” investments at home.
At the top of the list of steps he announced, Mr. Najib said ValueCap — an investment holding company set up in 2002 to provide support for Malaysia's stock market, with Khazanah, KWAP and Permodalan Nasional Berhad, another government-linked fund, as equal shareholders — would be entrusted with 20 billion ringgit to invest in Malaysian stocks.
In recent years, ValueCap moved beyond investing its three shareholders' proprietary funds to accept third-party money as well. A company spokesman couldn't be reached for further details.
It wasn't immediately clear whether Khazanah, KWAP and PNB would have to provide the fund's capital. Khazanah spokesman Raslan Sharif said details of where the 20 billion ringgit would be coming from should be forthcoming in the next few days.