Malaysia's Khazanah wealth fund posts strong profits amid weak currencies

The Khazanah Nasional Berhad posted a 32-percent increase year-on-year in its pretax profits of 1.56 billion ringgit (350 million U.S. dollars) last year, the state wealth fund of the Malaysian government said on Friday.

But Khazanah's net portfolios declined a slight 6.4 percent in 2016, standing at 101.9 billion ringgit, "in line with weakness in most benchmark equity markets and currencies," it said.

Breaking down its portfolios, the gains were mainly contributed by more than 1.5 billion ringgit increase in stakes in electricity utility company Tenaga Nasional Berhad, more than 600 million ringgit gain in CIMB banking, more than 400 million ringgit profit in property developer UEM Group Berhad and more than 300 million ringgit rise in Chinese e-commerce giant Alibaba.

Its decreases in the portfolios were mainly due to telecommunications sector, aviation sector and IHH Healthcare Berhad, in which Khazanah owns a major stake.

Highlighting its successful investment in Alibaba, Azman Mokhtar, managing director of Khazanah, said the fund has made 987.3 million U.S. dollars in its gains from investment in Alibaba.

The fund still has a stake of less than 1 percent in Alibaba, which is listed on the New York Stock Exchange.

According to Azman, Khazanah sees potential in China's aviation industry and environmental protection industry apart from its investment in the technology industry. He listed the aggressive expansion plan by Malaysia Airlines Berhad, a portfolio company 100 percent owned by Khazanah, which will see the airliner serve eight new destinations in China with direct flights.

The fund also make an unspecified investment in Cainiao, Alibaba's logistics arm. Endit