ASB Unitholders - 2013 Dividend and Lowest Bonus in Five Years and PNB's Lack of Appreciation for Loyal Investors

As the sunset of 2013 is fast approaching, the last of the dividend of the fixed-price PNB unit trust fund that is ASB was timely declared on Thursday 19 Dec for financial year ending on 31 Dec. The unitholders (Bumiputra) will receive a dividend of 7.70 sen per unit and a bonus of 1 sen per unit.The rates are noted to have declined by 0.05 sen and 0.15 sen in dividend and bonus respectively from 2012

There are 8.26 million unit holders who collectively hold 127.2 billion ASB units with the income distribution amounting to a total payout of RM9.38 billion and bonus accounted for RM 706.88 million.

As usual the Chairman of PNB, Tun Ahmad Sarji said that the dividend was competitive amid the global economic uncertainties and that, according to him, the fund could have declared a dividend of 10.54 sen per unit but it decided to bring forward 2.71 sen per unit to help the fund's portfolio to become more competitive in future.

It does look like the fund is forever under declaring its dividend and may,as a result, not really looking after those long-term loyal investors many of whom are elderly and would benefit from a higher dividend in the current financial year. Some have invested since the launching of the fund in 1981 as ASN and later migrated to ASB in 1990, a good 32 years and are now expected to keep looking to the future! Lamented one of my elderly ASB- investor acquaintances. Many of these investors are in the twilight years of their lives.

ASB should have rewarded the above such investors by giving a bonus at least at 1.25 sen per unit to offset a little the lower dividend rate. In short, PNB should value loyalty.

Bursa Malaysia: FBM KLCI Index gaining 200 points
from 1600 over a period of one year , 
Jan-Dec 2013 ( STAR online)

While our stock market is doing reasonably well with FBM KLCI index going from 1600 points to 1800 in the last 12 months, it does not reflect in tandem with the PNB income generation possibly partly due to its portfolio contents.

The fact is 2013's ASB income distribution is lower than in 2012 and the bonus is the lowest in the five year period as seen in the following table. Of particular concern is the performance of its overseas' investments and how they are presented in its annual report. Unlike banks which are regulated by BNM (Central Bank), which body is regulating the mammoth PNB?

ASB Dividend and Bonus 2009 - 2013

Year	Dividend	Bonus
*2009	7.30	1.25
*2010	7.50	1.25
*2011	7.65	1.15
*2012	7.75	1.15
2013	7.70	1.00

* Source: ASB Scheme Annual Reports

Granted that many ASB investors are grateful for the dividend and bonus rate for 2013 and that historically, PNB has never declared income generation inclusive of bonus lower than 8.50 sen per unit, a number is also unhappy with the lack of caring displayed by PNB for its loyal investors, putting them at the same level with new ones who are mostly the y generation who could still keep looking to the future.

On top of this rate reduction, the investors and other Malaysians are being burdened by higher cost of living starting with the removal of subsidy for sugar ( though most of us doctors welcome it), an increased electricity tariff, introduction of GST and now talks of toll rates being hiked as well, all coming in one go. Look like 2014 is not really going to be a happy new year for many low income groups.

In deciding on the dividend and bonus rates for ASB (many investors are low income group Bumiputras), PNB should take into account the current economic situation where cost of living is increasing and the need to reward its long-term loyal investors. 

By the way, is PNB's decision on income distribution and bonus declaration being influenced by external non-market forces? Just thinking aloud.

And curiously, for the first time, I am hard pressed trying to find one -for- the album photo of PNB's CEO appearing with the Chairman at the ceremony for ASB  dividend and bonus declaration for financial year 2013.