Portfolio Restructuring Enhances TH's Capacity To Generate Consistent Returns
By Nurul Jannah Kamaruddin and Nur Aiman Najwa Dzamae
KUALA LUMPUR, Aug 13 (Bernama) -- Tabung Haji (TH) is now in a better position to consistently generate returns of between four and five percent -- or even higher -- without assuming excessive risk.
According to Universiti Kuala Lumpur Business School economic analyst Assoc. Prof Dr Aimi Zulhazmi Abdul Rashid, the "portfolio cleansing" process has streamlined TH’s asset holdings, enhancing their quality and focus.
This enables the institution to concentrate on high-quality Shariah-compliant assets, real estate and infrastructure, as well as strategic international investments.
He said the restoration of the balance sheet and the transfer of non-performing assets to Urusharta Jamaah Sdn Bhd have been key to TH’s current stability, in addition to strengthening the fundamentals needed to restore depositor confidence, solvency, and profitability.
The problematic assets that were dragging down returns have been disposed of, allowing TH to focus on three primary asset classes: high-quality Shariah-compliant assets, including company shares and high-grade government and corporate sukuk; property and infrastructure investments, which generate rental income and long-term cash flows; and strategic and international investments.
"Property and infrastructure investments are particularly important as they align with TH's need to maintain long-term funds to finance the cost of performing the haj," he told Bernama.
Aimi Zulhazmi said diversification in overseas markets could help mitigate risk while enabling TH to capitalise on stable growth opportunities.
He explained that the true efficiency of the portfolio could be assessed through risk-weighted returns and strong corporate or Shariah compliance.
“The long-term challenge lies in ensuring professionalism in fund management and low operating costs, while avoiding a repeat of past mistakes—specifically, non-core investments,” said Aimi Zulhazmi.
As such, he emphasised that independent external oversight is crucial to ensure that investment risks remain under control.
“Once the gap in the balance sheet is closed and assets are revalued at current market rates, it sends TH’s nearly 10 million depositors the message that TH is now more solvent, and that the risk of massive losses due to impaired assets has diminished, thus their savings are safer.
“It also means a more consistent distribution of hibah. The situation following the restructuring provides the most concrete proof of this,” he said.
-- BERNAMA