Wednesday, September 16, 2009

Ekuinas to avoid 'sin' stocks

Malaysian Government-linked private equity fund management company Ekuiti Nasional Bhd (Ekuinas) is not a Shariah fund, but it has refrained from investing in 'sin' sectors like gaming and alcohol, reports The Star (September 5, 2009).
The report quoted its CEO Abdul Rahman Ahmad as saying that industries like property and construction were ruled out because "there’s enough interest and companies in these sectors."
The targeted companies for investment should be existing medium-sized firms with high potential for growth. "We don’t need to specify the number of years and the level of revenue or profit that the company needs to generate, as long as we’re convinced that the company is sound and has demonstrated enough track record," Rahman told the newspaper.
The newly set up outfit expects to identify its initial investments in six months. The selection process would also consider the specific industry and its business cycle. "You can’t really have one-size-fits-all basis type of requirement," he said.
Ekuinas, which has an initial fund size of RM500mil that will eventually be enlarged up to RM10bil, expects to generate double-digit returns on investments, with average size of RM50mil over three to five years of investment horizon, the report added.

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