The government assures it will not guarantee the RM20 billion injection into the market through its investment arm ValueCap Sdn Bhd, revealed Minister in the Prime Minister's Department Abdul Wahid Omar.

"The funds are not from the government and will not be guaranteed by the government," he said.

He added ValueCap's team consists of professional investment managers who have an excellent track record in ensuring the objectives of its shareholders are met.

ValueCap, owned by Khazanah Nasional Berhad, Retirement Fund Incorporated (KWAP) and Permodalan Nasional Berhad, was revived in September to shore up the market.

Abdul Wahid, who is a senator, also noted that the ValueCap's investments will have no bumiputera agenda.

"The fund invested are not meant to help any company, be it bumiputera or non-bumiputera," he told Khalid Abdul Samad (Amanah-Shah Alam) in a parliamentary written reply last Thursday.

He also said ValueCap is aimed at long-term rather than short-term investments, and will invest in banking, the consumer industry, services, construction, plantation and property.

"The selection of stock will not be driven by sentiment and speculation. The emphasis will be on companies with a strong and consistent record in procurement, and stable cash flow," he explained.

He said companies with good dividends in return and defensive stock will be chosen.

‘Mandate in renewal’

According to Wahid, the investment arm, which was established in 2002, was given a RM20 billion "mandate in renewal" to invest gradually in the market at appropriate times based on current share prices.

"Indirectly, this will contribute positively to the companies’ activities in the market and economic growth in general, such as Malayan Banking Berhad, United Plantation Berhad and real estate investment trust (REITs), which give a five percent dividend yield," he said.

He said ValueCap had recorded over 16.3 percent equity investment return from 2003 to 2013 and accumulated RM8.5 billion profit as of end of 2014.

Khalid asked if the treasury had conducted any survey in ensuring the RM20 billion injection was able to shore up the market.

Rafizi Ramli (PKR-Pandan) had warned about the high risk strategy involving ValueCap, which had only RM3 billion liquidated assets, and needed another RM17 billion loan for the purpose.

The opposition lawmaker said the investment arm might resort to issue large bonds.