Poor take-up for 1 Malaysia fund blamed on wary investors

By Lee Wei Lian - The Malaysian Insider

KUALA LUMPUR, Dec 29 — The undersubscription of the RM10 billion government-backed Amanah Saham 1Malaysia unit trust fund is likely due to the sheer volume of units available and wariness among some investors, according to analysts.

Only about a third of the fund has been subscribed so far and Permodalan Nasional Bhd (PNB), which manages the fund, has said that it will extend the subscription deadline for a third time since its launch in July.

This is in sharp contrast to PNB’s earlier funds such as Amanah Saham Malaysia and Amanah Saham Wawasan 2020, whose new units sold out quickly this year due to their track record of providing between six and eight per cent in returns.

Amanah Saham 1 Malaysia (AS1M) is PNB’s largest ever fund offering and getting the investing public to absorb all ten billion units would be more difficult than earlier funds, said market analysts canvassed by The Malaysian Insider.

Amanah Saham Malaysia, for example, was launched in 2000 with fewer than two billion units.

Investments in AS1M are also not capital guaranteed which affects its appeal.

Added to this is a perception among many investors that the size of the RM10 billion fund and its launch in the middle of the economic slowdown meant that the government is facing financial difficulties.

“The timing of the launch made some people feel that the government had no money,” one analyst told The Malaysian Insider.

The analyst added that other investors might have held back as they were wary over what investments would be made with the AS1M fund because the information would only be disclosed in the annual report.

According to a recent news report, 85 per cent of the Chinese quota and 21 per cent of the Indian quota has been taken up.

As 30 per cent of AS1M is set aside for Chinese investors and 15 per cent for Indian investors, and with only about 3 billion of the 10 billion available units taken up, this means an overwhelming portion of the unsubscribed units are those reserved for bumiputeras.

The low take up among bumiputeras could be due to a lack of familiarity with AS1M as it has to compete with other established PNB funds for attention.

One Malay investor in previous PNB funds such as Amanah Saham Bumiputera (ASB) and Amanah Saham Didik told The Malaysian Insider that there is some sceptism over AS1M.

“Funds such as ASB have been around a long time and people know what to expect,” she said. “People have other options. AS1M will have to differentiate itself.”

PNB has said it will have road shows nationwide to promote the AS1M starting with Perak and Sarawak in January followed by Sabah, Terengganu, Pahang and Melaka.