Malaysian investments favour domestic, cross-border strategies

To combat
the financial crisis, Khazanah Nasional Berhard, the US$25.7 billion
investment arm of the Malaysian government, will focus on catalysing domestic
economic growth and continuing its program of strategic cross-border
investments.

Khazanah,
which is entrusted with managing the Malaysian government’s commercial assets
and undertaking strategic domestic and global investments, aims to stimulate
the Malaysian economy by focusing on domestic investments with “high economic
and job creation multipliers,” the public company said in a statement.

The
manager has stakes in more than 50 companies, including an array of ‘government-linked
companies’, which are involved in industries ranging from banking, power,
telecommunications, infrastructure, transport and venture capital.

In the
four years to 2008, Khazanah and its underlying companies injected
approximately RM36 billion (US$9.89 billion) into the Malaysian economy. For
the three years to 2011, it has allocated $15.94 billion to be invested domestically
in industries including telecommunications, infrastructure, health care and
tourism. It will also target sectors that it regards as “new engines of
growth”.

But this
domestic focus will not stall its cross-border investment activities and
ambitions to attract foreign direct investment into

Malaysia.

“Khazanah
will continue to strengthen regional investment linkages and selectively look
for two-way investment opportunities to bring in more foreign direct investment
as well as continuing to selectively regionalise,” the company said.

In the
course of 2008, the financial crisis diminished the returns from Khazanah’s
listed investments portfolio, resulting in a decline of 35.7 per cent for the
year.