‘Resignation of board members unlikely to impact equity market’

KUALA LUMPUR: The resignation of the entire Khazanah Nasional Bhd board is unlikely to have any impact on the local equity market as it is mainly influenced by regional bourses, said Hermana Capital Bhd chief executive officer and chief investment officer Datuk Dr Nazri Khan Adam Khan.

“In fact, the effect is relatively muted. So far, we do not see any big fluctuation in stock prices related to companies where Khazanah has invested in, which include CIMB Bank Bhd and Axiata Group Bhd.”

He said reports that Khazanah, Permodalan Nasional Bhd and Petroliam Nasional Bhd would likely come under the Prime Minister’s Office instead of the Economic Affairs Ministry would not hamper investors’ confidence in Malaysia.

“It is just a restructuring move and a baby step to improve the governance and feasibility of the three companies.

“Furthermore, it is also one of the ways to phase out political appointees in government-linked companies (GLCs).”

On the foreign net outflow on Bursa Malaysia last week, Nazri said it was mainly due to losses in oil and gas-related stocks affected largely by tensions between Yemen and Saudi Arabia.

Meanwhile, Asia School of Business assistant professor of management Dr Renato Lima de Oliveira said the resignations and changes in GLCs would allow the government to pursue its policy priorities and manifesto.

“It is important in the long run to strengthen the governance of GLCs and protect them from political changes and pressures,” said de Oliveira.

If the government were to change the vision of how GLCs should function, he said it needed to draft a vision and engage society via public hearings, forums or parliamentary debates.

It must hire the right people to tackle the tasks at hand, he added. “Ideally, recruit (the right people) through a system which ensures that positions are filled by merit.”

So far, we do not see any big fluctuation in stock prices related to companies where Khazanah has invested in... DATUK DR NAZRI KHAN ADAM KHAN

Hermana Capital Bhd chief executive officer and chief investment officer