Top GLCs outperform stock market benchmark

Published: 2009/09/16

The total shareholder return of 20 of Malaysia's larger government-linked companies has outperformed the FBM KLCI by a compounded annual growth rate of 2.4 per cent

TOP government-linked companies (GLCs), which embarked on a GLC Transformation Programme more than five years ago, are showing resilience and that they can be competitive locally and in the region despite the economic downturn.

The total shareholder return of a selection of 20 of the country's larger GLCs, or G-20, has outperformed the benchmark index FBM KLCI by a compounded annual growth rate of 2.4 per cent since the launch of the programme.

In the same period, market capitalisation of the G-20 has increased 64 per cent, or RM101 billion.

Although the earnings forecast for fiscal year 2009 is expected to drop to RM9.97 billion, the G-20 is expected to recover in the next fiscal year, with estimated earnings of RM15.24 billion.

"GLCs must be able to compete regionally and globally to support the nation's growth as the country needs to set a greater pace of development to achieve developed nation status by 2020.

"In order to obtain the growth rates required to realise the targets, sources of growth beyond domestic markets must be tapped and it requires GLCs to adopt an increasingly international outlook in terms of market penetration and international competitiveness," Prime Minister Datuk Seri Najib Razak said in Putrajaya yesterday after the 20th meeting of the Putrajaya Committee on GLC High Performance.

The meeting was chaired by the Prime Minister and attended by several ministers as well as the respective chairman and chief executive officer of the companies.

In the first half of the year, the government-linked investment companies and the G-20 invested RM13.4 billion on the home front. They are expected to employ 20,559 people this year, and another 6,075 in the first quarter of next year.