Windfall from asset sales.

Strategic divestments help the government's investment arm Khazanah Nasional reap record profits last financial year.

The government's investment arm Khazanah Nasional Bhd reaped record profits from its strategic divestments, posting a pre-tax profit of RM5.33 billion for the financial year ended Dec 31, 2011, an increase of 156.3% from RM2.10 billion a year ago.

'The 2011 results is exceptionally high and mainly contributed through the disposal of Pos Malaysia Bhd and PLUS Expressways Bhd. This is also partly due to the strategic investments Khazanah has been undertaking, whereby it had restructured its investment portfolio to concentrate on better yielding assets,' says Lee Chung Cheng, head of research at JF Apex Research.

He adds that these asset sales not only would be the government's means to raise funds for future asset purchases but also to help finance its budget deficit, expected at 4.7% of Gross Domestic Product (GDP) for this year.

'The fund (Khazanah) is always looking for better assets, both locally and overseas. If you look at Khazanah's dividend payout of 56% in 2011 against 24% in 2010 and 13% in 2009 - and the timing of the sale of Pos, PLUS and more recently Proton Holdings Bhd - we believe the proceeds would be utilised to finance the government's rising operating expenditure this …