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Most Malaysian asset managers earn higher profits, Public Mutual led in 2021

In terms of cost to income ratio, AmInvest Islamic had the lowest with 48% in 2021, followed by Public Mutual with 52%
By Goh Thean Eu   
December 13, 2022

Most Malaysian fund management companies posted higher profits last year with Public Mutual leading the pack, though Kenanga Investors saw the strongest pace of growth with a triple-digit gain.

Data compiled by Asia Asset Management (AAM) shows that Public Mutual’s profit after tax rose 22% year-on-year to 765.45 million ringgit (US$173.37 million) in 2021. Public Mutual is the largest private fund management firm in Malaysia, with 94 billion ringgit of assets under management as of end-August this year.

Principal Asset Management was second with 145.45 million ringgit of after-tax profit though that was down 5.5% from 2020. AHAM Capital, formerly Affin Hwang Asset Management, was third with after-tax profit up 25% to 104.52 million ringgit.

Kenanga Investors’ after-tax profit surged 235% to 30.71 million ringgit, three times faster than the 75% increase at runner-up Nomura Asset Management Malaysia.

Meanwhile, AmInvest Islamic had the lowest cost-to-income ratio of 48% followed by Public Mutual with 52%. This is a measure of how efficiently a fund manager spends to grow its business.

Investor sentiment last year was “quite strong” even though the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index shed 3.9%, according to a fund manager at a foreign asset management firm in Kuala Lumpur.

“US and Asian markets were performing well. Hence, you see Malaysian investors having more appetite to invest in Asia and the US, and one of the best ways to get the exposure is via funds,” he tells AAM, speaking on condition of anonymity.

Although the war in Ukraine and global rate hikes to fight inflation have battered financial markets this year and raised worries about a recession, some asset managers anticipate a brighter outlook for 2023. They believe interest rates will stabilise with the US Federal Reserve likely to slow the pace of rate increases, and that the central bank will be able to engineer a soft landing.

“With the Fed rate becoming more certain now, we are optimistic that next year will be a good year,” Win Phromphaet, executive vice president of the high-net-worth division at Bank of Ayudhya, said during a panel discussion at AAM’s recent Thailand roundtable in Bangkok.

Please click here to download the full table.