KUALA LUMPUR, March 1 — After a successful turnaround and restructuring programme of its underperforming assets, Lembaga Tabung Haji is now planning to develop a new asset allocation strategy, said group managing director/chief executive officer Datuk Seri Zukri Samat.

He said the pilgrim fund plans to reallocate its asset mix, especially assets that are heavily exposed to risks, to enable it to have more stable revenue in the future, thus paying a handsome return to depositors.

“I think we need to look again at our asset mix and we shouldn’t be heavily exposed to equity because it is a high risk (asset).

“We should be skewed more towards fixed income, meaning we are looking at sukuk and government guarantee papers so that we can at least determine how much income and dividend we are going to get,” he told Bernama in an exclusive interview at the news agency's headquarters on Thursday.

Zukri said equity accounted for 55 per cent of TH’s asset portfolio in 2017 but had reduced to 50 per cent in 2018.

He said the current mix of assets for equity is a bit too high and “probably is going to be lowered”.   

TH will start developing the draft for its new asset allocation strategy after announcing the Hibah or dividend for 2018 set to take place before end-March, which would help the pilgrim fund make a better assessment based on its latest fund size.

As at end-2018, TH’s total fund size amounted to RM74 billion.

“Once we announce the Hibah, we will probably wait for a month, then only we can settle down with the strategy because we will know roughly where we stand.

“Then we will announce the strategy sometime in May,” he elaborated.

Late last year, TH announced it was undertaking a turnaround plan given its weak balance sheet with liabilities exceeding assets, leaving the fund with no capability to pay dividends.

Zukri said the plan, which involved the government setting up a special purpose vehicle (SPV) to take over TH’s underperforming assets worth RM19.9 billion, is now bearing fruit as the balance sheet is back to normal as at Dec 31, 2018.

Among major decisions were the disposal of its 0.65 hectare Tun Razak Exchange (TRX) land, which was acquired in 2015 from debt-ridden 1Malaysia Development Bhd for RM188.5 million, back to the government at a premium.

For now, he said, TH has no more asset to sell and it will only keep good assets that give the company reasonable incomes.

“We have succeeded in reviving TH’s financial position. We have no cash flow problem. We must generate deposits, and the assets must exceed the liabilities.

“The worst is over,” he said.

Asked on the possibility of venturing into new asset classes, he said TH has no such intention, pointing out that investing in areas that TH has no expertise in, although it offers high returns, would only provide risks to the company and harm its potential growth in the future. — Bernama