Malaysia’s Armed Forces Fund Board, known by its local acronym LTAT, plans to reduce stakes in strategic assets such as Affin Bank, oil palm company Boustead Plantations and conglomerate Boustead Holdings, and invest more in bonds under its new strategic asset allocation and restructuring plan.
The fund’s 57.8% exposure to such assets as of July this year will be lowered to 35% over the near to medium term, according to Mohamed Khaled Nordin, the Malaysian defence minister.
He says the new asset strategic asset allocation and overhaul plan is to reinforce and enhance the long-term sustainability of LTAT’s investment portfolio, and is currently being reviewed by the finance ministry for final approval.
He unveiled the plan in parliament on November 25 when responding to a question from a lawmaker who had asked whether the LTAT will keep dividends at around 10% like in the past.
Meanwhile, deputy defence minister Adly Zahari says the aim is to maintain consistent dividend payout of 5%-6% under the restructuring plan.
“Previously, high dividends sometimes came from selling assets. We do not want that. We do not want a situation where we sell assets, record large profits and distribute dividends of 10% or 11%. What we want is consistent returns driven by prudent management and long-term investment,” he says.
