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2
T UESDAY M AY 1 9, 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
For breaking news updates go to
www.theedgemarkets.com
ON EDGE T V
www.theedgemarkets.com
Dr M: Najib must
come clean on 1MDB
in Parliament
Khazanah’s ethical
sukuk to benefit
schools
1MDB’s board of
directors warns
against ‘Trial
by Media’
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PM: Respect Umno elections
Says calls for his resignation are against majority wishes
KUALA LUMPUR: Prime Minister
Datuk Seri Najib Razak said the fact
that he is the first Umno president
elected through a system that is
more open and democratic after
the amendment of the party constitution should be respected by
all party members.
Therefore, he said, calls by several parties for him to relinquish
his position are improper as they
ignore the wishes of the majority
of party members.
“As the party president, I am
most thankful for your support.
Why was I chosen? Through what
process? Through the election process in the party, where the party constitution was amended (in
2009),” he said when addressing
the guests at the Umno Veterans’
Evening With the President, at the
Putra World Trade Centre here
yesterday.
Najib said the election system
for the top leadership now is more
open and transparent compared
with the previous system, which
used the bonus vote and quota
system to retain the top party posts.
He said that if he had wanted to
retain the top leadership post for 22
years like the fourth prime minister
Tun Dr Mahathir Mohamad (1981
to 2003), he would not have agreed
with the suggestion to amend the
party constitution.
Najib said while Umno is facing numerous challenges, he will
continue to struggle in the interests
of the party and strive to improve
whatever weaknesses there are.
“We want to look after the party,
we cannot destroy our party, [because] our party is our saviour ... the
Malays have no where else to go to
except for this hallowed party. Do
not destroy Umno, love Umno and
look after Umno,” he said, adding
that every problem can be rectified
and resolved through consensus.
— Bernama
BY SHING-Y I TAN
‘Apple IPhone
designs copied
by Samsung’
KUALA LUMPUR: “The quality of
the works is excellent and the layout
of the space is very well done, especially for a private gallery,” said leading Malaysian artist Ahmad Zakii
Anwar at the opening of Galeri Z
in Taman Melawati, Kuala Lumpur.
Ahmad Zakii was one of the many
top local artists who attended Galeri
Z’s launch over the weekend. Other
big names included Latiff Mohidin,
Jalaini Abu Hassan, Kow Leong Kiang,
Chong Ai Lei, Datuk Sharifah Fatimah Zubir, Awang Damit, Choong
Kam Kow, Chong Siew Ying, Hoe Say
Yong, Cheng Thak Lui, Chang Fee
Ming and Johan Marjonid. Among
the corporate guests who attended
were Ambank Group chairman Tan
Sri Azman Hashim, Willowglen MSC
Bhd executive director Simon Wong,
and hotel manager Joshua Lim.
Boasting more than 500 paintings, drawings, sculptures and prints,
Galeri Z marks the unveiling of The
Zain Azahari Collection. Consisting
of mainly Malaysian and Indonesian
art, Zain’s private collection owes its
beginnings to a small watercolour
painting, given to him as a wedding
gift by the late Datuk Syed Ahmad
Jamal. The collection may be reflective of Zain’s personal tastes and interests, but it is also a valuable asset
to the preservation of predominantly
Malaysian and Indonesian art.
Works by Khalil Ibrahim, Lat-
WASHINGTON: Apple Inc's patented designs on its signature
iPhone mobile phone were copied
by chief rival Samsung Electronics Inc, a US appeals court ruled
yesterday.
The appeals court did throw out
part of the case, saying that the
overall look of the iPhone can't
be protected, and asked a lower
court to recalculate US$930 million (RM3.32 billion) in damages
awarded to Apple in 2013.
According to a Samsung court
filing, the portion of the damage award that will be tossed is
US$382 million, leaving US$548
million that the Suwon, South Korea-based company would potentially have to pay to Apple.
Apple and Samsung have
dropped all of their global battles
except the issue decided yesterday
and a second case, also before the
US Court of Appeals for the Federal Circuit.
The second case, involving Apple's contention that it should
be allowed to force Samsung to
remove certain patented features from Galaxy phones, is still
pending.
The two cases will determine
the eventual outcome of a dispute
that's continued for five years and
spanned the globe. — Bloomberg
More than 500 artworks at Galeri Z
(From left) Tong,
Zain and Cheong
at the launch
of Galeri Z on
Sunday.
iff Mohidin, Jolly Koh, Patrick Ng
and Ibrahim Hussein among those
by Indonesian artists, like Popo
Iskandar, Affandi, Srihadi Soedarsono and Gunawan are on display
at Zain’s home and the homes of
his immediate family. He has also
loaned his collection to national
institutions and public galleries.
The opening of Galeri Z was also
celebrated in conjunction with the
launch of the publication of Hati &
Jiwa: The Zain Azahari Collection
Volume I & II, which documents
the works in his collection.
The event was opened by the
past president of the Malaysian
Physicians for Social Responsibility and past co-president of the
International Physicians for the
Prevention of Nuclear War, Datuk
Dr Ronald McCoy. While highlighting the importance and quality of
Zain’s collection, he also noted the
importance for artists to be responsive to social and local issues.
Leading art collectors who attended the event include Tan Sri
Kamarul Ariffin, Datuk Noor Azman
Mohd Nurdin, Dr Steve Wong, Dr
Abang Askandar Kamel and wife
Dr Hanizah Aman Hashim, lawyer
Yoong Sin Min, retired legal consultant Billy Too Hing Yeap, Pakhruddin
Sulaiman and wife Fatimah Sulaiman, and Shaik Rizal Sulaiman.
The Edge Media Group chairman
Datuk Tong Kooi Ong and Dawn
Cheong, together with The Edge
managing director Au Foong Yee
and deputy managing director Lim
Shiew Yuin, also attended the event.
Maybank hives off PNG operations for RM418m cash
BY SANGEE THA AM ARTHALI NG AM
KUALA LUMPUR: Malayan Banking Bhd (Maybank) is exiting Papua
New Guinea (PNG) by hiving off
its entire equity stake in Maybank
(PNG) Ltd (MPNG) and Mayban
Property (PNG) Ltd (MPPL) to Kina
Ventures Ltd for RM418 million.
In a statement, Maybank president and chief executive officer
Datuk Abdul Farid Alias said the decision to dispose of its PNG operations was a result of regular strategic
reviews to “re-prioritise” its capital
and resources, with the intention of
focusing its growth agenda on tar-
get regions where it can achieve the
best returns from its investments.
Maybank has entered into a
share sale agreement (SSA) with
PNG-based stockbroking firm Kina
Securities Ltd and Kina Ventures
for the divestment of MPNG and
MPPL, according to the statement.
“While we have been operating
profitably and successfully in PNG
over the years, we had to evaluate
how best we can use our capital,
going forward, especially in light
of new and more stringent requirements under the Basel III [global
banking framework] regime.
“Ultimately, we believe we could
achieve greater value creation for
our stakeholders by refocusing our
resources in the Asean and Greater
China regions, where we can realise
greater synergies and achieve better returns on capital investment,”
Abdul Farid said.
In a filing with Bursa Malaysia,
Maybank (valuation: 1.45; fundamental: 1.5) said the SSA was signed
following the central bank of PNG’s
approval on May 12.
MPNG, established in 1994, and
MPPL, were incorporated in PNG, and
were involved in commercial banking
activities and property investment,
respectively. Both the companies,
which were serving the local community and cross-border clients for
the past 20 years, will cease to be subsidiaries of MBB with effect from the
completion of the proposed disposal.
Abdul Farid said despite this,
Maybank is still committed to serving customers in PNG, who have
cross-border requirements and the
bank will ensure a smooth transition to the new shareholders so that
customers can enjoy uninterrupted services.
Maybank shares gained four
sen or 0.43% at RM9.36 yesterday, with a market capitalisation
of RM87.2 billion.
4 HOME BUSINESS
‘Good time’ for Rapid jobs
The current low oil prices enable cost savings for Petronas
BY FATI N RA SY I QAH M USTAZA
KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) is going ahead
with its massive downstream project, the refinery and petrochemical
integrated development (Rapid), but
the national oil firm is fine-tuning
the plan with certain parts of the
project to be delayed till a later stage.
Petronas president and group
chief executive officer (CEO) Datuk
Wan Zulkiflee Wan Ariffin, who is
new at the helm, acknowledges that
the Rapid project will be commissioned in mid-2019. “For the refinery,
the start-up will be in the middle of
2019. That is the current schedule.”
Wan Zulkiflee commented that
it is now a “good time” to award engineering, procurement and construction (EPC) contracts for Rapid
as the current low oil price environment would enable cost savings.
“Commodity prices went down,
for us it was a good time to go into
the market for EPC contracts because
prices are (more) acceptable,” Wan
Zulkiflee replied when asked about
the impact of low crude oil prices on
the Rapid project at the 18th Asia Oil
and Gas Conference 2015.
“So I think that would be the
first impact for us in terms of low
oil prices,” he said, adding that Petronas has gone through a rebidding
process to get better prices for the
RM80 billion Rapid in Pengerang,
southern Johor.
The CEO revealed that Petronas
has already awarded all the infrastructure, the refinery and cracker
packages to reputable EPC contractors. However, its petrochemical
plant is still in the tendering process.
Wan Zulkiflee pointed out that
Petronas has also reviewed the
specifications of the project’s fa-
BY C Y N T H IA B L E MIN
cilities, which in turn has helped
the national oil corporation see
some savings. He noted that Petronas has subsequently made the
decision to take certain portions
of the petrochemical plant within
Rapid into several phases.
“We have taken a decision that
some of the chain (phases) in the
petrochemical plant would be
“re-phased”. Basically some of the
chains we will do a bit later,” he
said, noting that Petronas would
deploy more of its own employees
for Rapid to reduce dependency on
management consultants.
Local O&G industry must consolidate
BY FATI N RA SY I QAH M USTAZA
KUALA LUMPUR: Datuk Wan
Zulkiflee Wan Ariffin, Petroliam
Nasional Bhd (Petronas) president and group chief executive officer, (CEO) opines that oil and gas
(O&G) companies which are facing
headwinds from fallen crude oil
prices should consider mergers
as an alternative to strengthen
their footing.
Speaking at the 18th Asia Oil and
Gas Conference 2015 CEO Strategic
Dialogue yesterday, Wan Zulkiflee
said that as the industry landscape
has become increasingly uncertain,
“merging may be the best way forward for some” companies.
He noted that industry players
are taking steps to consolidate their
operating assets and technology
expertise which have been made
through mega mergers.
“While mergers come with their
own risks, returns can be rewarding
if the bets are called right ... At the
end of the day, companies that have
survived this industry cycle may
come out more prepared and resilient for future challenges,” he said.
Separately, during his keynote
speech at the opening ceremony,
Wan Zulkiflee noted that there are
ample opportunities for consolidation.
“Those with heftier cash reserves
and other means to fund acquisitions, and who are guided by a
clear strategic focus, will be able to
beat competitors to the negotiating
table for winning deals. These ma-
noeuvres will position them ahead
of the pack when oil prices recover.
“In this respect, I feel strongly
that Malaysian oil and gas companies must extend themselves to
explore consolidation opportunities within the fraternity to increase
their competitiveness and position
the country’s oil and gas industry in
good stead when the global market
recovers.”
He said that following the repercussions of the oil price drop,
opportunities have presented themselves as companies make the effort
to ensure that processes and cost
structures are redesigned for simplicity and to support long-term
lower operating costs and higher
efficiency.
“This, in fact, should be expand-
ed beyond individual organisations
through collaborative measures to
tackle the issue in wider spheres of
influence.
“I firmly believe that the industry
must respond in a cohesive manner
to make tangible impacts to lower
costs and drive up efficiency levels,” he said.
Wan Zulkiflee added that there
is still room for optimism “within
the gloom and doom”.
“I would like to call upon players
in the industry to interpret the current scenario through the lens of an
optimist; we are now in the mode of
realising opportunities amid challenges, to initiate reforms into our
economies, build capability for our
workforce and explore new ways to
increase competitiveness.”
EPF: 94.4% members want full withdrawal at 55
BY SU L H I A ZMA N
KUALA LUMPUR: The Employees
Provident Fund (EPF) announced
that 94.4% of the 96,448 respondents
it surveyed have indicated their preference for retaining full withdrawal
of their savings at 55 years old, with
new contributions made thereafter
to be drawn only at age 60.
According to the EPF chief executive officer Datuk Shahril Ridza
Ridzuan in a statement yesterday, the
survey results had a 0.35% margin of
error at a 95% confidence level, indicating that the results were statistically significant and representative
of the opinion of all EPF members.
On its initiative to align minimum contributions with the minimum wage legislation, the EPF said
74.6% or 71,950 of members have
agreed that this proposal will help
increase low-paid employees’ retirement savings.
“Members agreed that the proposal was timely as it would address the low savings of employees
whose contributions are lower than
they should be under the minimum
wage legislation. This would make
Source: EPF
it compulsory for both employers
and employees to calculate their
EPF contributions based on wages
stipulated by the minimum wage
legislation,” it said.
As for its proposal to extend dividend payments from age 75 to 100,
EPF said 61.3% of its members who
wish to continue to keep their sav-
ings with EPF after they retire, indicated their preference to continue
receiving dividends until age 100.
The EPF also said 71% of its members have agreed with the proposal
to allow its members to switch to
syariah-compliant retirement savings from the existing retirement
savings scheme, based on ethical
BNM wants to
pull its reps
from Socso
and Employees
Provident Fund
investment guidelines.
“There is demand for syariah-compliant retirement savings by
our members. Based on the number
of responses from the consultation,
we are confident the take-up rate for
the syariah-compliant retirement
savings scheme will be encouraging
for both Muslim and non-Muslim
members,” said Shahril.
The EPF also said 65.7% of its
survey respondents were members
aged 40 and below; 24.9% were between 41 and 50, 9.2% were between
51 and 60, and 0.2% were above 60.
“This demonstrated that younger
members are increasingly interested in actively taking charge of their
future retirement planning,” the retirement fund noted.
The EPF said 83.1% of its respondents were from the private
sector, 12.1% from the public sector,
and 4.8% from the self-employed
group; 57.6% were male and 42.4%
were female.
“This information can assist us
in our plans to engage with the government and to look at the best way
of implementing the initiatives,”
said Shahril.
KUALA LUMPUR: Bank Negara Malaysia (BNM) is seeking
to pull out its sole representatives from the investment panels
of two government agencies,
the Social Security Organisation (Socso) and the Employees Provident Fund (EPF), says
Deputy Finance Minister Datuk Chua Tee Yong. The central
bank’s move comes after the
government’s tabling of a controversial proposed amendment
to the Retirement Fund Act 2007
in Parliament recently, which
would see the removal of BNM’s
sole representative from Kumpulan Wang Persaraan (Diperbadankan) (KWAP), also known
as the Retirement Fund Inc.
Chua clarified yesterday that
it was BNM which had asked to
be pulled out of KWAP to avoid
a conflict of interest, due to the
fact that it is a regulator and
therefore should not be involved
in KWAP’s investments.
“BNM has [also] asked to
pull out its representatives from
Socso and the EPF,” Chua said
in his winding up speech on the
Retirement Fund (Amendment)
Bill 2015 in Parliament.
It was previously reported
that KWAP is managing a fund
size of about RM112 billion.
Opposition Members of
Parliament Rafizi Ramli, Tony
Pua and Wong Chen have all
expressed concern in their
speeches in Parliament that
KWAP had loaned RM4 billion
to Finance Ministry-owned SRC
International Sdn Bhd, which
was used to purchase a stake in
a mining company in Mongolia.
Earlier, during the same debate, Rafizi had disclosed that
he was in possession of leaked
Cabinet documents which confirmed that KWAP was one of the
companies that would be jointly
involved in the development of
the Tun Razak Exchange (TRX)
by the debt-ridden 1Malaysia
Development Bhd (1MDB).
Meanwhile, Pua said in the
parliament lobby later, that the
argument given by the Ministry
of Finance (MoF) that it wanted
to avoid conflict interest was
baseless.
“This is nonsense. Going by
the same argument, MoF, which
is also a regulator, has Treasury’s
secretary-general Tan Sri Irwan
Serigar Abdullah holding the
post of chairman of KWAP [so
he shouldn’t be there],” he said.
Pua said there may not be
any immediate impact resulting
from BNM pulling out its representatives from the retirement
funds, but warned that there
would be “no checks and balances” if something goes wrong.
MoF’s revelation yesterday
sparked speculation among
some opposition MPs that BNM
likely wants to “wash its hands”
of involvement in dealings that
are shrouded in controversy.
HOME BUSINESS 5
TU E SDAY MAY 1 9 , 20 15 • T HEED G E FINA NCIA L DA ILY
AirAsia X sees
lower passenger
volume in 1Q
Due to capacity management, slowdown in marketing activities
1QFY14,” AAX said.
ASK measures an airline’s passenger capacity, and is derived by
the total seats flown multiplied by
the number of kilometres flown.
In line with the airline’s turnaround strategy, which includes a
network consolidation exercise for
the first half of 2015, AAX said it
had implemented frequency cuts
on certain routes at the beginning
of the year, affecting mainly China and Australia, and had concurrently terminated loss-making routes such as to Adelaide in
Australia, and Nagoya in Japan,
to optimise capacity.
The excess capacity from capacity management was redeployed to short-term wet lease
and charter operations to maximise revenue, it added.
Moving forward, AAX said its
current booking trends are in line
with expectations for a recovery
in the second half of 2015.
In terms of fleet movement, the
airline took delivery of two Airbus
A330-300s on operating leases in 1Q,
bringing its total number of A330-300s
to 25 compared with 19 a year ago.
BY SU PRI YA SU REN DRAN
KUALA LUMPUR: AirAsia X Bhd
(AAX), the long-haul low-cost
affiliate of AirAsia Bhd, saw its
passenger volume, as measured
by revenue passenger kilometres
(RPK), decline 17% to 4.43 billion
in the first quarter ended March
(1Q) from 5.34 billion a year ago.
In a statement yesterday, AAX
attributed the drop in RPK to capacity management and a slowdown in marketing activities during the first three months of this
year following the crash of Indonesia AirAsia flight 8501 in December last year.
RPK is a measure of the volume
of passengers carried by the airline. It is derived from the number of passengers multiplied by
the number of kilometres these
passengers have flown.
“Available seat kilometres (ASK)
capacity [had also] decreased by
3% to 6.02 billion in 1QFY15 [from
6.22 billion a year ago], and consequently the load factor during the
quarter had dropped 12 percentage points to 74% against 86% in
On the performance of its associates, Thai AirAsia X registered
strong loads of 82% for 1Q, with
155,961 passengers carried, implying continued positive pickup for popular routes between
Thailand, Japan and South Korea.
Thai AirAsia X currently operates three A330-300s, while Indonesia AirAsia X has two A330-300s
serving Bali-Taipei and Bali-Melbourne respectively.
AAX (fundamental: N/A; valuation: N/A) shares closed down 5%
to 28.5 sen yesterday, with a market capitalisation of RM1.2 billion.
The Edge Research’s fundamental
score reflects a company’s profitability and balance sheet strength,
calculated based on historical
numbers. The valuation score
determines if a stock is attractively valued or not, also based
on historical numbers. A score
of 3 suggests strong fundamentals and attractive valuations. Go
to www.theedgemarkets.com for
details on a company’s financial
dashboard.
Scan Associates falls
into GN3 status after
injunction struck off
BY ME E N A L A K S H A N A
& S UL H I A Z MA N
KUALA LUMPUR: Bursa Securities
Bhd yesterday classified Scan Associates Bhd as a Guidance Note
3 (GN3) company after the High
Court dismissed the company’s
application for further injunction
to restrain the regulator from classifying it under that category.
In a statement yesterday, Bursa Securities said the action was
taken in accordance with the ACE
Market Listing Requirements (LR)
of Bursa Securities.
The information technology
security solutions provider is the
fourth company to be admitted to
Bursa’s GN3 list after AsiaEP Resources Bhd, Cybertowers Bhd and
R&A Telecommunication Group
Bhd.
“The Kuala Lumpur High Court
today (yesterday) has dismissed the
company’s application for further
injunction. As such, Bursa Securities today classifies Scan Associates
as a GN3 company effective May
18, 2015,” Bursa Securities said.
“We would like to emphasise
that we will continue to monitor
the progress of Scan in respect of
its compliance with the ACE Market LR,” it added.
Presiding judge Abu Bakar Jais
delivered the judgement in chambers yesterday. The case management for the suit will be heard on
June 1.
Yesterday, Scan Associates executive director Mak Siew Wei said
the company’s board of directors
will discuss whether to appeal the
High Court’s decision.
“On our part, the company
will consider to appeal against
the (High Court’s) decision in the
interests of our shareholders,” he
told The Edge Financial Daily outside the court after the decision
was delivered.
“Based on what our auditor
told us, and another auditor that
we had engaged with, we do not
(fall under GN3 status),” said Mak,
who owns a 6.19% stake in Scan
Associates.
On May 8, Bursa Securities had
issued a directive to Scan Associates to announce that the company
had triggered rules 2.1 (b) and (c)
of GN3 based on the company’s
fourth-quarter results ended December 2014.
Scan Associates had then appointed Messrs Lim, Chong, Phang
& Amy to file a lawsuit against Bursa Securities because the company
disagreed with the directive issued
by the regulator and to seek damages from the regulator.
Scan Associates was granted an
ad interim injunction by the High
Court on May 11 to restrain Bursa Securities from implementing
the classification on the company.
Scan Associates (fundamental: 0; valuation: 0.3) shares closed
unchanged at five sen yesterday,
with 35.4 million shares changing
hands. It was the top most active
stock on Bursa, with a market capitalisation of RM10 million.
MOST VIEWED STORIES ON
theedgemarkets.com
Tabung Haji lost ‘millions of ringgit’
in TH Heavy investment — Rafizi
KUALA LUMPUR: Lembaga
Tabung Haji’s paper losses from
its associate stake in TH Heavy Engineering Bhd could put pilgrims’
savings with the fund at risk, according to opposition lawmaker
Rafizi Ramli (pic).
PKR vice-president Rafizi said
in Parliament yesterday that “millions of ringgit” could be wiped out
due to bad investment choices by
Tabung Haji.
Tabung Haji owns 29.81% in TH
Heavy (fundamental: 0.35; valuation: 0.9), formerly known as Ramunia Holdings Bhd.
TH Heavy shares fell 1.67% to
29.5 sen yesterday, for a market
THE MALAYSIAN INSIDER
BY C Y NTHI A B L EMIN
1MDB accuses media of trying to shape public opinion
capitalisation of RM330.72 million.
According to Rafizi, Tabung Haji
had acquired the TH Heavy shares
at above RM1 in 2007 and 2008.
“It was an interesting oil and
gas counter back in 2005, 2006 and
2007, and that (is why) the fund
had decided to buy shares in the
company,” he said.
Correction
WITH reference to the article entitled “Analyst: FGV likely to be
out of KLCI list” published in The Edge Financial Daily yesterday,
FGV’s market capitalisation should be RM7.59 billion and not as
reported. The error is regretted.
KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) has accused the
media of trying to shape public opinion against it and added that it will
not respond to questions from them.
“It is clear from the selective presentation of facts, lack of supporting
evidence and biased reporting that
an attempt is being made to shape
public opinion ahead of the Public
Accounts Committee (PAC) and the
Auditor-General completing their
reviews,” said the debt-laden stateowned company in a statement yesterday.
It said the search for truth should
be conducted by trustworthy, unbiased and impartial parties, and that
a “trial by media” is of no benefit to
anyone who “is genuinely interested
in the truth”.
“Accordingly, the board will fully
co-operate with and will only reply
to questions posed by the bi-partisan PAC, the Auditor-General and
relevant regulatory authorities. In
the meantime, the board requests all
parties to respect the review process
being led by the Auditor-General (as
directed by the Cabinet) and to await
Filepic of a 1MDB
signboard. 1MDB
has accused the
media of selective
presentation of facts.
the outcome of PAC hearings which
commence this week.”
The Edge weekly had in its latest issue posed several questions
to the current and former directors
of 1MDB on various questionable
transactions carried out by the company.
Among others, the article questioned 1MDB’s joint venture with
PetroSaudi International, the firm’s
financing of power asset purchases in
2012, and its US$3 billion (RM10.71
billion) bond issuance for the Tun
Razak Exchange (TRX).
Criticism of the wholly-owned
Finance Ministry investment ve-
hicle that was set up in 2009 has
been mounting of late, most notably from former prime minister Tun
Dr Mahathir Mohamad and senior
banker Datuk Seri Nazir Razak, the
chairman of CIMB Group Holdings
Bhd, over the entity’s whopping
RM42 billion debt and the lack of
transparency in its deals.
Prime Minister Datuk Seri Najib Razak, the chairman of 1MDB’s
board of advisors, had ordered the
Auditor-General to conduct a review of the firm’s accounts. He had
also told the department to prepare
a report for further action and examination by the PAC.
Auditor-General Tan Sri Ambrin
Buang said the department planned
to submit a preliminary report to
the PAC by the end of next month.
6 HOME BUSINESS
QL blocks dilution
of stake in Lay Hong
SIS options were not given to the latter’s executive directors
BY Y EN N E FOO
KUALA LUMPUR: QL Resources Bhd
successfully defended its shareholding
in Lay Hong Bhd from being diluted
by blocking resolutions to grant share
issuance scheme (SIS) options to Lay
Hong’s executive directors at the latter’s extraordinary general meeting
(EGM) yesterday.
Lay Hong managing director Yap
Hoong Chai and three executive directors Yeap Weng Hong, Yap Chor
How and Yeap Fock Hoong who had
to abstain from voting, were all denied
the SIS options during the meeting.
The polls conducted during the
EGM saw only 11.11% of shareholders’
vote in favour of granting SIS options
to Hoong Chai. Weng Hong, Chor How
and Fock Hoong garnered 23.54%,
12.7% and 23.77% of shareholders’
ballot respectively. However, QL, the
second biggest shareholder of Lay
Hong with a 38.53% stake, voted in
favour of the group establishing a
SIS and granting SIS options to Lay
Hong chairman Datuk Dr Abdul Aziz
Mangkat, executive director Ng Kim
Tian and non-executive directors
Cheng Chin Hong, Gan Lian Peng
and Tan Ooi Jin.
“We (QL) did not vote for the SIS
for the four Lay Hong executive directors because we do not think that
they should be issuing shares to themselves,” QL group accountant and
investor relations officer Freddie Yap
told The Edge Financial Daily yesterday. Yap added that QL (fundamental: 1.1; valuation: 1.1) saw Lay
Hong’s move to grant SIS options
to its executive directors as a way to
dilute QL’s current equity interest in
Hoong Chai told reporters after
the EGM yesterday that the
poll results were both “fair and
normal”. Photo by Chu Juck Seng
the group, but dismissed the issue as
“a small corporate thing”.
Meanwhile, Hoong Chai, whose
family is a controlling shareholder of
Lay Hong with a 42.45% stake, told reporters after the EGM yesterday that
the poll results were both “fair and
normal given the current situation”,
referring to QL’s failed attempt to take
over Lay Hong back in December last
year. At the time, QL made a takeover
offer for Lay Hong at RM3.50 per share
after QL’s sole representative and executive director Chia Mak Hooi on
Lay Hong’s board was not re-elected
during an annual general meeting.
“But if you look at it under normal
circumstances when the executive directors have brought the company to
profitability, they should be rewarded
too [with the SIS options],” Hoong Chai
said. He also brushed off suggestions
that Lay Hong’s move to implement
the SIS was to dilute QL’s shareholding
in the group.
“The message is not correct,” Hoong
Chai said. “The impression [in the market] seems to be that they (QL) were
booted out [of Lay Hong’s board], but
it was the shareholders who chose not
to vote him (Chia) in. The Lay Hong
board had proposed him to be re-elected,” he added.
Apart from the SIS, Lay Hong had
proposed a private placement of up
to 7.62 million new shares or 15% of
the group’s enlarged share capital to
third party investors. Both plans would
help the poultry farmer comply with
the public shareholding spread as required by Bursa Malaysia, but may
at the same time dilute QL’s stake in
the firm.
“We are not trying to dilute QL’s
shares. We are using the money to
grow the group and make every shareholder feel that the investment in Lay
Hong is worth something,” Hoong
Chai explained.
Hoong Chai also assured investors that the relationship between Lay
Hong’s two biggest shareholders remains “very friendly”, with Lay Hong
continuing to purchase raw materials
from QL.
Earlier at the EGM, Lay Hong shareholders voted in favour of the proposed
private placement which is expected to
raise gross proceeds of up to RM23.1
million. With the private placement,
Lay Hong’s public shareholding spread
is expected to increase to 26% from
15.42% as at Dec 31, 2014.
Separately, Lay Hong (fundamental: 0.75; valuation: 0.8) is optimistic
that its results for the financial year
ended March 31, 2015 (FY15), which
is expected to be announced by the
end of this month, to be “much better
than last year”.
Khazanah to issue first tranche of
RM1b socially responsible sukuk
BY JEFFREY TA N
KUALA LUMPUR: Khazanah Nasional Bhd, via Ihsan Sukuk Bhd, will
issue the first tranche of its inaugural
sustainable and responsible investment (SRI) sukuk of RM1 billion — at
RM100 million — this year.
Proceeds from the maiden
issuance of the SRI sukuk will be
channelled to Khazanah’s non-profit
foundation Yayasan Amir to manage
its cash flow for the deployment of
the Trust School Programme (TSP)
for schools identified this year. Ihsan
Sukuk is a Malaysian-incorporated
independent special purpose vehicle
of Khazanah.
“The first issuance will be at
RM100 million, to roll out 20 schools
in 2015. God willing, we will do an
annual issuance of the sukuk in the
coming years,” Khazanah executive
director and chief financial officer
Mohd Izani Ghani told a press briefing after the launch of the SRI sukuk
here. He said the coupon rate of the
SRI sukuk is estimated at 4.3%, which
will be finalised soon.
According to Mohd Izani, a “diverse” group of some 50 investors,
comprising financial institutions,
foundations and asset management
firms, have indicated their interest to
participate in the SRI sukuk. But he
declined to reveal who the interested
parties are.
Meanwhile, Deputy Prime Minister and Education Minister Tan Sri
Muhyiddin Yassin, who launched
the SRI sukuk, has called upon Malaysian corporates to support the Islamic bond programme, which will
enable the smooth roll-out of the 20
schools. “This sukuk presents a new
method for funding for the purpose
of education and a means for investors to fulfil their corporate responsibility,” he said.
Khazanah said the social impact
of this “pay for success” structure is
measured using a set of predetermined key performance indicators
(KPIs), which will be measured over
a five-year period. It said if the KPIs
are met at maturity, sukuk holders
will forego a pre-agreed percentage
of the nominal amount due under
the SRI sukuk as part of their social obligation in recognising the
positive social impact generated
by the TSP.
On the other hand, if the KPIs are
not met, the sukuk holders will be
entitled to the nominal amount due
under the SRI sukuk in full.
The SRI sukuk has been assigned a
preliminary rating of AAA(s) by RAM
Rating Services Bhd.
NEWS IN BRIEF
AmProp signs 21-year Reppa with
TNB to build two hydro plants
KUALA LUMPUR: AmCorp Properties Bhd (AmProp), which is
controlled by veteran banker Tan Sri Azman Hashim with a 70.65%
stake, announced yesterday its two wholly-owned units — Contour
Mechanism Sdn Bhd and Trident Cartel Sdn Bhd — had signed a
21-year renewable energy power purchase agreement (Reppa) with
Tenaga Nasional Bhd (TNB).
In a filing with Bursa Malaysia, AmProp (fundamental: 2.4; valuation: 2.1) said under the agreement, it will build and operate two
renewable energy mini-hydro power plants, located at Sungei Liang,
Raub in Pahang, with a capacity of 10mw each. AmProp expects the
construction of the plants to take some 24 months.
Thereafter, TNB will purchase the electricity generated from Contour Mechanism’s and Trident Cartel’s mini-hydro power plants
for 21 years. The total estimated generation and value of renewable energy generated is approximately 85.42gw hour and RM20.5
million per year, respectively.
Contour Mechanism and Trident Cartel are owned by Affluent
Merger Sdn Bhd, in which AmProp’s wholly-owned unit Amcorp
Power Sdn Bhd has a 100% stake. Following the Reppa, TNB will
acquire a 49% equity interest in Affluent Merger, which will reduce
AmProp’s effective stake to 51%.
AmProp now operates a 4mw mini-hydro power plant in Bentong, Pahang, and a 10.25mw Solar Power Plant in Gemas, Negri
Sembilan. In the financial year ended March 31, 2014, AmProp’s
contracting, renewable energy and power generation business
contributes 56% to its overall revenue and 4% to its pre-tax profit.
AmProp closed 0.5% higher to RM1 yesterday, valuing it at
RM586.87 million. — by Sulhi Azman
MAS to sell stake in Abacus
International
KUALA LUMPUR: Malaysian Airline System Bhd (MAS) is selling its
indirect 8.84% stake in Abacus International Pte Ltd to Sabre Corp
in a move to streamline its businesses and divest non-core assets.
The sale is expected to be completed later this year.
MAS and 10 other airlines in Asia, which are founding shareholders of Abacus, will be selling their combined 65% stake in Abacus
— a global distribution system (GDS) for travel in Asia-Pacific — to
Sabre, which currently owns 35% of the company.
In a statement yesterday, MAS said Abacus had at end-2013
embarked on a strategic review of the company to determine how
it might continue its development and better service its customers and partners.
“The result of that exercise will see the airline shareholders sell
their collective 65% stake in Abacus to Sabre. Subject to certain
regulatory approvals, the transaction will result in Sabre emerging
as the sole shareholder of Abacus,” it added.
MAS also said it has entered into a new distribution agreement
with Abacus to ensure continuity of the GDS support.
Abacus today serves more than 100,000 travel agents across the
region’s 59 markets. — by Chen Shaua Fui
Malton bags RM208m job to build
Royale Pavilion Hotel
KUALA LUMPUR: Property developer Malton Bhd announced that
its wholly-owned unit Domain Resources Sdn Bhd has received a
letter of award for a RM208 million contract from Harmoni Perkasa
Sdn Bhd to build one block of Royale Pavilion Hotel, along Jalan
Bukit Bintang and Jalan Raja Chulan here.
In a filing with Bursa Malaysia, Malton (fundamental: 1.1; valuation: 2) said Harmoni Perkasa is a wholly-owned unit of Urusharta
Cemerlang Sdn Bhd, of which its chairman Tan Sri Desmond Lim
Siew Choon is an indirect substantial shareholder.
“A contract to finalise the scope and value of the construction
works will be entered into between Domain Resources and Harmoni Perkasa in due course,” Malton said in the filing.
Lim holds a 37.06% stake in Malton through Malton Corp Sdn
Bhd. He also has a 28.08% stake in Pavilion Real Estate Investment
Trust, which owns and runs Pavilion mall.
Malton’s share price gained 0.55% at 91.5 sen yesterday, with
665,400 shares traded, with a market capitalisation of RM403.57
million. — by Sulhi Azman
The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical
numbers. The valuation score determines if a stock is attractively
valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.
theedgemarkets.com for details on a company’s financial dashboard.
HOME BUSINESS 7
Foreign selling extended into third
week, says MIDF Research
BY SURIN MURUGIAH
KUALA LUMPUR: Relatively heavy
foreign selling of Malaysian equity
continued for the third week in a
row for the week ended last Friday, according to MIDF Research.
In his weekly fund report yesterday, MIDF Research head Zulkifli
Hamzah said foreign investors sold
equity listed in the open market
on Bursa Malaysia amounting to
RM537.7 million on a net basis last
week, compared with RM460.4
million the week before.
He said foreign selling was
heavy in the first three days, peaking last Tuesday when RM223.5
million was offloaded, the 13th
day this year that the amount had
exceeded RM200 million.
“However, we note that foreign investors turned net buyers
last Friday, although the amount
bought was only RM72 million.
Prior to [last] Friday, foreign investors had been selling for seven
straight days,” he said.
Zulkifli noted that in the last
two weeks, foreign investors had
offloaded RM1.58 billion in the
open market.
This has increased the cumulative net foreign outflow this year
to RM4.2 billion.
In comparison, the cumulative
foreign outflow for the entire 2014
was RM6.93 billion, he said.
Zulkifli said foreign participation on Bursa declined last week,
after two weeks of elevated trading.
He said the daily average gross
purchase and sale fell below RM1
billion to RM901 million.
“Retail investors retreated from
the market again, after nibbling the
week before.
“Retailers sold RM137.9 million
last week, but most of the selling
was recorded last Friday, when
Malakoff was listed.
“Participation rate remained
depressed at RM644 million,
among the lowest this year. Risk
aversion is still very high among
retail investors,” he said.
Zulkifli said for the third week in
a row, local institutions supported
the market strongly.
Local institutions absorbed
RM675.6 million last week, the
fourth highest in a week this year.
He said participation rate was
still elevated at RM2 billion.
Zulkifli said local institutions
have absorbed RM5.36 billion
net so far this year. Last year, they
mopped up RM8.18 billion net.
On the regional markets, Zulkifli
said global equity prices demonstrated a commendable degree of
resilience last week.
He said the focus was more towards the bond market, where
prices of sovereign debt securities
had slumped in the last few weeks.
CIMB: No MSS
outside Malaysia and
Indonesia
Thai unit too small for the exercise, says CEO
BY J E FFRE Y TAN
KUALA LUMPUR: CIMB Group
Holdings Bhd, which announced its
first-ever group-wide mutual separation scheme (MSS) last Friday, said it
will not implement the MSS outside
Malaysia and Indonesia.
“No, we have already introduced
it in Malaysia and Indonesia. CIMB
Thai is too small [for the MSS],” CIMB
group chief executive officer Tengku
Datuk Zafrul Tengku Abdul Aziz told
The Edge Financial Daily yesterday.
His comments came on the sidelines of the launch of Khazanah Nasional Bhd’s first sustainable and
responsible investment sukuk worth
RM1 billion.
When asked about the group’s
expected operational cost saving
from the MSS, Zafrul declined to
reveal any figures.
“It depends; it is voluntary. Depending on how many people (CIMB
staff ) will accept it (MSS), then we
will know,” he said. However, he confirmed that the figures reported by
The Edge Financial Daily yesterday
were “quite accurate”.
The daily, quoting sources, said
that the group is looking to cut about
RM400 million a year to hit its targeted cost to income ratio of 55%
this year.
It also noted that staff costs currently make up 55% of the group’s
total cost, and that CIMB (fundamental: 1.05; valuation: 1.65) will look at
other cost-cutting measures, such as
its procurement and strategic review
costs to trim its overhead.
It was previously reported that
employees who are interested in the
MSS are expected to submit their
applications by May 29.
Successful applicants will receive
packages based on rank and years
of service, as well as options for extended medical cover for three years
and participation in programmes.
The Edge Research’s fundamental score
reflects a company’s profitability and balance sheet strength, calculated based on
historical numbers. The valuation score
determines if a stock is attractively valued
or not, also based on historical numbers.
A score of 3 suggests strong fundamentals
and attractive valuations. Go to www.
theedgemarkets.com for more details
on a company’s financial dashboard.
8 HOME BUSINESS
Star strategises to
reduce print reliance
Plans to expand its reach in Southeast Asia
BY SA NGEETHA AM ARTHALINGAM
PETALING JAYA: Media group Star
Publications (Malaysia) Bhd has
drawn up five strategies to reduce
its reliance on revenue from print
advertising and shift its focus to
digital revenue, as well as expand
its reach in Southeast Asia.
Chairman Datuk Fu Ah Kiow listed the strategies that Star Publications would adopt, which include
making synergistic investments and
introducing an audience interest
marketing database system next
month that allows the customisation of target markets.
The others are expanding its advertising and event management
segment that organises exhibitions,
enhancing corporate governance,
and improving efficiency and productivity.
Fu said this transition is important at a time when news needs to
be distributed in the fastest manner
possible through various channels.
"While the print segment contributes about 70% to the group's reve-
nue, we cannot be overdependent
on it to move forward. We are looking at a digital transformation, which
entails the presentation of news and
content in the right format," he told
reporters after the company’s annual
general meeting (AGM) yesterday.
“We will increase our video content and deliver it in the fastest
manner possible via print, radio
online and television," he said.
The group will launch its Star TV
portal in September, a site that will
aggregate and collate videos from
all its websites, to expand its footprint in Southeast Asia through its
present working relationship with
foreign publications.
Its flagship Star Online and
R.AGE portals will be revamped to
include more video content, he said.
Fu, however, declined to reveal
the capital expenditure and revenue
growth from the strategies.
Star Publications, which will
announce its first-quarter results
today, reported a 22% drop in net
profit to RM111.42 million for the financial year ended December 2014
(FY14) from RM142.88 million in
FY13. Revenue was flat at RM1.01
billion versus RM1.03 billion in the
same period.
Last month, the group announced its 64.1%-owned Singapore-listed unit Cityneon Holdings
Ltd was buying Singapore-based
Victory Hill Exhibitions Pte Ltd, an
exhibition services provider which
holds the rights to provide exhibition services for Marvel Comics,
from Philadelphia Investments
Pte Ltd for S$21 million (RM56.68
million).
Fu said the proposed acquisition is expected to be completed
"in the next few months" and will
contribute "substantially" to group
revenue.
Meanwhile, Star Publications
group managing director Datuk Seri
Wong Chun Wai said the group remains “cautiously optimistic” about
its financial performance for FY15.
Earlier at the AGM, Star Publications shareholders approved
the group's change of name to Star
Media Group Bhd.
Top fund sees bargains in small
stocks at 39% discount
KUALA LUMPUR: The country’s top
performing fund manager is adding to holdings of small cap stocks,
betting that a bull market rally will
continue as earnings improve and
valuations trail larger peers. Kenanga
Investors Bhd favours exporters and
builders as the US economy recovers
and Malaysia boosts spending on infrastructure, chief investment officer
Lee Sook Yee said in an interview.
The FBM Small Cap Index is valued at 10.2 times estimated earnings,
a 39% discount to the FBM KLCI.
Smaller companies are involved
in more diverse industries with better
prospects than larger peers, which
are dominated by banks and commodity producers, Lee said. Profits
of companies in the small cap measure will increase 21% in the next 12
months, compared with a 3.5% gain
for the KLCI, analyst estimates compiled by Bloomberg show.
“Small caps will continue to outperform the narrower KLCI and
lead the recovery,” said Lee, who
helps oversee RM5.6 billion. “Even
after the outperformance, we continue to see value within this space.”
The small cap index rose 0.3% to a
three-week high at the close in Kuala
Lumpur. It has surged 11% this year,
more than triple the KLCI’s 3.5% gain.
Lee said exporters are benefiting
from the weaker ringgit as well as being “indirect proxies” to the recovery
in both the technology industry and
US consumer confidence.
Inari Amertron Bhd, the semiconductor packager whose main client is US-based Avago Technologies
Ltd, is among the best performers on
the small cap gauge this year, with
a 41% advance. Malaysian Pacific
Industries Bhd, a semiconductor
company which gets 29% of its revenue from the US, has jumped 48%.
The ringgit has fallen 6.1% against
the US dollar in the past six months,
the second biggest drop after the
rupiah, helping to boost overseas
earnings for exporters. The US labour
market has continued to strengthen, with data last week showing the
fewest jobless claims in 15 years,
while the Nasdaq Composite in April
topped its 2000 dot-com-era high.
The Kenanga Growth Fund, set
up for long-term capital growth
and to outperform the KLCI, has
returned 21% annually in the past
five years to beat 87 peers with assets of more than US$100 million
(RM357 million), according to data
compiled by Bloomberg. Kenanga’s
top holdings include builders IJM
Corp and Gamuda Bhd.
IJM, whose net income doubled
in 2014 from a year earlier, has risen 8.4% this year. Gamuda, which is
helping to develop the Klang Valley
Mass Rail Transit system, posted a
33% increase in 2014 net income.
The government plans to spend
RM48.5 billion on development
this year, including the Pan-Borneo
Highway and other transport links.
Malaysia cut its 2015 economic
growth target in January to 4.5% to
5.5% from an earlier projection of as
much as 6%, citing the dampening
effect of an oil price slide. Oil-related contributions make up almost
30% of annual state revenue.
“The larger cap stocks within
the KLCI consist mainly of banks,
plantation and oil and gas names,
and the current macro environment
doesn’t favour those few sectors
aforementioned,” Lee said. “On
the other hand, the small cap universe consists of companies with
very diversified business sectors
and some of them offer superior
earnings growth profiles.”
Malayan Banking Bhd and Tenaga Nasional Bhd, the nation’s two
biggest listed companies by market value, have gained less than
2% this year. Oil palm planter IOI
Corp has fallen 11% in the period
after reporting a 75% slump in second-quarter net income.
The gauge of smaller companies
entered a bull market last month
after rebounding more than 20%
from its December low. The measure has since dropped 2.6% from
its April 21 high.
“The small cap index has had a
good run year-to-date,” Lee said.
“As long as macro conditions remain intact, any corrections are
more likely to represent a mid-cycle
consolidation rather than a trend
reversal.” — Bloomberg
GEMFIVE.com aims to go
regional in three years
KUALA LUMPUR: Local online
e-commerce platform GEMFIVE.
com, a project by Quek Kon Sean,
the youngest son of tycoon Tan
Sri Quek Leng Chan, plans to go
regional in the next three years
and is eyeing Indonesia, Vietnam
and Singapore as potential high
growth markets.
"Some of the countries we
think where we have potential
for strong growth are Indonesia,
Vietnam and Singapore. We hope
to have a strong presence in the
Southeast Asian market," GEMFIVE.com chief executive officer
Moey Tan told reporters after the
official launch of GEMFIVE.com
yesterday. She said Singapore has
one of the highest rates of online
retail consumer spend (1% to
1.2%) among Southeast Asian
countries — still low — while
Malaysia’s is at less than 1%.
GEMFIVE.com is owned and
operated by GuoLine eMarketing
Sdn Bhd, a member of Hong Leong group, which is the principal
investor in GEMFIVE.com. The
e-commerce site offers more than
300 brands, with products like
Tan: We hope to have a strong presence
in the Southeast Asian market. Photo
by Patrick Goh
clothing, baby products, home
decor and electronics.
“GEMFIVE focuses on curation, value and simplicity. We
help customers discover authentic products and exciting brands
— many of which are emerging
or are not easily accessible locally,” said Tan.
She said a GEMFIVE mobile
app will be launched soon.
R E S U LT S I N B R I E F
Pharmaniaga 1Q net profit up 21.3%
KUALA LUMPUR: Pharmaniaga Bhd’s net profit rose 21.3% on-year
to RM31.79 million or 12.28 sen per share for the first quarter ended March (1QFY15) from RM26.22 million or 10.13 sen per share
on higher manufacturing profit margins.
Revenue was flat at RM471.9 million against RM468.67 million
in 1QFY14. The group also declared a first interim dividend of seven sen per share for the financial year ending December (FY15),
payable on June 25.
In a statement, Pharmaniaga (fundamental:0.95; valuation:1.70)
said its manufacturing division recorded a pre-tax profit of RM28
million compared with RM23 million in 1QFY14, due to the group’s
ongoing efforts to strengthen operational efficiencies and reduce
manufacturing costs.
Chairman Tan Sri Lodin Wok Kamaruddin said Pharmaniaga
will maintain its drive to strengthen organic growth while implementing cost optimisation measures. He said manufacturing will
remain a key driver of growth for the group as it scales up manufacturing capabilities in Malaysia and Indonesia.
Separately, Pharmaniaga said its proposed joint venture agreement with Modern Healthcare Solutions Co Ltd to build a pharmaceutical manufacturing plant in Saudi Arabia lapsed last Friday.
“Both parties (Pharmaniaga and Modern) have not determined the
new extension date,” said Pharmaniaga. — by Supriya Surendran
I-Bhd 1Q earnings jump 68%
KUALA LUMPUR: I-Bhd’s net profit jumped 67.7% on-year to
RM10.24 million or 0.96 sen a share for the first quarter ended
March (1QFY15) from RM6.1 million or 1.27 sen a share, driven
by its property development segment.
Revenue grew 67.8% on-year to RM75.35 million from RM44.91
million. In a statement, I-Bhd deputy chairman Datuk Eu Hong
Chew said he expects both the property development and leisure segments to continue with their positive contributions to the
group’s performance.
“The results are in line with the group’s growth plan to achieve
revenue of RM500 million per year come 2018. By then, we expect
the leisure segment’s revenue to be double that of 2014, while having completed our RM1 billion investment property programme,”
he said. Eu said the group has now reached a stage where property
development will continue to be the major contributor for the group.
He noted that in 1QFY15, I-Bhd (valuation: 2.4, fundamental:
3) launched the Paris-inspired “Parisien Tower” service residence,
which is the second of three thematic residential tower collections
to be rolled out within the 72-acre (29ha) freehold i-City ultrapolis
in Shah Alam, Selangor. The launch of the “Hyde Tower” is planned
for the second half of the year. — by Joshua Lim
P R O P E RT Y S NA P S H
T 9
Source: theedgeproperty.com
What’s affordable in KLCC?
KLCC Top 5 most expensive condominiums/apartments
by average transacted price
• The prices of condominiums in the KLCC area reflect the prestige of
living in the heart of the city.
• 3Q2014 recorded an average price per square foot (psf ) of non-landed
properties at RM1,052 psf, while the average transaction price of a unit
was RM1.68 million.
• Based on theedgeproperty.com’s analysis of transactions for the 12
months to 3Q2014, about a quarter of transactions (25.6%) were for
units priced above RM2.0 million. The second largest price range by
market share was for units priced between RM1.0 – 1.5 million (22.8%).
• The most expensive address belongs to The Binjai with an average
transacted unit price of RM5 million. Located within the KLCC
development, average transacted prices here were RM2,005 psf.
• The other most expensive developments are The Pearl, The Troika and
Binjai Residency with average transacted unit prices at RM4.70 million,
RM2.99 million and RM2.92 million, respectively.
• The most affordable development in KLCC is Parkview Service
Apartment with an average transacted unit price at RM620,000. The
compact units at 431 sq ft are also the smallest in the area.
• Other affordable developments are The Orion (RM680,000), Fraser
Place (RM790,000) and Soho Suites (RM870,000). Fraser Place and
Soho Suites comprise mainly smaller units while The Orion has larger
units, but is situated much further away on Jalan Tun Razak, nearer
Istana Budaya.
• There are sometimes bargains to be found. During the period in review,
a 3 bedroom unit at The Orion changed hands for only RM354,000.
KLCC Top 5 least expensive condominiums/apartments
The Analytics are based on the data available at the date of publication and may be subject to further revision as
and when more data is made available to us.
For more of such information across Malaysia and Singapore, log onto the
theedgeproperty.com. The one-stop portal for all your property needs,
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Landmarks inks JV for hotels in Bintan
BY SU L H I A ZMA N
China recovery takes
hold as Shenzhen
property leads gains
KUALA LUMPUR: Resort and property developer Landmarks Bhd has teamed up with
Singapore-based ML Hotel Investments Pte
Ltd to develop, own and operate two international hotel chains at its flagship Treasure
Bay Bintan development in Bintan, Indonesia.
In a statement yesterday, Landmarks
said its wholly-owned subsidiary PT Bintan
Hotel Utama has signed a joint venture (JV)
agreement with ML Hotel Investments for
the proposed projects.
Both hotels, Mercure and ibis Budget,
are expected to open in 2017 and will be
managed by Accor Group.
Mercure will be a mid-scale hotel with its
personality rooted in the local culture, while
ibis Budget will provide essential comfort at
a budget price.
When completed, Mercure will be the
island’s tallest landmark at 10 stories. It will
offer 182 rooms to Treasure Bay Bintan, of
which 114 long-term leases will be made
available for sale.
ibis Budget, meanwhile, will feature 162
rooms.
“With this JV and other partnerships with
international hospitality brands in the pipeline,
we are poised to position Treasure Bay Bintan
as Southeast Asia’s leading leisure destination,”
said Landmarks chief operating officer Fong
Chee Khuen in a statement yesterday.
“We are confident that Phase 1 of Treasure Bay Bintan will serve as a catalyst in
creating lasting real estate value and augmenting Bintan’s tourism offering, by bringing in unique leisure and entertainment
concepts not found anywhere else in the
region,” he said.
Landmarks (fundamental: 1.65; valuation:
0.9) shares closed at RM1.37 yesterday, with
a market capitalisation of RM658.71 million.
SHENZHEN: Yi Anwen bought a home
for 1.95 million yuan (RM1.12 million)
here from embattled developer Kaisa
Group Holdings Ltd, which has defaulted
on some of its debts while being investigated as part of a corruption probe.
Although Yi and hundreds of other
buyers in Shenzhen have spent the past
six months fighting to take ownership
of their homes despite being blocked by
the investigation, the 33-year-old engineer, who bought in September, doesn’t
want his money back now.
“Home prices in Shenzhen have risen so much in the past few months,”
Yi said. “Buying a similar home now
would cost me about 2.5 million yuan.
Refund? No way!”
Shenzhen, where home prices have
been rising since December, is shaping
up as ground zero of a property market
recovery that is slowly taking hold in China’s major cities. In Beijing and Tianjin,
prices also have been increasing. And
the decline in average prices in 70 cities
tracked by the government narrowed to
the lowest in 10 months in March after
policymakers began reversing four years of
property curbs and cutting interest rates. .
“If simultaneous increases in both
price and volume are the criteria of a
recovery, that’s what we’re seeing right
now, said Alan Jin, a Hong Kong-based
real estate analyst at Mizuho Securities
Asia Ltd.”
JPMorgan Chase & Co, Barclays plc
and other banks have raised share price
targets for Chinese developers by as
much as 41%, underpinning a stock
market rally that has pushed valuations
to record highs. — Bloomberg
01
01. Artist’s impression of the
Mercure hotel swimming pool
recreation area.
02. Artist’s impression of the Mercure
hotel in Bintan, Indonesia.
The Edge Research’s fundamental score
reflects a company’s profitability and balance sheet strength, calculated based on
historical numbers. The valuation score
determines if a stock is attractively valued
or not, also based on historical numbers.
A score of 3 suggests strong fundamentals
and attractive valuations. Go to www.theedgemarkets.com for details on a company’s financial dashboard.
02
12 B R O K E R S’ C A L L
CIMB’s MSS comes
after a slew of
headcount cuts
Amway registers significant growth
in 1QFY15 bottom line
Amway (M) Holdings Bhd
(May 18, RM11.04)
Maintain buy with a target price
(TP) of RM12.30: Amway (M)
Holdings’ first quarter of financial
year 2015 (1QFY15) results were
above our expectations, making up
to 38% and 35% of our full-year forecast and consensus’ respectively.
Year-on-year top-line revenue
showed growth of 51% to RM322
million from RM213.3 million a
year ago on the back of pre-goods
and services tax (GST) buying and
well received pre-GST promotions
focusing on high value items.
Significant growth (an increase
of 44.7%) was seen in the bottom
line due to better sales performance.
We are maintaining our FY15
and FY16 earnings forecast at
RM95.6 million and RM94.4 million
respectively with TP of RM12.30.
The implementation of the GST
has resulted in consumers buying in bulk hence the better quarter-on-quarter (q-o-q) sales performance for 1QFY15, up by 40.1%
to RM322 million from RM299.9
million in the 4QFY14.
Q-o-q bottom line improved by
58.6% of RM36.8 million.
The company is on a net cash
position of RM227.4 million, and
has declared single interim single-tier dividend of 10 sen (payment on June 17).
We are looking forward to a
gross dividend amounting 65 sen
for 2015, translating into a prospective dividend yield of 6.4%.
At this juncture, in view of
moderating demand, low consumer sentiment, tougher market
and economic conditions moving forward we are maintaining
our FY15 and FY16 net earnings
forecast at RM95.6 million and
RM94.4 million respectively.
Additional increase in cost due
to the GST is absorbed by Amway.
Therefore, we expect compression
of some margin this year from the
aggressive marketing and promotional activities which will be done
by the management in order to
maintain their leadership status.
Our TP is unchanged at RM12.30
based on unchanged discounted
cash flow (DCF) methodology
(weighted average cost of capital:
7.5%). We have a “buy” recommendation for Amway. — BIMB
Securities Sdn Bhd, May 18
CIMB Group Holdings Bhd
(May 18, RM5.95)
Maintain market perform with a
target price (TP) of RM6.02: Last
Friday, CIMB Group Holdings announced that it will be offering a
mutual separation scheme to its
Malaysian and Indonesian employees. This is in attempt to further bring down its operating cost
structure as personnel expenses
make up a huge chunk of its costs.
(financial year 2014 or FY14: 56%).
We were not entirely surprised
by the move as CIMB aims to be
a leaner entity. This comes after
a slew of headcount cuts within
its investment banking business
across the region.
To recap, CIMB hopes to achieve
return on equity (ROE) in excess
of 15% (FY14: 9%), common equity Tier-1 ratio of more than 11%
(FY14: 11%), and cost-to-income
ratio of less than 50% (FY14: 59%)
by 2018.
With this exercise, we still reckon that target 2018 (T18) is not an
easy task for CIMB to accomplish.
Structural and cyclical headwinds
clouding the overall banking industry are hindrances to its aspiration — tepid loan or deposits
growth, net interest margin (NIM)
compression and weak capital
market activities.
Based on our calculations,
CIMB’s net profit needs to accelerate by a staggering four-year compound annual growth rate (CAGR)
(2014 to 2018) of 26% in order to
see its ROE climb above 15%. In
our opinion, this is a difficult feat
to pull off.
PT CIMB Niaga Tbk, its 98%-owned
Amway (Malaysia) Holdings Bhd
FYE DEC (RM MIL)
2012
2013E
2014E
2015E
2016E
Revenue
797.5
834.2
888.3
910.4
935.8
Ebit
127.0
145.2
138.2
132.6
131.0
Pretax profit
137.1
145.2
133.1
127.5
125.9
Net profit
99.7
109.0
99.9
95.6
94.4
60.7
66.3
60.7
58.2
57.4
EPS (sen)
10.8
9.3
(8.4)
(4.2)
(1.3
EPS growth (%)
16.7
15.3
16.7
17.4
17.7
PER (x)
62.5
62.5
65.0
65.0
65.0
DPS (sen)
6.2
6.2
6.4
6.4
6.4
Dividend yield (%)
1.36
1.40
1.35
1.45
1.55
NTA/share (RM)
15.9
17.4
15.6
14.6
14.0
Ebit margin (%)
17.2
17.4
15.0
14.0
13.5
Pre-tax margin (%)
27.3
24.9
25.0
25.0
25.0
Effective tax rate (%)
47.4
47.2
43.3
40.6
37.5
ROE (%)
31.1
32.9
29.3
26.3
23.7
ROA (%)
net cash net cash net cash net cash net cash
Net gearing (x)
Growth ratios
Turnover (%)
Ebit (%)
Pre-tax profit (%)
Net profit (%)
8.4
13.8
13.3
10.8
4.6
14.3
5.9
9.3
6.5
(4.8)
(8.3)
(8.4)
2.5
(4.1)
(4.2)
(4.2)
2.8
(1.2)
(1.3)
(1.3)
CIMB Group Holdings Bhd
FYE DEC (RM MIL)
Net interest income
Islamic Banking Inc.
Non interest income
Total income
PBT
Core net profit (NP)
Consensus NP
EPS (sen)
EPS growth (%)
DPS (sen)
BV/Share (RM)
ROE (%)
PER (x)
Price/NTA (x)
Price/Book (x)
Dividend yield (%)
2014A
2015E
2016E
8,655.5
1,461.3
3,931.1
14,048.0
4,276.4
3,159.0
38.1
(30.9)
15.0
4.53
9.3
15.6
1.8
1.3
2.5
9,320.0
1,457.2
4,183.6
14,960.7
5,257.7
3,990.6
4,041.6
46.8
22.9
19.3
4.85
10.1
12.7
1.6
1.2
3.2
9,822.9
1,537.7
4,383.1
15,743.7
5,692.4
4,320.6
4,533.5
49.3
5.2
20.3
5.16
10.0
12.1
1.5
1.2
3.4
Source: Company, AmResearch estimates
Indonesia subsidiary, will continue
to drag the group’s overall financial
performance (contributed 19% of
FY14 profit before tax or PBT) as
it is likely to grapple with another
round of high bad loan provisioning in the second quarter of 2015
(2Q15); its gross non-performing
loans ratio is expected to rise and
come in between 4% and 4.5% this
year (1Q15: 4%).
Furthermore, CIMB Niaga’s FY15
NIM is expected to taper below 5%
(1Q15: 5.2%) as a result of the shift
in its loan portfolio mix to higher
quality assets.
No changes were made to our
forecasts. The group is poised to
release its 1Q15 results tomorrow.
Our Gordon growth model derives a TP of RM6.02 as unchanged.
This is based on 1.24 times FY15
price-to-book ratio (P/B); we utilised: cost of equity of 8.8%, FY15
ROE of 10.1%, and terminal growth
of 3%.
The lower P/B multiple is to reflect slower growth and weaker
ROE generation moving forward.
Recall that CIMB was traded at
average P/B of two times for the
past two years when it generated
ROE of more than 15%.
Risks to our call are a steeper
margin squeeze, a lower-than-expected loan and deposits growth,
worse-than-expected deterioration in asset quality, and a further
slowdown in capital market activities and adverse currency fluctuations. — Kenanga Investment Bank
Bhd, May 18
Source: BIMB securities research
LHFB stake sale may cap Carlsberg’s innovation activities
Carslberg Brewery (M) Bhd
(May 18, RM12.90)
Maintain buy with a target price of
RM13.90: We maintain our “buy”
rating on Carlsberg Brewery with
an unchanged discounted cash flow
(DCF)-derived fair value of RM13.90
per share.
Last Friday, Carlsberg announced
that it is selling its entire 70% stake in
Luen Heng F&B Sdn Bhd (LHFB) to
Capriwood Sdn Bhd for a total cash
consideration of RM19.5 million.
LHFB’s other 30% equity interest
is held by Luen Heng Agency Sdn
Bhd. Carlsberg had on Dec 1, 2008,
purchased the 70% stake in LHFB for
RM2.1 million.
LHFB is primarily involved in the
importation, distribution and sale
of alcoholic and non-alcoholic beverages including beer, hard liquor,
Carlsberg Brewery Malaysia Bhd
FYE DEC 31
2013
2014
2015F
2016F
2017F
Revenue
1,555.1
Core net profit
183.9
60.2
FD Core EPS (sen)
(4.0)
FD Core EPS growth (%)
Consensus net profit
61.0
DPS (sen)
21.1
PER (x)
15.0
EV/Ebitda (x)
4.7
Div yield (%)
64.2
ROE (%)
1,635.1
211.6
69.2
15.0
71.0
18.3
13.2
5.5
72.2
1,735.6
234.5
76.7
10.8
191.3
77.0
16.5
12.0
6.0
80.9
1,832.4
251.8
82.4
7.4
201.3
83.0
15.4
11.3
6.5
94.6
1,920.8
271.5
88.8
7.8
215.1
90.0
14.3
10.5
7.0
103.0
Source: Company, AmResearch estimates
wine as well as other food and nonfood items.
According to Carlsberg’s management, the rationale underpinning the
disposal was its strategy of focusing
on the malt liquor market (MLM),
which consists of beer, stout and cider
as well as its emphasis on maximising
its return on invested capital.
As it is, wine and spirits are very
capital-intensive investments given
the high value of the products and the
need to maintain inventories. Additionally, these products offer limited
commercial synergies with MLM as
they are of a different segment.
In Malaysia, MLM products dominate the alcoholic beverage market
at 80%, while wine and spirits each
has 10%.
While we are surprised by this divestment, we understand that Carlsberg will continue to sell selected
imported premium beers by LHFB
as part of its portfolio.
The LHFB purchase effectively
gives Carlsberg exclusive distribution
and sales rights to a range of imported
premium beers such as Hoegaarden,
Stella Artois and Budweiser.
That said, it may cap Carlsberg’s
innovation activities as Carlsberg can
no longer immediately or exclusively
leverage on LHFB’s labels to quickly
adapt to consumers’ ever-changing
taste.
In financial year 2014 (FY14),
LHFB contributed about RM10 million (or 5%) to Carlsberg’s net profit.
Based on our back-of-envelope calculations, the disposal could potentially
trim 2% to 7% off Carlsberg’s FY15
forecast (FY15F) to FY17F earnings
(including the one-off loss of RM10.9
million).
We are, however, leaving our FY15F
to FY17F earnings unchanged for now
pending the release of its first-quarter financial year 2015 (1QFY15) results. The disposal is expected to be
completed in the 3QFY15 with the
proceeds being reinvested for working capital and commercial expenses. —AmResearch Sdn Bhd, May 18.
14 B R O K E R S’ C A L L
Good news flow
for MRT Line 2 and
LRT Line 3 in 2H
Ghana FPSO services to contribute
significantly to Yinson’s profits
Construction: Cost comparison of MRT 2 vs LRT 3
MRT 2
LRT 3
Total
TOTAL
COST
(RM MIL)
DISTANCE
(KM)
COST/KM
(RM MIL)
UNDERGROUND
TUNNEL
(KM)
AWARD
PHASE
% OF
TUNNELLING
PORTION’S
LENGTH
25,000
9,000
34,000
52.2
36.0
88
478.9
250.0
13.5
2
15.5
1H16
1H16
26
1
27
Source: CIMB, Public display
Construction sector
Maintain overweight: We visited the
public display of the alignments of
the Klang Valley Mass Rapid Transit
(MRT) Line 2 and Light Rail Transit
(LRT) Line 3. This is a three-month
event before the government executes the land acquisition part and
prior to the pre-qualification and
award phase.
Key details we garnered are: (i)
the pre-award phase for MRT Line
2 and LRT Line 3 looks likely to gain
traction in the second half of 2015
(2H15); (ii) the total estimated cost
of both lines is RM34 billion — the
cost per km of MRT Line 2 is almost
double that of LRT Line 3 as 26% of
the total length of MRT Line 2 will
be underground compared to LRT
Line 3’s 1%; (iii) the award for LRT
Line 3’s project development partner (PDP) is targeted for July 2015
(likely 6% PDP fees) while MRT Line
3 has already awarded the PDP role
to MMC-Gamuda Joint Venture (JV)
Sdn Bhd and (iv) awards for LRT Line
3 could begin from end-2015 at the
earliest and MRT Line 2 in 1H16.
Although there were no major
surprises, indications of timing and
major milestones we gathered from
our checks with the officials at the
show that 2H15 is likely to be a period of good news flow for both MRT
Line 2 and LRT Line 3.
The revised alignment of MRT
Line 2 has resulted in a longer underground portion that accommodates Bandar Malaysia as a feature
station of the planned high-speed
rail (HSR) link to Singapore. This is
positive for Gamuda Bhd as it could
mean a larger share of contract value compared with the RM4 billion
package for MRT Line 1.
We expect the pre-qualification
and award phase to feature other contractors under our coverage that have
won MRT Line 1 packages, including
IJM Corp Bhd and Sunway Bhd.
Accumulate potential MRT Line
2 and LRT Line 3 plays ahead of the
award phase in 2H15. MRT Line 2’s
potential beneficiary list is likely to
be broader, similar to the impact of
MRT Line 1, while LRT Line 3’s next
key event is the award of the PDP role
in July this year.
We are overall positive as the public display of lines marks the start of
the pre-award phase of both projects, estimated to cost a combined
RM34 billion.
We maintain “overweight”, with
Gamuda (the biggest beneficiary of
MRT) and Muhibbah Engineering
(M) Bhd as top picks. — CIMB Investment Bank, May 18.
TBE power plant to boost
Malakoff ’s earnings
Malakoff Corp
(May 18, RM1.80)
Maintain outperform with a target
price of RM2.18: The performance of
Malakoff shares was lukewarm last
Friday due to heavy selling pressure,
which is contrary to our expectations.
Management issued a press statement last Friday evening denying that
the group is keen to acquire the power assets of Edra Global Energy Bhd.
We believe the knee-jerk reaction
is temporary, and we continue to like
Malakoff based on its independent
power producer (IPP) business model which provides the group with
consistent and sustainable revenue
streams throughout the power purchase agreement (PPA) concession
period with fuel cost pass-through
features.
We therefore reiterate our “outperform” call on Malakoff with a
target price (TP) of RM2.18. The current weakness in Malakoff ’s share
price provides an opportunity for
investors to accumulate. We expect
earnings growth will come from its
upcoming 1,000mw coal-fired Tanjung Bin Energy (TBE) power plant,
which is scheduled to commence
Yinson’s FPSO Adoon.
operations on March 1, 2016.
Despite earlier hiccups in the construction progress, the issues have
been resolved. In addition to the chief
executive officer Datuk Seri Syed
Faisal Albar’s assurance during the
initial public offering analysts’ briefing in April, our recent check with
management confirmed that TBE’s
progress is on track to commence
operations as scheduled.
We estimate revenue from TBE to
boost the group’s earnings by 46.6% in
the financial year ending December
2016 (FY16) and 29% in FY17.
Arising from the expectation of
higher earnings in FY16 and FY17,
dividend yields are correspondingly
anticipated to be higher, premised
on the group’s dividend policy of a
minimum 70% of profit after tax and
minority interest payout ratio. We
estimate dividend yield will be 4.6%
for FY16 and 5.9% for FY17.
According to news reports, the
Energy Commission is considering
extending the concessions of some
existing power plants which are expiring in the next few years due to
potential startup delays of awarded
power plant projects. We opine the
group’s Port Dickson power plant
stands a good chance to be considered for an extension of its PPA. In
addition to the plant’s good condition, its close proximity to the central
region would be an added benefit for
consideration of the extension.
The group is also believed to be
a front runner in a waste-to-energy
project for Kuala Lumpur at 1,000
tonnes per day and 25mw capacity.
Though contribution to the bottom line from this project is expected to be relatively small, it would
nevertheless provide an advantage
to the group to further explore other waste-to-energy project opportunities and expand its renewable
energy portfolio domestically and
internationally.
We anticipate the group will announce stronger first-quarter FY15
results compared with the previous
corresponding quarter as the recovery programme for its Tanjung Bin
power plant was completed in March
2014. We continue to like Malakoff
based on its IPP business model and
reiterate our “outperform” call with
a TP of RM2.18. — Public Investment
Bank Bhd, May 18.
Yinson Holdings Bhd
(May 18, RM3.11)
Upgrade to buy with a higher target price of RM3.60 from RM2.85:
We upgrade Yinson to a “buy” with
a higher fair value of RM3.60 per
share (from RM2.85 per share),
based on our sum-of-parts (SOP)
valuation.
Our fair value implies a financial year 2016 ending January forecast (FY16F) price- earnings ratio
(PER) of 25 times, a premium to
the oil and gas industry average of
17 times. We deem this justifiable
due to the strong counterparties
for its floating, production, storage and offloading vessels (FPSO)
and the potential for earnings to
double upon the commencement
of the Offshore Cape Three Points
block (OCTP) FPSO in Ghana.
Following a recent meeting
with management, we raise our
valuation of OCTP as we have
imputed a higher internal rate
of return of 12.5% as guided by
management, compared with
our previous assumption of 10%.
The OCTP project currently accounts for 48% of our total SOP
valuation.
Upon the commencement of
operations in September 2017,
the FPSO is expected to contribute to the bottom line significantly, with approximately RM150
million full-year accretion.
We have accounted for four
months contribution from the
project for FY18F. Earnings for
FY19F should double FY15F’s, although this is not currently within
our forecast horizon.
We are taking a more constructive stance on the OCTP
contract. We understand the execution and counterparty risks appear somewhat low given that its
customer, Eni SpA, is one of the
largest integrated energy companies in the world with a market capitalisation of €61 billion
(RM247 million) and a healthy
balance sheet (net gearing of 0.3
times). Furthermore, Yinson does
not bear the risk of lower crude
oil prices potentially causing the
production from the FPSO to be
economically unfeasible. This is
because Yinson is well protected
by the contract terms between the
two parties. The early termination fees would preserve its net
present value currently derived
from the project.
With 75:25 debt-to-equity
funding for the project, the group’s
net gearing is expected to increase
from 0.32 times currently to more
than two times over the next two to
three years. This would be progressively offset by the strong earnings
and cash flow generated from
the FPSOs.
Yinson’s plan to divest its nonoil and gas operations (valued at
RM273 million) by this year will
further help pare down its gearing levels.
Meanwhile, we understand
that Yinson is actively bidding for
more FPSO contracts.
One such contract is the Ca
Rong Do project in Vietnam by
Talisman Energy Inc (now Repsol
SA), according to international
oil and gas newspaper Upstream.
The FPSO will have a production capacity of between 25,000
barrels per day (bpd) of oil and
30,000 bpd, plus 60 million standard cu ft per day of gas, with first
production targeted in the second
quarter of calendar year 2018.
The stock currently trades at a
FY16F PER of 21 times. The entry
of Kencana Capital Sdn Bhd as
the second largest shareholder
should continue to underpin the
sentiment of the stock, given its
excellent track record in growing Kencana Petroleum (subsequently SapuraKencana Petroleum Bhd) into one of the largest
oil and gas service providers in
the country. — AmResearch Sdn
Bhd, May 18.
Yinson Holdings Bhd
FYE JAN (RM MIL)
2015
2016F
2017F
2018F
Revenue
1,083.4
Core net profit
144.7
14.0
FD Core EPS (sen)
20.2
FD Core EPS growth (%)
Consensus net profit
1.5
DPS (sen)
22.0
PER (x)
15.5
EV/Ebitda (x)
0.5
Div yield (%)
25.0
ROE (%)
33.1
Net gearing (%)
1,124.2
148.1
14.3
2.4
119.2
2.5
21.5
17.5
0.8
10.2
60.4
1,171.8
151.6
14.7
2.4
137.2
2.5
21.0
23.4
0.8
9.6
127.3
1,365.6
209.4
20.3
38.1
137.0
2.5
15.2
16.5
0.8
12.1
156.6
Source: Company, AmResearch
H O M E 15
Husam sticks to contest for PAS veep
KUALA LUMPUR: Datuk Husam
Musa will stick to defending his
PAS vice president’s post and confirmed yesterday his rejection of
nominations for him to run for
party president or deputy president, despite being eligible to
contest either position.
In a statement, Husam apologised to the party members and
divisions who had nominated
him for the top two posts, held
by Datuk Seri Abdul Hadi Awang
and Mohamad Sabu respectively.
“With great apologies to all divisions and members who have
great expectations, I only intend
to accept the nomination for PAS
vice president post that I hold
now.
“I understand their concerns
especially concerning the direction of the Islamic struggle of
PAS in Malaysia for many years
to come,” Husam said.
Husam had received eight
n o m i n a t i o n s f o r t h e PA S
presidency.
His withdrawal from the race
for number one now leaves that
contest to be waged between former vice president and party veteran Ahmad Awang and incumbent Hadi.
Another eligible contender
for the presidency, Datuk Tuan
Ibrahim Tuan Man, had earlier declined to run against Hadi
and is now gunning for deputy
presidency against incumbent
Mohamad.
PAS will hold its elections for
new office bearers at its 61st muktamar or annual general assembly next month. The elections
will be historic as this marks the
first time the presidency is being
contested.
Husam in his statement said it
was important that PAS be led by
the ulama (clerics) and reminded
party members not to fall for the
“ploys” of their political enemies.
“What has been achieved
by PAS’ struggle today is the
continuation of approach, strategy
and method that were decided
by our predecessors through
Husam: With great
apologies to all
divisions and members
who have great
expectations, I only
intend to accept the
nomination for PAS
vice president post that
I hold now. Photo by
The Malaysian Insider
discussions and consensus at
all levels.”
But in a nod to continued
cooperation with Pakatan Rakyat allies, PKR and DAP, Husam
also said that PAS’ approach “to
take over the federal government
through the ‘PAS for all’ approach
to win the hearts of non-Muslims
was decided by consensus at all
levels and not based on the decision of any individual”.
The coming elections are expected to be hotly contested as
PAS also struggles to resolve internal differences over the Islamist party’s future and whether
it should continue cooperation
with the opposition pact. — The
Malaysian Insider
MPs failling to put nation
and people first, say lawyers
Instead of fulfilling oath, responsibilities are abdicated to political masters
BY V A N B A L AGA N
KUALA LUMPUR: Instead of fulfilling their oaths to serve the
electorate, members of parliament (MPs) have abdicated their
responsibilities to their political
masters, constitutional lawyers
said, warning that the nation and
its people will ultimately suffer
if the lawmakers fail to perform
their duties.
They said it appears that members of the Dewan Rakyat mechanically administer their oaths
to discharge their duties, including protecting the Federal Constitution.
Senior lawyer Datuk Dominic Puthucheary said the Dewan
Rakyat had failed to play its constitutional role because political
parties had taken control of the
house and turned it into a “Dewan Parti” (political hall).
“Representatives to the Dewan
Rakyat are elected by voters, but
the elected have given their loyalties to political leaders, and the
august body has become a Dewan
Parti,” said the 82-year-old, who
was a one-term Nibong Tebal MP
from 1995.
He said most elected representatives never understand their
roles or bother to find out what
they are expected to do as prescribed in the national charter.
“For many, it is a career and
not to perform a public duty as
lawmaker,” he said in response to
an impassioned speech by Gua Razaleigh, who had been elected
Musang MP Tengku Razaleigh without fail since 1974.
Hamzah to his fellow members
“The concentration of that
to put the nation and the people power in any individual is unconabove anyone else.
stitutional. That is not what conThe 222 Dewan Rakyat mem- stitutional democracy is about.
bers began sitting yesterday for
“Therefore, the members of
a month to discuss the affairs of the Dewan Rakyat have to decide
the state.
whether they want to fulfil the
In the March sitting, when pledge that they have taken or
debating the royal address, the abdicated their responsibilities
Kelantan prince, fondly known to a power outside the Dewan
as Ku Li, said Malaysia is in a Rakyat,” said Tengku Razaleigh.
state of political
Dominic
and economic
said there is
gridlock, and
no doubt that
Representatives to
this could only
Tengku Razathe
Dewan
Rakyat
be unlocked by
leigh hit the
Dewan Rakyat are elected by voters, nail right on
members.
but the elected have the head in his
He
expeech, but
given their loyalty to sadmitted
pressed conthere
cern over the political leaders, and needs to be a
mounting debt
the august body has revamp of the
i n c u r r e d b y become a Dewan Parti entire system of
1Malaysia Degovernance.
velopment Bhd
He also exas a result of
pressed dismay
obtaining unover the paroauthorised loans as well as the chial attitude of representatives
implementation of the goods and from Sabah and Sarawak, who
services tax.
are more concerned about their
“We are facing an unprece- territories and interests instead
dented challenge to fulfil the of national issues.
pledge to serve the nation and
Lawyer R Kenghadharan said
the people.
any parliamentarian, who is un“This is because the truth is able to adhere to noble values,
that the power of the Dewan Rak- would be a misfit and should vayat has constitutionally shifted to cate office as he or she is a gross
the leadership of the political par- liability to the democratic proty,” said the 77-year-old Tengku cess.
“Such incompetent parliamentarians will seriously damage the democratic process and
governance — and we have many
of those.”
“Unless the people rise to save
this institution, we risk our current system of governance collapsing completely and Malaysia becoming a failed state,” he
added.
Lawyer Edmond Bon said the
constitutional idea is that elected
representatives vote according to
their intellect and conscience to
be accountable to the people.
Bon said MPs could not act independently, like introducing a
motion of no-confidence against
the leader of the house, as the
party whip is enforced to maintain discipline.
He said what was articulated
by Tengku Razaleigh had been
advocated by civil society for the
removal of the concentration of
power within the hands of an individual or selected few.
Bon also said the proportionate representation system of MPs
— based on the percentage of
popular votes obtained — should
be looked into when parliamentary reforms are undertaken, as
done in the West.
“We should also allow citizens
direct access to the Dewan Rakyat
if a respectable number signed a
petition to debate public interest
issues,” he added. — The Malaysian Insider
IN BRIEF
Russia to blame for
downing MH17, says
British investigator
KUALA LUMPUR: Malaysia
Airlines flight MH17 was almost certainly shot down by
a Russian missile in spite of
the country’s insistence on the
contrary, a British investigator
said in a documentary aired
by Australia’s 60 Minutes. According to a report by The Mirror, Eliot Higgins and his team
spent months uncovering and
analysing YouTube videos as
well as social media images
posted by Russia’s own soldiers, using software previously
available only to the military.
Using a technique known as
“geotagging”, Higgins matched
the backgrounds in the images
to actual locations on Google
Maps. He and his team were
reportedly able to trace the
path of a BUK surface-to-air
missile from Russia’s 53rd Air
Defence Brigade base in Kursk
to the crash site near Hrabrove
in Ukraine. After the crash, it
was filmed driving back to the
base with one missile missing,
the report said. — The Malaysian Insider
Dr M: Pandikar is trying
to ‘shame’ me
KUALA LUMPUR: Former
prime minister Tun Dr Mahathir Mohamad said yesterday that Dewan Rakyat Speaker
Tan Sri Pandikar Amin Mulia
was trying to “shame” him by
denying his intention to resign
in a private meeting between
both men. “He is shaming me
by saying he never told me that.
He told me he does not want to
be speaker anymore and that
he was unhappy with how he
was being treated,” he added.
“He even told me he had sent
in his resignation to the prime
minister and will be communicating his decision to the PM,”
Dr Mahathir told reporters after
the launch of his new book yesterday. — The Malaysian Insider
Google enables virtual
tour of Melaka museums
MELAKA: Thirty-six museums
and galleries in Melaka are
now accessible via virtual tour
through Google, developed
by Melaka Museum Corporation and Kezerk Imaging.
Kezerk Imaging director Paul
Koh said through the project,
visitors would be able to obtain all information on the
museums and galleries via
Google Search and Google
Maps. — Bernama
Singapore lifts ban on
pork from Malaysia
SINGAPORE: After an absence of 16 years, pork meat
from Malaysia is finally back
on supermarket shelves in
Singapore. The Straits Times
reported yesterday that the
island republic’s Agri-Food &
Veterinary Authority recently
approved the import of frozen
pork from its neighbour, but
only from one slaughterhouse
in Sarawak, for now. — The
Malaysian Insider
16 H O M E
Uphold human rights
for Muslims, say lawyers
Or they will be discriminated against if religious council’s proposition is allowed
BY V A N B A L AGA N
KUALA LUMPUR: Muslims in secular Malaysia, who are also subject
to Islamic law, will be discriminated against if a religious council’s
proposition to exempt them from
enjoying all fundamental rights
under the Federal Constitution is
allowed, lawyers said.
They said this would leave only
non-Muslims to enjoy such universal human rights.
This line of argument also goes
against the teachings of Islam which
provide that the authorities respect
the faith of followers, similar to
those accorded in the constitution,
they said.
What is worrying, they said, is
that denying the majority population such rights would have an effect
on investor confidence in Malaysia,
and political leaders would lose all
moral authority to speak up on critical issues in international forums.
Lawyer Nizam Bashir told The
Malaysian Insider that if such a
proposition is upheld by the Federal Court, then Muslims may find
that “fundamental liberties” need
not be observed by the state legislature when enacting Islamic laws.
“The proposition that fundamental liberties are irrelevant when enacting Islamic law appears to be
unsupported by the principal source
of Islamic law, the Quran,” he said,
referring to the Federal Territories
Islamic Religious Council (MAIWP).
Nizam cited some examples such
as the right to privacy (Quran 24:27
and 49:12); the right to reputation
(Quran 49:11); freedom of conscience (Quran 2:256 and 10:99); and
presumption of innocence (Quran
17:15). He said this in response to
MAIWP, which opposes non-Mus-
lim lawyers practising syariah law,
and last week contended in court
that all Islamic enactments are excluded from fundamental liberties
in the Federal Constitution.
MAIWP lawyer Mohd Hanif Khatri Abdulla said this was a new point
of constitutional importance to
be raised against Victoria Jayaseele Martin’s appeal in the Federal
Court, in which the lawyer is seeking the right to practise Islamic law
in the Syariah Court.
The case will be heard on Aug 13.
Nizam added that one must also
not ignore the Universal Islamic
Declaration of Human Rights and
the Cairo Declaration on Human
Rights in Islam of which Malaysia
is a signatory.
Civil rights lawyer Syahredzan
Johan said the position adopted by
MAIWP is an attempt to rewrite the
constitution. “The secularity of the
constitution is enshrined in Article
4 which provides that the charter is
the highest law of the land and any
law that is inconsistent with the Federal constitution is null and void.”
Syahredzan said there are no provisos in fundamental liberty clauses
which allow these freedoms to be
denied to Muslims when it comes
to state syariah enactments.
“If we were to take MAIWP’s argument, then it would mean that Muslims have lesser fundamental liberties compared with non-Muslims.
Lawyer R Kenghadaran said
Mohd Hanif was attempting to
present a perverse argument, because the legal position was settled
that all laws, including syariah-related enactments passed by state
assemblies and laws by Parliament
(for Federal Territories) could not
override any provision in the Constitution. — The Malaysian Insider
JOY OF READING … McDonald’s launched the Happy Meal Book Programme yesterday to encourage family togetherness and celebrate the joy of reading. The
programme was officially launched by Women, Family and Community Development Minister Datuk Seri Rohani Abdul Karim and is supported by the ministry, McDonald’s said
in a statement. During the weekends, McDonald’s will play host to a series of family-oriented activities across selected restaurants nationwide. Activities include storytelling
competitions, Book Time with Ronald McDonald, and meeting with aspiring local author’s. Seen here , a young contestant in the storytelling competition in the Green Lane
McDonald’s restaurant in Penang impresses the other participants. Photo by McDonald’s
Ibrahim Ali loses defamation suit
BY A ZRI L A N N UAR
SHAH ALAM: The High Court threw
out yesterday a defamation suit by
Perkasa president Datuk Ibrahim
Ali against theSun and two of the
English daily’s former editors.
Judicial commissioner Gunalan Muniandy said the article was
not about Ibrahim, but the Malay
rights group which the latter heads.
Ibrahim had brought the RM5
million suit against theSun, former
managing editor Chong Cheng Hai
and ex-deputy editor (special reports and investigations) Terence
Fernandez for an article on the Sultan of Selangor’s refusal to launch
Perkasa’s first general assembly.
The article titled “Sultan keeps
Perkasa guessing” was written by
Fernandez and appeared on the
cover of the paper’s March 17, 2010
edition.
Fernandez had said the Sultan of
Selangor had withdrawn his consent
to launch the assembly as the ruler
was concerned with the organisation’s image as a chauvinist party.
Justice Gunalan said apart from
the fact that Fernandez had focused
on Perkasa, he had also contacted
Ibrahim for comment, to which the
former Pasir Mas member of parliament had refused to respond.
The judge also ruled that the arti-
cle was justified and protected by
qualified privilege.
During the trial, the Sultan of
Selangor’s senior private secretary Datuk Mohamad Munir Bani
testified for the plaintiff, reading a
statement issued by the Sultan in
2010, explaining the Sultan’s reservations in launching Perkasa’s first
general assembly. His reservations
included the fact that the event had
a political flavour.
In the statement, the ruler also
advised the organisation to take
note of the feelings of others when
championing its cause.
When met outside the court, Ibrahim said he would be appealing the
case. “We will appeal the case because definitely we are not satisfied.
For Fernandez, who is currently
editor (investigations) at The Edge
Media Group, it was his third and
final defamation suit at theSun. He
had won two previous suits brought
by two businessmen.
“Legal suits seem to be the new
weapon of choice for those trying to
silence the press. I am relieved that
justice has prevailed three times
over for me.
“But if anything, these suits are a
reminder that one must write fairly, accurately and without malice.
This is the only way to have the law
on your side.”
IN BRIEF
14 probe papers on
by-election completed
GEORGE TOWN: Police have
completed 14 investigation papers on offences reportedly
committed during the recent
Permatang Pauh by-election.
Penang police chief Datuk Abdul Rahim Hanafi said all the
completed investigation papers would he handed over
to the head of the legal unit
soon. “We had opened 16 investigation papers on election
offences committed during the
Permatang Pauh by-election.
“[Besides the 14 mentioned],
two other cases include the one
on the PKR deputy president
(Mohamed Azmin Ali) calling
the Inspector-General of Police
Tan Sri Khalid Abu Bakar a “barua Umno” (Umno stooge) in
his ceramah during the by-election campaign, of which the
investigation papers are now in
the final stage of completion,”
he said at a gathering of cadet
sergeant trainees. — Bernama
Klang residents call for
flood mitigation plan
KLANG: Several residents’ associations in Klang have urged
the Klang Municipal Council to
devise a long-term, proactive
flood mitigation plan to address
recurring flash flood woes in
the city. BBK Heights residents’
association secretary Loo Say
Beng said a sustainable flood
plan is needed to manage and
control flood water movement
in several areas here. This, he
said, might include redirecting
flood run-off through the use
of proper channels as opposed
to merely clearing clogged
drains whenever flooding occurs which would not solve the
problem.Taman Setia Residents
Association president M Sivaguru echoed Loo’s sentiments,
saying that a long-term flood
mitigation plan is needed in
Klang to prevent property damage. — Bernama
Alleged rape threat probe
papers returned to police
KUALA LUMPUR: The Attorney-General’s (AG) Chambers
has returned to the police the
investigation papers on an alleged rape threat involving a
Workers Day rally participant,
requesting a further probe, said
Kuala Lumpur police chief Datuk Tajuddin Md Isa. “We have
submitted the papers and they
have been returned to us with
a few more instructions, as directed by deputy public prosecutor. We will gather more
evidence and try to solve the
case,” he said. — The Malaysian Insider
15 years jail for beating
friend to death
SHAH ALAM: A man who beat
his friend during an argument
over a RM20 handphone was
sentenced yesterday to 15
years’ jail for causing his death.
High Court judge Datuk Ahmad
Nasfy Yasin ordered M Silvam,
44, to serve the jail sentence
from the date of arrest on June
13, 2012. — Bernama
H O M E 17
Pushback endangers thousands, says UN
NEW YORK: Asean countries
should focus on saving the lives
of the Rohingya and Bangladeshi
migrants because pushing them
back to sea after giving them provisions is incomprehensible and
inhumane, said the United Nations
as it urged governments in the region to take swift action to protect
the migrants’ lives.
UN High Commissioner for Human Rights Zeid Ra’ad Al Hussein
said he was appalled at reports
that Thailand, Indonesia and Malaysia had been pushing boats full
of migrants back out to sea, which
he added would inevitably lead to
many avoidable deaths.
“The focus should be on saving lives, not further endangering
them,” he said, adding that news
that a boat carrying several hundred
people in abject condition had been
given provisions and then pushed
back out to sea by the Thai navy last
Thursday was “incomprehensible
and inhumane”.
Zeid also expressed alarm that
countries in the region were threatening to criminalise vulnerable
migrants and asylum seekers who
had crossed the borders.
“Governments in Southeast Asia
need to respond to this crisis on the
premise that migrants — regardless
of their legal status, how they arrive
at borders, or where they come from
— are people with rights that must
be upheld,” he said in a statement.
Zeid said the number of people
leaving Myanmar and Bangladesh
by boat last year was estimated to
have climbed to around 53,000.
Some 920 migrants, he added,
are known to have perished in the
Bay of Bengal between September 2014 and March this year. —
The Malaysian Insider
Two ships rusting away
Legal wrangle over Bangladeshi vessels in Port Klang has been dragging on for years
Review child rape verdict,
says Sarawak group
KUCHING: The Sarawak Women for Women Society (SWWS)
joined the chorus demanding
that the Attorney-General’s
Chambers file a review against
the acquittal of a 60-year-old
man who raped a 14-year-old
girl, saying that the court’s decision showed “a clear need for
a speedy change to the law”.
The teenager became pregnant and in 2012 gave birth to
a son. DNA tests showed that
the man, Bunya Jalong, was the
biological father of the child. “If
there is no review, the public
is being asked to believe the
assertion of the accused that
conception could only have occurred through a finger, which
scientifically has a low probability,” SWWS president Margaret Bedus said yesterday. — The
Malaysian Insider
Orang Asli sue TNB over
Telom Dam
BY V SH A NKA R GA NESH
PORT KLANG: Two ships have
been rusting away in Malaysian
waters as a legal wrangle shows
up the hazards facing the agency tasked with enforcing maritime law.
The impasse involving two
Bangladeshi vessels began five
years ago, when the Banga Biraj
and its 15 crew came to national
attention after they were stranded
following an accident in Northport
which resulted in a messy compensation tussle.
The sailors were found starving
and emaciated and after the public was alerted, the Bangladesh
High Commission and well-wishers came to their aid.
While the men have been taken care of, this vessel is still an
island prison as the legal issues
surrounding it play out.
In 2012, another vessel, the
Banga Bodor, was involved in a
maritime incident and is in the
same predicament. Today, the two
stalled ships are languishing in the
busy waterways off Port Klang.
Both vessels were anchored in
deep water off Port Klang, but last
month both broke their anchors
and drifted dangerously before
tugboats from Northport towed
them towards unused docks. To
make matters worse, the Banga
Bodor rammed into another vessel, but fortunately both ships sustained only minor damage.
Officials from the Port Klang
Authority said that HRC Shipping
Ltd from Bangladesh, which owns
both ships, has placed skeleton
crews on the vessels, the hulls of
which are rusting. There are now
10 men on the Bodor and three
on the Biraj.
The Edge Financial Daily recently visited the ships and found that
both have been run aground by
the authorities as a safety measure
about 1km from Northport’s busy
shipping lanes.
The crew members said the
ships broke anchor when the tide
was unusually high but they were
unable to do anything as the ships’
engines were not working.
“We just drifted and only
stopped when we hit the other
vessel. Luckily we were pulled to
IN BRIEF
KUALA LUMPUR: Eleven Orang
Asli have filed suit against Tenaga Nasional Bhd, the Pahang
government, Orang Asli Development Department director-general and the Malaysian
government to challenge the acquisition of their ancestral land
for the construction of the Telom
Dam in Kuala Lipis. Jeffry Hassan
and 10 residents of Kampung
Pos Lanai, Kuala Lipis, Pahang
filed the lawsuit in the Civil High
Court on April 17. The plaintiffs
are asking the court to declare,
among others, that they have native titles to and are the owners
of the land they are now residing
on. The court has set July 9 for
case management. — Bernama
Engineer on drug charge
escapes gallows
Skeleton crews have been left on the ships, which have become unmanoeuvrable. Photo by V Shankar Ganesh
safety,” said one of them.
The crew members, who spoke
on condition of anonymity, said
HRC Shipping rotates the crew
for the two ships every six to 12
months.
“We have been here doing nothing ever since we came. Nothing
works on the ships and we have
not received our salaries for the
last four months.
“As for food, the owners have
appointed a local agent who brings
us food supplies every week but
it’s barely enough.”
The vessels are no longer manoeuvrable as their engines are
no longer operational, they said.
How it began
THE saga started when the
11,804-tonne Biraj damaged two
container quay cranes while berthing at Northport on Oct 22, 2008.
HRC Shipping gave an undertaking
to Northport to pay for the damage
and the vessel was allowed to sail
the following day.
However, the company failed
to pay for the damage and on a
subsequent call to Port Klang on
May 4, 2010, the vessel was served
a detention order by the Shah Alam
High Court following a petition by
Northport to recover costs.
A Northport spokesman said
all rights of claim to the ship were
subrogated to its insurance company Takaful Ikhlas Sdn Bhd. Northport was compensated by the insurance company, and Takaful is
also believed to have been compensated by the ship’s owners.
As for the 9,692-tonne Bodor,
this ship needed repairs after it
called at Port Klang in 2012. The
Marine Department has recently
issued a tender notice to scrap the
two vessels and the exercise was
closed on April 28.
A Port Klang Authority (PKA)
official said the ships are in bad
shape and could even sink.
“The tender is very timely and
hopefully the five-year problem
will finally be solved,” he said.
a lawsuit against the department
to prevent the sale of the ship.
Hence, a department spokesman
said, the tender exercise will be
delayed.
The long delay in disposing
of the ships has drawn the ire of
many in the maritime industry,
who blame the authorities for
foot-dragging over the situation.
The Marine Department has
declined comment in view of the
lawsuit. HRC Shipping has not responded to requests for comment
made two weeks ago.
In effect, said a PKA official, the
ships are enjoying free parking at
the port. “If they are taken back to
Bangladesh, they would definitely
be sold off,” he said.
The issue could have been resolved long ago if quick action had
been taken, he opined. The onus
was on the Marine Department as
it is the only authority with the jurisdiction to deal with such probShipowners prevent sale
lems, said the official.
of ships
With no end in sight to the issue,
However the Marine Department it now looks like the sailors left on
has been stopped from selling the the ships could once again go hunships as HRC Shipping has filed gry and live in squalid conditions.
PUTRAJAYA: A Filipina IT engineer escaped the hangman’s
noose yestrday when the Federal Court reduced the charge
against her from trafficking in
1.04kg of heroin and monoacetylmorphine, to possession.
A five-member panel of judges
chaired by Justice Tan Sri Abdull
Hamid Embong allowed Marivelle Gonzales’ appeal to set aside
her conviction and death sentence on two counts of trafficking.
She was sentenced to 20 years’
jail for each count but ordered
the sentences to run concurrently
from the date of arrest in March
2010. — Bernama
Pakatan to revive shadow
Cabinet
KUALA LUMPUR: Pakatan Rakyat will revive its shadow Cabinet to strengthen the checks and
balances system of the government, said opposition Leader
Datuk Seri Dr Wan Azizah Wan
Ismail. She said the opposition’s
shadow Cabinet committee for
each ministry will be represented by a Pakatan member of parliament (MP). Wan Azizah, the
MP for Permatang Pauh, said the
shadow Cabinet is based on the
principles of consensus and created in the interest of the people
of various races and religions in
the country. — Bernama
18 C O M M E N T
Yellen takes a back seat to China
Some think it is starting to eclipse the US as the most influential player in setting global borrowing costs
BY WILLIAM PESEK
T
raders have been panicking over the sudden rise in global bond
yields triggered by the
expected tapering of
the US Federal Reserve’s stimulus programmes. But
an unlikely saviour may emerge
to limit the damage: China. That’s
the view of researchers at Oxford
Economics, who think the world’s
second largest economy is starting
to eclipse the United States as the
most influential player in setting
global borrowing costs.
As the world’s largest trading
nation and holder of currency reserves, China has long held sway
over economic activity in places
ranging from Brazil to Indonesia.
What’s new is that the country’s influence over global bond markets
is beginning to eclipse that of the
Federal Reserve. While traders still
keep a close watch on decisions
made by Fed chair Janet Yellen (pic)
in Washington, economic shifts in
China are starting to matter even
more for the global economy.
Oxford economist Adam Slater
has run the numbers on three distinct growth scenarios for China:
(i) growth slowing in a controlled
manner; (ii) a hard landing in which
growth drops precipitously and (iii)
a sudden return toward growth in
the 8% range.
The first is Oxford’s baseline
assumption, to which Slater assigns 55% odds. His models see
growth easing to 6.6% this year
and toward 5.3% by 2020. In this
scenario, China’s ageing population, its slowing urbanisation and
President Xi Jinping’s efforts to prioritise domestic consumption will
all contribute to gradually slower
growth. In that case, Slater says,
China’s slowdown won’t necessarily “cause severe disruptions
in global markets”. Even if the Fed
begins hiking rates in September,
China’s moderation will limit the
fallout in bond markets. At most,
Slater reckons US 10-year yields
would rise from 2.2% now to 2.9%
by end-2016.
Oxford estimates the second
scenario — a deep downturn in
China — is a 30% proposition and
could leave US 10-year rates at 1.7%
by the end of next year. It assumes
a “severe correction in the property
sector combines with acute problems in parts of heavy industry lead-
ing to a serious bad loan problem
in the banking sector”, Slater says.
“Both the supply of and demand
for credit drop back, with the high
leverage of many Chinese firms
contributing to the latter effect.”
The after-effects would be broad
and powerful, with Chinese property falling at least 10% and local
government finances deteriorating even more dramatically. Next,
foreign direct investment would
plunge; the number of non-performing loans would skyrocket and
stock markets from New York to
Frankfurt to Singapore would slide.
In that case, global gross domestic product (GDP) might average
only 2.1% in both 2015 and 2016
instead of the currently expected
2.7% and 3%. That, in turn, would
affect the calculations of central
banks: the Fed would be less inclined to raise rates; the European
Central Bank might keep rates at
zero until perhaps 2020, and Japanese bond yields could remain at
zero into 2017.
Surprisingly strong growth in
China is scenario three. In that instance, China would fix its structural problems quickly and painlessly. “A stronger China,” Slater says,
“means strong world trade and
GDP growth and a faster rise in
global bond yields.” In the US, 10year rates could rise toward 4.8%
by 2020, while German Bund rates
might climb from their current 0.6%
to 2.3%.
But there’s a reason Oxford considers this the least likely scenario (Slater puts the odds at 15%).
China’s economy showed no signs
of acceleration at the start of the
second quarter: the most recent
lending and investment data sig-
nalled the opposite. Fixed-asset investment, meanwhile, is the lowest
in almost 15 years. Worse, China’s
default risks are soaring — a side
effect of a US$20 trillion (RM71.4
trillion) surge in credit since 2009
that’s left many borrowers overextended.
Bond traders aren’t the only
ones keeping a closer eye on China’s
US$9.2 trillion economy — Yellen is,
too. In February, she told Congress
that for all the obsessing about Fed
rates, foreign events “can pose risk
to the US economic outlook”. In
China, she said, “economic growth
could slow more than anticipated,
as policymakers address financial
vulnerabilities and manage the desired transition to less reliance on
exports and investment as sources
of growth”.
If you sense a hint of anxiety in
that quote, that’s not an accident.
Yellen is aware that she doesn’t
have nearly as much control over
the fate of the US economy — and
the fate of global bond markets —
as her reputation might suggest.
— Bloomberg View
William Pesek is a Bloomberg News
columnist. The opinions expressed
are his own.
Southeast Asia must deal with human trafficking crisis
BY THE ED I TORS
INTERNATIONAL pressure to address a humanitarian crisis in Thailand has exposed another one in
Myanmar. Now the world — and
especially Southeast Asia — has
no choice but to deal with both of
them together.
The United States and European
nations have been urging Thailand
to combat human trafficking for
some time, and it’s working: Thai
authorities recently made several
arrests in cases against criminal
gangs that smuggle migrants from
Myanmar. In response, however,
many of those smugglers are abandoning their cargoes, setting adrift
possibly thousands of would-be migrants without food, fuel or water.
Regional navies have vowed to turn
the vessels away, for fear of encouraging others to attempt the journey.
Countries such as Malaysia, Indonesia and Thailand should certainly heed UN pleas to allow the
refugees to land. But this is also the
moment to address the trafficking
problem at its source.
Many if not most of the stranded
migrants are Rohingya Muslims from
Myanmar’s coastal Rakhine state.
More than 120,000 Rohingya have
fled Rakhine since 2012, and the pace
nearly doubled in the first quarter of
2015. Long considered interlopers imported by the British during colonial
times from what is now Bangladesh,
the one million-plus Rohingya com-
A boat with migrants being towed
away from Thailand by a Thai
navy vessel, in waters near Koh
Lipe island on Saturday. Malaysian
vessels intercepted the boat
crammed with migrants after
the Thai navy towed it away from
Thailand, the latest of a number
of vessels pushed back to sea by
governments who have ignored a
UN call for an immediate rescue.
Photo by Reuters
munity suffers virulent discrimination
in Myanmar. Denied full citizenship,
they also face restrictions on their
freedom to move, marry and worship; earlier this year, they lost the
right to vote.
Conditions have deteriorated
steadily since anti-Muslim riots
swept Rakhine in 2012. As many as
150,000 Rohingya remain trapped
in displacement camps that lack
sanitation, sufficient food and proper medical care. It’s little wonder
so many are willing to place their
fates in the hands of smugglers,
who have held some for ransom
and sold others into virtual slavery.
The Myanmar government has to
do much more to reverse this outflow.
The easiest place to start, relatively
speaking, is by improving conditions
in Rakhine’s refugee camps. While
humanitarian agencies are at work
again after a one-month halt last
year, levels of assistance remain inadequate. Aid groups are limited by
the number of local staff they can
employ and other logistical hurdles.
Authorities also need to reach out to
tens of thousands of Rohingya living
in apartheid-like conditions in isolated villages, largely cut off from aid
and access to livelihoods.
More broadly, the government
needs to find a way to integrate the
Rohingya — many of whom trace
their ancestry back generations
— into society as full rather than
naturalised citizens. The latter are
prohibited from owning immovable property, running for office,
working for the government, or
studying medicine or engineering.
The hardest yet most crucial task
will be changing hearts and minds
across the country. Anti-Rohingya
prejudice unites virtually the entire
majority Buddhist population and
all political parties. At the least, the
instigators of the 2012 riots and subsequent attacks should face trial so
that the Rohingya can see that the
law protects them, too.
True reconciliation will require
years. In the meantime, authorities
must at least clamp down harder
on hate speech and stop distorting
or obscuring the Rohingyas’ generations-long roots in the country.
If Myanmar’s neighbours have a
duty to care for refugees fleeing its
shores, it is Myanmar’s obligation
to give the Rohingya reasons to
stay. — Bloomberg View
F E AT U R E 1 9
Pope Francis extends agenda
of change to Vatican diplomacy
BY GAVI N JON ES
& JAMES MACKENZIE
POPE Francis’ hard-hitting criticisms of globalisation and inequality long ago set him out as a
leader unafraid of mixing theology and politics. He is now flexing
the Vatican’s diplomatic muscle
as well.
Last year, he helped to broker
an historic accord between Cuba
and the United States. This past
week, his office announced the
first formal accord between the
Vatican and the State of Palestine.
The Pope ruffled even more
feathers in Turkey last month by
referring to the massacre of up
to 1.5 million Armenians in the
early 20th century as a “genocide”.
After the inward-looking pontificate of his scholarly predecessor, Pope Benedict, Pope Francis
has in some ways returned to the
active Vatican diplomacy practised by globetrotting Pope John
Paul II.
Much of his effort has concentrated on improving relations between different faiths and protecting the embattled Middle Eastern
Christians.
However, in an increasingly fractured geopolitical world,
his diplomacy is less obviously aligned to one side in a global stand-off between competing
blocs.
This is reinforced by his status as the world’s first pope from
Latin America, which has given
him an entirely different political
grounding from any of his European predecessors.
“Under this pope, the Vatican’s
foreign policy looks South,” said
Massimo Franco, a prominent
Italian political commentator.
He said the Pope has been
careful to avoid taking sides on
issues like Ukraine, where he has
never defined Russia as an aggressor.
That approach is intended to
ensure that he remains more credible with countries like Syria, Russia and Cuba, all nations where
Pope Francis feels he can help
local Christians best by steering
an independent course.
Clearly deeply interested in
how the world outside the walls of
the Vatican works, he appears determined to use his position and
the huge global audience he commands to challenge entrenched
diplomatic positions as well.
The former secretary of state,
Cardinal Tarcisio Bertone, a veteran insider whose office formerly controlled both relations with
foreign powers and many internal
Vatican affairs, has been replaced.
His office has been downgraded to
resemble a more classical diplomatic service, while Pope Francis
has set a bolder, more personal
stamp on Vatican foreign policy.
“He’s someone who’s capable
of praying in the Blue Mosque in
Istanbul, and then talking about
the Armenian genocide. He’s not
someone who’s bound by political
correctness,” said former Italian
foreign minister Franco Frattini.
With many conservative Catholics unhappy about the Pope’s focus on issues like economic injustice and his relatively tolerant
tone on sensitive social topics,
like homosexuality and the status
of divorced people, pronounced
views on delicate diplomatic issues could cause further division
in the Catholic Church.
It is a point where he will be
particularly tested in September
— on his upcoming visit to the US.
After helping to foster last
year’s agreement reviving diplomatic relations between Havana
and Washington, Pope Francis
reaped criticism from many US
conservatives, including Marco
Rubio, a candidate for the Republican nomination for president.
Rubio avoided directly admonishing the Pope, but said he should
“take up the cause of freedom and
democracy” in Cuba. That kind of
veiled criticism reflects the wider
unease some Catholics feel at the
change the Pope has ushered in.
“Bishops complain that he becomes popular by attacking the
church,” said Franco.
“He speaks directly to the people and doesn’t respect the usual
command structures.” — Reuters
Corporate Japan
answers to nobody
Toshiba questioned, Sharp asks lenders for another bailout
BY WILLIAM PESEK
I
t’s been a dreadful week for
Japanese corporations. Toshiba was facing questions about
its accounting practices; Sharp
was asking lenders for another
bailout; and Takata couldn’t
escape bad news about its airbags.
These problems are bad enough
on its own. Together, they raise serious questions about the state of
Japan’s corporate governance. At
a time when the Nikkei stock exchange has been rising (it’s up 36%
over the past year), those questions
are in urgent need of answers. If Japan’s leading companies are managed as poorly as this past week’s
events suggest, there’s little reason
to believe the country’s stock market surge is sustainable.
Prime Minister Shinzo Abe has
certainly tried to improve Japan’s
corporate governance. Next month,
Tokyo will release a national code of
conduct for executives. Companies
will be asked to include at least two
outside directors on their boards or
explain why they shouldn’t have
to. Abe is also asking companies to
invite more women into the executive suite. Diversity in the boardroom, the government hopes, will
enhance oversight.
In theory, said Nicholas Smith,
a Tokyo-based strategist at CLSA,
“this should trigger a flurry of fevered business and balance sheet
restructuring”. In practice, corporate Japan has barely budged in
response to Abe’s reforms — after
decades of running their affairs
free of outside interference, their
inertia has proven too powerful.
Take Toshiba, which on May 8
Abe is asking companies to invite more
women into the executive suite. Diversity
in the boardroom, the government
hopes, will enhance oversight. Photo
by Reuters
ny with no path to growth. The
debt-saddled company posted a
US$1.9 billion loss for the year that
ended March 31. And the company
only has itself to blame. Once synonymous with cutting-edge electronics, Sharp’s moves to diversify into
software and content businesses
have been glacial. Little has changed
at the company since 2012, when the
company was saved from the brink
of bankruptcy by indulgent lenders.
Now, Sharp is back, cap in hand,
asking for more help. And all it is
offering in return is a business plan
riddled with gimmicks, like reducing capital to cut tax payments. By
any account, Sharp is the type of
company that should be allowed to
fail. Instead, weak oversight allowed
management to run the company
into the ground.
Takata, for its part, has managed
to combine Toshiba’s lack of transparency with Sharp’s chronic complacency. Last week, Toyota, Nissan
and Honda said they’re recalling at
least 6.5 million vehicles because
of faulty airbags supplied by Takata — that can endanger passengers
by emitting shrapnel. Those recalls
might have occurred much sooner
had Takata not needlessly released
information about its products in
small drips. Even with passenger
safety at stake, company executives
haven’t offered their full knowledge
to the public.
In that sense, It wasn’t just a bad
week for corporate Japan. It was a bad
week for the Japanese government. It
should finally recognise that its efforts
at corporate reform are falling far
short of the mark. — Bloomberg View
estimated it will write down US$420
million (RM1.5 billion) of profit over
three years, in response to an ongoing internal accounting probe that
revealed the company has overstated
its profits. Financial markets seemed
relieved, but investors should be
asking themselves two questions:
How could such massive accounting
irregularities still happen — almost
14 years after Enron Corp’s implosion
and four years after the US$1.7 billion Olympus Corp’s fraud scandal?
And how have Japanese authorities
responded to Toshiba’s malfeasance?
As for how Tokyo has responded
to the revelations about Toshiba —
it has barely done anything. There
have been no investigation of the
company, no public chastisement, no
parliamentary hearings. Toshiba has
even kept its place on the JPX-Nikkei
Index 400, which is supposed to list
the country’s best-run companies. William Pesek is a Bloomberg View
Sharp, meanwhile, proved last columnist. The opinions expressed
week that it’s a zombie compa- are his own.
Singapore studies to get smarter
BY ANSUYA HARJANI
FROM Santander to Seoul, urban
centres around the world are mapping out ambitious “smart city”
blueprints. But Singapore is taking
these plans to use technology to
make city living more connected
— by aiming to become a “smart
nation” within the next decade.
According to Steve Leonard, executive deputy chairman of the Infocomm Development Authority
of Singapore, what sets Singapore
apart is the city state’s relative economic and political stability.
At 700 sq km, Singapore, of course,
is also a much more compact country
compared with peers, making it easier to scale up successful initiatives.
Last year, Prime Minister Lee
Hsien Loong launched Singapore’s
Smart Nation initiative, setting up a
Smart Nation Programme Office to
coordinate efforts by various government agencies.
The government
assigned Jurong Lake
district as the test bed
for smart city initiatives.
Singapore’s smart
nation initiative involves collaboration
among government,
academia and the
city’s fast-growing community of
tech entrepreneurs backed by heavy
investments in research and development, Leonard said.
Key components of Singapore’s
smart nation are transportation and
elderly care. The country is home to
a rapidly ageing population, with the
number of its senior citizens forecast
to triple over the next 15 years.
“Technology can
help them to live independently in their
own communities
with their own support
networks, and give
their children peace
of mind, especially if
we can integrate sensors, apps and remote
monitoring to help our
seniors to age in place, to connect
with other seniors, and to stay in
touch with their children, grandchildren and caregivers,” Lee said in
a speech at Founders Forum Smart
Nation Singapore.
Several public hospitals are currently trialling a tele-health rehabilitation system, where data is transmitted wirelessly through sensors
attached to patients’ limbs as they
carry out therapy sessions at home.
This is to eliminate the need for elderly patients to travel and wait for
their appointments in hospitals.
Being the world’s third most
densely populated nation, an efficient transportation system is also
central to Singapore’s plans.
“Land is scarce in Singapore. Already, we are one of the most densely populated countries in the world,
and we can’t keep on building more
and more roads indefinitely, becoming like Los Angeles,” said Lee.
“We have got to find solutions, using technology, using data, to make
our transport more efficient and to
improve the commuting experience
— through information for commuters; through responsive management
of public transport systems; through
smart city planning to minimise long
and unproductive commutes.”
Singapore is currently rolling out
sensors across the island to collect
data from busy areas, such as traffic
junctions, bus stops and taxi queues,
which will then be relayed back to
the relevant agencies for analysis.
This is aimed at helping the government gain insights into urban challenges, and build services to make
life for commuters more fluid and
less congested. — CNBC
For more, visit www.cnbc.com
20 FO CU S
T UE
F
01. Human remains
retrieved from a
mass grave at a
rubber plantation in
Thailand’s southern
Songkhla province on
May 7. More than 50
Thai police officers
have been punished
over suspected
links to human
trafficking networks,
the country’s police
chief said. Thailand’s
prime minister has
ordered a probe
into the existence
of trafficking camps
near the Malaysian
border. Photos by
Reuters
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The depths of desperation
Lid lifted on brutality of traffickers exploiting Muslim Rohingya fleeing persecution in Myanmar
BY SI MON ROU GHNEEN
B
odies buried in the jungle, camps hurriedly
abandoned, officials arrested, police suspended from duty, thousands
of desperate refugees
adrift at sea and pushed back into
international waters by foreign navies.
Tens of thousands of Muslim Rohingya fleeing discrimination and
enslavement in Myanmar are running a gauntlet of extortion, rape,
starvation and sometimes execution
in the remote jungles of Southern
Thailand, a usual way station en route
to Malaysia.
Two weeks ago, more than 30
bodies were dug up at abandoned
camps around Padang Besar near
the Thailand-Malaysia frontier. Thailand’s military junta, under pressure
internationally over accusations of
human trafficking as well as slavery
in its fishing industry, scoured the
country’s southern reaches for victims of traffickers.
The traffickers, themselves Rohingya in some cases, were likely
working with support from members
of the security forces, Deputy Prime
Minister and Defence Minister Prawit
Wongsuwan believed.
By last Sunday, the impact of Thailand’s hunt was being felt as 600 refugees, mostly Rohingya, washed up
near Aceh on the north-western tip
of Indonesia. Last Monday, 1,000
more were found dumped in shallow
seas near Langkawi in Malaysia, and
another 400 drifting in a boat off the
west coast of Indonesia.
By last Tuesday, both countries
were saying that they would not accept any more refugees arriving by
sea, with Indonesia sending a boat-
load of around 300 back towards
Malaysia.
“I am still very worried that there
are many more boats we don’t know
about,” said Chris Lewa, director of
the Arakan Project, a non-governmental organisation that monitors
Rohingya displacement.
According to the United Nations
High Commissioner for Refugees
(UNHCR), in the first quarter of this
year, around 25,000 people, double
that for the same period over the past
two years, crossed the Bay of Bengal
in the traffickers’ cramped, rickety
and sunbaked boats.
While most refugees are fleeing
voluntarily, they risk being trapped by
gangs seeking fees of up to US$2,000
(RM7,140) to smuggle them into Malaysia — money often extorted during
anguished phone calls from captives,
sometimes during torture, to family
members.
“Based on interviews with those
who have reached Thailand or Malaysia, 300 people are estimated to
have died at sea while attempting
maritime journeys from the Bay of
Bengal in the first quarter of 2015 —
and as many as 620 since October
2014 — primarily as a result of starvation, dehydration, and beatings by
boat crews,” the UNHCR reported
two weeks ago.
See related story on Page 26
Such a perilous, brutal exodus is
driven by decades of discrimination
against the Rohingya, a group not
recognised as one of Myanmar’s
135 listed ethnicities and thereby
denied most rights. Numbering up
to an estimated 1.3 million, most
live in poverty in Rakhine state in
north-west Myanmar, one of Myan-
02
mar’s poorest regions which is the
homeland of around two million
Buddhist ethnic Rakhine.
And while anti-Rohingya persecution goes back decades — to military
operations that forced hundreds of
thousands to flee across the border
to Bangladesh in the late 1970s — life
for the Rohingya has worsened since
Myanmar’s civilian government took
office in 2011 and introduced a welter
of liberalising reforms.
At the same time as once-respected defenders of democracy and human rights — such as the opposition
National League for Democracy
(NLD) party and former political
prisoners known as the 88 Generation — were at last granted many of
the freedoms so long denied them
by the junta, so too were the likes
of Wirathu, leader of a group of anti-Muslim Buddhist monks, as well
as various Rakhine political parties.
All of these groups describe
the Rohingya as Bengali, implying
that they are foreigners from
Bangladesh. The NLD and the 88
Generation have, in less crude and
go to Malaysia,” he said.
A year ago, Myanmar held its
first nationwide census in three
decades, and did not allow the Rohingya to register. The government
has also revoked Rohingya voting
rights and identity cards, while a
set of “race and religion” bills in
Parliament will, if passed, ensure
additional discrimination against
Muslims.
Three years on from the violence,
almost 150,000 Rohingya languish
in refugee camps scattered along
the Rakhine coast — ample fodder
for the trafficking trade, which in
recent months has seen increased
numbers fleeing a polarised and
unstable Bangladesh.
There are rumours of more camps
on the Malaysian side of the border,
though these, too, may have been
disbanded after Malaysian police
rounded up around 20 traffickers,
mostly Rohingya themselves, according to Lewa.
Thai junta leader General Prayuth
Chan-o-cha stressed that Thailand
is a transit country only for the migrants and wants a regional meeting
to help curb the trafficking that has
long blighted Thailand’s reputation,
with thousands of Burmese migrant
workers enslaved on Thai fishing
boats in recent years.
The general no doubt has an eye
on the upcoming publication of the
US government’s annual global trafficking survey, which last year saw
Thailand demoted and listed among
the world’s worst human trafficking
countries. — The Edge Review
strident terms, fallen in with the
anti-Rohingya chestbeating.
By mid-2012, communal violence
had erupted between the Rohingya
and Rakhine, tit-for-tat burnings
and killings that later took on all
the appearance of an anti-Muslim
pogrom.
Lewa estimated that more than
100,000 have fled Myanmar since
2012, willing to risk captivity and
ransoming to escape the increasingly restive Rakhine state.
Rakhine political parties claimed
the national government is too soft
on the Rohingya and had amalgamated ahead of national elections
due in November, while a Rakhine
rebel militia known as the Arakan
Army had clashed with the national
army in recent weeks.
“Since the violence, many Rohingya cannot make a living even
compared with before 2012,” said
Myo Thant, speaking by phone from
Sittwe, the Rakhine regional capital
and scene of mob violence in 2012. This article first appeared in this
“No jobs, no freedom of movement. week’s edition of The Edge Review
That’s why people take the risk to at http://www.theedgereview.com
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FO CU S 21
T U E SDAY MAY 1 9 , 20 1 5 • T HEED G E FINA NCIA L DA ILY
People sorting the
catch unloaded
from a fishing
ship at a port in
Mahachai, Samut
Sakhon province,
Thailand. Photo
by Reuters
Fishy Thai business
BY MA RWA A N MAC A N-M ARKAR
01
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WHEN Thai junta leader General
Prayuth Chan-o-cha invoked Article 44 of the military Constitution a
month ago, it provoked fears among
human rights activists of the sweeping authority of the power dubbed
“the dictator’s law”.
Defenders welcomed the clause,
which placed Prayuth above the
courts, Parliament and Cabinet.
It is the ideal weapon to clean up
Thailand’s mess, they said.
Fittingly, Prayuth threatened to
use the draconian law to clean up
a big stink in Thailand’s billion-US
dollar seafood industry, following
an European Union (EU) warning
on April 21 that it would ban Thai
seafood imports within six months
unless the fishing sector is brought
to heel.
But the general has now beaten
a hasty retreat, declaring Article 44
unable to fix the sector’s problems.
That rare admission says little
about the limits of the law, however, and more about the scale of the
challenge facing one of the world’s
largest seafood exporting nations
to get into the bad books of the EU,
Thailand’s third-largest seafood market after the United States and Japan.
What has got up the EU’s nose is
the persistent habit of illegal, unreported and unregulated (IUU) fishing by Thai-owned fishing trawlers.
“Failure to take strong action
against illegal fishing will carry consequences,” warned Karmenu Vella, the European commissioner for
the environment, maritime affairs
and fisheries.
The IUU Mechanism, as it is
known, is an EU drive to make Thai
suppliers provide a legitimate record of “traceability” of their ocean
catch and eliminate unsustainable
fishing activities.
The top priority is a “catch certificate” issued by Thailand’s Department of Fisheries as proof that EU
standards for imported fish products have been followed. Failure
to halt IUU fishing will lead to an
EU trade ban.
The threat is not new to players
in Thailand’s fishing sector, ranging
from fisheries department bureaucrats and industry tycoons to shady
shipowners. The EU put Thailand
on notice two years ago that seafood
exports, estimated at 25 billion baht
(RM81.6 billion) a year, faced disappearance from European shops.
Nor is it news to local and international environmentalists and activists, who have many long-standing beefs over abusive practices in
the fishing industry, most glaringly
the rapid depletion of fish in the
seas off the coast of Thailand due
to unregulated commercial fishing. That has driven Thai-owned
trawlers to stray into the waters of
its Southeast Asian neighbours.
Research commissioned by the
United Nations Food and Agriculture Organisation pointed to a huge
reduction in sea fishing in the past
half-century. Since the 1950s, Thai aquaculture production has risen from
200,000 tonnes to 1.4 million tonnes
a year, while the catch from coastal
trawlers sharply dropped from 300kg
of fish per hour in 1961 to 17.8kg per
hour in 2010.
But this belies the nature of the
problem. A study of commercial fishing along a southern stretch of the
Gulf of Thailand, commissioned by
British development organisation
Oxfam, showed that trawlers scraping
the seabed with dragnets nowadays
end up catching mostly “trash fish”,
used for animal feed.
Such fish accounted for 62% of
the catch in the study, with only
38% intended for sale as food for
humans. “The trawlers are destroy-
Power struggle in Indonesia
BY JOHN MCBETH / JAKARTA
INDONESIAN President Joko
Widodo is nothing if not ambitious. But adding 35gw to national
electricity supply capacity over the
next five years — a colossal 66%
increase in Indonesia’s current
53GW — may be a few power stations too far.
Another 7.4gw is currently under construction as the government seeks to build capacity by
8.7% per year, in order to keep
pace with rising demand, much of
it from Indonesia’s rapidly growing
middle classes, and to increase
nationwide power coverage from
around 80% to 99% by 2022.
Under the Rp608 trillion
(RM165.4 billion) five-year programme, state-run utility State
Electricity Company (PLN) will
install 15gw, leaving the remaining 20gw to better-resourced
independent power producers
(IPPs).
While Indonesia’s Constitution
forbids private interests from operating distribution networks, the
government may have to bring in
outside help to string some of the
62,000km of new transmission
lines that it projects will be needed.
About 55% of Indonesia’s current installed capacity is generated
from coal, 24% from natural gas
and 11% from oil.
The expansion will add 20.9gw
to the 28gw Java-Bali grid and
8.7gw to power-starved Sumatra’s
3gw network.
Among projects on the drawing
board is a 5gw coal-fired complex
— one of the largest in the world
— to be built by private developer
Java Energy and Chinese investors near Cilacap on Java’s south
coast. It is scheduled for completion in 2018.
PLN is looking to secure longterm loans directly from international financial agencies to support the programme, instead of
channelling the process through
the country’s notoriously sluggish
bureaucracy.
Afrizal, deputy director for electricity business development at
the Ministry of Energy and Mineral Resources, suggested recently that the government may also
declare a state of crisis to allow
the direct appointment of private
power providers.
But what infrastructure players
like to call a “noble quest” still faces several major challenges. One
is a predicted shortage of 120,000
engineers over the next five years.
The education system is not producing enough, particularly those
with real hands-on experience.
Indonesia currently has about
750,000 engineers, or 3,000 per
million people, the lowest ratio in
the region, according to Heru Dewanto, secretary-general of both
the Indonesia Institute of Engineers and the Indonesian Electricity Society.
Yet, while one arm of govern-
ing the seabed by catching such
huge amounts,” said Oxfam representative Werapong Prapha.
This abundance of “trash fish”
has been a bounty for Charoen
Pokphand Foods (CPF), an arm of
a Thai agribusiness conglomerate
that depends on the animal feed for
its thriving shrimp trade, including
exports to Europe. The EU’s warning
puts the company on notice to
produce “traceability” documents
for its fishmeal exports.
The company’s investors apparently believe the threat of trouble
ahead is real, despite reassurances
by its executives. The day after the
EU warning, CPF shares fell 3.7%,
their biggest one-day dip this year.
The likes of CPF and Thai Union Frozen — the world’s largest
canned tuna producer, which also
cannot dodge the EU threat — will
have to place their faith in a new
regulatory push by government
fisheries officials to amend an archaic fisheries law with enough
loopholes for corrupt trawler owners and boat captains to thrive on.
“There is corruption between
the fisheries department officials
and the boat owners,” alleged Tara
Buakamsri, Thailand director of
Greenpeace Southeast Asia, an environmental lobby. “The big private
companies also have bargaining
power and apply pressure on the
government.”
Prayuth’s retreat suggests perhaps
that the junta is unwilling to tangle
with the big fish. — The Edge Review
This article first appeared in this
week’s edition of The Edge Review
at http://www.theedgereview.com
Workers of PT Pertamina
Geothermal Energi rotating a
valve during a production test
at Karaha geothermal well in
Tasikmalaya, West Java province
of Indonesia. Karaha Geothermal
Power Plant is scheduled to
supply power to PLN at the end
of 2016. Photo by Reuters
ment is seeking massive new
investment in power and other
infrastructure, the Ministry of
Manpower is progressively reducing work permits for foreign
engineers, who are needed more
than ever to fill the skill gap.
Ticking off other drawbacks on
the list, Dewanto said that over the
same five-year time frame, Indonesia’s cement production and
steel-making will have to grow
dramatically.
Then there are transport deficiencies. With 60% of the 42gw
allotted to coal-fired generation,
an additional 140 million tonnes
of coal — 30% of Indonesia’s total
output — will be required each
year, much of it to be moved by
ship and barge from Sumatra and
Kalimantan to Java.
The problem: Indonesia doesn’t
have enough capacity to ship that
much extra coal without running
landowners haggle over only 15%
of the project area.
Officials said they hope to get
around land issues by making government-owned property available
for many future power stations,
as has been done with the 5gw
mega-plant near Cilacap, which
is being built on army land.
Other bright spots are the Ministry of Energy and Mineral Resources’ recent groundbreaking
decision to transfer the approval
process for private electricity projects to the Investment Coordinating Board, which has launched a
new one-stop shop investment
service to streamline licencing
services for IPPs.
Lawson said that this move,
along with a series of new regulations, could be gamechangers in
transforming the “jungle” and the
“quagmire” — terms most commonly used to describe a bureaucratic approval process that has
hitherto involved obtaining 52
licences from 22 different desks.
— The Edge Review
foul of its 2005 Cabotage Law, under which all ships operating in
its waters must be under an Indonesian flag.
Land acquisition is another
nightmare for developers. Despite
the passage of the 2012 Property
Law, which creates the concept of
eminent domain, Indonesian Coal
Club vice-chairman Ben Lawson
described it as “the biggest obstacle I have ever encountered
anywhere in the world”.
Even now, the law has yet to
be invoked, ostensibly because
its so-called “socialisation” period only ended in December. The
first test case is shaping up to be
the long-delayed US$4 billion
(RM14.28 billion), 2gw coal-fired
station in Batang, Central Java.
A joint venture between Japanese developers and domestic coal This article first appeared in this
miner Adaro Energy, it has been week’s edition of The Edge Review
held up for three years, while local at http://www.theedgereview.com
22 F E AT U R E
Date shows what Japan lacks
Billionaire property developer’s daughter is an unusual leader in a sector dominated by men
A
nyone wondering
why Prime Minister
Shinzo Abe is crusading to get more women running Japan’s
male-dominated corporations should meet Miwako Date
(pic), daughter of Japanese billionaire
property developer Akira Mori.
Four years after Date became president of Mori Trust Hotels & Resorts
Co, a unit of Mori Trust Co, the company is forecasting hotel revenue to
grow 26% cent in the latest fiscal year.
That compares with an average 5.4%
gain at the five largest hotel operators
in the same period, the year ended
March 31, according to an estimate
by Mizuho Bank Ltd.
Mori has picked Date, 43, to take
over his Mori Trust Co, the closely-held development firm with ¥149.7
billion (RM4.59 billion) in revenue,
94 office buildings and about 30 hotels — including the Conrad Tokyo,
the year-old Courtyard by Marriott
Tokyo Station and the Suiran, a Japanese-style luxury hotel in Kyoto,
which opened last month in collaboration with Starwood Hotels & Resorts Worldwide Inc.
“She is very ambitious, and she is
very capable,” the 78-year-old Mori,
the current chief executive officer,
said in an interview in which he credited his daughter with the success of
the company’s hotel business and
confirmed she’ll take his place in “the
near future,” without giving a date.
As Abe seeks to increase female
managers to 30% Japan-wide by 2020,
Date is an unusual leader in a sector
BLOOMBERG
dominated by men. Although women account for about 40% of the real
estate workforce, according to the
Statistics Bureau of Japan, only 1.6%
of the industry’s managers are female,
a report by the Ministry of Health,
Labour and Welfare said. It’s 4.9%
on average in Japan’s private sector,
government data show.
“Japan’s largest companies must
produce more top female leaders
going forward,” said Yasuhiro Matsumoto, a Tokyo-based senior manager
at ABeam Consulting Ltd. A woman
at the helm of Mori Trust “will be a
role model.” Japan can’t truly thrive
unless all citizens reach their fullest
potential, the prime minister wrote in
a Bloomberg commentary published
at end-April.
“The question is no longer whether
to pursue the advancement of women but what positions and roles they
should take on, and how soon,” Abe
wrote.
Date is the granddaughter of
the late property tycoon Taikichiro
Mori, who six decades ago founded
Mori Fudosan Co Ltd. After his 1993
death, sons Minoru and Akira split
the company in two — Mori Building Co and Mori Trust, now Japan’s
biggest closely held developers. Mori
Building, which spent years planning
and completing the Roppongi Hills
complex in central Tokyo, focuses
on multibillion-dollar complexes.
Mori Trust sticks to single or twin
structures.
Date credits her father and grandfather with fostering her ambitions
and goals. When she was young,
they frequently peppered her with
questions, prompting her to think
in-depth and “consider the best ways
to respond and explain,” she said in
an interview in January.
Date attended Sacred Heart private girls school in Tokyo, where Empress Michiko was educated. She
received a master’s degree in media
and governance from Tokyo’s Keio
University, and joined Mori Trust in
1998 after a stint at a Japanese consulting firm that helped her establish
a track record, Date said.
After she entered the family business in her 20s, her father “would
present challenges for me and ask
me to come up with suggestions and
solutions,” said Date. The experience
informs her managerial style with
employees today, she said.
“Instead of giving them a methodology, I tend to also give my people
opportunities to resolve issues on
their own,” she said.
While her career rise may be due
to family position, there’s no question
about her ability, said Hiro Kosugi,
director of Japan sales, marketing
and operations at Marriott International Inc, who worked with Date to
develop the Courtyard, which Mori
Trust operates under franchise. “She
would have been successful no matter what,” said Kosugi. “She has that
talent, inner strength and vision.”
The Tokyo Station property is different from Marriott’s other beige-oriented Courtyards around the world:
It features colourful guest quarters
with names such as creator’s room,
editor’s room, photographer’s room
and curator’s room.
“She talks a lot about innovations,
and Courtyard Tokyo is one of the
examples,” said Kosugi. “Instead of
running a regular business hotel,
she wants to bring in new types of
designs and concepts.”
The hotel is booked with 88% occupancy in April, higher than the 70%
Mori Trust forecast.
“She is very talented in visual presentation and she is good with overseeing numbers,” said Kosugi. “She is
somebody who really pays attention
to details. Because of that, it’s keeping
a lot of her managers on their toes.”
Japan’s hotel industry had been
dominated by domestic brands
through the early 1990s, until the
opening of a Four Seasons Hotel, the
Park Hyatt Tokyo and the Westin Tokyo. After Japan’s asset bubble burst,
it took a decade for another round of
foreign hotels to come in, and Mori
Trust became one of the first to aid
their return.
In 2002, two years before Date was
made managing director in charge of
Mori Trust’s property development,
she helped persuade the company’s
partner in building a new office tower to invite Hilton Worldwide Holding Inc’s Conrad Hotels & Resorts
to come and manage its first Tokyo
property, which opened in 2005, according to information provided by
Mori Trust. Since Date took on the
development role, Mori Trust has
added 2,000 hotel rooms to its portfolio, 1,200 of them internationally
branded. She has plans for more projects ahead of Tokyo’s hosting of the
Olympics in 2020, including building
more international-brand hotels and
renovating some properties, she said.
Already Mori Trust is benefiting
from a surge in tourism. Visitors to
Japan in March totalled a record
high 1.53 million, 45% more than
the year-earlier period, according
to the Japan National Tourism Organization.
Date speaks passionately and
frankly at public events about Mori
Trust’s strategy, standing out in a field
of men with more-guarded stances,
said Tomohiko Sawayanagi, managing director of hotels and hospitality at Jones Lang LaSalle Inc, who
moderated a panel where Date spoke
last year.
Date’s willingness to franchise,and
develop small hotels like the 39-room
luxury ryokan (inn) with Starwood
in Kyoto, “demonstrate her ability
and authority to run international
hotels” while being flexible about
how to do it.
“Even with new ideas, if you can’t
make it happen, it doesn’t mean anything,” Date said. — Bloomberg
India online retail hierarchy looks far from fixed
BY U NA GA L A NI
INDIA’S e-commerce hierarchy
looks far from fixed. The exponential growth of smartphone users is
rapidly changing shopping habits
in the nation of 1.2 billion people.
Investors have poured in hoping to
pick the next Amazon or Alibaba.
The opportunity is huge, but low
barriers to entry mean it is easy for
wannabes to crash the party.
Indians are going online to buy
everything from electronics to cars.
Bangalore-based Flipkart has 40
million registered users and sells between 10% and 20% of all Samsung,
Apple and Micromax smartphones
in the country through its site. Over
the past 13 months investors have
pumped US$4.5 billion (RM16.15
billion) into online investments in
India, says Morgan Stanley. The bank
reckons the country’s Internet market was worth US$11 billion in 2013
and could grow to US$137 billion by
2020. Even then transactions will be
just a third of the amount that Alibaba, China’s dominant player, processed in the year to March.
Online retailers can choose from
essentially two global role models.
Seattle-based Amazon.com Inc
mostly sells stock that it owns and
keeps it in its own warehouses. By
contrast, Alibaba acts as a virtual
marketplace, connecting buyers to
sellers of all sizes from mom-andpop stores to international brands.
Though it is still early days, Alibaba’s model is emerging on top in
India. Flipkart, which was set up by
former Amazon employees Sachin
Bansal and Binny Bansal in 2007,
switched to a marketplace model
two years ago. Others have taken a
similar approach.
India’s aspiring Alibabas come
with a few twists, however. They
maintain centrally-located warehouses where merchants have the
option to store goods. This approach
may be a way to sidestep India’s ban
on foreign investment in online entities that sell goods directly to customers. Even Amazon operates as a
marketplace in India while it lobbies
for a relaxation of the law.
Home-grown players have relied
on foreign capital to keep up with the
American giant, which is investing
US$2 billion in its Indian operations.
Flipkart counts the Qatar Investment
Authority amongst its investors. Another big difference is how Indian
e-commerce companies generate
Online fashion retailer Myntra chief executive officer Mukesh Bansal (left) speaking
during a news conference as Flipkart co-founder as Sachin looked on in Bangalore,
India on May 12. Over the past 13 months investors have pumped US$4.5 billion into
online investments in India, says Morgan Stanley. Photo by Reuters
revenue. Alibaba gets most of its income from selling advertising and
information on consumer trends to
merchants. By comparison, Flipkart,
Snapdeal and Amazon India charge
a commission on each sale.
As competitors race to win market
share, India’s online shoppers have
been bombarded with big discounts
and flash sales.
UBS AG estimates it will take the
industry until 2020 to generate an
operating profit. The discounting
is only likely to end when investors
stop throwing money at the industry.
Meanwhile, Alibaba is shaping
up to be a competitor. It is in talks
to spend US$1.2 billion on 20% of
Micromax Informatics Ltd, India’s
second-largest smartphone maker. Earlier this year Alibaba affiliate
Ant Financial bought 25% of India’s
One97 Communications Ltd, owner
of Paytm, for US$575 million.
Paytm is the country’s leading
mobile wallet with 60 million registered users. It also has a growing
marketplace. Since Ant’s investment,
Noida-based Paytm has become
more aggressive. For three days in
April it offered customers up to 100%
credit on all fashion purchases.
Paytm stands out because it has
mimicked Alibaba by waiving commissions. Instead, it levies a fee when
users transfer money out of its wallet
and offers an escrow service so that
customers only pay for goods once
they are satisfied with the order. Rival Indian marketplaces cannot offer such a service without a special
licence from the central bank. As
more customers shift to paying online, Paytm may have an advantage.
For Indian e-commerce leaders, China offers a cautionary tale.
America’s eBay Inc briefly occupied
the top spot in the People’s Republic after it acquired EachNet.com in
2003. Within three years it had been
overtaken by Alibaba.
It’s unclear if the Chinese giant
will be able to repeat the trick beyond
its own shores. But with or without
the Alibaba, India’s online retailers
face a long hard and unprofitable
slog. — Reuters
W O R L D B U S I N E S S 23
BHP Billiton hunts for deep water oil assets
MELBOURNE: BHP Billiton Ltd
is looking to take advantage of a
slump in oil prices to pick up assets, where it can use its deep water
drilling expertise to boost growth
as it slows expansion in onshore
shale, its petroleum head said.
The world’s biggest miner has
slashed its US onshore drilling and
development by more than half,
South32 says
work to do
on growth as
debut misses
estimates
flagging last week that it will spend
just US$1.5 billion (RM5.36 billion)
in financial year 2016, down from
US$3.4 billion in the current year.
“We’re not going to rely on the
US shale. We’re going to have to
expand back into the conventional business,” BHP petroleum
president Tim Cutt told reporters
yesterday, on the sidelines of an
Australian oil and gas conference.
The shift reflects BHP’s view that
oil prices will rebound after around
2018, as a supply gap opens up due
to a lack of new sources of cheap
supply, while it sees US natural
gas prices holding below US$5 per
million British thermal units until
at least 2020.
“We want to look for assets,
where we could bring our technological advantage — where we
could do it faster, we could do it
cheaper,” Cutt said, pointing to
BHP’s skills drilling in the Gulf of
Mexico.
The company is unlikely to look
at taking over any oil producers as
that would require paying a premium. — Reuters
Greek endgame
nears for Tsipras
BY DAVI D STRI N GER
& RI SHA A D SA L A MAT
SYDNEY: South32 Ltd, the miner spun off from BHP Billiton
Ltd, missed analyst estimates
on its Sydney trading debut,
with investors valuing it at
about US$9.1 billion (RM32.49
billion) amid concern about its
growth potential.
South32’s market value is below the US$11.2 billion median
estimate from among seven forecasts compiled by Bloomberg. It’s
the world’s biggest manganese
ore producer and operator of
the largest silver mine.
“We have to do some work to
work out how we take the assets
forward in terms of growth potential,” chief executive officer
Graham Kerr said yesterday,
in an interview with Trending
Business on Bloomberg Television. “From day one, they sit
very comfortably in the cost
curve and they’ve been cashgenerative through the cycle.”
Perth-based South32 is examining expansion options at
its South African thermal coal
unit and its manganese and
silver operations, Kerr said.
Jefferies Group LLC said the
company had limited organic
growth potential and needs to
consider expansion projects
and acquisitions.
BHP, the world’s biggest
miner, separated 12 assets into
South32 as it sought to focus
on its most profitable iron ore,
coal, copper and petroleum
operations.
Investors are seeking clarity
on South32’s future and have
concerns over the impact of
weaker Chinese growth on
the outlook for industrial metals, according to Evan Lucas,
a market strategist at IG Ltd.
“It’s about the risk inside it.
Where do you find the next
asset? What’s the strategic direction of South32 once some
of those assets expire?”
The debut valuation confirmed the Perth-based company as mining’s biggest spin-off in
almost a decade. It began trading
yesterday at A$2.13 (RM6.09) a
share, giving it a market valuation of A$11.3 billion. South32
closed at A$2.05 in Sydney, or
A$10.9 billion. — Bloomberg
Banks running short of collateral they need to stay alive
European policymakers are
losing patience with Tsipras,
who said last Thursday that he
won’t compromise on any of his
key demands. Photo by Reuters
BY NIKOS CHRYS O LO RAS
& VASSILIS KARAM ANI S
ATHENS: Greek banks are running
short of the collateral they need to
stay alive, a crisis that could help
force Prime Minister Alexis Tsipras’
hand, after weeks of brinkmanship
with creditors.
As deposits flee the financial system, lenders use collateral parked
at the Greek central bank to tap
more and more emergency liquidity every week. In a worst-case scenario, that lifeline will be maxed
out within three weeks, pushing
banks towards insolvency, some
economists said.
“The point where collateral is exhausted is likely to be near,” JPMorgan Chase Bank analysts Malcolm
Barr and David Mackie wrote in a
note to clients last Friday. “Pressures on central government cash
flow, pressures on the banking system and the political timetable are
all converging in late May to early
June.”
European policymakers are los-
ing patience with Tsipras, who said
last Thursday that he won’t compromise on any of his key demands.
While talks are centring on whether to give Greece more money, the
European Central Bank could raise
the stakes — if it increases the discount on the collateral Greek banks’
pledge — in exchange for cash under its Emergency Liquidity Assistance programme.
Such a move might inadvertently
prompt a further outflow of bank
deposits and pressure Tsipras to
choose between doing a deal and
putting his country on the road to
capital controls. — Bloomberg
Bond turmoil signals new era of return-free risk
BY SWAHA PAT TANAI K
LONDON: US and German government bonds are gyrating as they rarely do. Yields are shooting higher for
no apparent reason, and sometimes
falling back within hours for equally
unclear motives. Such turbulence
in the biggest and most liquid bond
markets is ushering in a new era.
The traditional concept of risk-free
returns has been turned on its head.
Ten-year Bund yields have multiplied by 16 times, to a high of 0.8%
on May 7 from 0.05% on April 17.
And German bond prices, which
move inversely to yields, have suffered a larger drop than in 99% of
the three-week periods of the last
25 years, UBS Wealth Management
strategists calculated. Meanwhile,
comparable US yields have risen
by more than a quarter in less than
four weeks, peaking at 2.37%.
The brutal moves are creating
what Jan Straatman, global chief
investment officer at Lombard Odier Investment Managers, calls “return-free risk”. Investors have two
problems as a result.
IN BRIEF
Japan to join bidding to
sell Australia stealth
submarine fleet
TOKYO: Japan will join competitive bidding to sell Australia
a fleet of stealth submarines,
the government said yesterday, a move expected to require
Tokyo to supply Canberra with
classified data. The development comes as Prime Minister
Shinzo Abe moves to strengthen security ties with the United
States and some countries in
the region, including Australia in the face of China’s rapid
military modernisation and
maritime expansion. “We have
decided to participate” in the
bidding to replace Australia’s
ageing fleet, chief cabinet secretary Yoshihide Suga said. The
“competitive assessment” will
see Germany’s ThyssenKrupp
and France’s state-controlled
naval contractor DCNS separately competing with a Japanese government-led bid for
contractors, such as Kawasaki
Heavy Industries Ltd and Mitsubishi Heavy Industries Ltd.
— Reuters
London house prices
dip as election concerns
hit market
LONDON: Asking prices of
London homes fell the most
in nine months in May, as concern about potential property
tax changes before the election cooled demand. Prices
dropped 2.3% from April — led
by top-priced Kensington and
Chelsea — and were up 1.5%
from a year earlier, property
website operator Rightmove
said yesterday. That’s the smallest annual gain in more than
four years. Nationally, prices
slipped 0.1%, the first decline
in a May since the last general
election in 2010. Concerns in
the run-up to the election surrounding housing policy proposals — particularly those put
forward by the opposition Labour Party — unnerved buyers
and caused fewer homes to be
put in the market. — Bloomberg
India needs to open up
capital account further
A money changer counting US dollar bills at a currency exchange office. Gold is
supposed to be a solid store of value, but the price is in thrall to the US dollar’s volatile
exchange rate. Photo by Reuters
The first is sharply practical. Safety has become expensive or less
safe. Holding cash in the form of
a rock-solid currency, such as the
Swiss franc, is punitive since policy interest rates are close to zero or
even negative. Gold is supposed to
be a solid store of value, but the price
is in thrall to the US dollar’s volatile
exchange rate. Now, US and German
government bonds are looking risky.
These days, the hunt for safety
is not a big theme for most investors. They would rather take some
risks in return for higher yields. But
that brings up the second problem
with the new era. High turbulence
in supposedly safe bond markets
complicates the pricing of risk.
The standard asset pricing model
relies on a benchmark risk-free interest rate. Riskier investments — from
corporate bonds through shares to
artworks — are supposed to promise a probable additional return in
exchange for additional uncertainty
and price volatility. The model is like
a compass pointing in the direction
of the right price. But this compass
goes haywire when safe debt becomes
extraordinarily volatile. Investors are
left at sea. — Reuters
MUMBAI: India needs to continue to move towards making
the rupee more convertible for
capital transactions by foreign
investors, said Reserve Bank
of India executive director G
Padmanabhan, amid a growing debate over the merits of a
freely floating currency. Padmanabhan, who is set to retire from the central bank this
month, added that India could
not afford to remain isolated
from global financial systems
with existing caps on capital account transactions. — Reuters
Nissan CEO: No reason to
change Renault deal
TOKYO: The head of Renault-Nissan yesterday said
there is “no reason” to change
a long-standing partnership
between the two companies,
after the French government’s
controversial move to hike its
stake in Renault. — AFP
24 W O R L D B U S I N E S S
Ezion sued in Singapore
Accused of conspiracy to induce A P Moeller-Maersk A/S unit to breach contract
BY A ND REA TA N
SINGAPORE: Ezion Holdings Ltd
was sued by a partner which accused the Singapore-based offshore
service provider of a conspiracy to
induce an A P Moeller-Maersk A/S
unit to breach charter agreements.
Ezion created the impression Atlantic Marine Services BV, which
it had agreed to charter oil rigs to
Maersk Oil, was in financial trouble,
the Amsterdam-based company
Thai economy
grows 0.3%
in 1Q, growth
forecast lowered
claimed in a lawsuit filed last month
in the Singapore High Court. A closed
hearing is scheduled for June 2.
Atlantic Marine said in the suit
it agreed to pay inflated charter
rates to Ezion for the rig services
provided to Maersk Oil to help the
Singapore company secure bigger
loans. The claims are frivolous and
without merit, Ezion’s lawyer Peter Doraisamy said. Maersk Oil,
which isn’t a party in the lawsuit,
said it has terminated its contract
with Atlantic Marine for its failure
to meet contractual obligations.
Muralli Rajaram, a lawyer representing Atlantic Marine, declined
to comment.
Ezion’s stock fell 5.1% to S$1.125
(RM3.04) as of 1.45pm local time,
poised for the lowest close since
April 10. The benchmark Straits
Times Index declined 0.2%.
Atlantic Marine’s lawsuit “could
potentially be viewed as an attempt
to save its position as a Maersk Oil
middleman,” RHB analyst Lee Yue
Jer said in a research note yesterday. “The market has taken a kneejerk negative reaction.” Lee kept
his “buy” rating and target price
of S$2.10.
Ezion, which last week posted
a 9.4% fall in first-quarter net income to US$41 million (RM146.37
million), described the operating
environment as “challenging” after a drastic drop in oil prices. —
Bloomberg Indonesia seen holding rates
steady despite weakening growth
BY GAYATRI S U ROYO
BANGKOK: Thailand’s economy expanded 0.3% on-quarter
in January-March, official data
showed yesterday, highlighting
the task ahead for the military
junta that seized power in a
coup last year vowing to kickstart growth after months of
political instability.
And in another blow to the
country’s year-old government
the National Economic and
Social Development Board
(NESB) lowered its growth
forecast for this year.
Year-on-year first-quarter
growth came in at 3%, the NESB
said. But Krystal Tan, an Asia
economist at Capital Economics, said that figure was “exaggerated by a low base in the first
quarter of 2014, when growth
contracted and political unrest
was at its peak”.
At the time Bangkok was
paralysed by protests against
the democratically elected government of Yingluck Shinawatra, whose administration
was eventually toppled in the
coup.
The NESB said it expected
the economy to grow 3% to 4%
this year, down from an earlier prediction of 3.5% to 4.5%.
Growth came in at just 0.7% in
2014, its weakest pace in three
years.
In February, Thailand’s finance minister said he had
been told by junta chief Prayut
Chan-O-Cha to push for at least
4% growth for 2015, something
many analysts thought optimistic.
The World Bank estimates
growth for 2015 will be closer
to 3.5%.
The ruling junta has vowed
to pump billions of dollars into
the economy, mainly through
long-planned infrastructure
schemes but analysts say government spending and increased tourist revenues have
failed to offset falling exports
and weakening demand at
home. — AFP
JAKARTA: Indonesia’s central
bank is expected to hold its key
policy rate steady today although
the country’s growth rate has fallen to its weakest since 2009.
Growth in Southeast Asia’s
largest economy slumped to
4.71% annually in the first quarter, but Bank Indonesia (BI) is
in a bind as rising inflationary
pressures and a fragile currency
crimp its ability to cut rates.
Annual headline inflation in
April rose to 6.79% from March’s
6.38%, prompting BI to revise its
inflation outlook for end-2015 to
4% to 4.2% from below 4%.
The central bank’s main focus
now could be the rupiah, which
has weakened about 5.5% this
year and is the emerging Asia’s
worst performing currency. It
traded around 13,115 to the dollar yesterday.
With the exchange rate under
scrutiny and a heavy external
financing requirements for the
rest of 2015, “BI will have to be
particularly cautious before solidifying a dovish stance,” said
Deutsche Bank economist Taimur Baig in Singapore.
Baig expects the benchmark
rate to be cut 50 basis points to
7% by year-end, but sees more
opportunity for looser monetary
policy later.
MANILA: Philippine liquor firm Emperador Inc said yesterday it had
submitted a bid to buy French cognac maker Louis Royer from Japan’s
Suntory Holdings Ltd, and could go
to the debt market to fund the deal.
The acquisition is unlikely to
cost Emperador more than last
year’s US$700 million deal to buy
the Whyte & Mackay whisky unit
of India’s United Spirits Ltd, company director and spokesman
Singapore’s GIC in joint
venture to buy Seoul
mall for US$263m
SINGAPORE: Singapore’s sovereign wealth fund GIC said it
formed a joint venture partnership with the Canada Pension
Plan Investment Board (CPPIB) to buy a mall in Seoul from
Daesung Industries for US$263
million (RM938.91 million).
After the deal closes, GIC and
CPPIB will each own a 50%
stake in D-Cube Retail Mall.
“Our investment in the D-Cube
Retail Mall reflects our confidence in the long-term growth
of Korean domestic demand
and is consistent with our strategy of acquiring high-quality,
centrally-located assets with
upside potential,” said Loh Wai
Keong, managing director and
co-head Asia for GIC Real Estate Pte Ltd. — Reuters
Changes to Housing
Developers Act to kick
in from May 25
SINGAPORE: The Ministry of National Development announced
yesterday that amendments to
the Housing Developers (Control
and Licensing) Act and subsidiary legislation will be implemented from May 25, 2015, to
improve safeguards and enable
prospective private homebuyers
to make better-informed purchasing decisions, The Straits
Times reported. In April 2013,
Parliament approved amendments to the Housing Developers (Control and Licensing)
Act to improve and update legislative safeguards for buyers of
uncompleted private residential
properties.
HSBC: Tepid demand
continues to weigh on
regional growth
A woman holding some Indonesian rupiah notes. Bank Indonesia is in a bind as rising
inflationary pressures and a fragile currency crimp its ability to cut rates. Photo by
Reuters
Eighteen of 21 analysts in a
Reuters poll expected BI to hold
rates steady today, but most who
gave longer-term views see a cut
later in the year.
A day after weak first-quarter
growth was announced, Governor Agus Martowardojo said BI
will respond with a policy-mix
including looser downpayment
requirements for consumer loans
and relaxed loan-to-deposit ratio for banks, so that they can
lend more.
Dian Ayu Yustina, an analyst
at Bank Danamon, said BI would
rely more on such stimulus measures than rate cuts because of
worries about the currency. —
Reuters
Emperador seeks to buy cognac firm
BY ENRICO DELA CRUZ
IN BRIEF
Kingson Sian said.
Sian declined to disclose Emperador’s offer citing a confidentiality
agreement, and said he was not
aware who the other bidders for
Louis Royer were.
“After the first round, there may
be a second round ... There may be
a shortlist first, so it’s too early to
say,” Sian said when asked when
the bidding results were likely to
be released.
Suntory, one of Japan’s oldest
companies, is looking to sell off
its smaller assets to consolidate
its portfolio and finance its acquisitions, Sian said.
Suntory bought US drinks firm
Beam in a deal last year valued at
about US$15.7 billion. It was the
third-biggest acquisition by a Japanese company.
Emperador, mainly a brandy producer with a market value of US$4
billion, bought Whyte & Mackay last
year as part of a long-term strategy
to expand its product portfolio and
global reach. — Reuters
SINGAPORE: Growth in Asia is
unlikely to rebound in the near
future as tepid import demand
from the West continues to be a
drag on exports, a new report released by HSBC said, The Straits
Times reported. “Things are decidedly soggy everywhere,” said
Frederic Neumann, co-head of
Asian economics research at
HSBC, in the report. Since roughly 2012, exports have stagnated,
registering a third of growth seen
in the mid-2000s. Shipments
from China, Korea, and Taiwan
declined by over 8% in April over
the same month a year ago.
Yoma Strategic opens
water plant in Myanmar
SINGAPORE: Property and construction group Yoma Strategic
Holdings yesterday announced
the opening of its potable water
plant at Pun Hlaing Golf Estate
in Myanmar, The Straits Times
reported. The move is aimed at
delivering “high-quality drinking water straight to the taps of
residents of the estate”, said the
mainboard-listed company. The
plant, designed and supplied by
global water solutions provider
Hyflux, sets apart Pun Hlaing
Golf Estate as the first real estate development in Myanmar to
have its own Hyflux water treatment plant.
W O R L D B U S I N E S S 25
Taobao has six months to pull out
TAIPEI: Taiwan has given Chinese
e-commerce giant Alibaba Group
Holding Ltd six months to wind
down its online marketplace Taobao’s operations on the island after it failed to apply for the permit
required for a mainland Chinese
company to do business there, Taipei authorities said yesterday.
An official at Taiwan’s Investment
Commission said a fine of T$240,000
(RM28,195) has also been imposed
on Taobao in what is the second
case of an Alibaba operation falling
foul of the permit rules for mainland China companies this year.
Huatai draws
China tech
bosses to
US$4.5b sale
BY FOX H U
HONG KONG: Huatai Securities
Co Ltd, China’s fourth-biggest
listed brokerage by revenue, attracted two Internet entrepreneurs as cornerstone investors
for a first-time share sale in Hong
Kong that will raise as much as
US$4.5 billion (RM16.1 billion).
The Nanjing-based company
agreed to sell as much as US$1.9
billion of the offering to 13 cornerstone investors, according to
terms for the deal obtained by
Bloomberg. Ma Huateng, the
billionaire chairman of China’s
second-biggest Internet company Tencent Holdings Ltd, committed to invest US$100 million
while news portal NetEase Inc
and its founder Lei Ding will buy
a US$200 million stake.
Chinese brokers are raising
funds to boost margin lending
after a world-beating rally for
the nation’s stocks. At the top
of the price range, Huatai’s offering would be Hong Kong’s
biggest share sale this year,
according to data compiled
by Bloomberg. Huatai Securities is offering 1.4 billion
shares at HK$20.68 (RM9.53)
to HK$24.80 apiece, according to the terms. — Bloomberg
In March, Alibaba.com was told to
leave Taiwan within six months and
fined T$120,000 for a similar reason.
While the fine is small and Taiwanese shoppers can continue to
order goods via Taobao’s mainland
base in future, the permits glitch is
an unwelcome headache for Alibaba as its seeks to grow business
outside its mainland base.
“Mainland companies registered in foreign countries need
to apply for mainland business
permits in Taiwan,” Investment
Commission executive secretary
Emile Chang said. “Neither Ali-
baba nor Taobao have done so.”
Chang said both Taobao and
Alibaba.com, the business-to-business online Alibaba platform hit
by a similar ruling earlier this year,
had applied for regular licences to
operate in Taiwan as non-Chinese,
foreign-owned. Alibaba.com has a
registration in Singapore, while Taobao has a Hong Kong registration.
He noted the companies could still
apply for Chinese mainland-owned
company permits and potentially
maintain operations in Taiwan.
In a statement provided via its
Taiwan Taobao operations, Alibaba
IN BRIEF
said it is “having positive ongoing
discussions with the relevant Taiwanese authorities ... we hope to
find a suitable way forward in order
to continue to serve the needs of
Taiwan consumers and merchants.”
News of the Taobao fine was
first reported by Chinese and Taiwanese media last Thursday, and
confirmed by authorities yesterday.
Investment rules in Taiwan are
stricter for mainland-owned companies than other foreign-owned
firms, largely due to long-standing
mistrust between the two political
entities. — Reuters
Alibaba denounces
baseless accusation
After Kering files suit for selling counterfeits of its product
SHANGHAI: Chinese e-commerce
giant Alibaba yesterday denounced
as baseless a lawsuit by French apparel company Kering Group, whose
luxury brands include Gucci, which
accused it of selling fake products.
Kering filed a suit against United
States-listed Alibaba in a New York
court last week for selling counterfeits of its products worldwide,
Chinese state media reported.
Kering’s portfolio of luxury
and lifestyle brands include Saint
Laurent, Alexander McQueen and
Puma, according to its website.
Copyright infringement is rife
in China, but Alibaba said it plans
to fight the case.
“Unfortunately, Kering Group
has chosen the path of wasteful
litigation instead of the path of constructive cooperation,” an Alibaba
spokeswoman said in a statement
provided to AFP.
“We believe this complaint has
no basis and we will fight it vigorously,” it said.
Alibaba’s Taobao platform is
Ma gesturing during a talk by
Our Hong Kong Foundation in
Hong Kong. He says Alibaba
has always been committed
to combating fake products.
Photo by Reuters
estimated to hold more than 90%
of the consumer-to-consumer
market in China, while its Tmall.
com is believed to command over
half the Chinese market for business-to-consumer transactions.
State media said that Kering filed
an earlier lawsuit against Alibaba in
July last year, but dropped it after
the two companies agreed to work
together to reduce counterfeiting.
“We continue to work in part-
nership with numerous brands to
help them protect their intellectual
property, and we have a strong track
record of doing so,” Alibaba said in
its statement yesterday.
In January, the State Administration for Industry and Commerce
(SAIC), which regulates market order in China, delivered an unusual
dressing-down of the prominent
company, publishing a survey saying only about a third of products
sampled from Alibaba’s Taobao
were genuine.
“We have always been committed to combating fake products and
have devoted our efforts to solving this difficult problem,” Alibaba
founder Jack Ma said in a meeting
with the SAIC, after the survey was
released. — AFP
Renhe says it has repaid 2015 US dollar bonds due yesterday
BY DAVI D YONG
HONG KONG: Renhe Commercial
Holdings Co Ltd repaid an offshore
bond ahead of a deadline that expired yesterday, avoiding default
and easing concerns about worsening credit stress in China’s US dollar
debt market.
The Harbin, Heilongjiang province-based developer’s US$78.71 million (RM281.1 million) of 11.75% notes
matured yesterday, according to data
compiled by Bloomberg. The redemption rewarded investors who held
out for full payment, after snubbing
Renhe’s discounted bond buy-back
in December, a deal that Standard
& Poor’s said amounted to a default.
The payment comes as a relief to
China’s US currency debt market, following two defaults in the past month
amid signs of more financial stress in
the world’s second-biggest economy.
Homebuilder Kaisa Group Holdings
Ltd last month became the first Chinese developer to miss interest payments on US dollar debentures, while
coal importer Winsway Enterprises
Holdings Ltd followed on May 8.
“The 2015 senior notes are fully repaid,” Rebecca Chan, a Hong
Kong-based spokeswoman for Renhe, said via email yesterday. The
bonds, sold at 99.08 cents on the US
dollar in 2010, last traded at 97.083
cents on the US dollar on May 12,
prices compiled by Bloomberg show.
Renhe’s US$161.2 million of 13%
notes due March 2016 are at 91 cents
on the US dollar to yield 25.95%. The
securities were sold at 100 cents on the
US dollar in September 2010, according to data compiled by Bloomberg.
Those bonds, and a US$400 million loan due August next year, are
the company’s next major debt obligations, according to S&P. Renhe’s cash
flow may be insufficient to redeem
both of them next year, S&P said in a
January assessment.
“It’s interesting that the company had the US$78 million to repay”
the notes, said Charles Macgregor,
head of Asian high-yield research at
Lucror Analytics Pte in Singapore. “I
suppose that augurs well for holders
of the 2016 bonds.”
China’s economy grew last quarter at the slowest pace since 2009.
Retail sales have cooled, with a 10%
gain in April, the least since February
2006. Policymakers have cut interest
rates three times since November
to stem the slowdown, as well as
easing home lending rules to revive
the real estate market. High-yield
bonds in China have gained 3.83%
this quarter-to-date, on track for the
best performance since the second
quarter of last year, a Bank of America Merrill Lynch index shows.
S&P downgraded Renhe’s credit
rating to “selective default” in January and raised it to CCC, eight levels
below investment grade, after the
buy-back. Renhe spent US$660 million to buy back its 2015 and 2016
securities at discounts of as much
as 18%. — Bloomberg
ICBC ‘unaware’ of S$50b
fund plan to finance
investments in Brazil
SAO PAULO/BEIJING: Industrial and Commercial Bank
of China Ltd, the world’s
largest bank by assets, said
last Friday it is not aware of
plans to create a US$50 billion (RM179 billion) fund to
finance infrastructure investments in Brazil. Last Wednesday, two Brazilian government sources told Reuters
that a memorandum of understanding between ICBC
and Brazil’s Caixa Econômica
Federal to create the fund will
be formally announced next
week, when Chinese Premier
Li Keqiang visits South America. A third source with direct
involvement in the talks confirmed the plan last Thursday. Under the terms of the
plan, ICBC would provide
the financing for the fund,
the sources told Reuters on
condition of anonymity. —
Reuters
China’s April home
prices fuel hopes of
bottoming out
HONG KONG: China’s new
home prices fell for the eighth
consecutive month in April
from a year earlier but were
flat from March, adding to
hopes that a property downturn, which is weighing heavily
on the economy, is beginning
to bottom out. But analysts
warned any recovery in the
market will take some time given a huge inventory of unsold
homes, and said the property
sector remains the biggest risk
to the world’s second-largest
economy, which looks set for
its worst year in 25 years. —
Reuters
Foreign investors
welcome Chinese
regulator’s stance
HONG KONG: Foreign investors have welcomed assurances by China’s securities watchdog that their shareholding
rights are recognised in the
country, in a development
that should boost trading on
a landmark Hong Kong-Shanghai trading link.The so-called
Stock Connect project went
live in November, allowing foreign investors to buy and sell
Shanghai shares via the Hong
Kong Exchanges & Clearing
Ltd for the first time. — Reuters
Online gaming company
888 Holdings bids
for Bwin.Party
LONDON: British online
gaming company 888 Holdings plc offered to buy bigger
rival Bwin.Party Digital Entertainment plc, raising the
prospect of a takeover battle
between 888 and GVC Holdings plc. 888, which ended
talks on a takeover by William Hill plc earlier this year,
said yesterday it saw “significant industrial logic” in
combining with Bwin, which
put itself up for sale last year.
— Reuters
26 WORLD
Myanmar acknowledges
‘concerns’ over exodus
But insists it should not be solely blamed
YANGON: Myanmar acknowledged
yesterday that the international
community had “concerns” about
waves of boat people fleeing its
shores but insisted it should not
be solely blamed for the regional
migrant crisis.
Information Minister Ye Htut
said his country understood “the
concerns [of] the international community on the people in the sea”.
“Instead of blaming Myanmar for
all these problems ... all these issues
should be solved by the regional partners,” he added in English following
a briefing between government officials and diplomats in Yangon.
Tens of thousands of Rohingya
Muslims, a minority who face daily
prejudice and a raft of restrictions
in western Myanmar, have long
fled in rickety boats across the Bay
of Bengal.
Indian nurse
dies after 42
years in coma
following rape
NEW DELHI: A nurse died
yesterday after 42 years in a
coma following a brutal rape,
in a case that led India to ease
some restrictions on euthanasia.
Aruna Shanbaug suffered
brain damage and had been in
a vegetative state in a Mumbai
hospital since being strangled
with a dog chain and sexually
assaulted by a hospital worker
in 1973.
The 66-year-old Shanbaug
had suffered a bout of pneumonia in recent days and was
on a ventilator, officials at King
Edward Hospital in Mumbai
told the Press Trust of India
news agency.
Shanbaug was attacked by
a ward boy in the basement of
the hospital where she was discovered 11 hours later, blind
and suffering from a severe
brain stem injury.
Left bedridden, she spent
more than four decades being
cared for by a team of doctors
and nurses at the hospital.
Her attacker was freed after a seven-year jail sentence.
“Her actual death happened in 1973 (the date of
the attack). Now what has
happened is her legal death,”
her friend and journalist
Pinki Virani told Zee News
TV channel.
“Our Aruna has given our
country a big thing in the form
of a law on passive euthanasia,” Virani said. — AFP
In recent years they have been
joined by growing numbers of economic migrants from neighbouring Bangladesh looking to escape
grinding poverty.
Myanmar’s part in the grim
and often deadly exodus had been
largely ignored by its neighbours.
But the former army-run nation
has faced growing international
pressure this month after thousands
of migrants were abandoned in overcrowded boats by people smugglers
following a crackdown on the trade
in Thailand, a key transit point.
Thousands of Rohingya and
Bangladeshis, many emaciated
and exhausted, have since landed on Malaysian and Indonesian
shores while others crammed into
vessels have been turned back to
sea — sparking international outrage. — AFP
Rohingyas queueuing up as they move to better shelter in Indonesia. These migrants
are largely ignored by regional partners. Photo by Reuters
gling following the discovery of a
network of secret jungle camps in
the south and dozens of shallow
graves thought to contain the remains of Myanmar Rohingya and
Bangladeshi migrants.
Thousands of migrants were
subsequently abandoned by smuggling gangs, some in remote jungles but many more on rickety
boats in the Andaman Sea.
Rights groups and observers
have long accused Thai officials,
including the police and military,
of turning a blind eye to human
trafficking — and even being complicit in the grim trade.
Ko Tong was until recently an
influential official in Thailand’s
southern province of Satun, a re-
gion long known to be a major
transit point for people smugglers
and traffickers.
Thai police had previously suggested he might have fled to Malaysia, but Prawut said there was no
evidence he had left the country.
Television showed pictures of
Ko Tong, balding and dressed in a
white t-shirt, appearing at a brief
press conference flanked by police officers, some of whom were
armed.
It is common in Thailand for accused criminals to be presented to
the media once they are charged.
Local media reported that he
denied all the charges against him
and said he would only testify in
court. — AFP
China tells drivers to cool it after horrific road rage
BEIJING: The horrific incident
shocked the nation when it went
viral in China earlier this month: a
woman was dragged from her car,
thrown to the ground and kicked
repeatedly in the face and head
in a case of road rage in Sichuan.
And it was hardly an isolated
event. About 100 million roadrage incidents have been reported since January 2012, according
to the Ministry of Public Security. Incidents arising from drivers
forcefully changing lanes or disrespecting the right of way rose 10%
in the first four months of this year,
compared with the same period
‘US, China discussing
further sanctions on
North Korea’
SEOUL: The US is discussing
with China imposing further
sanctions against North Korea as the reclusive country is
“not even close” to taking steps
to rein in its nuclear weapons
programme, US Secretary of
State John Kerry said yesterday.
Speaking in the South Korean
capital, Kerry said Washington had offered the North the
chance of an improved relationship in return for signs of a
genuine willingness to end its
nuclear programme. “To date,
to this moment, particularly
with recent provocations, it is
clear the DPRK (Democratic
People’s Republic of Korea) is
not even close to meeting that
standard,” Kerry told a joint
news conference with South
Korean Foreign Minister Yun
Byung-se. — Reuters
‘China police on trial for
fatal beating of woman’
Thai people smuggling
‘kingpin’ hands himself in
BANGKOK: A former Thai regional
official accused of being a major
people trafficking kingpin turned
himself in yesterday, police said, as
the kingdom continues a belated
blitz against the lucrative trade.
Pajjuban Aungkachotephan,
better known as Ko Tong (Big
Brother Tong), had been sought
by police for the last week on human trafficking charges.
“He surrendered to police this
morning in Bangkok,” national police spokesman Lieutenant General Prawut Thavornsiri told AFP.
“Police are now taking him to
the south for questioning and more
investigation,” he added.
Thailand began a crackdown
on human trafficking and smug-
IN BRIEF
last year, it said.
“People are easily agitated nowadays, feel underappreciated and
disrespected, and they take it out
on the road by being bullies on the
road,” Sun Xiaohong, a prominent
female observer of the auto industry for more than a decade, said in
an interview.
As a result of the public debate
over the video, the Security Ministry issued a statement on May 8,
calling on drivers to be “civilised”,
follow traffic rules and manage
their anger.
“Offensive driving caused by
road rage is a severe violation of
law that disrupts order and endangers traffic safety,” the ministry said
in the statement. “Drivers should
consciously rein in their road rage.”
The anger in China is rising in
tandem with the 10-fold surge in
vehicle ownership over the past
decade, causing motorists to fight
for everything from parking spaces
to right of way. Across the country, zebra crossings are routinely
ignored by motorists, angry honking is epidemic and jaywalking is
rampant. Road rage caused about
82,000 car accidents last year, a
2.4% increase over 2013, the ministry said. — Bloomberg
BEIJING: Three Chinese policemen went on trial yesterday over the fatal beating of a
female migrant worker, state
media said, a case that sparked
an online outcry about violence by law enforcers. Zhou
Xiuyun, 47, was assaulted by
the police at a construction
site in Taiyuan in December
as she tried to prevent officers
from taking away her husband
and son over a dispute with
security guards, according to
previous media reports. The
three were taken to a local police station where Zhou was
thrown to the ground while
the two men were beaten up,
they said. Zhou died the next
day in hospital. — AFP
Australians face travel
ban to PNG’s Bougainville
SYDNEY: Papua New Guinea
(PNG) has banned Australians
from travelling to the politically
sensitive autonomous region
of Bougainville, officials said
yesterday, after Canberra announced plans to open a diplomatic mission there. Australia
revealed proposals for a new
mission in resource-rich Bougainville last week, ahead of
an independence referendum
expected to be held within the
next five years. PNG Prime Minister Peter O’Neill earlier said
the plans came as a shock and
he had not been consulted on
them. — AFP
China police shoot dead
killer lion — report
BEIJING: Chinese police have
shot dead a lion that killed a
keeper, state media reported,
in the country’s second such
zookeeper death this year. Police were called in to shoot the
lion to “ensure the safety of
tourists”, after the feline fatally
injured a keeper who entered
its cage for cleaning, according to the official Xinhua news
agency. The lion escaped from
its enclosure and was at large
in the zoo for about two hours,
reports said. — AFP
W O R L D 27
Singapore slams Iran for warning shots
SINGAPORE: Singapore yesterday
condemned Iranian forces for firing warning shots in the Gulf at a
commercial ship registered in the
Asian city-state, calling it a “serious violation of international law”.
The Maritime and Port Authority (MPA) also urged Tehran to investigate last Thursday’s incident
involving the Singapore-flagged
Alpine Eternity which it said was
in international waters.
“With regard to the reported
Spain arrests five
accused of trying
to buy kidney
MADRID: Spanish police said
yesterday they had arrested
five people accused of trying
to buy a kidney from an impoverished immigrant for €6,000
(RM24,421.58).
Officers in Spain made the
arrests working in collaboration
with others in Germany and Belgium, a brief police statement
said. It did not say exactly when
the arrests were made.
“The immigrant tried to pull
out of the deal while he was undergoing clinical tests, so he was
kidnapped, beaten and threatened with death to make him
go ahead,” the statement said.
The person wanting to buy
the organ was the leader of a
criminal gang specialised in robberies, who wanted it for a son
suffering from kidney disease.
Police chiefs and the head
of Spain’s National Transplant
Organization were due to give
more details at a press conference yesterday.
In March, 14 European nations in Spain signed the first
ever international treaty to fight
human organ trafficking. — AFP
Texas biker gang
battle kills nine
WASHINGTON: At least nine
outlaw biker gang members
were killed in Texas on Sunday
when a brawl between rival
groups erupted into a pitched
gun battle in a parking lot.
Police told local reporters that
they were amazed that none of
the families eating in nearby
restaurants was wounded in the
crossfire as members of up to
five gangs fought.
“In 34 years of law enforcement, this is the most violent
crime scene I have ever been
involved in. There is blood everywhere,” Sergeant Patrick Swanton told the Waco Tribune.
“Twenty-five feet away there
were families,” he said. “This is
one of the worst gun fights we’ve
ever had in the city limits. They
started shooting at our officers.”
The battle broke out at restaurant, part of the Twin Peaks
chain of sports bars and a known
biker watering hole, in a popular
shopping and dining centre in
Waco. — AFP
shooting incident on May 14, 2015,
involving a Singapore-registered
tanker ‘Alpine Eternity’ that took
place in international waters, Singapore is deeply concerned with such
actions,” the MPA said in a statement.
“Such interference with navigational rights is a serious violation
of international law,” it said.
“The freedom of navigation
and free flow of commerce are of
critical importance to Singapore
and other maritime and trading
nations,” it added.
The MPA said it had “requested
the Iranian maritime authorities to
investigate the incident and prevent
future recurrences”.
In the incident, Iranian Revolutionary Guard forces fired warning
shots across the bow of the Singapore-flagged tanker before vessels from the United Arab Emirates
came to the ship’s aid, according to
US officials.
After hearing a radio call for
help, the United Arab Emirates
dispatched coastguard vessels to
aid the tanker and the Iranian boats
then left the area.
The Iranian vessels apparently
tried to intercept the ship to settle
a legal dispute over an Iranian oil
rig that was damaged on March 22.
An Iranian official last Friday
said the Alpine Eternity, which is
operated by Norway’s Transpetrol
TM AS, had hit the rig in the Gulf
after drifting off course. — AFP
EU to back naval
force to fight against
people smugglers
Operation will involve warships and surveillance aircraft
BY ALIX RIJCKAE RT
BRUSSELS: European Union (EU)
ministers were set to approve
plans yesterday for an unprecedented naval force to fight people
smugglers in the Mediterranean
after a series of shipwrecks killed
hundreds of migrants.
The ambitious operation starting in June will involve the deployment of warships and surveillance aircraft off the coast of
Libya, the epicentre of the humanitarian disaster unfolding on
Europe’s southern shores.
The EU plan also includes the
possible destruction of smugglers’ boats before they reach
European shores, although that
requires a United Nations Security Council resolution backing
military action.
Federica Mogherini, the EU
diplomatic chief, said approval
from the European foreign and
defence ministers at a “very intense” meeting in Brussels yesterday would help push the United
Nations into action.
“Today the main point will be
taking the decision to establish
the EU operation at sea to dismantle the criminal networks
that are smuggling people in the
Mediterranean,” Mogherini told
reporters.
“I think that after we take the
decision today it is more likely
for the Security Council to take
a resolution.”
She has however insisted there
is no question of EU “boots on the
ground” in Libya, where political
chaos and the rising threat of Islamic State militants make it the
main launching point for people
risking their lives to cross the sea.
More than 5,000 migrants,
many escaping civil war in Syria,
have died over the past 18 months
while trying to cross from North
IN BRIEF
German cop probed for
alleged brutal assaults
on refugees
BERLIN: German prosecutors
are investigating a police officer who allegedly abused two
refugees, strangling an Afghan
man and forcing a Moroccan
to eat rotten pork off the floor.
The police officer has been accused of bragging about the
brutal assaults in text messages
and photos he sent via instant
messaging service WhatsApp to
his colleagues. Human rights
group Pro Asyl condemned
the alleged incidents for their
“appalling level of racism and
inhumanity” and demanded a
probe into how many “accomplices in police uniform” knew
of the violence. — AFP
Serbian man kills six
in shooting spree after
son’s wedding
BELGRADE: A 55-year-old man
went on a shooting spree in Serbia in an apparent drunken rage
over his son’s wedding, killing
six people including the bride
and her parents, police said yesterday. The killing frenzy in the
northern town of Kanjiza on
Sunday was blamed on “troubled family relations,” an Interior Ministry spokeswoman
told AFP. Local media reported
that the man had been drinking heavily before taking up his
hunting rifle and shooting dead
the six victims, a day after the
wedding he had allegedly opposed. — AFP
Macedonia PM rallies
supporters as
protesters dig in
NATO secretary-general Jens Stoltenberg listening to EU diplomatic chief Federica
Mogherini (R) during a joint meeting of EU foreign and defence ministers at the EU
Council in Brussels yesterday. Photo by Reuters
Africa, often on flimsy rubber dinghies or crowded fishing boats.
Britain, France, Germany, Italy
and Spain have already promised
to deploy warships for the mission, a rare joint military venture
for the 28-nation European bloc
that prefers political and financial gambits.
“The Royal Navy is already saving lives at sea but we need to
agree action today to get after the
criminal gangs,” British Defence
Minister Michael Fallon said as
he arrived for the talks.
German Defence Minister Ursula von der Leyen said that while
rescue operations at sea would remain the EU’s first priority, it had
to tackle the roots of the problem.
“Even if sea rescue operations
will stay our top priority, we have
to address at the same time the
causes, which bring people to
venture on this high-risk escape
over the sea,” she said.
Rights groups have however
criticised the military plan, saying it will not solve the problem
of complex smuggling networks
and of a huge number of people
fleeing war and poverty.
The headquarters of the mission, called EU Navfor Med, is
to be in Rome and will be led by
Italian Rear Admiral Enrico Credendino, a European diplomat
told AFP. — AFP
SKOPJE: Macedonian opposition supporters set up a protest
camp outside the offices of embattled Prime Minister Nikola
Gruevski as thousands of his
supporters were expected to
turn out for a counter rally yesterday night. More than 20,000
opposition protesters marched
through the capital Skopje on
Sunday to demand that Gruevski
step down, accusing him of corruption, mass wiretapping and
of fomenting ethnic tensions
to hang onto power. Opposition leader Zoran Zaev called
on demonstrators to stay on the
streets in front of Gruevski’s neoclassical government headquarters “until he goes”. — AFP
Famous US thrill
seeker dies in jumping
accident
LOS ANGELES: A world-renowned extreme athlete died
along with another man during
a stunt at the Yosemite National Park in California, US media
said on Sunday. Tributes poured
in from all over the globe for
Dean Potter, 43, following his
death on Saturday. He and fellow BASE jumper Graham Hunt,
29, were killed during a jump at
Taft Point, ABC News said, citing
Yosemite National Park spokesman Scott Gediman. Reports
filtered through to park officials
on Saturday of an accident and
a helicopter spotted the two
bodies on Sunday. — AFP
28
live it!
T UE
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Personal
ASSISTANT
hyp
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can
rig
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ing
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WORK. LIFE. BALANCE
is D
Messages in
TREAT your palate to some culinary
delights while you enjoy a live band
performance on a Tuesday night with
Tujo’s Cloudy Bay Seafood and Duck Trail
promotion. The two options available
are the Cloudy Bay Sauvignon Blanc and
Seafood menu which includes a bottle of
the wine paired with grilled tiger prawns
in lemon honey mustard, and the Cloudy
Bay Pinot and Duck menu which includes
a bottle of the wine paired with herbed
tabouleh and smoked duck. The bottle of
wine for both menus is RM300++ for two
persons with an additional RM76 for two
mains. Tujo is located at Ascott, 9 Jalan
Pinang, KL. For more information, visit
www.tujo.my or call (03) 2161 7789.
Kl Swing! brings you the weekly Tuesday
Night Swing at Sid’s Pub, Bangsar South.
Not a swing dancer but have always wanted
to give it a go? A 30 minute taster class will
take place at 9pm for beginners to learn
the ropes of swing dancing. There will be
no cover charge, but a contribution of RM10
is requested and you are encouraged to
purchase drinks to support the venue. So,
if you are a swing dancer or would like to
give it a go, wear comfortable footwear to
the Tuesday Night Swing tonight at Sid’s
Pub, Bangsar South located at Jalan 112h,
Kampung Kerinchi, KL. More details on the
event can be found on www.klswing.com.
YOUR DNA
With genetic testing now more easily available, you can find out why your diet
is not working or if you are doing the right things to prevent heart disease
BY J OAN NG
A
fter Hollywood film star
Angelina Jolie went public about her preventive
breast surgery, genetic
testing for BRCA mutations doubled in the US.
Jolie, who has a family history of breast
and ovarian cancers, also has a BRCA1
gene mutation that dramatically raises her
risk of cancer. She removed her breasts
and ovaries, and in the process spurred
many other women to do the same.
In fact, genetic testing is slowly entering the mainstream. There is enough
scientific and clinical evidence such
that some medical centres in the US
have made it part of routine practice.
And although these tests cannot tell
you everything yet, they can tell you
something new. Josephine Ng, a nu-
tritional therapist and functional medicine practitioner at COMO Shambhala
Urban Escape, found this out when she
sent her DNA for a battery of tests in August last year.
“I found out that caffeine affects my
bones,” she says. Her risk of osteoporosis increases if she consumes too much
caffeine. Since undergoing the tests, she
has been trying to limit herself to one
cup of coffee a day. She also found that
she has a cancer-related gene deletion,
which she mitigates by eating plenty of
broccoli, kale and onions.
Ng’s test results came from DNA Life,
a joint venture between Danish testing
facility, Nordic Laboratories, and South
African DNA specialist, DNAlysis Biotechnology. And COMO Shambhala has partnered DNA Life to make these tests easily
available in Singapore. In April, COMO
Shambhala announced that it will offer
four nutrigenomic tests at its centre in
Orchard Road. Testing requires a simple
mouth swab. And Ng, who had attended
a training programme conducted by DNA
Life, will help clients interpret the results
of the tests and suggest diet, exercise and
lifestyle strategies based not just on the
results but also on an individual’s case
history. “Taking a case history is crucial,”
she says. “That’s how I can understand
what is going on in a person’s life, what
is his lifestyle, and what are his dietary
preference and family history.”
The four tests
If you have been trying unsuccessfully
to lose weight for years, DNA Diet might
be a useful test for you. A weight management-focused test, it covers 13 gene
variations that impact obesity risk and
weight loss. Your genes can influence how
you absorb fat or burn carbohydrates, for
instance. The test will show how your genetic profile might impact your response
to the three most scientifically proven
and effective weight management plans:
low-fat, low-carb and Mediterranean. You
will also find out how much exercise you
need to achieve and maintain weight loss.
DNA Diet is particularly recommended
Ng says the usefulness of DNA testing lies in
the ability to create a personalised healthcare
plan. Photo by Bryan Tay/The Edge Singapore
for those with a family history of obesity,
those with obesity-related health issues,
those who lose weight on dieting but put
back all the weight later on and those who
eat well but cannot lose weight.
Women who suffer from oestrogen-dominant conditions, such as endometriosis, premenstrual syndrome
and uterine fibroids, would benefit from
DNA Oestrogen. It tests 10 genes that
affect or are related to the oestrogen in
your body. Women with a family history
of breast, uterine or ovarian cancer would
also benefit, as well as men with a family
history of prostate cancer.
Meanwhile, DNA Sport analyses 13
genes and can determine whether you
will make a better endurance athlete or
are more likely to have power in your
punch like Manny Pacquiao. It also shows
the speed of your body’s recovery and
genetic susceptibilities to tendon and
other soft tissue injuries. And it will provide an optimal strategy for training and
diet. Professional athletes will probably
find the results most useful, but sports
enthusiasts who want to minimise injuries or those who have a family history of
live it! 29
T U E SDAY MAY 1 9 , 20 1 5 • T HEED G E FINA NCIA L DA ILY
hypertension can also gain valuable insights.
Ng also recommends this test for children
as it can measure athletic potential, which
can indicate how far a child can go with the
right training.
Until May 31, COMO Shambhala is offering each of these three tests at a launch price
of S$520 (RM1,400). Thereafter, the tests will
be priced at S$940 each. Each package includes two consultations with Ng.
The most comprehensive test of the lot
is DNA Health, which looks at 28 genes
that have significant roles in the onset of
chronic diseases such as coronary heart
disease and diabetes. Those who would
benefit most are those with existing chronic health conditions such as hypertension,
high cholesterol and heart disease, as well
as those with a family history of cardiovascular conditions, insulin resistance and
diabetes, bone-related conditions such
as osteoporosis and osteoarthritis, and
allergic asthma. According to Ng, this is
potentially the most useful of all the tests.
Even seemingly healthy people would be
able to use the test results to make better
diet and lifestyle choices, helping to prevent many diseases. COMO Shambhala is
not offering this test as part of a package,
but the test and two consultations with Ng
are likely to cost about S$1,108.
What can you expect?
The usefulness of DNA testing lies in the ability to create a personalised healthcare plan,
says Ng. Doctors typically recommend onesize-fits-all solutions. “To lower cholesterol,
they prescribe statins. If you are overweight,
they suggest you exercise,” she says. However, the result of such prescriptions often
differs from one patient to another.
Ng says she has seen results so far among
clients who took the DNA Diet test. “The
diet works quite well if you are obese. But of
course, no test can guarantee you can lose
weight,” she says, adding that a lot of the work
still has to be done by clients. “DNA Health
is also very good. I have found instances where people have unusual symptoms,
such as chemical sensitivities to perfumes
or preservatives.”
In fact, the tests that DNA Life runs and
the results it returns are all backed by rigorous research and clinical evidence, Ng says.
This means that there is strong evidence to
support a lifestyle change based on the test
results. To be qualified to administer the
results, she had to attend a three-day training programme conducted by a university
professor. “It’s a very technical programme
and you need to be a nutritionist or doctor
— someone with medical training,” she says.
As genetic testing gains popularity, Ng
sees the market growing. She says there
are already quite a number of other testing
companies out there that test
all sorts of genes — even those that may
not be very useful because not enough research has been done on them. And while
DNA Life interprets the results with actionable points, not all genetic testing companies do this.
Indeed, after Jolie underwent her double
mastectomy, some experts warned about the
risks of unnecessary surgery from misinterpreted test results. The good thing about the
DNA Life tests is that the recommendations
are generally sound ones, no matter what
your genetic imperfection: eat well, exercise
and get a good night’s sleep. Ng says her test
results mostly confirmed a lifestyle that was
already ingrained in her as a nutritionist and
functional medicine practitioner. “Because
of my gene deletion, I have to eat certain
vegetables. But I was already eating those
anyway,” she says. “It was a confirmation
that more or less what I have been doing is
right for me.” — The Edge Singapore
t
PICK OF THE DAY
THE recently launched Acer Iconia Talk S combines both mobile phone and tablet functionalities in a single device. The dual SIM card
feature allows users the flexibility to manage
two accounts at once while the narrow bezel
display ensures an immersive viewing experience on the 6.9in high definition touch screen
display. The device weighs only 275g and is a
pocket-friendly tablet with a slim body design.
Priced at RM799, the Acer Iconia Talk S is now
available at all Acer stores. More details can
be obtained from www.facebook.com/AcerMalaysia or by contacting the Acer Product
Infoline at 1800-88-1288.
re
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An example of the results from a DNA Diet test.
30
live it!
Zen TODAY
No thief, however skilful, can rob one of knowledge, and that is
why knowledge is the best and safest treasure to acquire.
— L Frank Baum
HOPPING
on the KFit
bandwagon
BY SU A N N QUA H
W
anting to be healthy and
getting more exercise are
a perennial resolution —
this is why gyms register
the most number of new
participants in January,
although that doesn’t mean people regularly
go. The reasons for letting things slip in the fitness department vary, and are often justified.
Plus, being tied down for a lengthy period of
time and forced to settle for a fitness regime
at a gym you don’t entirely like anymore can
be quite a punishing experience. Enter KFit,
Asia’s new kid on the fitness block and a possible solution to the age-old problem of wasting
money on gym memberships that you end up
not utilising.
Started by the co-founder of Groupon Malaysia, Joel Neoh, KFit claims to be the answer
to high gym membership fees. Instead of paying for a year’s subscription, all users have to
do is sign up for a monthly membership on
KFit’s website, start searching for classes that
they’re interested in— the list includes yoga,
weightlifting and hundreds more — make a
reservation and then off you go. It’s like a Netflix for fitness, if you will.
With just several clicks of a button, users
will have access to a comprehensive list of
exercise options, so that workout sessions are
varied and full of new and exciting challenges. Apparently, about 90% of Asians do not
have gym memberships, and this is exactly
what makes KFit so appealing. Now available
in Malaysia, Hong Kong and Singapore, the
website is a tantalising offer for the majority
of people wanting to dabble in various fitness
options instead of committing to a single gym
for an entire year.
By the end of this year, KFit aims to become
available in Australia, New Zealand, the Philippines, Taiwan, Korea, Japan, China and India
as well. Monthly subscription prices in these
cities will be dependent on the cost of living
and fitness activities, respectively. Here in Malaysia, it costs RM99 per month to become a
part of KFit — the upsides are that there are no
upfront fees, no contracts and memberships
can be terminated at any time.
The cost of the monthly membership is
split between KFit and the participating gyms,
depending on where members utilise their
memberships. It claims to be the answer for
small gym owners that only have one or two
outlets – KFit helps promote them to the masses
and reach a wider target audience than they
normally would.
KFit not only links gyms, but also dance
studios, sports complexes, such as futsal and
badminton courts, and all sorts of fitness activities around the city in its quest to make fitness
accessible and enjoyable to everyone. For the
bigger players in the fitness industry, KFit helps
gym and studio owners fill up classes. The list
of options made available provides for different training levels to cater to various needs in
addition to enabling people to invite friends
to join classes with them, making workouts
even more enjoyable.
Within just a couple of months of KFit’s
launch, almost 100,000 people have already
registered their interest in the service, which
is only website-based at the moment but will
soon be coming to mobiles in the form of apps.
For more info on KFit or to request an invite
to join, visit www.kfit.com.
S P O RT S 3 1
TV app for SEA Games
Event in Singapore will be streamed live on YouTube and smart phones
SINGAPORE: The Southeast Asian
(SEA) Games to be held in June
in high-tech Singapore will be
streamed live on dedicated mobile apps and YouTube, organisers
said yesterday.
More than 600 hours of the
39-sport competition from June 5
to 16 will be streamed live on the
“SEA Games TV” apps for Android
and iOS mobile devices, the Singapore SEA Games organising committee said in a statement.
Sixteen sports will also be
streamed live on popular video
Germany’s Audi
rules out entry
into Formula
One racing
FRANKFURT: Germany’s
Audi has no plans to enter
Formula One, the company said yeseterday, seeking
to end speculation that the
sports car maker was tempted
to broaden its commitment
to motor racing.
“This is not a topic for us,”
a spokesman for the premium brand, which is owned
by Volkswagen, said.
German daily Handelsblatt yesterday reported that
Audi Chief Executive Rupert
Stadler had ruled out an entry
into Formula One after speculation of a partnership with
former champions Red Bull.
“Formula One needs to
solve its problems on its own,”
Handelsblatt quoted Stadler
as saying in its Monday edition. The sport, in which Ferrari and Mercedes race, is
seeking to make cars faster
and louder again to maintain
its allure.
Last week Stadler was
quoted as saying Formula
One remained an option for
Audi. He told Britain’s Auto
Express magazine website that
“in life you must keep things
open”, in response to a question about the sport.
There has long been speculation about whether Audi
might be tempted into Formula One, and it increased
after Volkswagen’s Chairman Ferdinand Piech quit
last month.
Piech was seen as being
strongly opposed to Formula
One where top teams have annual budgets of over US$200
million (RM714 million).
Audi competes in the Le
Mans annual endurance race,
the German Touring Car series and the fledgling Formula E competition for electric
powered cars. — Reuters
sharing and streaming site YouTube, along with the opening and
closing ceremonies, the statement
said.
“The digital platforms allow the
organisers to go beyond venue capacity and geographical boundaries and to reach out to the entire
region,” it said.
Lim Teck Yin, chairman of the
organising committee, said the intent of the digital platforms was to
keep regional sports fans “updated
and excited about the games, no
matter where they live”.
Organisers last week said costs
for the Games will come in at
S$324.5 million (RM877.83 million).
The biennial SEA Games is a
smorgasbord of different sports
ranging from the popular football,
swimming and athletics as well as
more exotic sports followed passionately in Southeast Asia.
Among them is the Chinese martial art wushu, and sepak takraw
— a cross between volleyball and
football where players use their
feet, legs and head to lob a rattan
ball into the opposing court.
Singapore last hosted the Games
in 1993. The centrepiece of this
year’s event will be the city state’s
state-of-the-art 55,000-seater National Stadium which opened its
doors last June.
The Games involve all 10 members of the Association of Southeast
Asian Nations (ASEAN) — Brunei,
Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines,
Singapore, Thailand and Vietnam
— plus non-ASEAN state East Timor which first participated in the
Games in 2003. — AFP
Nicol bags top Penang TYT
Prime Award Trophy
B U T T E R W O R T H : Na t i o n a l
squash queen Datuk Nicol David
has once again won the Penang
TYT Prime Award Trophy, repeating her outstanding achievement during the seven seasons
since 2004.
Nicol who was also named
Penang sportswoman of the year
2014 could not be present to receive
the award, which was presented by
the Penang Yang di-Pertua Negeri
Tun Abdul Rahman Abbas at the
Sports Awards Ceremony at The
Light Hotel on Sunday night.
Nicol who just finished the
British Open semi-final challenge
in Hull, England, on Saturday,
was represented by her father,
Desmond David.
National diver Ooi Tze Liang
emerged as the new Sportsman of
Penang by his historical success
in bringing home the country’s
first gold in the men’s diving event
at last year’s Commonwealth
Games in Glasgow.
The 22-year-old athlete was represented by his father Ooi Hong
Cherng, 57, as Ooi is undergoing
training in China in preparation
for the SEA Games next month.
Nicol and Ooi each received a
championship trophy, a trophy,
a certificate of appreciation and
RM3,000 cash.
Meanwhile, two young athletes, karate’s Ooi San Hong, 15,
and squash’s Nur Aliah Izzati Muhammad Anis, 15, were awarded
the Sportsman and Sportswoman
of Hope 2014.
Ooi won a bronze medal with
his first appearance in the 14th
Asian Karate Championship last
year, while Nur Aliah Izzati won
a silver medal in the Asian Junior
Squash Championship in Iran.
The Do Karate Team emerged
the best men’s team after showing
encouraging performance by winning a gold medal in the third South
East-Asian Championship Karate
in Vietnam last year. — Bernama
Nadal woes raise French Open flag for rivals
Nadal serving to Wawrinka of
Switzerland during their men’s
quarter-final match at the Rome
Open tennis. The Spaniard has been
virtually unbeatable at Roland Garros.
Photo by Reuters
BY JUSTIN DAVI S
ROME: For the past 10 years Rafael
Nadal has been virtually unbeatable
at Roland Garros, but that could all
change at this year’s French Open
as the Spaniard’s woes continue
on clay.
Nadal, stunned in the final of
the Madrid Masters a week ago by
Britain’s Andy Murray, has won only
one tournament — Buenos Aires —
on his favourite surface this year.
Having already lost twice this year
to Italian Fabio Fognini, Serbian
rival Novak Djokovic and Murray,
the 14-time Grand Slam winner was
eliminated from the quarter-finals of
the Italian Open by Stan Wawrinka,
who also beat Nadal to the Australian Open title in 2014.
If Nadal’s defeat to Murray was
confirmation that things were not
quite going to plan, his failure to
reach the latter stages in Rome
means he will likely miss out on a
top four seeding for Roland Garros.
Seedings for the second Grand
Slam of the year, which begins on
May 24, will be announced by the
French Open organisers shortly,
and Nadal is unlikely to be given the
luxury of a top four seeding, mean-
ing he could meet one of his main
rivals as early as the quarter-finals.
Barring 2009, when Sweden’s
Robin Soderling upset him in Paris, Nadal has won the French Open
every year since 2005, stretching his
record to nine titles in 2014 last year
with victory over Djokovic.
It goes without saying Nadal’s
struggles have not gone unnoticed.
Djokovic overwhelmed Swiss
Roger Federer to defend his Italian Open title on Sunday. Although
neither have dismissed Nadal, they
admit his virtually barren run on
clay has surprised them.
“I think to be honest it surprised
everybody considering his record
on clay courts over the years,” said
Djokovic.
“It’s something that hasn’t happened in the last 10 years. But he’s
human as well and does have his
periods where he’s not confident
or not winning matches.
“This is the surface that always allowed him to regain his confidence
if he was losing more on hard courts
than clay courts. Whenever he would
get to the clay season he would win
matches and then feel like he’s back
on the right path.
“This year is quite different and
it will be interesting to see how he
bounces back for Roland Garros, the
most successful tournament he has
ever played in his career.” — AFP
IN BRIEF
Shimomura wants no roof
for Tokyo 2020 stadium
TOKYO: Tokyo’s sparkling new
National Stadium, the centre
piece for the 2020 Olympic
Games and 2019 rugby World
Cup, should ditch its plan for a
retractable roof to save money,
Japan’s sports minister proposed
yesterday. Hakubun Shimomura
added that he wanted around
35% of the seats at the 80,000 seat
stadium to be temporary ones in
another cost-cutting measure
and also to shorten construction
time at the ¥170 billion (RM5.08
billion) facility. Shimomura also
called on the local government to
contribute ¥50 billion but Tokyo
Governor Yoichi Masuzoe said
local residents and the metropolitan assembly needed to be
convinced first, Kyodo News reported. — Reuters
Ex-tennis star Bob Hewitt
jailed for rape in S Africa
PRETORIA: Australian-born former tennis Grand Slam champion Bob Hewitt was sentenced
to six years in jail in South Africa yesterday for raping and assaulting young girls he coached
in the 1980s and 1990s. Hewitt,
75, had pleaded not guilty to the
two charges of rape and one of
sexual assault that were brought
against him by three women
in 2013. Hewitt won numerous Grand Slam doubles titles
during his career in the 1960s
and 1970s and was named to
the International Tennis Hall
of Fame in 1992. But his name
was removed from the hall of
fame in 2012, following sexual
abuse allegations. — AFP
Djokovic dominant,
Raonic drops out of top 5
PARIS: World No 1 Novak Djokovic tightened his grip at the top
of the ATP rankings published
yesterday after his straight sets
Italian Open win over Roger
Federer. The Swiss, defeated
6-4, 6-3 by the Serb champ
on Sunday, remains second
ahead of Scot Andy Murray.
Rafael Nadal, knocked out in
the quarter-finals in Rome, sits
on seventh just behind Canadian Milos Raonic, who dropped
two places. As a result Tomas
Berdych of Czech Republic and
Kei Nishikori of Japan moved
up to fourth and fifth place respectively. — AFP
Sharapova overtakes
Halep into second place
PARIS: Maria Sharapova of Russia jumped into second place in
the Serena-Williams-dominated
WTA rankings published yesterday thanks to her third Italian
Open crown. The double Roland
Garros winner leapfrogs Romanian Simona Halep after her 4-6,
7-5, 6-1 Sunday win over Spain’s
Carla Suarez, who jumped two
places to sit on eighth. Wiliams,
who sat the Rome Open out due
to an elbow injury, continues to
dominate the women’s rankings while her sister Venus is
15th. Further down, Ekaterina
Makarova of Russia and Andrea
Petkovic both dropped to ninth
and 10th respectively. — AFP
3 2 S P O RT S
Is 65 the magic number
for Malaysian football?
NFDP director: Each player is given one year to improve themselves
BY T VI GN ESH
BUKIT JALIL: Does the future of Malaysian football rest on the shoulders
of 65 youngsters?
The National Football Development Programme (NFDP) has produced 65 teenagers who are Malaysia’s hopes for the Under-17 World
Cup in India in 2017 and beyond.
NFDP director Lim Teong Kim said
there are 25 key players between the
ages of 12 and 13 from the three sports
schools — Bukit Jalil Sports School,
Tunku Mahkota Ismail Sports School
and Gambang Sports School.
Lim said that these 25 are the best
of the 65 players in this age group.
“The NFDP scout selected these
25 players but they are not promised
a permanent spot in the team.
“Each player is given one year to
improve themselves which means
if the player cannot make the cut in
one year, they could be replaced by
others,” he said, explaining that is why
the talent pool is large at 65 people.
“So it is very competitive among
the players and this is what we want
to instil into the players at this age —
which is to have the winning mentality,” said Lim.
He said there have been changes
in the past year in terms of number of
games the young players have been
playing.
“The number of games played
is very crucial for players at the age
of seven to 17 years old. The more
games they play, the more they become exposed and the more a player
can improve himself.
“We also give them practical
homework when they are on their
Sunderland’s
Johnson to deny
child sex charges
LONDON: Sunderland winger
Adam Johnson will deny three
charges of sexual activity with a
child and one count of grooming,
a court in north-east England
was told yesterday.
Johnson, 27, was arrested in
March on suspicion of sexual
activity with a 15-year-old girl.
His solicitor, Paul Morris, told
a hearing at Peterlee Magistrates’
Court that Johnson intends to
deny the charges when they are
formally put before him.
Johnson, who has been
capped 12 times by England,
appeared at court accompanied
by his partner, Stacey Flounders,
and was bailed to appear before
Durham Crown Court on June 3.
He left without speaking to
reporters. — AFP
Lim: Why don’t
the officials learn
to adapt to the
new culture the
foreign coaches
try to instil?
Photo from www.
goal.com
three-week or four-week break.
“Our training is just not playing
football well but also changing their
mindsets. We are now teaching them
work ethics and good values.”
Lim believes the NFDP is the answer to pulling Malaysian football
out of the doldrums but admitted
this would take time.
“The programme is progressing
slowly but we are on track with our
achievement,” Lim told The Edge Financial Daily.
The national team was condemned to their lowest position in
history as they fell in the FIFA rankings to 166 — below countries such as
Bhutan, Gambia, Belize, Indonesia,
Singapore and Myanmar.
This collaboration between the
Youth and Sports Ministry and the
National Sports Council seeks to inculcate a footballing culture similar to
that in England, where children start
playing as young as seven years old.
However Lim admits that in reviving Malaysian football, focus must
also be on the coaches and officials
to ensure they are on board.
“Our style of playing is totally
wrong. Our football is too slow compared to other top Asian Leagues.
“The officials also need to change
their mentalities. When they hire
a foreigner as a coach, advisor or
technical director, the officials here
expect the foreigners to adapt to the
Malaysian culture,” said the former
Bayern Munich development coach.
Lim added that everyone knows
that the Malaysian culture does not
work but still officials insist otherwise. “Why don’t the officials learn to
adapt to the new culture the foreign
coaches try to instil?” He said.
Lim also said it is important for
the Football Association of Malaysia
(FAM) and State Football Associa-
tions to see the importance of youth
development.
The irony is that these are the organisations which should be emphasising youth development but their
demonstration of a lack of commitment in this area saw the government
cough up RM40 million to kick off
the NFDP.
In its enthusiasm to find young
talents however, the NFDP did not
factor in the post-NFDP life of most of
the trainees, especially those who do
not make the cut to the national team.
Lim said that FAM should organise
more leagues in the age group (18 to
21 years old) where the good players
would have better chances of making
it into the senior team.
“We have been talking about this
with FAM technical director Fritz
Schmid who is working with us
on the development programme,”
Lim said.
Messi eulogised after leading
Barca to La Liga triumph
BY IAIN RO G E RS
MADRID: Spain’s biggest selling
sports daily Marca summed it up
in yesterday’s headline after Barcelona wrapped up the fifth La Liga
title in seven years and their 23rd
overall on Sunday: “Messi’s League”.
The Argentina forward scored a
typically brilliant goal to secure a
1-0 win at Atletico Madrid, exactly
a year after last season’s champions
pipped Barca to the title with a 1-1
draw at the Nou Camp on the final
day of the campaign.
Barca’s latest triumph was
the first part of a possible treble
of Champions League, domestic
league and Cup crowns, which Barca became the only Spanish club
to achieve in 2008/09 under Pep
Guardiola.
Messi’s goal was his 41st in 37
La Liga appearances this term, four
behind top scorer Cristiano Ronaldo, whose Real Madrid side are
four points adrift of their arch-rivals
with one game left.
Messi has also made an incredible 17 assists and it has been his
scintillating form since the turn of
the year, after he broke the La Liga
scoring record in November, that
has been the main driving force
behind Barca’s treble charge.
They meet Juventus in the Champions League final on June 6, a week
after hosting Athletic Bilbao for the
King’s Cup final, an impressive
achievement for coach Luis Enrique in his first season in charge.
“Right now I am thinking about
all those who have helped us win
this title, without exception,” Luis
Enrique told a news conference
after the match at the Calderon.
“There are still two titles up for
grabs and then we will know what
mark we can award ourselves, but
winning this league makes us very
happy,” added the former Barca
and Spain midfielder.
Barca’s defence, marshalled by
Chile goalkeeper Claudio Bravo,
has also played its part, conceding a
mere 19 goals in 37 La Liga games,
while Real leaked 35.
But club talisman Messi predictably dominated yesterday’s front
pages after the 27-year-old again
proved decisive when it mattered
most.
Exchanging passes with Pedro, he found the tiny amount of
space he needed in the crowd of
defenders and clipped a precise
shot into the corner to seal what
was undoubtedly “Messi’s League”.
— Reuters
IN BRIEF
Sport furious over late
Flamengo equaliser
SAO PAULO: Flamengo came
back from 2-0 down to grab
a point against Sport at the
Maracana stadium on Sunday
but their injury-time equaliser
sparked accusations of poor
sportsmanship. The equalising goal, scored by Everton
in the sixth minute of injury
time, came after Flamengo
had refused to return the ball
to Sport, who had kicked it
out of play when one of their
players went down with
what looked like cramp. The
Flamengo players claimed
their opponents were wasting time but Sport’s Diego
Souza, who scored his side’s
opener, was furious after the
final whistle. — Reuters
Luis Enrique eyes new era
of Barcelona dominance
MADRID: Barcelona coach
Luis Enrique believes his
side’s 23rd La Liga title can be
the launching pad for another
prolonged period of success
and a potential treble this
season. Barca face Athletic
Bilbao on home soil in the
Copa del Rey final on May
30 before taking on Juventus
in the Champions League final a week later. Luis Enrique
was recruited along with seven new players last summer
after Barca’s first trophyless
campaign in six years and
he lauded their response in
what he described a season
of “transition”. — AFP
Benfica win back-to-back
Portuguese titles
LISBON: Benfica won the Portuguese title for the 34th time
on Sunday after a 0-0 draw
away to Vitoria Guimaraes
combined with a 1-1 draw for
nearest challengers Porto at
Belenenses. The Lisbon giants, coached by Jorge Jesus,
can no longer be caught by
bitter rivals Porto, who are
three points behind with one
game remaining and crucially
lose out in the head-to-head
between the sides. It is the
first time that Benfica have
won back-to-back titles in
31 years and the third time
they have won it under Jesus. — AFP
Kaka inspires 4-0
thrashing of LA Galaxy
LOS ANGELES: Defending
champions LA Galaxy suffered
a humiliating 4-0 defeat to Major League Soccer newcomers
Orlando City on Sunday, with
an inspired Kaka creating a goal
and scoring a penalty. With three
wins from 12 games, Galaxy are
level on points with Sporting
Kansas City, who hold the sixth
play-off spot. Former World Player of the Year Kaka started the
move which led to Orlando’s
12th minute opener, Brek Shea
heading a Rafael Ramos cross
back across goal where Eric Avila
nodded home. — Reuters

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