News on Saham Amanah Sabah ( SAS )

KOTA KINABALU: Saham Amanah Sabah’s (SAS) accumulated loss stood at RM350.99 million as at June 30 and will take a long time to reduce, Sabah assistant finance minister Ramlee Marahaban said today.

Responding to a question by Wilfred Bumburing (PCS-Tamparuli) at the Sabah legislative assembly, Ramlee said SAS was affected by the 1997 Asian financial crisis, during which the then-Kuala Lumpur Stock Exchange lost half its value.

“Since 1999, we have restructured our portfolio using a cut-loss strategy by reducing holdings in stocks whose prospects were affected by the crisis,” he said.

“As a result, SAS suffered a realised accumulated loss. Several subsequent events such as the outbreak of the severe acute respiratory syndrome (Sars) that began in China in 2003 had a further impact on the global and regional markets.

“Apart from that, the 2008 major failure of the American financial institutions caused by exposure to subprime lending and negative credit market pressure became a global crisis.

“This caused several European banks to fail and depreciation in stock and commodity values worldwide. The depreciation of the Chinese currency in 2016 affected global and regional markets including Malaysia.”

According to Ramlee, the accumulated loss had been brought forward yearly and would not be reduced as long as there was no realised profit to bring it down.

Although SAS managed to generate a profit almost every year, Ramlee said, in principle, any yearly profit would be distributed to unitholders as SAS is an income and growth fund.

“Because of this constraint, any strategy to reduce the accumulated loss will take a long time.

“The current unit market price takes into account the accumulated loss. Therefore, if this sum (accumulated loss) goes down, the current unit market value will rise.”

He said that since 2008, after the implementation of the State Government Net Asset Value Improvement Scheme, SAS had announced an income distribution of RM305.97 million or RM0.2485 per unit.

If the amount since 1994 were included, a total RM577.03 million or RM0.8517 per unit had been distributed.

In 1996, SAS awarded three free units for each 10 units held, which would have reduced the average investment cost, if a unitholder had invested in 1994.

Ramlee said as at Sept 15, 2008, SAS’ fund was at RM71.85 million before the implementation of the scheme while, after it, the fund rose to RM271.85 million.

On Nov 6, the fund stood at RM465.90 million or RM0.3815 per unit despite the income distribution of RM305.97 million or RM0.2485 per unit.

If SAS had not declared any income distribution since 2008, its net asset value would have stood at RM0.6320 per unit, said Ramlee.

SAS’ assets as at Nov 6 were worth RM465.90 million with a market value of RM0.3815 per unit, he added.

Many unitholders, who took bank loans to invest in the scheme at RM1 per unit during its launch, had expressed unhappiness over the current value of their investments.

Two decades after the launch, the units are trading at just over 30 sen each.

A unitholder reportedly said the different state administrations had blamed each other for the “fiasco” but they forgot that they were responsible as a whole.

“This is not about individuals. This is about government responsibility,” he said in 2012.

There was also a suggestion that the government used its other investments to pay the unitholders.FMT