This article first appeared in The Edge Financial Daily on April 3, 2018

KUALA LUMPUR: PMB Investment Bhd, a wholly-owned subsidiary of Pelaburan MARA Bhd, is looking to increase its assets under management (AUM) to RM1.9 billion by the end of this year, from RM1.1 billion currently.

The additional AUM, the Islamic fund management company said, would come from its existing funds as well as its newly launched multi-currency fund, PMB Shariah ASEAN Stars Equity Fund (PMB SASEF).

PMB Investment chief executive officer Najmi Mohamed said the company is targeting an initial investment of US$30 million (RM115.8 million) to US$50 million this year for the PMB SASEF. No limit has been set for the fund’s size.

The fund intends to invest in five major Asean markets — Malaysia, Indonesia, Thailand, Singapore and the Philippines — Najmi said at PMB SASEF’s launch ceremony yesterday.

“Based on our track record domestically and our investment strategy, it’s time for us to penetrate the Asean markets,” he said. “We are quite confident of these Asean countries as [Asean] will become the third largest economy in the world. That’s why we chose Asean.”

Najmi added that the fund aims to achieve capital growth by investing in a diversified portfolio of syariah-compliant securities.

The total net asset value (NAV) of stocks — both syariah and conventional — in the five Asean countries is US$2.6 trillion. Of this, only US$860 billion worth of stocks have been selected for PMB SASEF.

Najmi said that of the total 3,286 companies listed on Asean stock exchanges, 1,720 companies or 47.7% were syariah-compliant as of Feb 28.

However, he said PMB SASEF will only invest in the 300 largest syariah-compliant companies by market capitalisation, of which 98 (32.67%) are in Malaysia, 73 (24.33%) are in Indonesia, 72 (24%) are in Thailand, 34 (11.33%) are in Singapore and 23 (7.67%) are in the Philippines.

The fund will invest between 70% and 99.5% of its NAV in these equities, while the balance will be invested in Islamic money market instruments, Islamic deposit placement, sukuk, syariah collective investment scheme and other syariah investment instruments.

Najmi said the fund manager will perform a relative performance analysis on the 300 syariah-compliant companies based on stock price movements, growth potential, profit and dividend yield before selecting high-potential stocks.

Meanwhile, PMB Investment also plans to launch its first private retirement scheme (PRS) fund, tailored for young investors, by the first half of 2019 (1H19).

“If the AUM and PMB SASEF get exciting response, there is a chance for [the] PRS to be introduced this year. If not, [the] PRS will be launched in 1H19,” said Najmi.