10 things we learnt from Shahril Ridza Ridzuan’s interview with BFM today

10 Things We Learnt from Shahril Ridza Ridzuan’s interview with BFM today

Written by: Breakfast Grille

Datuk Shahril Ridza Ridzuan, Managing Director of Khazanah Nasional, is from that rare breed of leaders who lead important public institutions like Khazanah, EPF and Danaharta but who also know how to protect public assets from abuse by politicians. Here are 10 things that we learnt from his Breakfast Grille session today with BFM’s Wong Shou Ning:

1. The government is entitled to ask any amount of dividend from Khazanah
Khazanah recently announced a RM2 billion dividend payout to the government, despite only making RM2.9 billion in profit for 2020.

This will have some impact on Khazanah’s long term requirement to reinvest. But given the pressure the government is experiencing to support the economy during the Covid pandemic, Shahril sees no problem in paying this higher dividend to support the government.
After all, Khazanah is 100% owned by the government.

2. Khazanah is open to its MAS stake being divested, but don’t hold your breath
Khazanah was already looking for a strategic investor to come in and take a stake in Malaysia Airlines since 2018. But now, realistically, it won’t happen until Covid is over. Airlines all around the world are too focused on surviving themselves at the moment, and most would go bankrupt without government support.

3. Do not expect Khazanah’s latest RM3.6 billion injection in MAS to be the last bailout. 
Khazanah did a deal with Malaysia Airlines’s creditors very quickly and removed RM10 billion of liabilities off its balance sheet. But when pressed whether the RM3.6 billion is the final bailout, Shahril replied, “There are no guarantees in life”. Malaysia Airlines should have, however, enough to last for five years.

4. Governments are bad at building businesses
Governments around the world tend to be poor at being business builders.The entrepreneurial streak that’s required to make it a success doesn’t exist.

Partnerships with the private sector may be the better way forward for Khazanah’s strategic investments. Shahril pointed to Holstein Milk as a good example of public-private partnerships done right, where it has emerged to become the largest producer of milk in Malaysia.

5. Khazanah is over exposed to the Malaysian market for the commercial fund
Although Khazanah’s returns for its international portion of its commercial fund was 26% in 2020, the underperforming Malaysian market dragged Khazanah’s overall two year rolling time weighted rate of return to only 1.5% in 2020.
The goal for the future is to get more exposure to companies and assets in developed economies as well as emerging markets in North Asia and India for diversification. This ensures a more consistent risk adjusted return towards Khazanah’s long-term return benchmark of consumer price index plus 3%.

6. Khazanah practices market timing
There’s a lot of liquidity in global markets resulting in euphoria around asset prices. Retail money is driving valuations to peaks. But markets are never a straight line and Khazanah will have to try and enter the markets when there are dips with a view towards building a long term portfolio. Shahril says that If you are a disciplined long term investor, over the long term, you will generate better returns than people who just trade on momentum.

7. Political appointments are here to stay
Shahril says Khazanah is not fond of political appointments. But in companies where Malayisan government owns a golden share, Khazanah accepts that the Malaysian government has the right to make appointments. 

8. Best defence against political interference are institutions with good governance
Individuals can be appointed and removed, but Shahril says if you create institutions with the right governance, the right processes, and the right strategies, the institution will outlast any government or individuals who run them. That was Shahril’s focus at EPF.

9.  Shahril does not accept Khazanah is less transparent then Temasek
Whilst Khazanah’s transparency is not to the level of Norway’s Norges, the world’s largest sovereign fund, Shahril does not accept that Khazanah’s transparency is lesser than Singapore’s Temasek.  Shahril is happy to strive for more transparency but also poses the question of whether Malaysia has a mature enough society to handle that kind of  transparency. 

10.  Will Shahril still helm Khzanah when his contract ends in August?
Shahril said it’s too premature to discuss this, it’s still a few months away. But he feels he is blessed to have had the opportunity, especially at EPF and Khazanah, to do work that has a direct bearing on the people and financial future of Malaysia.

“Bugger Off” Says Khairy Jamaluddin Regarding Political Power Struggles, Urges Focus On COVID-19 Management

“Bugger off” says Khairy Jamaluddin regarding political power struggles, urges focus on Covid-19 management.

Kuala Lumpur, Friday, 16 October – YB Khairy Jamaluddin expressed frustration at the current state of politics during his interview on BFM 89.9’s Breakfast Grille this morning. He said, “There are many of us in government who are for doing the work, who are focused on trying to get through this pandemic, whether it’s the health crisis, whether it’s the economic crisis… We are bewildered by the sort of statements, and again, the manoeuvres that are taking place. So my message is to all the politicians who are planning and scheming –  stop the nonsense.”

In recent weeks, the stability of the Malaysian government has once again been called into question as Dato’ Seri Anwar Ibrahim has claimed a majority backing from MPs and calls have risen for a vote of no-confidence against the current prime minister. However, according to Khairy, the timing could not be worse as the political power struggle is happening in the midst of the third Covid-19 wave. 

When asked about his views on the matter, Khairy was firm in his focus that the priority should be managing the containment and prevention of Covid-19. 

“This is a life and death situation right now. I am consumed almost 24/7 trying to secure [a] Covid-19 vaccine for Malaysians. Stop all this nonsense. If you have the numbers – and once the palace accepts audiences – then by all means, show your numbers and get on with it. But if you don’t have the numbers, then bugger off.”

The Ministry of Science, Technology and Innovation (MOSTI) has been focused on procuring the Covid-19 vaccine for Malaysia and it was revealed that Malaysia hopes to formally join the Global Alliance for Vaccine and Immunisation (GAVI) by November. GAVI is a global alliance established to get access to a portfolio of vaccines for Covid-19, which it terms as the Covax facility. GAVI has 64 countries formally signed up so far with another 38 countries in the final stages of the agreement.

In the ASEAN region, Thailand and Malaysia are the only 2 countries that have yet to formalise their participation in the Covax facility. Khairy pointed out that cost is a factor, as Malaysia is ranked as an upper middle income country and does not qualify for reduced rates for the vaccine. But there has also been procurement policy difficulties, as current Malaysian procurement rules do not accommodate products that are not yet in existence.

However, Khairy affirmed that Covax is only one of the pillars in a multi-pronged strategy. MOSTI has also been working on bilateral agreements with individual pharmaceutical companies and been in active discussions with the Chinese government with regard to procurement of Covid-19 vaccines. 

In terms of who will be prioritised to receive the vaccine, Khairy said he will follow WHO guidelines. Healthcare and social care workers at the frontline of the pandemic will be first, followed by teachers, policemen, and other security staff, then high-risk groups, such as those aged 60 and above.

Khairy also revealed that he has made recommendations to the Prime Minister and the Finance Minister that the cost of the first round of vaccines for all Malaysians and possibly permanent residents, be borne by the Government. In addition, he is advocating for an allocation of RM 3 billion in Budget 2021 for the procurement of the Covid-19 vaccine, which should cover the needs of about 70% of the population at a blended pricing model of USD10 per dose.
Discussions are underway with Pharmaniaga Bhd and Duopharma Biotech Bhd, and soon with other private sector players, on investing in the fill and finish stage of the vaccine  in Malaysia.

To the question of whether politicians should be the first to get the vaccine in order to prove its efficacy, Khairy said that they would likely be part of the second stage.

When pressed about his political alliances, Khairy categorically denied being  part of Anwar Ibrahim’s list of MPs and cautioned against pushing for a general election in this climate.

“As the Minister of Science, I want to say clearly that having a general election right now, in the midst of a third wave of COVID-19 infections is absolutely irresponsible, and if you ask me as a politician, my answer is listen to the science”.

With regard to the legitimacy of the current  administration, Khairy said that the Pakatan Harapan goverment itself committed politicial suicide. In order to  fill the void, the King followed the constitution, and appointed a legitimate government. 

“To me, it is a functional government”, said Khairy.


The BFM interview with YB Khairy Jamaluddin will be repeated later today, Friday 16 October 2020 at 1pm on BFM 89.9. The podcast of the full interview will be available for download on the BFM app at noon. This interview was conducted by Wong Shou Ning, who can be contacted at producers@bfm.my


Syed Saddiq announces Muda dah Mula

Written by: Breakfast Grille

Kuala Lumpur 17 Sep 2020 – Syed Saddiq bin Syed Abdul Rahman, the former Minister of Youth and Sports, has announced that he will be registering Muda as a new political party today. At his interview with BFM 89.9, the business radio station, he said he will be going to Registrar of Societies immediately after his  interview with BFM  to register the new political party.

Saddiq said Muda will be a multi-racial party. To criticisms that this a multi-racial party will not appeal to the Malay voters, he said, “politics is not just about winning by pandering, it is also about working hard, despite it taking a longer time, to change the hearts and minds of people.”

Syed Saddiq also refuted BFM presenter Wong Shou Ning’s suggestion that the leadership of Muda was too urbane to appeal to rural voters. He pointed to, Shahrizal Denci who started a rural farm in Sabah, and Cikgu Ayu who started education for stateless children. Syed Saddiq also referred to his own background, where his mother was a teacher in Pulai, Johor, and and his father, an odd-jobs construction worker who commuted to Singapore every day to support the family.

“I mean seriously, just because I can speak good English and I’m successful academically, suddenly I’m urban? Well, know me, meet me, and not just me, the team.”

To  the question of whether he harbours  the ambition to be the Prime Minister eventually, Saddiq said that his ultimate goal as a politician is to champion the interests of the people, and not his own political position. 

The BFM interview with Syed Saddiq will be repeated later today at 1pm on BFM 89.9. The podcast of the full interview will be available for download on the BFM app at  2pm.