The unit trust scheme known as Amanah Saham Nasional (ASN) is a scheme
for mobilising Malay savings for equity investment. It was launched in
1981 as a major vehicle for implementing the transfer of corporate
assets held under trusteeship to the Bumiputera. Unlike BIMB and TH,
ASN is aimed mainly at improving the economic conditions of the
Bumiputera, especially the Malays and therefore, the ethnic aspects
overshadow the religious ones. Nevertheless, as the relationship
between Islam and Malayness are so intertwined, ASN has also been
associated with the Islamisation package of Dr. Mahathir.
As discussed in the previous chapters, the government adopted the NEP
to restructure society so that the economically backward Malays would
be able to own at least 30 per cent equity in the corporate sector.
Previous experience shows that the Malays were more interested in
capital appreciation than in equity ownership. In other words, the
shares allocated to the Malays were sold when the price went up, thus
defeating the objective of the NEP. Research also indicated that when
Malay shareholders sold their shares, the proceeds were used for
consumption and not for investment purposes.
In order to find a more effective way of achieving the aims and
aspirations of the NEP, the Government established a Working Committee
in 1977 under the chairmanship of Tun Ismail Mohamed Ali. The
committee drew up policies for the establishment of a Bumiputera
Investment Fund. Among these were:
a) The information of a fund as a business entity with the
authority to invest in all forms of investment and the authority to
b) The establishment of a unit trust fund to distribute these
investment to the Bumiputera community
As a result, the Bumiputera Investment Foundation (BIF), or Yayasan
Pelaburan Bumiputera (YPB) was set up on 9 January 1978 under the
Companies Act, 1965, as a company limited by guarantee. The YPB
provides funds for the purpose of subscribing to shares in companies
which wish to issue their shares to the Bumiputera community in
compliance with the NEP. It also formulates policies and guidelines
for Bumiputera equity investment participation. It has acted as a
catalyst in encouraging the savings habit, developing entrepreneurship
and investment skills among the Bumiputera community.
To further the YPB's objectives, in March 1978, the National Equity
Corporation (NEC) or Permodalan Nasional Berhad (PNB) was incorporated
as a wholly owned subsidiary of the foundation. PNB is a commercial
organisation, managed by professionals who are responsible for
selecting and operating the portfolio of shares of limited companies
in Malaysia to be held in trust for subsequent sale to individual
Bumiputera investors. In May 1979, National Unit Trust Limited also
known as Amanah Saham Nasional Berhad (ASNB) was then incorporated as
a wholly owned subsidiary of PNB to establish and manage a National
Unit Trust (NUT) or Amanah Saham Nasional (ASN) scheme as an
intermediary for the channeling of shares to the Bumiputera community .
To launch ASN, the Government instructed the Bumiputera companies (eg.
PERNAS) and statutory bodies (eg.SEDCS) to sell part of their equity
portfolios to the PNB at book value. Thus, it was reported that PERNAS
had to suffer a substantial loss for the year 1982 because it had been
forced to transfer more than RM 1 billion of assets to PNB. This
government-imposed sale of assets resulted in serious opposition from
PERNAS and other affected Bumiputera Companies.
2. ASN SCHEME: SOME SALIENT FEATURES
The main features of the scheme have been carefully devised to
encourage the widest possible individual participation based on PNB's
preparatory research to ascertain the socio-economic profile of the
typical Bumiputera unit holder. At the same time, incentives are
provided in the scheme, as a form of savings and investment.
Therefore, the scheme does not have exactly the same features as other
ordinary shares. In ordinary shares, the buying and selling prices of
each unit are quoted on a daily or weekly basis. The unit-holder, as a
risk-taker, can expect to make capital gains in addition to a certain
level of investment yield as dividend. It is the prospect of capital
gains rather than investment which is the typical motivation behind
participation of in such shares. Unlike ASN, until 1991, the scheme
holder could only resell their units to ASNB at the original par value
of RM . This condition was designed to build a strong Bumiputera
The ASN scheme is based on a clear separation of equity ownership from
corporate control. Ownership is controlled by its unit holders, but
they do not have the right to appoint or change the managers.
Immediate control, as distinct from ultimate control, including
decisions regarding the investment portfolio, rest with a management
team appointed by PNB and the YPB. By way of compensation for this
separation of ownership and control, unit- holders were guaranteed a
minimum annual dividend of 10 percent until 1990. In addition, the
first RM 400 of investment income is tax-exempt resulting in earlier
yield of up to 15 percent.
3. PROGRESS AND DEVELOPMENT
The year 1990 marked the passing of an important phase in the
operation of PNB. During the past decade, the operations of PNB have
been expanded and its original objectives have been achieved. PNB
started the decade as an investment organisation and by 1990, it had
grown to become an important institution for the mobilisation of
In December 1990, ASN had a total of 2,460,977 unit holders as
compared with only 841,200 on 31 December 1981, the year which ASN was
launched (PNB Annual Reports 1981 and 1990). Net investment of ASN
unit holders rose from RM 299.1 million as of 31 December 1981, to RM
8, 511.4 million as of 31 December 1990. Through prudent investment of
the portfolio of ASN, the unit holders been rewarded with satisfactory
returns. During the decade, the return on investment ranged from 13
percent to 20 percent a year comprising dividends and bonus units
provided by the PNB. The total dividends and bonuses paid out to unit
holders rose from RM 75.4 million in 1981 to a cumulative amount of RM
4,135 on 31 December 1990 (PNB annual report 1990).
In December 1990, the PNB appointed an independent actuary to survey
the investment return of pooled funds and savings institutions in
Malaysia over the previous 10 years. The results of the survey showed
that ASN provided the highest annualised rate of return on investment.
As an example, an annual investment of RM 1,000 a year in ASN from
1981 would have accumulated to RM 31,762.67 on January 1991.
In view of the growth of PNB during the last decade up to 1990, it
undertook a strategic review of its operations. As a result, various
programmes were implemented which would provide the necessary
preparations to position PNB and to enhance its expected role in the
decade of the nineties.
A major work program was to enable transactions in ASN to be conducted
at variable unit prices from 2 January 1991 as specified by its Deed
of Trust. Another project was the launching of a new scheme called
Bumiputera Trust Scheme (Amanah Saham Bumiputera or ASB) on 2 January
1991 with a fixed transaction price. This was to enable Bumiputera
unit holders to continue investing in a scheme with a similar features
to that of ASN before the latter commenced operations based on market
prices on 2 January 1991.
In 1991, PNB faced a new challenge, that of managing two unit trusts
with different characteristics. The challenge included transforming
ASN, the original scheme, into a conventional unit trust scheme while
at the same time promoting ASB, a new scheme with guaranteed buying
and selling prices similar to the old pre-1990 ASN.
On 2 January 1991, ASN began transactions at variable unit prices.
ASN's pricing is subject to the market performance of the shares of
companies quoted on the KLSE. The new pricing system thus requires
unit holders to follow the movements of share prices on the KLSE and
the various factors affecting them. The new pricing was well received
by unit holders as reflected by the overall performance of ASN in
1991. As of 31 December 1991, the total number of unit holders in ASN
was 1,310,499 with a total investment of 1,666.82 million units (PNB
Annual Report 1991: 11) ASN unit holders have also begun to adapt
themselves as investors to the new pricing arrangement and have been
able to take advantage of the capital appreciation of ASN units as
indicated by the large number of units sold, when they considered the
prices to be attractive.
To ensure separate management of ASN's investments, a new company,
Pengurusan Pelaburan ASN Berhad (ASN Management Investment Limited)
was incorporated on 20 June 1991. This separate structure enables the
investment managers of ASN and ASB to concentrate entirely on their
PNB's main investments is in four main sectors, i.e. industry,
plantation, mining, property and finance (PNB Annual Reports). Its
sources of investment can be divided into four:
a) Purchases from stock-market and institutions;
b) Allocation of shares through companies;
c) Restructuring from the Ministry of Trade and Industry;
d) Transfer Scheme from government to Bumiputera