CalSTRS to Sell Stocks With Sudan Links
The share price of MISC Bhd came under pressure yesterday following a Bloomberg report that the California State Teachers' Retirement System (CalSTRS), the second largest US pension fund, plans to sell stocks of companies with business in Sudan.
Among the big-cap stocks that fund managers invest in, MISC stood out as directly having business operations in Sudan.
MISC has a joint venture in the transport sector in Sudan. Ironically, the venture was intended to provide transport, with humanitarian interests, for the United Nations World Food Programme there.
Besides that, MISC has a joint venture with Sudan Shipping Line.
In a knee-jerk reaction, MISC and MISC-foreign fell 40 sen each to RM8.95 and RM8.80 respectively, while MISC-CA (call warrant) dropped 45 sen to RM5.25.
They were also actively traded, with seven million MISC-foreign and 4.1 million MISC shares changing hands.
CalSTRS may not even own any shares in MISC. The market concerns were that other large foreign funds may also sell out of companies with business in Sudan.
Politicians in California have also called, for instance, for CalPERS (California Public Employees' Retirement System), the largest US pension fund, to take similar steps. They want the funds to join their protest against human rights abuses in Darfur, Sudan.
In the local market, calm is expected to be restored soon, after the initial alarm over Sudan-linked stocks because the CalSTRS decision does not affect the financial fundamentals of companies like MISC.
CalSTRS will sell only about US$13.7mil of stocks in companies with business in Sudan, according to Bloomberg.
The scheme is the largest teachers' retirement fund in the United States, with more than 775,900 members and assets of over US$129bil.
Earlier, the University of California made similar plans for stocks with links to Sudan. In July last year, public pension funds in New Jersey and Illinois made similar statements.
CalSTRS is, however, the largest US fund so far to have taken this step, according to Bloomberg.
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