Investment History: Tabung Haji

Investment activities for Th started as early as 1964 with an initial equity purchase of 2 listed companies amounting to RM4.5 million (US$1.2 million). In 1966, Th made the first sale from its equity investments and reaped a profit of RM20 thousand (US$5,300). Over the years equity investments have been intensified with the introduction of the new economic policy in 1969, whereby Tabung Haji has been identified to take up the Bumiputera portion of equity ownership in Malaysia’s corporate wealth. Th started diversifying investments in Islamic financial instruments after the establishment of Bank Islam Berhad in 1983 and foresee further opportunities, in this area given the governments aspirations of having an equally sophisticated Islamic financial system that can operate side by side with the conventional financial system. As on Dec. 31, 1998, 36 years after its establishment, Tabung Haji’s total investment at cost is worth about RM6 billion (US$1.6 billion).

Types of investment: Broadly, there are 3 types of investments made by Th. These include:

1. Investment in equities
2. Investment in Islamic financial instruments
3. Investment in land and building

As mentioned earlier, investment in equities represents the biggest portion of Th’s investment portfolio at 58% with the remaining two at 31% and 11%, respectively.

Source: Towards Islamic Banking: Experience and Challenges, Institute of Policy Studies. Republished with permission.