In Davos, Malaysia’s Khazanah seems to be to developed market investments, tame Trump dangers

By Divya Chowdhury and Danial Azhar

DAVOS, Switzerland (Reuters) – Malaysia’s sovereign wealth fund Khazanah Nasional Bhd is rebalancing its portfolio to speculate extra in developed markets, with a watch on managing anticipated dangers from the brand new Donald Trump presidency within the U.S., its high official mentioned.

Khazanah invests closely in Malaysia, with home investments amounting to 59.1% of its portfolio, adopted by North America at 15.5%. The fund invests in sectors starting from power and healthcare to info expertise and actual property, based on its web site.

In an interview on the World Financial Discussion board’s annual gathering in Davos, Khazanah Managing Director Amirul Feisal Wan Zahir mentioned the potential for much less regulation, decrease taxes, low-cost power, inflationary pressures and a powerful greenback, because of the Trump administration’s anticipated insurance policies, supplied alternatives to put money into developed markets.

“We do want to maneuver nonetheless into developed markets … we take a look at U.S., Europe and Japan. U.S. nonetheless is a pretty market,” Amirul Feisal advised the Reuters World Markets Discussion board on Monday.

Amirul Feisal, nevertheless, mentioned Khazanah might face challenges in China. Trump, who was sworn in on Monday, has threatened to slap tariffs of 10% to 60% on Chinese language items.

Khazanah will maintain its investments in China and handle its dangers, because the nation’s rising middle-income demographic and vibrant expertise sector proceed to make it interesting, Amirul Feisal mentioned. Investments in China quantity to eight% of Khazanah’s portfolio.

He additionally mentioned Khazanah was bullish about its investments in India attributable to good returns in private and non-private markets.

CAPITAL RETURNING TO MALAYSIA 

Amirul Feisal was constructive on Malaysia’s development prospects attributable to rising overseas direct investments, a strong home economic system, and better family spending.

“Malaysia is a bit distinctive as a result of it is a market folks have forgotten for some time, and what we noticed in 2024 was much more capital flowing again into Malaysia,” he mentioned.

Amirul Feisal mentioned whereas market volatility is predicted, the Malaysian authorities’s insurance policies will proceed to draw FDI and drive home direct investments via Khazanah and the Staff Provident Fund.

Malaysia is quick turning into a haven in Southeast Asia, with overseas buyers returning, as enhancing development and a secure forex set it other than friends grappling with political flux and financial uncertainty.

The nation acquired a slew of digital investments from tech corporations final yr, together with Alphabet’s (O:GOOGL) Google, Microsoft (O:MSFT) and Oracle (N:ORCL), serving to propel its economic system above market expectations within the second and third quarters, and making the ringgit one in every of Asia’s high performing currencies in 2024.

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