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KUALA LUMPUR - Economists have suggested that Lembaga Tabung Haji (TH) consider establishing a strategic partnership with Permodalan Nasional Bhd (PNB) to strengthen its asset and investment management and improve its long-term performance.
Professor Emeritus Dr Barjoyai Bardai, of Malaysia University of Science and Technology (MUST), said the proposal warrants consideration given that TH currently manages assets worth nearly RM100 billion, requiring a mature and disciplined governance and portfolio management structure.
He said PNB could serve as a benchmark, given its experience in managing large-scale investment portfolios.
"TH appears to lack a mature portfolio management discipline, making it susceptible to external influence and pressure from its board of directors. Consequently, its investments lack the robustness seen in institutions such as PNB or the Employees Provident Fund (EPF).
"I am considering the long-term possibility of TH either outsourcing its portfolio management to an institution such as PNB or establishing a truly qualified investment management team that adheres to sound portfolio management principles,” he said.
Barjoyai said a clear portfolio management framework should determine allocations for various asset classes, including fixed-income investments, domestic equities, initial public offerings (IPOs), overseas investments, real estate and long-term investments.
He said the allocations should be based on sound portfolio analysis and adhered to consistently to prevent TH from becoming overly exposed to short-term, profit-driven investments.
"Take the EPF, for instance. It has managed investments for many years and follows a disciplined portfolio strategy that sets specific allocations for different investment categories, including fixed income, domestic equities, IPOs, overseas investments, real estate and long-term investments.
"These allocations are based on robust portfolio analysis, and strict adherence to them enables more accurate annual performance projections. The key is to steer TH away from a focus on quick profits, as there is no concept of ‘getting rich quick’ in the investment world,” he said.
Meanwhile, Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said a more professional management approach must be supported by strong governance and transparent information disclosure, allowing TH’s performance to be assessed periodically.
He said the EPF could serve as a benchmark for transparency, as it announces its financial results quarterly, enabling depositors to monitor its performance regularly.
"Perhaps TH could adopt a similar approach by providing clear and periodic information, allowing depositors and the Muslim community to regularly assess its capabilities and performance.
"If implemented, this would undoubtedly strengthen depositors’ confidence in TH,” he said.
On large-scale fund management, Mohd Afzanizam said TH must ensure that every investment decision is made within a clear governance framework, supported by an investment committee or investment panel.
He added that the financial and investment expertise within such panels could strengthen decision-making and enhance the confidence of depositors and the Muslim community in TH’s management. - BERNAMA