Tabung Haji to continue investing in O&G despite losses

Pilgrimage fund Lembaga Tabung Haji (TH) today said that it would continue to invest in the oil and gas sector despite criticisms that it had made short-term losses in the sector, as it matched national interests and had proven to be profitable in the long run.

"TH considers this sector as one that has national strategic importance. Short and medium term 'mark to market' losses from unrealised losses will not deter our appetite and commitment to continue to invest in the sector," said the fund in a statement posted on its Facebook page.

The fund explained that while some of its investments hit some snags, investment in oil and gas was a long term affair, and it had been in the sector since 2001 and had overall, garnered RM1.06 billion in profits from previous investments.

"Most investments are made in stable and capable bumiputera-owned companies which provide primary support services to the national oil company to reduce our dependence on foreign oil and gas firms," read the statement further.

In any case, TH also assured all that it had proper risk assessment and management in place, to ensure that it maintained profitability and more importantly, safeguard the interest of its depositors.

"TH conducts its investment as per its Strategic Asset Allocation policy which focuses on equity, fixed income, real estate and the money market, with a view on long term transactions," explained the fund.

And thus far, TH said that its investment policy had managed to create sufficient cashflow to provide returns as well as cover the cost of haj operations with enough left over for it to provide haj subsidy to boot.

That said, TH however admitted that a small portion of its investment portfolio had under performed or even made losses, but insisted that this paled in comparison to the many other profitable investments it has.

"Our investment policy is based on 'foresight' and not 'hindsight' which some of our critics used," added TH explaining that it had to dynamically evaluate all factors that affect any investments as well as navigate the strict guidelines of its set investment policy.

In any case TH concluded that despite the losses that some of its investment incurred, it had managed to record profits overall in the face of global economic uncertainties, as it continued to exercise proper judgement, the same as it was doing with its involvement in the nationally important oil and gas sector.

While TH did not name names, its statement is likely a direct reply to allegations by PKR vice-president Rafizi Ramli, who had criticised the fund's RM700 million venture into the sector, which he said had incurred losses.- Mkini