KUALA LUMPUR (Sept 15):  The RM20 billion injection into state investment firm ValueCap Sdn Bhd that was announced by Prime Minister Datuk Seri Najib Razak yesterday, will not be an allocation from the government, Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar said today.

The funds will come from its three shareholders – Khazanah Nasional Bhd, Permodalan Nasional Bhd and Kumpulan Wang Persaraan (Diperbadankan).

"We looked at the efforts to stabilise the financial market and felt that it is timely to reactivate ValueCap and to revisit the collaboration among the (three) shareholders," Wahid told reporters after the launch of Ekuiti Nasional Bhd's holding company of its education portfolio, Ilmu Education Group here.

"Therefore, the money will come from the shareholders (of ValueCap) and will not be an allocation from the government," he added.

Yesterday, Najib announced several economic stimulus measures, which include a RM20 billion injection into ValueCap to shore up the stock market. ValueCap will invest in undervalued Malaysian companies.

Wahid explained that the RM20 billion investment will be done in phases.

"It will be done professionally where fully qualified fund managers will look at individual stocks that are very well managed with good business model,  good performance and undervalued and invest from time to time," he said.

Wahid was responding to concerns raised by the Opposition that said it was worried the RM20 billion injection into state equity investment firm ValueCap could be used to save companies linked to Umno and Barisan Nasional that have been affected by the economic slowdown.

Founded in 2002, ValueCap has been able to invest prudently and create value over a 10-year period, said Wahid.

"They (ValueCap) achieved average returns of 15% per year compared with the FBM KLCI's 10% per year, accumulating about RM8 billion in profits," he said, adding that the company has met its objectives and the profits have been distributed to its three shareholders.

Wahid noted that ValueCap is now concentrating on environmental special governance (ESG) stocks.