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Khazanah Nasional Bhd., Malaysia’s sovereign wealth fund, sold a 581.3 million ringgit ($181 million) stake in state-controlled Telekom Malaysia Bhd. as part of the government’s plans to reduce its local business holdings.

Khazanah sold 178.9 million shares, or 5 percent of the fixed-line phone and Internet service provider, at a fixed price of 3.25 ringgit apiece, according to a statement by joint placement agents Maybank Investment Bank Bhd. and Nomura Singapore Ltd. today.

That’s a 2.7 percent discount to the stock’s 3.34 ringgit closing price in Kuala Lumpur yesterday. Maybank rose 0.4 percent to close at 7.70 ringgit today. “There was strong demand from both domestic and foreign institutional investors for the placement,” the statement said.

Prime Minister Najib Razak said on March 30 that state- linked institutions will cut public-company holdings to free up shares and attract foreign investors to Malaysia, part of a plan that may also almost halve its budget deficit in the next five years, reduce expenses and make Malaysia more competitive.

The divestiture plan “has been on the agenda for a while. They’re just timing it rightly,” said Pankaj Kumar, who oversees about $560 million as chief investment officer of Kurnia Insurans Malaysia Bhd. “It shows that investors now have an appetite for it.”

Asset Sales

Khazanah, a state investment agency whose investments climbed 63 percent in value to 54.1 billion ringgit last year, trimmed its holdings in power producer Tenaga Nasional Bhd., toll-road operator PLUS Expressways Bhd. and Malaysia Airports Holdings Bhd. in 2009. It also plans to sell its 32.2 percent stake in Pos Malaysia Bhd., a national postal company.

The Employees Provident Fund, a state-controlled pension fund, accounts for half of daily trading volume in Malaysia’s local equity and bond markets, Najib said.

The investment agency may raise 3 billion ringgit to 3.5 billion ringgit from divestments this year, Managing Director Azman Mokhtar said in January.

The agency, which currently makes 12 percent of its investments outside Malaysia, will explore more international acquisitions in Asia, Azman said on March 23. It is currently competing with Fortis Healthcare Ltd. to take over Singapore- listed Parkway Holdings Ltd., Asia’s biggest hospital operator.
Khazanah Nasional Bhd. , Malaysia’s sovereign wealth fund, sold a 581.3 million ringgit ($181 million) stake in state-controlled Telekom Malaysia Bhd. as part of the government’s plans to reduce its local business holdings.

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This post was submitted by Harshit Agrawal.