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FBM KLCI 1785.97
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WEDNESDAY DECEMBER 3, 2014 ISSUE 1852/2014
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
www.theedgemarkets.com
5 HOME BUSINESS
Yvonne Chialed SPAC to raise
RM750m via
Bursa listing
5 HOME BUSINESS
MOL Global shares
tumble on Vietnam
accounting glitch,
profit slump
6 HOME BUSINESS
Govt confident
of hitting fiscal
deficit target
16 C O M M E N T
Good, bad and ugly
of lower oil prices
22 W O R L D B U S I N E S S
Investors shun
China stock link on
ownership concern
Cameron Highlands disaster
exposes lax regulation
13 H O M E
19.20
2
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
For breaking news updates go to
www.theedgemarkets.com
ON EDGE T V
www.theedgemarkets.com
Mier cuts
Malaysia’s 2015
GDP growth
forecast to
5%-5.5%
Zeti: Falling
oil price
benefits local
businesses and
consumers
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Aviva in £5.6b
Friends Life takeover
Creates market leader with 16 million life insurance customers
BY HUW JO NE S & C ARO LY N CO HN
LONDON: British insurer Aviva
agreed terms yesterday for a £5.6
billion (RM30.09 billion) all-share
takeover of rival Friends Life, responding to pressures caused by
pension industry reform.
Pension providers are rushing to
revise their product ranges after the
government in March surprisingly
removed obligations for people to
buy an annuity, or income for life,
at retirement, hurting sales.
Aviva said the merger creates a
market leader with 16 million life
insurance customers. It is expected
to generate £600 million in excess
cash flow a year and about £225
million in annual cost savings by
the end of 2017.
Andy Briggs, current group chief
executive of Friends Life, will become CEO of Aviva UK Life, with
Mark Wilson continuing as CEO of
the enlarged Aviva Group.
Briggs said the two businesses worked well together. Friends
Life’s corporate pension business is
skewed to larger firms, while Aviva
focused on smaller ones.
“There’s a very good complementary fit,” he said.
After the changes announced by
the government in March, insurers
have focused on alternative products
such as pensions drawdown which
allow savers more freedom over the
amount of money they withdraw
each year, or “bulk annuites” — taking on the risk of company defined
benefit pension schemes.
Wilson said there would likely
be job losses among the combined
staff of more than 15,000 and savings from office moves.
Analysts said the cost savings
from the Aviva/Friends Life combination were higher than expected
but would take several years to be
achieved. — Reuters
Indonesia to cut off ‘oil mafia’
JAKARTA: Indonesia’s new administration plans a major expansion
of oil storage and will construct
more refineries as part of sweeping energy reforms that will help in
cracking down on any corruption
in the state oil trader.
Sworn in six weeks ago, President Joko Widodo launched the
overhaul of the scandal-tainted
oil and gas sector last Friday by
sacking the entire board of state
oil giant Pertamina and pledging a
comprehensive audit of its trading
arm, Petral.
In 2013, Indonesia’s oil and gas
sector made up over 7% of GDP in
the US$740 billion (RM2.5 trillion)
economy, Southeast Asia’s largest.
When completed, the plan to
increase storage and refining capacity will allow Indonesia to shift
from buying gasoline and diesel on
the opaque spot market to stable
long-term contracts with foreign
producers. That would reduce opportunities for graft at Petral.
IN BRIEF
Doctor’s bomb joke costs
him US$90,000
MIAMI: A doctor thought it
might be funny to crack a joke
about a bomb in his luggage. Instead, he partly forced the evacuation of Miami International
airport, and earned an almost
US$90,000 (RM307,800) fine.
Manuel Alvarado, 60, will pay out
US$89,172 for his “momentary
lapse of reason in making these
statements,” which prompted
costly evacuations and delays for
airlines, and brought out a police
bomb squad, said his lawyer Brian Bieber. Just before boarding a
flight to Bogota (Colombia) on
Oct 22, a security officer asked
Alvarado routine questions; the
Venezuelan doctor responded
that he was carrying C-4 explosives. Though he corrected himself and said he was just joking,
it was too late for airport authorities’ taste. — AFP
Smartphone growth
cooling, prices dropping
WASHINGTON: The global
smartphone market will see cooler growth in the next few years,
amid “cut-throat” competition
that will bring down prices for
many consumers, a market tracker said on Monday. A forecast by
the research firm IDC indicates
smartphone sales of 1.5 billion
units in 2015, a rise of 12.2% from
the current year’s estimate. That
would mean growth falling by
more than half from the 26% pace
of 2014. The sluggish growth is
likely to continue through 2018,
IDC said. — Reuters
GIC to buy US landlord
IndCor for US$8.1b
Indonesian State Enterprise Minister Rini Soemarno (left), Dwi Soetjipto, the new head
of state energy firm Pertamina, and Energy Minister Sudirman Said (right) pose for the
media in Jakarta on Nov 28. Indonesia’s president sacked the entire board of Pertamina
last Friday and pledged an audit of its trading arm, Petral. Photo by Reuters
“With limited storage, all you
can do is buy on the spot market
and then you are at the mercy of
the market,” Ari Soemarno, a presidential adviser and former head of
Pertamina, said.
Energy Minister Sudirman Said
said last week: “Every transaction
that is hidden has that potential
(for corruption). Direct deals reduce that potential and reduce the
role of intermediaries.” — Reuters
SINGAPORE: Sovereign wealth
fund GIC Pte Ltd will buy IndCor Properties Inc, one of the
biggest industrial landlords in
the United States, from parent
firm Blackstone for a whopping US$8.1 billion (RM27.7
billion), the companies said
yesterday. Blackstone Group
LP aid in a statement that the
deal is expected to close in the
first quarter of next year. It said
that as a result of the transaction, Chicago-based IndCor
will no longer be pursuing an
initial public offering. — AFP
China’s invisible tycoon takes centre stage in Wanda IPO
BY JOHN FO LE Y
BEIJING: Wang Jianlin is China’s invisible tycoon. The founder of Dalian
Wanda Group Corp Bhd will soon be
the controlling shareholder of four
listed companies spanning cinemas,
real estate and hotels with shares that
trade in China, Hong Kong and New
York (the United States). Yet he is not
on the board of any of them. What
may look like good governance raises
a different set of questions.
Investors in Chinese companies
are accustomed to founders with
controlling stakes and enormous
power. But Wang has no official role
in Wanda’s commercial property
division, which is planning to list a
minority stake in Hong Kong, or in
the upcoming offering of its mainland Chinese cinema business.
He is also absent from US cinema chain AMC Entertainment Inc,
which Wanda bought in 2012 and
refloated a year later, and from its
Hong Kong-listed hotel unit.
See related story on Page 22
Wanda executives hold various
board seats, including the chairman’s role at all four companies. Yet
the tycoon’s lack of direct involvement is unusual. At first glance, it’s
reassuring, because it looks as if he
is distancing himself from the dayto-day running of the businesses.
It may also reflect the fact that
Wanda, with 178 real estate projects and around 500 cinemas as
of September, has grown too big to
be micro-managed by its founder.
Yet Wang is hardly stepping back.
He won’t be selling shares in Wanda Commercial Properties Co Ltd,
according to a person familiar with
the situation. And the reality is that
founders are influential insiders.
Snagging land in China’s property market depends on connections.
Wang will continue to trade between his companies too, as tenant,
landlord and supplier. If his talks to
buy Hollywood movie maker Lions
Gate Entertainment Corp come to
fruition, Wanda productions will
be showing on AMC and Wanda
Cinema Line’s big screens.
Having board seats or a clear
role wouldn’t remove scope for
undue meddling, but would add
transparency and accountability.
The biggest unknown is Wang
himself, ranked China’s second
richest man by the Hurun Report.
Chinese billionaires operate in a
deeply political system, and anything that affects Wang’s personal
reputation would swiftly be reflected in the share prices of his portfolio companies.
Investors may be glad that he is
taking a hands-off approach, but
they shouldn’t pretend he doesn’t
have a leading role. — Reuters
HOME BUSINESS 3
W E D N E SDAY D EC E MBER 3 , 2014 • T HEED G E FINA NCIA L DAILY
Job cuts in TH Heavy amid
dwindling order book
Management to retrench redundant staff effective Monday
BY L EVI N A L I M
KUALA LUMPUR: TH Heavy Engineering Bhd (TH Heavy) is laying
off staff in order to withstand the
current strong headwinds in the
oil and gas industry.
In a memo sighted by The Edge
Financial Daily, the fabrication
company informed selected employees that “due to the current financial situation the management
has no alternative but to implement
the retrenchment of redundant staff
effective Dec 1”.
It is learnt that the selected employees were hired in anticipation
of clinching at least one fabrication
job from Petroliam Nasional Bhd
(Petronas) in either the Baronia
oil field or the Bergading central
processing platform (CPP).
“This retrenchment is good for
TH Heavy as it reduces its ‘burn
rate’,” a source told The Edge Financial Daily.
In an earlier interview with The
Edge weekly, TH Heavy managing
director and chief executive officer
Nor Badli Munawir Mohamad Alias
Lafti had admitted that if the company did not bag a reasonably large
fabrication job by the first quarter
of next year, it could be in “serious
trouble”.
As the Bergading project in the
North Malay basin was awarded to
South Korea’s Hyundai Heavy Industries (HHI) in May, TH Heavy’s
fortune hinges on the possible US$1
billion (RM3.42 billion) award of
the CPP project for the Baronia oil
field off Sarawak.
However, reports from international oil and gas publications indicated that HHI is likely to be the
front runner for the project, which
will edge out TH Heavy and its partner McDermott International Inc.
As at Sept 30, 2014, TH Heavy
had an outstanding fabrication order book of barely RM180 million
and a floating production, storage and offloading (FPSO) leasing
award of about US$372 million.
TH Heavy’s FPSO leasing award
from JX Nippon is expected to contribute positively towards its earnings. However, it is understood that
the FPSO will only start generating
revenue in the later part of 2016.
The falling crude oil prices do
not augur well for companies such
as TH Heavy, which has failed to
secure enough contracts to weather the possible slowdown in the
industry. Petronas last Friday announced a cut in capital expenditure by 15% to 20%.
In the third quarter ended Sept
30, 2014 (3QFY14), TH Heavy posted a net loss of RM15.09 million
against a net profit of RM3.9 million a year ago. Its revenue dropped
Nor Badli: This retrenchment is good for
TH Heavy as it reduces its ‘burn rate’.
Photo by Suhaimi Yusuf
5.51% to RM78.99 million from
RM83.6 million previously.
TH Heavy’s administration
expenses shot up almost 62% to
RM17.75 million in 3Q compared
with RM10.98 million a year ago
— an indication of higher payroll.
“Moving forward, we are cautiously optimistic but anticipate
the fabrication business to remain
challenging in view of the present
competitive environment.
“However, the company is working towards realigning its business
strategies to capitalise on more
promising areas in the fabrication
business and is exploring other
business opportunities in the oil
and gas value chain,” TH Heavy
said in its results announcement.
Its operating environment has
also become challenging, with the
number of licensed fabricators increasing from six to eight after Petronas awarded Sarawak-based KKB
Engineering Bhd and Muhibbah
Engineering (M) Bhd licences in
2013.
CIMB Research recently downgraded TH Heavy to “reduce” with
a target price of 43 sen after the release of its 3Q results.
“Expenses for lost contracts
caused TH Heavy to post a wider
net loss of RM20 million in 9MFY14,
significantly below our FY14 expectations and consensus estimate.
“The fabrication of FPSO modules will start in FY15 and the Sepat
CPP contract is still on offer but the
fabrication outlook appears grim
for certain players, including TH
Heavy,” said CIMB analyst Norziana Inon.
Its share price has fallen off
the cliff, tumbling from 82 sen at
end-September to 40.5 sen yesterday — the lowest closing since
July 2012.
Bargains emerge in O&G sector
BY GHO C H EE Y UA N
KUALA LUMPUR: Despite the
sharp fall in crude oil prices, investment analysts believe that
companies which have secured
contracts should be able to weather the possible slowdown in the
industry.
Kenanga Research believes that
certain oil and gas (O&G) stocks
offer good bottom-fishing opportunities as values have started to
emerge even after earnings downgrades. Its picks are Dayang Enterprise Holdings Bhd, Barakah
Offshore Petroleum Bhd, Perdana
Petroleum Bhd and SapuraKencana Petroleum Bhd.
Kenanga Research has ruled
out the possibility of crude oil hitting US$40 (RM137) to US$50 per
barrel as per market talks. “This
is because our simulation study
reveals that the probability for it
dipping below US$60 per barrel
is remote with a probability of less
than 10%,” it added.
AllianceDBS Research analyst
Arhnue Tan said earnings of O&G
companies had met expectations in
the recently concluded results season for the quarter ended Sept 30.
She expects corporate
fourth-quarter (4Q) earnings to remain intact as most of the companies have secured contracts which
will be realised in 4Q14.
“Our earlier forecast on the O&G
sector remains unchanged in the
short term,” Tan told The Edge Financial Daily yesterday. Nonetheless, she noted that she is still
working on the new valuations for
the sector for 2015 in view of the
plunge in oil prices.
Tan is advising investors to
pick stocks that have strong fundamentals or heavily sold down
O&G stocks such as SapuraKencana Petroleum, Dialog Group Bhd
and Bumi Armada Bhd to capitalise on the recent sharp decline in
their stock prices.
“These counters are fairly strong
fundamentally and have large order books which may help them
to pull through the difficult operating times.
“Furthermore, these counters
have a long-term earnings visibility and they are more resilient
compared with other counters,”
she added.
But Tan remained cautious
about the sector as she believes a
recovery would not be immediate.
“As of now, I maintain a ‘neutral’
rating on the sector as there is no
exact time frame for the recovery
in crude oil.”
O&G stocks regained some
lost ground yesterday after the
heavy selldown on Monday. Beaten-down shares such as Petroliam
Nasional Bhd (Petronas)-related
stocks led the rebound, with Petronas Chemical Group Bhd emerging as the top gainer, up 7.21% to
close at the day’s high of RM5.50
after falling 8.88% or 50 sen the
day before. The FBM KLCI also
recovered, rising 0.4% to 1,785.97
points yesterday.
According to Reuters, Brent was
unchanged at US$72.54 yesterday,
while US crude was down 40 cents
to US$68.60 a barrel.
In its strategy report yesterday, CIMB Research head Terence
Wong said it remains positive on
the O&G sector, which should be
a major winner riding on the Economic Transformation Programme
(ETP) spending despite the 15% to
20% cutback in Petronas’ spending next year.
“Assuming that our earlier forecast for Petronas’ capital expendi-
ture (capex) in 2015 of RM60 billion
(based on its average capex in 2012
and 2013) will be lowered by RM9
billion to RM12 billion to RM48 billion to RM51 billion, this will still
be the highest annual capex prior
to the implementation of the ETP.
“It also appears that the capex
reduction will affect the downstream segment more than upstream, which forms the bulk of Petronas’ net profit and where most of
the companies under our coverage
operate,” said Wong.
He noted that the companies
under CIMB Research’s coverage
are mostly service providers, which
“are sticking to their growth plans,
even eyeing merger and acquisition opportunities as the sluggish
market has thrown up attractive
valuations”.
“Their order books, over the next
two years at least, are intact as they
are based on committed capex.
“Furthermore, the contractual terms and rates are not tied to
oil prices,” he said, adding that it
maintains an “overweight” stance
on the sector.
Its top picks are SapuraKencana
among the big caps and Perdana
Petroleum among the small caps.
Nexgram’s
founder Tey
disposes of
1.48% stake
BY L IE W J IA T E N G
KUALA LUMPUR: Businessman
Tey Por Yee (pic), who is embroiled in a shareholder tussle
with Protasco Bhd group managing director Datuk Seri Chong
Ket Pen for control of the company, has disposed of a 1.48%
stake in Nexgram Holdings Bhd,
a company he founded.
In a filing with Bursa Malaysia yesterday, Nexgram said
Tey sold around 27.826 million
shares. He still owns an 11.52%
direct stake and an 8.5% indirect
stake after the disposal.
The 27.826 million Nexgram
shares sold by Tey represented
41.88% of the firm’s trading volume yesterday.
Shares in Nexgram were actively traded and emerged as
the fourth most active on Bursa
Malaysia, with more than 66.463
million shares changing hands.
Tey is the chief executive officer and managing director of
Nexgram, which is involved in
telecommunications software
research and development, as
well as investment and technology advisory services.
Tey has been trimming his
stake in Nexgram since Nov 7
this year. He owned as much
as 26.12% of Nexgram as at May
8, 2014, subsequently reducing
his stake to 20.02% stake as of
yesterday.
Nexgram shares rose one
sen or 14.3% to settle at eight
sen yesterday, giving it a market capitalisation of RM150.6
million.
Tey continued to acquire
100,000 shares in Protasco yesterday. He now owns
about 57.521 million shares or
a 17.16% stake in the company.
Boustead
considers
spinning off unit
SINGAPORE: Boustead Singapore Ltd said it was considering
spinning off its real estate solutions business, which could
lead to a listing of the unit’s
shares.
The company said the proposed plan was at a preliminary stage.
Boustead Projects, which
designs and builds industrial
facilities, operates in Singapore, China, Malaysia and Vietnam. — Reuters
4 HOME BUSINESS
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
MOST VIEWED STORIES ON
theedgemarkets.com
Petronas Chemicals leads
rebound in O&G counters
However, the surge may be a short-term recovery followed by continued downtrend
BY JEFFREY TAN
KUALA LUMPUR: Oil & gas
(O&G) counters led by Petronas
Chemicals Group Bhd staged a
rebound yesterday on bargain
hunting, said analysts.
The rebound followed a beating in O&G stocks on Monday
as global oil prices fell to a
five-year low of below US$68
(RM232.56) per barrel.
However, analysts are unsure if the surge reflects a dead
cat bounce pattern, which depicts a short-term recovery fol-
SIP programme
to get
government
subsidy
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak said subsidies
at 2% interest rate will be given
under the SME Investment Partner (SIP) programme of the SME
Masterplan.
Najib, who is also finance minister, said the subsidies are necessary because of the high costs
involved and to enhance earlystage financing for SMEs.
“Because the subsidies involve
sukuk bonds, the costs will be
quite high. We decided subsdies
would be given out by the government at an interest rate of two percent to identified SME Partners,”
he told reporters after chairing
the National SME Development
Council’s 17th meeting here yesterday.
Under Budget 2015, the government has proposed a RM375
million fund for five years in the
form of loans, equity or both, especially at the start-up stage, for
the SIP programme.
Of the total, RM250 million will
come from SME Bank and RM125
million from private investors.
Najib said the draft for the proposed SME Act is being prepared
and is expected to be tabled in
Parliament in the third quarter
of next year.
SME Corp said the draft will
cover the roles and responsibilities
of the government and the private
sector, with the former focusing
on regulation and monitoring,
and the latter taking a more proactive stance through business
associations. — Bernama
lowed by a continuation of the
downtrend.
AllianceDBS Research analyst
Tan Arhnue told TheEdge Markets.com that it is still unclear
what the impact of crude price
volatility will be on O&G stocks.
Another O&G research analyst
said the rebound in O&G stocks
yesterday was due to investors
picking up oversold stocks as valuation improved.
“Valuation has dropped a lot,
but fundamentally there is no
change,” he said.
The analyst agreed much un-
certainty remained in the market
due to declining crude oil prices
and Petroliam Nasional Bhd’s (Petronas) cut in next year’s capital
expenditure budget.
“I don’t think O&G stocks
will reach its former valuation
or peak,” he said.
Petronas Chemicals shares rose
37 sen or 7.21% to end the day at
its highest of RM5.50, emerging
as the top gainer with 2.31 million
shares changing hands.
Pe t ro na s D a ga n ga n Bh d
climbed 14 sen or 0.96% to close
at RM14.78 on trades of 885,900
shares, while Petronas Gas Bhd
gained 10 sen or 0.48% to RM21.10
with 1.13 million shares done.
SapuraKencana Petroleum
Group Bhd nudged up 5 sen or
1.99% to RM2.56 on volume of
some 39.92 million shares.
UMW Oil & Gas Corp Bhd
shares gained 15 sen or 6.44% to
close at RM2.48 yesterday. The
sixth top gainer saw trades of
some 13.49 million shares. It had
earlier scaled a high of RM2.56.
Dialog Group Bhd rose 7 sen or
5.56% to settle at RM1.33 on volume of some 69.47 million shares.
Country Heights Damansara
residents block high-rise project
BY LEV INA LI M
KUALA LUMPUR: Residents of
Country Heights Damansara here
are attempting to block a development approved by the Kuala
Lumpur City Hall (DBKL) to build
two blocks of 41-storey condominiums, which they claimed to be an
“arbitrary, illegal and irrational”
decision.
“The initial plan was to build a
clubhouse with a three-storey commercial strip that has a plot ratio of
1:1, dubbed SARA Waterfall Commercial Centre,” Teoh Seow Chiew,
a member of the Country Heights
Damansara Residents’ Association
(CHDRA), told a press conference
yesterday.
“Should the 700 condominium
units be built, Country Heights Damansara will be turned into a high
density area with an increased plot
ratio of 1:6,” said Teoh.
He said this will drastically
raise the congestion of traffic
heading towards the entrance
of Country Heights Damansara,
which is along the Lebuhraya
Lim (left) and
Teoh at the press
conference on
the building of
two blocks of
condominiums on
a site originally
meant for a
clubhouse. Photo
by Kenny Yap
Damansara-Puchong (LDP).
Segambut Member of Parliament
Lim Lip Eng, who was present at
the press conference to represent
CHDRA, said there was no public
consultation on the change of the
original plan, with DBKL ignoring
residents’ letters of objection sent
over the last two years.
Several weeks ago, residents of
Country Heights Damansara discovered that site work for the project
had begun despite their objections.
It is understood that the developer
of SARA Waterfall Commercial Cen-
tre is a privately-held firm known as
Maryland Supreme Sdn Bhd.
There was also a separate attempt in 2012 to alter another development plan in an adjacent commercial plot in Country Heights
Damansara for a 13-storey hostel,
which was not approved by DBKL
on the grounds that it clashes with
the original plan.
Lim said he will bring up the matter to the Ministry of Federal Territories and Urban Wellbeing, and
to the Malaysian Anti-Corruption
Commission if necessary.
EPF trims Bumi Armada stake to 8.51%
KUALA LUMPUR: The Employees
Provident Fund has trimmed its
equity stake in Bumi Armada Bhd
to 8.51%, the latter said in a filing
with Bursa Malaysia yesterday.
The pension fund on Nov 27
disposed of some 1.7 million
shares that represented a 0.03%
stake in the offshore oilfield service
provider and floating, production,
storage and offloading player.
Yesterday, Bloomberg reported that the Malaysian oil and gas
services provider climbed from
a record low after saying that the
oil rout and the cut in spending
by state-owned energy company
Petroliam Nasional Bhd (Petronas) will have “minimal” impact
on earnings.
Bumi Armada sank the most on
record on Monday after oil slid to
a five-year low and an announced
spending cut of as much as 20%
by Petronas dented investor confidence.
Bumi Armada closed up 4 sen
or 4% yesterday to RM1.05, giving
it a market capitalisation of RM5.98
billion. — by Jeffrey Tan
Fima Corp shares
up on attractive
dividend yield,
valuations
KUALA LUMPUR: Investors
bought Fima Corp Bhd shares
after Insider Asia said the company offered attractive dividend
yield and valuations.
Fima Corp owns a concession
to produce government security and confidential documents,
besides bank notes.
Fima Corp shares rose 8 sen
or 3.15% to close at RM2.62 yesterday. A total of 54,900 shares
were traded. In comparison, the
FBM KLCI fell 7.56 points or 0.4%.
Insider Asia said in a report
published in The Edge Financial
Daily yesterday that Fima Corp
offered an attractive dividend
yield of 4.4%, while payout ratio had doubled from 20.3% in
financial year ended March 31,
2010 (FY10) to 41.6% in FY14.
On valuations, Insider Asia
said Fima Corp shares traded at a
12-month trailing price-earnings
ratio (PER) of 9.73 times and 1.29
times book value.
Bloomberg data showed that
the sector average PER is about
26 times.
Insider Asia reported
Fima Corp offers investors a
high-yielding investment with
stable income, thanks to its unusual core business. — by Tarani Palani
Sime Darby sells
55% of China
palm oil refining
unit for RM45m
KUALA LUMPUR: Sime Darby
Bhd is selling a controlling 55%
stake in its China-based palm
oil refining unit to a local business entity for 85.25 million yuan
(RM45.2 million).
In a statement to Bursa Malaysia yesterday, Sime Darby said
it is selling the stake in wholly-owned Rizhao Sime Darby
Oils & Fats Co Ltd to Shandong
Wanbao Agricultural Co Ltd.
Sime Darby said it had signed
the equity transfer agreement
with Shandong Wanbao last
Friday. “The proposed transaction offers a good opportunity
for Sime Darby to improve its
commercial viability in other
edible oils in China.”
The transaction is due for
completion within six months
from the date of the agreement.
— by Chong Jin Hun
HOME BUSINESS 5
W E D N E SDAY D EC E MBER 3 , 2014 • T HEED G E FINA NCIA L DAILY
Yvonne Chia-led SPAC
to raise RM750m
Credit Suisse
named
Malaysia’s
best foreign
investment bank
BY C H E N S H AUA F UI
THE EDGE FILE PHOTO
95% of proceeds will be used to acquire new qualifying assets
BY A H MA D NAQ I B I DRIS
KUALA LUMPUR: Asian Healthcare
Group Bhd, led by former Hong
Leong Bank Bhd group managing
director and chief executive officer Datuk Yvonne Chia (pic) as its
executive director and chairman,
plans to raise RM750 million from
its initial public offering (IPO) on
the Main Market of Bursa Malaysia, of which 95% of the proceeds
will be used to acquire new qualifying assets.
It will be the country’s first
healthcare special purpose acquisition vehicle (SPAC) listing on
Bursa, which has seen four oil and
gas (O&G) SPACs listed to date —
namely Hibiscus Petroleum Bhd,
CLIQ Energy Bhd, Sona Petroleum
Bhd and Reach Energy Bhd.
According to its draft prospectus
lodged with the Securities Commission yesterday, Asian Healthcare
said it intends to acquire at least
one secondary and/or tertiary care
hospital with 100 to 500 beds in
Malaysia together with any complementary services attached to
such hospital(s) for its qualifying
acquisition.
Asian Healthcare’s IPO involves
an offering of 1.5 billion new shares
at an issue price of 50 sen per share,
and to entice investors; it comes
together with one warrant for each
share subscribed.
Out of its 1.5 billion shares to be
issued, 112.55 million shares will be
allocated to retail investors, while
1.39 billion shares have been earmarked for institutional investors.
Apart from the 1.5 billion new
shares and 1.5 billion warrants,
there are also 187.5 million redeemable convertible preference
shares of 10 sen each that will be
converted into 375 million new
shares together with 375 million
attached warrants, which will raise
gross proceeds of around RM18.75
million.
Asian Healthcare said it plans to
use 95% or RM712.50 million of its
proceeds from the IPO to acquire
its qualifying asset, while the balance will be used to cover its listing
expenses and for working capital.
Apart from Chia, Asian Healthcare has at its helm BP Healthcare
Group managing director (MD)
Datuk Chevy Beh as its executive
director and MD and renowned
medical doctor Tan Sri Dr M Jegathesan as its credentialing counsel.
Going forward, the group aims to
be an integrated healthcare services
provider, with services ranging from
primary to tertiary, intermediate
and long-term care in Malaysia.
It may also expand its business in
other countries in Southeast Asia
such as Indonesia, Thailand and
Singapore.
Post-listing, its IPO investors
will hold an 80% stake in the enlarged issued share capital of the
company, while Chia, Beh and Negrita Holdings Sdn Bhd will have
equity interests of 8%, 5% and 7%
respectively.
The group would have a market
value of around RM937.5 million
upon listing based on its issue price.
MOL Global shares tumble on glitch
SINGAPORE: Shares in MOL Global Inc, the first Malaysian company
to list in the United States, fell more
than 60% on Monday after the online payments company reported
accounting errors at its Vietnam
unit and a 61.5% fall in net profit.
The company, majority owned
by billionaire Tan Sri Vincent Tan
and the Sultan of Johor, is now trading 80% below the price it was listed on Oct 10. It is also facing two
class action lawsuits from investors
who said they had been misled by
its listing prospectus.
MOL said the Vietnam unit initially overstated revenue and direct
costs slightly. The error, though,
will add to investors’ worries about
the company after the departure of
chief financial officer (CFO) Allan
Wong last week and a delay in its
results announcement.
“It’s a perfect storm that resulted in a delay in our earnings result,” chief executive Ganesh Kumar
Bangah said on an analyst conference call.
“We hope we get up and are able
to basically continue to deliver on
the promises we have set forth in
our prospectus and to our investors.”
Trading in MOL shares was halted on Nov 24 after falling more than
50% when the company said Wong
was leaving, a departure the company stressed was for personal reasons.
The eventual release of its results
on Monday offered little respite to
investors, showing that the profit
The company blames
the fall in profit on the
‘rapid’ shift in gaming
habits of consumers
who are now playing
more games on their
smartphones than
online.
attributable to shareholders fell
61.5% to RM3 million in the three
months ended Sept 30.
The company blamed the fall on
the “rapid” shift in gaming habits
of consumers who are now playing
more games on their smartphones
rather than online.
“This decrease was further compounded by technical delays in
introducing and monetising new
mobile games on the company’s
platform,” MOL said.
The company, also known as
Money Online, is one of the largest e-payment enablers for online
goods and gaming in Southeast
Asia by payment volume.
Deutsche Bank AG, which helped
MOL to go public, suspended its research coverage on the company last
week, citing the delay in reporting
third-quarter results and the departure of the CFO. Its analysts have
not said anything further since the
results release. — Reuters
KUALA LUMPUR: Credit Suisse
has been named Best Foreign Investment Bank and M&A (mergers
and acquisitions) House in Malaysia for 2014 by The Asset magazine.
In a statement, Credit Suisse
said it won the best foreign investment bank accolade for the fourth
consecutive year under The Asset’s
Triple A Country Awards.
Credit Suisse said this marked
a continuation of its excellent
track record in Malaysia.
“This award complements
Credit Suisse’s philosophy in cultivating long-term relationships
with Malaysian corporates as well
as complementing and not competing with the domestic investment banking partners.
“We thrive to strengthen the
bank’s reputation as the “first
call” foreign investment bank of
choice in Malaysia,” said Edwin
Low, Credit Suisse’s co-head
of Southeast Asia investment
banking.
According to Credit Suisse, during the period under review, it
executed a number of landmark
transactions involving M&A and
equity issuances in Malaysia.
In M&A, Credit Suisse had
advised Affin Holdings Bhd’s
US$410 million (RM1.43 billion)
acquisition of the investment
banking, asset management and
futures business of Hwang-DBS
(Malaysia) Bhd.
Credit Suisse is also currently advising RHB Capital Bhd on
the proposed RHB-CIMB Group
Holdings Bhd-Malaysia Building
Society Bhd merger.
Credit Suisse’s head of Malaysia coverage in investment
banking, Jefferi Hashim, said the
group emphasised the creation
of a capable team to further grow
its business here.
“We put strong emphasis on
investing in a high calibre local
team and hope to continue this
commitment to the Malaysian
franchise given this success and
support from our clients and local partners,” said Jefferi.
Zafrul: Malaysia’s economic fundamentals intact depite volatilty in oil market
KUALA LUMPUR: Malaysia’s underlying economic fundamentals
continue to be strong despite the
apparent free fall in global crude oil
prices which roiled markets worldwide including the local equity and
currency markets.
“The economy remains strong
but the country does not operate in
isolation, making its markets vulnerable to falling oil prices,” CIMB
Group Holdings Bhd chief executive Tengku Datuk Zafrul Tengku
Abdul Aziz said yesterday.
He said Bursa Malaysia’s bearish performance, particularly oil
and gas (O&G)-related counters,
on Monday was mainly due to Malaysia being a major investment
Zafrul: Bursa Malaysia’s bearish
performance, particularly O&G-related
counters, on Monday was mainly due
to Malaysia being a major investment
destination for O&G players.
The Edge file photo
destination for O&G players. As a
result, what happened in external
economies, especially the O&G sector, would normally influence investor sentiment locally. “Malaysia has
been a strong destination for O&G
companies to be listed, especially
O&G support services companies.
“They (O&G firms) are not immune to what is happening right
now and we don’t know where it is
heading. It depends on global developments,” he told reporters after the
CIMB Asean Stock Challenge-National Level awards presentation
ceremony here yesterday.
Crude oil prices, now hovering at
US$68 (RM233) per barrel, are at fiveyear lows following the Organization
of the Petroleum Exporting Countries
(Opec)’s decision last week not to cut
production despite excess supply.
Analysts feared that the prices now, seemingly on a free fall,
could deteriorate further to as low
as US$40 per barrel, a level last
reached some 30 years ago. Prices
had also fallen to a historic low of
US$12 per barrel in the 1980’s, again
due to over-production and Opec’s
refusal to cut production then.
However, O&G counters on Burasa Malaysia, which fell heavily on
Monday, recovered yesterday on
bargain-hunting. Petronas Gas Bhd
closed 10 sen higher at RM21.10,
Petronas Chemicals Bhd gained 37
sen to RM5.50, Petronas Dagangan
Bhd perked 14 sen to RM14.78, and
SapuraKencana Petroleum Bhd
added five sen to RM2.56.
The competition tested participants’ ability to trade in stocks with
a virtual start-up capital of US$80,000
in four major Asean stock markets
— Bursa Malaysia, Indonesia Stock
Exchange, Singapore Exchange and
Stock Exchange of Thailand. StocksElite, the team from HELP University,
emerged as the Malaysian champion
and advances to compete with the
national champions from four other
countries for the regional champion
title and US$12,000 grand prize at the
grand finale in Thailand. — Bernama
6 HOME BUSINESS
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
Govt confident of hitting
fiscal deficit target
Benalec to
sell reclaimed
Melaka land
for RM107m
BY A H MA D N AQ IB ID R IS KUALA LUMPUR : Benalec Holdings Bhd is disposing
nine pieces of reclaimed land
in Pekan Klebang, Melaka for
RM107.2 million, which will
enable it to repay outstanding
debts, as well as finance ongoing
and future reclamation projects.
In a filing with Bursa Malaysia yesterday, the group said its
wholly-owned unit Sentosacove
Development Sdn Bhd (SDSB),
has entered into a sale and purchase agreement with Jadex
Land Sdn Bhd (JLSB) and its
subsidiary Quality Paradise Sdn
Bhd (QPSB) to dispose of the
lands. Six of those tracts measure about 39.27 acres (15.89ha)
and will be sold to QPSB for
RM71.8 million.
“Benalec is expected to
realise an estimated gain of
RM18.82 million (after taxation) against the estimated net
book value of approximately
RM46.75 million,” said Benalec.
Another three pieces of land
measuring 19.36 acres will be
sold to JLSB for RM35.4 million.
The group expects an estimated
gain of RM9.28 million from the
disposal, against the land’s net
book value of RM23.05 million.
“The land disposal is in line
with Benalec group’s business
model to dispose of the reclaimed land, which involve
settlement in kind for cash in a
timely manner either through
disposals or joint ventures,” said
Benalec.
It said it will be able to repay
its outstanding debts, as well as
finance ongoing and future reclamation projects via the proceeds from the disposal.
The group expects to complete the disposal by the end
of the fourth quarter of 2015.
Need to look at revenue contribution from taxes and oil and gas
PETALING JAYA: The government
remains confident of achieving
its fiscal deficit target of 3.5% of
gross domestic product (GDP) for
this year, following the removal of
fuel subsidies for RON95 petrol
and diesel, said Second Finance
Minister Datuk Seri Ahmad Husni
Mohamad Hanadzlah.
“We have to look at the overall
financial position in terms of revenue contribution from taxes and oil
and gas (O&G) that we received,”
he told reporters after opening the
National Economic Outlook Conference yesterday.
In 2013, Malaysia’s fiscal deficit
stood at 3.9% of GDP.
Ahmad Husni noted the infla-
tion rate will increase next year
from 3.3% this year, despite the
softening in oil prices. For the first
eight months of 2014, Malaysia’s
inflation accelerated to above 3%,
but inflation eased slightly in September and October to 2.6% and
2.8% respectively.
“Based on our forecast, if we take
into account the implementation
of the goods and services tax (GST)
next year, inflation would inch up
further,” he said.
On Monday, the government
implemented the managed float
system to fix the prices for RON95
petrol and diesel.
In his keynote address earlier,
the minister said the government
knew that the subsidy did not benefit those who needed it the most,
as only about 24% of the entire fuel
subsidy went to Malaysian households, with the remainder benefiting mainly the business sector.
“These subsidies were unfair
to the poor,” he said, adding that
on average, assuming all things
remained equal, each household,
regardless of income, received a
subsidy of RM625 per year for electricity and RM885 for fuel. In reality,
however, it was the high-income
households that enjoyed both of
these subsidies, receiving 80% of
both subsidies,” he added.
On another note, Malaysian
Institute of Economic Research
(MIER) executive director Professor Emeritus Dr Zakariah Abdul
Rashid said Malaysia’s GDP growth
will remain robust at 5.9% this year,
driven by private sector consumption and investment.
However, he estimated GDP
growth of 5% to 5.5% next year,
supported by external demand.
Zakariah warned that the recent
weakening of the ringgit along
with other regional currencies
would continue as the US dollar
strengthens.
He also said as Malaysia relies
quite significantly on the O&G industry, the impact on the country
will be both positive and negative.—
Bernama
Fairfax buys MCIS’ general insurance unit
BY C H EN SHAUA F UI
KUALA LUMPUR: Fairfax Financial
Holdings Ltd is acquiring the general insurance business of MCIS
Insurance Bhd to expand its presence in the region. The deal is expected to be completed in the first
quarter of 2015.
In a statement yesterday, Fairfax’s wholly-owned unit The Pacific
Insurance Bhd said it has entered
into a business transfer agreement
with MCIS, formerly MCIS Zurich
Insurance Bhd, and Koperasi MCIS
Bhd, to effect the transaction.
“The transaction is subject to
customary closing conditions, in-
cluding court approval, and is expected to close in the first quarter
of 2015,” said Pacific Insurance. The
statement was jointly issued by Pacific Insurance and MCIS.
It said Pacific Insurance has been
granted approval by Bank Negara
Malaysia to acquire the general insurance business of MCIS.
The value of the deal, however,
was not disclosed.
MCIS is an established life and
general insurer in Malaysia with
over RM180 million in gross written
premiums in 2013 for its general
insurance business. On completion of the deal, the
general insurance division of MCIS
will trade under the name “Pacific
Insurance”, becoming part of the
Fairfax Asia group under the leadership of Ramaswamy Athappan,
the statement said.
“We are thrilled to have the general insurance business of MCIS
join the Fairfax group and we look
forward to working with Koperasi
MCIS as our new partner in Malaysia,” said Prem Watsa, chairman
and chief executive officer (CEO)
of Fairfax. “MCIS has a very strong presence
in the Malaysian insurance sector
and this is a great opportunity for
us to expand our operations in the
region”, added Prem.
“We commenced a restructuring
exercise to strengthen our participation in the Malaysian insurance
industry in both the life and general insurance business through
strategic partnerships to enhance
opportunities and optimise synergies,” said Datuk Balaram Petha
Naidu, chairman of Koperasi MCIS.
Koperasi MCIS has been involved
in the insurance business for more
than five decades. Meanwhile, MCIS CEO Kevin
Jones said the business transfer augurs well for MCIS as it paves the
way for the life insurance business
to establish itself on a stronger footing to compete with market players.
RM2.5b Skycity project in Kota Kinabalu to be launched in 2Q15
BY C H A I Y EE HOONG
KOTA KINABALU: Homesign Network Sdn Bhd will launch a mixeduse development called Skycity in
Karamunsing here in the second
quarter of next year.
A joint venture between Homesign Network and the Ministry of
Local Government and Housing
Sabah (KKTP) Sdn Bhd, the 6-acre
(2.42ha) Skycity development commands some RM2.5 billion in gross
development value (GDV) and sits
on the site of a former abandoned
housing project.
It features a five-star hotel, grade
A offices, a shopping mall and two
towers of residential suites.
“Skycity will be a good location
for professionals and businesses
due to its location in the city centre.
It is well connected to other rapidly developing regions,” said the
minister with special tasks Datuk
Teo Chee Kang at the Skycity sign-
ing ceremony between Homesign
Network and New World Hotel &
Resorts on Monday.
“Other developments and transport expansion in the area [are] expected to grow and this would be
the most bustling area in [the] near
future,” he added.
The ceremony marked the collaboration for the development and
management of the New World Kota
Kinabalu Hotel that is a part of the
Skycity development.
Teo said Sabah is currently in a
rapid economic development phase
of the Economic Transformation
Programme led by the Sabah Economic Development and Investment Authority.
He noted that the Malaysian
property market is expected to increase in terms of value and stabilise in terms of transactions in 2015.
He added that the real estate sector is seeing high demand due to
the implementation of the Sabah
Skycity development commands some RM2.5 billion in gross development value and
sits on the site of a former abandoned housing projectl.
Development Corridor and that
prices for residential, commercial
and industrial units are projected
to increase by 5% to 10% next year.
Homesign Network managing
director Lee Chee Kiang said the
number of tourist arrivals may drop
due to the shortage of hotel rooms
in the state. He noted that most hotels recorded about 92% average
occupancy rate and close to 100%
during peak seasons. He estimated
that more than 2,000 rooms would
be needed in the city to prevent
shortage.
The hotel in Skycity will carry
the New World Hotels & Resorts
brand under its parent company, the
Rosewood Hotel Group. The group’s
portfolio encompasses 49 hotels in
17 countries and is expanding with
nearly 30 new hotels currently under
development.
“Based on these numbers we
are confident that our renowned
brand name in North Asia will be a
great addition to the Kota Kinabalu
hospitality market,” said Rosewood
Hotel Group chief executive officer
Sonia Cheng.
The 16-storey hotel features 350
rooms and will offer facilities such
as a sky pool, spa, gymnasium, lobby bar, sky bar, two restaurants, two
basement car parks, as well as 41,792
sq ft of meeting facilities. It is slated
to open in 2018 and will be atop 1012 storeys of office space.
WE D N E SDAY D EC E MB ER 3 , 2014 • T HEED G E FINA NCIA L DAILY
Perduren (M) Bhd
PERDUREN (M) Bhd, formerly known as
Orlando Holdings and later Formis (Malaysia) is now a property investment company
following the discontinuation of its former
IT and garment businesses in 2006.
The company was taken over by tycoon
Tan Sri David Law Tien Sen, who undertook
a general offer for the remaining shares he
did not own late last year at RM1.10 per share.
Its shares are currently trading at RM2.06,
having risen 10.8% yesterday, but on very
thin volume of 106,300 shares. As the tycoon
currently has a 71.4% stake in the company,
its shares are fairly illiquid.
Perduren’s key property assets are in Johor
Bahru, comprise Plaza Sentosa, a commercial
complex, Grand Sentosa Hotel and Holiday
Plaza, a retail and commercial mall. In the
Klang Valley, Perduren also owns Shamelin
Business Centre in Taman Shamelin Perkasa, Cheras.
The company’s property investment portfolio provides stable income. It has also started moving into property development with
the launch of Shamelin Star in Taman Shamelin Perkasa in 2013. The project, comprising
of serviced apartments and retail lots, has a
GDV of RM330 million and is expected to be
completed by 2016.
Over the past five years, the company’s
revenue has been steadily rising, except for
the marginal dip in FY March 2011, to RM66.3
million in FY2014. For FY2014, net profit rose
190% to RM6.9 million. Net gearing is relatively
high at 63.2% as at FY2014, and the company
has not paid any dividend since 2004.
For 2Q2015, Perduren’s revenue jumped
190.0% to RM22.6 million while its net profit
turned into black from the previous corresponding period. The stock appears fully valued, trading at a trailing 12-month P/E of 32.6
times and a price-to-book ratio of 1.2 times.
*Valuation factor — Composite measure of historical return & valuation
**Fundamental factor — Composite measure of balance sheet strength &
profitability
Note: A score of 3.0 is the best to have and 0.0 is the worst to have
ST O C KS W I T H M O M E N T U M 7
8 I N V E ST I N G I D E A S
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
I N S I D E R A S I A’S S TO C K O F T H E D AY
Matrix Concepts Holdings Bhd
SINCE listing on May 28, 2013, Matrix Concepts
has seen its market capitalisation almost doubled to RM1.3 billion, partly due to its policy of
rewarding shareholders well. It paid dividends
of 30.4 sen per share in 2013, or a yield of 13.8%
against its IPO price of RM2.20. In July 2014, a
1-for-2 bonus issue was declared.
Matrix is famed for its flagship 5,233-acre
Bandar Sri Senayan (BSS) township in Seremban. As end-Sept 2014, it has a remaining
landbank of 1,289.5 acres at BSS, including
Sendayan TechValley (STV), with potential
GDV of RM5.1 billion. STV, an established
industrial park within BSS, has attracted RM3
billion worth of investments from multinational companies.
Its other projects in Seremban have estimated GDV of RM1.2 billion on 343.6 acres
of land. Down south, Matrix is developing the
637.6-acre Taman Seri Impian in Kluang. It has
294.5 acres left to be developed with GDV of
RM957 million. Last year, Matrix acquired 1.1
acres of land near Putra World Trade Centre
in Kuala Lumpur and aims to launch apartments with GDV of RM400 million in 3Q2015.
All in, Matrix’ remaining land bank has potential GDV of RM6.5 billion to last until 2022.
As at end-Sept 2013, unbilled sales totalled
RM410.5 million, equivalent to a year’s revenue. Thus, longer term earnings sustainability
may be an issue although industrial property
sales are more ad-hoc.
Matrix’ net cash fell from RM 191.9 million
at end-3Q2013 to RM0.1 million in 3Q2014,
due to property development cost of RM556.3
million and the dividend payout. The stock is
trading at a trailing 12-month P/E ratio of 7.8
times and 2.0 times book. It has set a minimum 40% dividend payout policy. However,
the ability to continue paying high dividends
will depend on future profits and cashflows,
since its cash position has fallen sharply.
T O N G ’S
MOMENTUM
P O RT F O L I O
THE local bourse went through a roller-coaster ride yesterday before closing
higher. The rebound in oil and gas stocks,
as well as banks and plantations, mirrored a recovery in global oil prices, which
hit five-year lows. Brent crude touched
$67.53 per barrel, its lowest level since
October 2009, before recovering to $72.54
per barrel.
Volatility in oil prices, down 40% since
June, may persist. OPEC’s decision to
maintain production, despite a global
glut, signalled its intent to squeeze out
US shale producers. The price war could
turn bloody with the IEA estimating that
many of the latter remain profitable at
prices above $42 per barrel.
Low oil price is good news for most
Asia economies but not Malaysia, a net
oil exporter and major palm oil producer. Already, the ringgit has fallen by 4.6%
this year. With over 40% foreign holdings
in government bonds, a further slide may
intensify capital outflow.
The FBM KLCI index gained 0.43%
to close at 1,785.97. Market breadth was
slightly positive with gainers outweighing
losers by 1.1 to one.
Total returns on my portfolio rose 0.48%
to RM102,308.9.
The portfolio started on 8 July 2014
with a capital of RM100,000. Since then, it
has outperformed the FBM KLCI by 7.9%,
registering an annualised return of 5.7%.
Total profits currently stand at RM2,309.
This is a personal portfolio for information purposes only and does not constitute a recommendation or solicitation or expression of views to influence readers to buy/sell any stocks.
Portfolio started on 8 July 2014 with RM100,000.
B R O K E R S’ C A L L / T E C H N I C A L S 9
W E D N E SDAY D EC E MBER 3 , 2014 • T HEED G E FINA NCIA L DAILY
Market
to trade
sideways
BY B ENN Y L EE
P
lunging crude oil prices and the weak ringgit
weighed down Bursa
Malaysia in the past
week. I mentioned in
the previous week that
the FTSE Bursa Malaysia Kuala
Lumpur Composite Index (FBMKLCI) was still in a bearish trend
despite having a rebound and resistance at 1,850 points.
The index failed to break the resistance level and its bearish trend.
Global markets were still bullish as
lower crude oil prices are favourable to economic growth. However,
our market, which has oil and gas
companies in the index, was hit.
Plantation companies were also affected by declining crude oil prices
as it affects demand for biodiesel.
The KLCI fell 2.9% in a week to
1,785.97 points after rebounding
from a low of 1,763.55 points yesterday. Trading volume has slightly increased in the past week with
foreign institutions continuing to
cash out on the weak ringgit. Average daily trading volume in the past
week increased to 2.1 billion shares
from 2 billion shares two weeks ago.
The average daily trading value in
the past week was RM0.1 billion
higher than the previous week at
RM2.1 billion.
Foreign institutions were the
sole net seller last week. Net selling
from foreign institutions amounted
to RM108.9 million while local institutions and local retail net buying
were RM96.9 million and RM12
million respectively. In the KLCI,
decliners outnumbered gainers 5
to 1. Gainers were led by Genting
Bhd (+4.0% from last week), IOI
Corporation Bhd (+3.2%) and YTL
Corporation Bhd (+1.9%) while
decliners in the index were led by
SapuraKencana Petroleum Bhd
(-21.5%), Petronas Dagangan Bhd
(-12.8%) and Felda Global Venture
Holdings Bhd (-12.3%).
Markets in Asia were mixed in
the past week but the bulls continued to dominate China. China’s
Shanghai Stock Exchange Composite jumped 7.6% in a week to
its highest level in more than three
years at 2,763.32 points. Japan’s Nikkei 225 increased 1.5% in a week to
17,663.22 points, the highest level in
seven years. However, Hong Kong’s
Hang Seng Index declined 0.7% in
a week to 23,654.3 points. Singapore’s Straits Times Index also fell
0.7% in a week to 3,322.32 points
The US market took a breather
from its bullish trend in the past
week while European markets were
Daily FBM KLCI chart as at December 2, 2014.
mixed. On Monday, the US Dow
Jones Industrial Average declined
0.2% to 17,776.80 points after pulling back from a record close two
weeks ago. London’s FTSE100 Index
declined 1.1% to 6,656.37 and Germany’s DAX rose 1.8% to 9,963.51
points. The US Dollar index declined marginally from last week to
87.98 points. The Malaysian ringgit
weakened from 3.36 a week ago to
3.43 against the US dollar.
Gold was bearish throughout the
past week but a strong rebound on
Monday pushed the price to close
higher than the previous week.
Comex gold increased 1.2% in a
week to US$1,211.90 (RM4,144.70)
an ounce after rebounding from a
low of US$1,149.50. Nymex WTI
crude oil declined 8.2% in a week to
US$69.31 per barrel. Crude palm oil
futures on Bursa Malaysia fell 3.6%
in a week to RM2,139 per tonne on
falling price and weak demand in
November.
The KLCI fell below the short-
November results season
was a disappointment
Malaysia’s 3Q14 results
In view of the earnings cuts, our
end-2015 KLCI target has been
lowered from 2,050 points to 1,970
points, based on an unchanged
10% premium over the three-year
moving average price earnings
ratio (PER) or a PER target of 16.5
times. We still prefer the Economic
Transformation Programme (ETP)
sector winners i.e. oil and gas, construction and property. We also
continue to like smaller-cap stocks.
The November results season
was a disappointment as the percentage of stocks in our universe
that missed expectations increased
from August’s 30% to 36%. The
percentage of companies that beat
expectations, however, increased
from 11% to 13%.
As a result, the revision ratio
stayed at its lowest point since the
second quarter of 2011 (2Q11), at
0.36 times. In terms of companies
that met expectations, the proportion declined from 59% to 51%. All
in, 15 sectors disappointed, two
more than the previous results
season, while only two (three previously) beat expectations. Only
the construction and transport
sectors did better than expected
while the rest either missed forecasts or at best were in line.
Our biggest fear has materialised as 2014 core net earnings per
share (EPS) growth has been continuously cut from double digits
earlier in the year to only 0.7%. This
represents the third year of close
to zero earnings growth. Banks,
plantation companies and telcos
are the key culprits dragging down
earnings. 2015 growth should improve to 8.1% due to the low base
but there are downside risks due
to low commodity prices and the
impact from the implementation
of the goods and services tax (GST)
starting from April 1.
Of the 117 companies that we
track, 36% missed expectations
during the recently-concluded
reporting season, a deterioration
from the 30% that missed during
the August results season.
Our revision ratio (number of
forecasts upgraded vs number of
forecasts downgraded) stayed at
0.36 times as the percent increase
in number of companies that beat
expectations and disappointed was
the same 20%. This ratio is closing in with the lows of 0.32 times
in second quarter financial year
ending 2008 (2QFY08) and 0.31
times in 2QFY11.
3QFY14 EPS changes dipped
deeper into negative territory on
both a quarter-on-quarter and
year-on-year basis. This second
straight quarter of contraction is
worrying.
In the last three months, we cut
calender year ending 2014 (CY14)
EPS by 5.2% and CY15 EPS by a
steeper 7.9%. The number of companies with their earnings upgraded increased from 11 to 12, while
the number of companies with
their earnings downgraded increased from 24 to 37. — CIMB
Research, Dec 2
term 30-day moving average and
Ichimoku Cloud indicators after
breaking above these two indicators a week ago. The market turned
bearish after the index failed to
break above the immediate resistance level at 1,850 points. This was
also where the long-term 200-day
moving average was. So basically, the index remains in a bearish
trend.
Momentum indicators turned
bearish again. The RSI fell below its
mid-level and the MACD indicator
crossed below its moving average.
Furthermore, the Bollinger Bands
are expanding with the KLCI trading at the bottom band. In addition,
the Ichimoku Cloud indicator is
currently narrow and this indicates
that the index can easily whip-saw.
Moving forward, the Cloud is in a
whipsaw and this indicator is weak
in providing support or resistance.
The market is currently being
supported at the 1,760 points level.
Like I had mentioned in my pre-
vious article, this support level is
crucial as it is the confirmation of a
longer term bearish trend reversal
pattern. A breakout below this level
could send the KLCI to 1,650 points
based on the pattern price target.
However, the index is expected to
be supported above this level as the
rebound yesterday showed some
bargain hunting. Henceforth, I am
expecting the KLCI to be trending
sideways as the Cloud indicator is in
a whipsaw mode and range between
1,770 and 1,810 points.
Benny Lee is chief market strategist
for Jupiter Securities Sdn Bhd. Jupiter Securities is a participating
broker in Bursa Malaysia. He can
be contacted at bennylee.kl@gmail.
com. The views expressed in the article are the opinions of the writer
and should not be construed as investment advice. Please exercise your
own judgement or seek professional
advice for your investment decisions.
Berjaya Auto to ride on
Inokom’s earnings uptrend
Berjaya Auto Bhd
(Dec 2, RM3.31)
Maintain outperform with target price (TP) of RM 3.82. Berjaya
Auto Bhd (BJAuto) announced that it had entered into separate
share sale agreements with Berjaya Group and Perusal (M) to acquire 20 million ordinary shares, representing a 20% equity interest
in Inokom Corp Sdn Bhd (Inokom) for a total cash consideration
of RM30 million (or RM1.50 per share).
The considerations for the acquisition will be funded entirely
from BJAuto’s internally generated funds.
Inokom is principally involved in the manufacturing and assembly of light commercial and passenger vehicles, and contract
assembly of passenger vehicles. It is also the contract assembler for
Mazda completely knocked down (CKD) models namely Mazda 3
and CX-5 in Malaysia. It recorded a core net profit (NP) of RM9.2
million in the financial year ended June 2013 (FY13).
Although the RM1.50 per share valuation for Inokom appears
to be stretched based on our back-of-the envelope calculation,
we laud the management’s move and are positive on the deal
as this allows the group to ride on Inokom’s earnings uptrend,
which is benefiting from BJAuto’s aggressive launches of its
CKD models in Malaysia, with higher earnings contribution to
BJAuto’s associate level (currently only contributed by Mazda
Malaysia Sdn Bhd), and wide exposure of eight foreign brands
that Inokom is assembling.
Assuming a conservative two-year compound annual growth
rate of 5% from Inokom’s FY13 core NP of RM9.2m, which arrives
at Inokom FY15 core NP of RM10.2 million, this could contribute
at least RM2 million to the associate earnings of BJAuto in FY15.
The balance-sheet impact is minimal as BJAuto is still sitting on a
huge net cash pile of RM229.1 million. — Kenanga Research, Dec 2
10 B R O K E R S’ C A L L
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
Household loans will be slow
Banking sector
Maintain “neutral”. Banking system loan growth stable at 9% yearon-year (y-o-y) in October 2014,
growing at the same rate as the
preceding month. Business loan
growth continued to gain traction for the second consecutive
month, rising to 8.3% y-o-y, up 50
basis points (bps) from the previous month. Meanwhile, household loan growth further moderated, slipping RM20 billion from the
previous month to 10.5% y-o-y in
October 2014.
Growth in working capital loans
continued to rise, growing at 9 %
y-o-y while growth in construction
loans slipped to 14.4% y-o-y, down
220 bps from the previous month.
Expansion of loans was mainly
attributable to increase in loans to
the manufacturing, construction, real
estate, financing, insurance and business services, and wholesale, retail,
and restaurants and hotels sectors.
Momentum for household
loans continued to be slow. There
is still a good traction on mortgage
loans. Growth in loans for residential property purchases remained
Growth in loans for residential property purchases remained stable at 13.7% in October 2014 y-o-y. The Edge file photo
stable at 13.7% in October 2014
y-o-y while growth in loans for purchase of non-residential property
moderated slightly to 15.1% y-o-y.
Meanwhile, growth in loans for
purchase of securities slipped to
15.1% y-o-y, a decline of 40 bps
from September 2014.
Growth in loans for purchase of
passenger cars improved to 3.7%
y-o-y after four consecutive months
of decline. Personal loans and credit card lending continued to grow
modestly at 3.7% y-o-y and 2.7%
y-o-y respectively.
Industry loan application growth
further decelerated to -4.3% y-o-y vs
6.7% y-o-y in the preceding month.
Hartalega should be more
aggressive on its pricing
Hartalega Holdings Bhd
(Dec 2, RM6.75)
Upgrade to “buy” with a target
price (TP) of RM 8.45. The first two
new-generation complex (NGC)
production lines will come online
this month. Backed by incoming
capacity (about nine billion pieces
per annum) and the best operating
structure in the sector — break even
utilisation of only 42% — we expect
Hartalega to be more aggressive
on its pricing, once it has commissioned sufficient capacity at the NGC
plants. It would help Hartalega to:
i) grab market share from competitors; ii) maximise utilisation and
profits and iii) derail competitors’
expansion plans by depressing future internal rate of return (IRRs).
An aggressive pricing strategy
will reduce earnings before interest
and tax per 1,000 pieces of gloves
(Ebit/k); we have reflected this in
our forecasts but this will be more
than offset by the resulting higher
sales volumes. Despite revising financial year 2015 and 2016 (FY15
and FY16) sales volumes up by 8%
and 13%, our revised earnings are
only 2% and 3% higher because
we conservatively slashed Ebit/k
gloves. There could be upside to
our earnings forecasts.
Our RM8.45 TP is based on 22
times FY16 earnings per share (EPS)
(50% premium to peers average),
which we believe is justified by our
expectations for 16% earnings compound annual growth rate in FY15
to FY17 forecasts (F). We expect
valuation to rerate once Hartalega
proves it can execute its expansion
plan successfully. The key rerating
catalysts for the stock will be the
timely roll-out of the NGC production lines, successful deployment
of the new capacity in an earnings-accretive manner, and further
milestones in plant 3 and plant 4.
Hartalega maintains an edge
over peers in terms of production
efficiency and automation. The six
NGC plants are expected to have
an annual capacity of 27.2 billion
gloves. This is expected to triple
Hartalega’s installed annual capacity to 42.5 billion gloves.
We estimate Hartalega has a
break-even utilisation level of 42%,
while its competitors’ are 44% to
57%. This gives Hartalega strong
leverage to weather a price war.
We upgrade Hartalega to “buy”
with a RM8.45 TP, based on 22 times
FY15F EPS. Our target valuation
is at 50% premium to the industry
average. Hartalega is facing rising
competition as the other glovemakers are crowding into the nitrile gloves segment.The lucrative
margins currently enjoyed by Hartalega may not be sustainable. —
AllianceDBS Research. Dec 2
Compared with September 2014,
the decline in growth in applications in October 2014 was broadbased. By business sectors, finance,
insurance and business activities
construction and manufacturing
experienced slower growths in loan
applications compared with the
preceding month.
Growth in household’s loan applications slipped to -14.1% y-o-y from
-0.5% y-o-y in the preceding month.
Loan demand weakened across
all types of household loans. We
believe this has been attributed by
the rise in inflation with the adjustment in fuel prices as well as due to
some banks taking a conservative
stance on lending only to selected
segments, hence avoiding lending
to individuals falling under the vulnerable income group or borrowers
that do not fall under the preferred
risk grades for lending.
Maintain our “neutral” stance on
the sector. Our stock picks are Hong
Leong Bank Bhd (target price [TP]:
RM16.30), Malayan Banking Bhd
(TP: RM11.20) and RHB Capital Bhd
(RM10.70). We have a trading “buy”
call on CIMB Group Holdings Bhd
(TP: RM7.27) due its share price
weakness which has declined below its fundamental value. On the
other stocks, we are neutral on Public Bank Bhd (TP: RM19.50), AHB
Holdings Bhd (TP: 3.30), AMMB
Holdings Bhd (TP: RM7.30), and
Alliance Financial Group Bhd (TP:
RM5) — MIDF Research
Gamuda’s new land expected
to generate RM3b in GDV
Gamuda Bhd
(Dec 2, RM5.05)
Maintain “neutral” with a target
price (TP) of RM 4.90. Gamuda
enlarged its exposure in Tanjong
12, Kuala Langat in Selangor after
announcing that its wholly-owned
subsidiary, Setara Hati Sdn Bhd
had entered into a sale and purchase agreement with Bukit Melati Sdn Bhd for the acquisition of
104.1ha of leasehold land located within the area for RM392.2
million.
If the deal materialises, Gamuda will have 1,787 acres (723ha) of
land in Tanjong 12, which should
take more than 20 years to develop. The new land is expected
to generate RM3 billion in gross
development value (GDV) in our
estimates, which will increase the
group’s potential GDV to RM22
billion in the area.
Similar to the earlier land, the
new land deal is also a leasehold
agricultural land, and is located
2km away from its flagship development, Kota Kemuning, in
Shah Alam, Selangor. Hence, the
accessibility is good, with the land
connected to highways such as
the Shah Alam Expressway and
Lebuhraya Kemuning-Shah Alam
via the main spine road (Persiaran Anggerik Mokara) in Kota
Kemuning which extends right
through to Thangamalay estate.
We understand that upon completion of the connection road
from Kota Kemuning to Bandar
Saujana Putra, accessibility to
the land will be further improved
with connections to Expressway
Lingkaran Tengah and the South
Klang Valley Expressway.
Together with the previous two
land deals, this land will be the
group’s third major land deal and
we believe it will be financed by
internally generated funds and/
or bank borrowings, which should
not be a problem given the current low net gearing of 0.3 times.
If the deal goes through, Gamuda is expected to spend RM1.8
billion to expand its land bank
in the recent two years, which
is within its guidance of spending RM1 billion per annum for
landbanking. The land price of
RM392.2 million or RM35 per sq
ft (psf ) appears to be on the high
side if compared with RM11.80
psf (or compared with Eco World
Development Group Bhd’s land
in Beranang, Ulu Langat [Kuala Lumpur-Putrajay] which was
purchased at RM10.50 psf ) it paid
earlier for the 1,530 acres in the
same locality.
However, if Gamuda can generate similar GDV/acre that is RM3
billion, the land cost of 13% looks
palatable compared with other
development projects whereby
land cost can go as high as 20%
nowadays. With this land deal,
we expect Gamuda’s remaining
GDV to increase to RM48 billion,
with RM35 billion from Malaysia.
We maintain “neutral” and a
TP of RM4.90, pegged on parity with our sum-of-parts valuation. In view of the anticipated
infrastructure spending, job flows
for Gamuda remain good but we
opine the risk-reward is not attractive as yet. — Public Investment
Bank, Dec 2
12 H O M E
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
M’sia palm oil industry
using child labour, says US
Also for forced labour in the country’s electronics and garment sectors
KUALA LUMPUR: Malaysia’s palm
oil industry has been cited by the
United States Department of Labour
for using child labour and for forced
labour in the country’s electronics
and garment sectors.
Malaysia appears in the latest
list of goods produced by child labour or forced labour released by
its Bureau of International Labour
Affairs (ILAB), which was released
on Monday as part of biannual reporting to the US Congress.
In a press statement on the department of labour’s website, it said
palm oil was a new addition to the
list of goods made with child labour,
and cited Malaysia for it.
Malaysia’s electronics sector was
also a new addition to the list under the category of forced labour,
in addition to the garment sector.
The list, in its sixth edition, is required by US law under the Trafficking Victims Protection Reauthorisation Act 2005 to monitor and provide
information on human trafficking
for forced labour.
This news follows Malaysia’s
downgrade to Tier 3 in the US’ annual Trafficking of Persons Report
Penang says
renaming
Gurney Drive
a rumour
GEORGE TOWN: The Penang
government dismissed yesterday a rumour that it wanted to rename Gurney Drive as
Chin Peng Drive on Jan 1 next
year after the late leader of the
outlawed Communist Party of
Malaya (CPM).
State Local Government,
Traffic Management and Flood
Mitigation committee chairman Chow Kon Yeow described
the rumour as absurd.“There
is no truth at all to the matter,” he said when contacted
by Bernama.
He was asked to comment
on a statement by Penang
Umno Youth chief Rafizal Abdul Rahim seeking clarification
from the state government over
the rumour.
Rafizal told a press conference that Umno Youth had
heard about the matter from
the office of Penang Chief
Minister Lim Guan Eng, but
declined to name the source
of the information. “We will
protest in the strongest terms
if there is any move to rename
Gurney Drive as Chin Peng
Drive,” he said. — Bernama
in June this year for insufficient
action to combat human trafficking, whereby victims are said to
include foreign migrants seeking
work in Malaysia.
In a report about the list on the
department’s website, the ILAB said
it focused on information about
children under the age of 18. It also
defined “child labour” as work done
by a person below 15 that is similar
to slavery, for illicit purposes, which
harms “the health, safety and morals of children”.
It defined “forced labour” as
work that is done under coercion,
force and fraud, which includes
the use of threats or actual physical harm, schemes and abuse of
the law or legal progress.
The list was made using data
from “publicly available primary
and secondary sources”, and these
included data from the International
Labour Organisation, site visits by
ILAB and American government
staff, as well as information compiled by academic institutions and
non-governmental organisations.
Other goods made with child
labour that were added this time
around were garments from Bangladesh, cotton and sugar cane from
India, vanilla from Madagascar, fish
from Kenya and Yemen, and alcoholic beverages, meat, textiles and
timber from Cambodia.
“There’s a story behind each
item on these lists — a child facing back-breaking labour without
education or other opportunities
for a better life or an adult trapped
in a dismal job through deceit or
threats,” the press statement quoted US Secretary of Labour Thomas E Perez.
There are an estimated 168 million
child and 21 million forced labourers
globally making everyday consumer
goods, it added, quoting the Deputy
Undersecretary of Labour for International Affairs, Carol Pier.
“Child labour and forced labour
are fundamental human rights violations, and they are also bad business practices that stifle economic
development,” she said.
The ILAB’s mission includes improvement of working conditions,
raising living standards, protecting
workers’ rights, and addressing
workplace exploitation of children
and vulnerable groups.
The listing of Malaysia’s electronics sector under the forced labour
category also follows a report by
international labour rights group
Verite, which in September said
that nearly one in three of 350,000
workers in the sector suffered from
conditions of modern-day slavery,
such as debt bondage.
Penang Chief Minister Lim
Guan Eng urged the federal government to respond to the report
or risk Malaysia being put on a
watch list and be subject to possible economic restrictions.
Penang is a hub for the electronics and electrical industry,
contributing to about half of the
sector which was worth RM236.8
billion in 2013, or 32.9% of Malaysia’s total exports that year.
But, an opposition MP from
Penang, Sim Tze Tzin, said the industry practised self-regulation
through the electronics industry
code of conduct, but this had not
been “properly communicated” by
the Ministry of International Trade
and Industry to the US Labour Department. — The Malaysian Insider
Lawyer: Putrajaya silent on
return of ‘Allah’ CDs letters
BY V ANBALAG AN
KUALA LUMPUR: The government
has not replied to demand letters
sent by Jill Ireland to return eight
Christian CDs that contained the
word “Allah” after a court order
in July, said lawyer Annou Xavier.
“We have sent three demand
letters to the Attorney-General’s
Chambers to comply with the court
order, but there was no reply at
all,” he said.
Xavier said the Home Ministry
could not retain the CDs just because it had filed a stay application.
He said his client was entitled
to enjoy the success of her judicial review until that decision was
set aside.
“My client wants to know the
status of the CDs after the court
ordered its return and quashed the
Ministry’s decision to seize them,”
he told The Malaysian Insider after attending a case management
session to fix the date to hear the
government’s application to stay
the July 21 High Court order.
Judge Datuk Asmabi Mohamad
will hear the application on Jan 22.
In August, Home Minister Datuk Seri Dr Ahmad Zahid Hamidi
affirmed an affidavit that he would
not return the CDs on grounds of
public interest.
Xavier (left) said he wrote letters on Aug 13 and 21, and Oct 21 to the government’s
lawyers, seeking the return of the CDs. Photo by The Malaysian Insider
Judge Datuk Zaleha Yusof ordered the return of the CDs to the
Melanau clerk, but did not set a
time frame for it to be complied.
She also ordered Putrajaya to pay
the applicant RM5,000 in costs.
Xavier said he wrote letters on
Aug 13 and 21, and Oct 21 to the
government’s lawyers, seeking the
return of the CDs. Ireland is also
objecting to Putrajaya filing the stay
application to withhold the CDs.
Ministry officials confiscated the
CDs from Ireland at the then LowCost Carrier Terminal (LCCT) in
Sepang, Selangor in 2008 and this
prompted Ireland to challenge the
seizure in court.
Ireland’s legal team argued that
this case was not about Christianity
against Islam, but about her constitutional right as a bumiputera
Christian.
Putrajaya is appealing against
Zaleha’s ruling. Ireland also filed
an appeal against the High Court
decision which failed to address
her constitutional right to use the
word “Allah”, as the court had only
ordered that the CDs confiscated
from her be returned. Putrajaya’s
and Ireland’s appeals are fixed for
hearing in the Court of Appeal on
Feb 10. — The Malaysian Insider
Two civil
servants among
three held in
Islamic State
raids
KUALA LUMPUR: Two civil
servants among three people
detained in raids in Kedah and
Kuala Lumpur are believed to
be involved in the Islamic State
(IS) militant group in Syria, including channelling funds to
Malaysians participating in the
group.
Inspector-General of Police
Tan Sri Khalid Abu Bakar said
all three Malaysians were apprehended by the Special Branch’s
counterterrorism division in
raids last Thursday and Friday.
“The government employees,
aged 23 and 28, were working in
a department in Kuala Lumpur
and are believed to be involved
in channelling funds to several
Malaysians who wanted to join
the IS group in Syria.
“Another suspect, aged 36,
joined the militant group in
Syria on Dec 28 and returned
to Malaysia on April 2,” he said
in a statement here yesterday.
Khalid said all the suspects
were nabbed for offences under
the Penal Code (Act 574) and
would be investigated under
the Security Offences Act (Special Measures) 2012 (Act 747).
In another case, the Syariah
High Court here issued a warrant of arrest against Mohd Fazil
Mohd Yunus, who is charged
with spreading deviant teachings known as Millah Ibrahim@
Abraham.
Judge Muhamad Abdul Karim Wahab made the order after
the Federal Territory senior syariah prosecutor Zainor Rashid
Hassin informed the court that
Mohd Fazil, 37, a businessman,
was not in the court and that the
accused went missing after his
release on bail last Nov 4.
He said officials from the
Federal Territory Islamic Religious Department (Jawi) went
to Mohd Fazil’s house in Klang,
Selangor, but the accused and
his family were not there.
“Jawi also went to look for the
accused at his in-law’s house,
and was told by his father-inlaw that he was also looking for
Mohd Fazil and his wife. Mohd
Fazil’s wife, who is a religious
teacher, was also said to have
not been to her workplace for
some time,” he added.
The proceeding yesterday
was fixed to record the plea
by Mohd Fazil and another
accused, Wan Ramlah Megat
Razalli, 47. Wan Ramlah pleaded guilty to the charge of spreading a doctrine or religious belief other than that of Islam at
Level 2, No 10-2, Jalan 2A/27A,
Section 1, Wangsa Maju here,
between 10pm and 10.30pm
on Nov 3 this year.
The charge, under Section 5
of the Syariah Criminal Offences (Federal Territory) Act 1997,
provided a maximum fine of
RM3,000 or imprisonment for
up to two years, or both, if found
guilty. — Bernama
H O M E 13
W E D N E SDAY D EC E MBER 3 , 2014 • T HEED G E FINA NCIA L DAILY
Set out clear roadmap for
creative value chain — DPM
Strong collaboration between tertiary institutions and the industry must be forged
BY JAMALUDDIN MUHAMMAD
BEIJING: Tan Sri Muhyiddin Yassin wants all Malaysian public and
private higher education institutions to set out a clear roadmap and
commit rigorous efforts towards
building and managing a creative
value chain.
In this regard, the deputy prime
minister, who is also the education minister, said strong collaboration between higher education
institutions and the industry must
be forged to address various challenges in creating a conducive environment.
“The knowledge-exchange will
help students see the practical application of what they learn from
the textbook in university. Without this, college education remains
incomplete,” he said when opening the Seeds for the Future Programme by Huawei at the Huawei
R&D (research and development)
Centre here yesterday. He said the
aspiration to achieve high-income
Muhyiddin (right)
shaking hands with
Prof Long Peng,
president of Beijing
Foreign Studies
University, after
being conferred an
honorary doctorate
at the university
yesterday. Photo by
Bernama.
status as a developed country was
very much dependent on an innovation-based economy founded on
high-level knowledge and creativity.
Greater efforts in enabling R&D
activities towards outcome-based
innovation and commercialisation
had been steadily encouraged by
the Malaysian government, he said.
Muhyiddin said the government
had also emphasised the development of educational infrastructure,
student character, curriculum and
development.
Huawei, he said, had truly taken the lead in industry-academia
interaction in Malaysia especially
in the telecommunications sector
and the programme was another
milestone achieved.
“I hope more corporations follow
in Huawei’s footsteps in enabling
technology transfer and partnering
with Malaysia for a better, brighter
future of our young leaders,” he said.
Huawei is one of the leading global information and communications technology solutions providers
founded in 1987, serving more than
one-third of the world’s population
in more than 170 countries.
It has over 70,000 products and
solutions R&D employees, comprising more than 45% of its total
workforce worldwide.
Huawei sponsored 16 Malaysian
university students for a two-week
hands-on work experience training
at its R&D centre under the initiative starting yesterday.
The Fortune 500 Global company with a revenue close to US$40
billion (RM136.8 billion) last year
trains 20,000 engineers annually
at its global training centre in Cyberjaya. — Bernama
First device to
detect driver
fatigue on sale
KUALA LUMPUR: The first Driver Alertness Detection System
(DADS) is now available for purchase at DADS.SRGINT.com. It
is the first solution that provides
advance warnings of fatigue for all
drivers — commercial fleet, mass
transit operators, commuters and
young drivers.
Operating as a cloud-based
service developed by InterCore’s
wholly-owned subsidiary SRG
International Inc, DADS is a real-time monitoring and warning
system that can assist in preventing accidents caused by driver
fatigue, lack of alertness, or distractions, said a statement issued
yesterday in Delray Beach, Florida, US.
“We are excited to be bringing
DADS to the market with consumer and commercial versions, offering both sectors a simple, highly
effective way to detect fatigue and
distractions while driving.
“The DADS service alerts drivers and dispatchers to help avert
tragedies and disasters on our
roadways,” explained James F
Groelinger, InterCore chief executive officer in the statement.
The DADS service uses sophisticated technology to assess three
stages of alertness in drivers. —
Bernama
Cameron Highlands disaster exposes lax regulation
BY KK SEMENY I H
KUALA LUMPUR: The destruction
of Cameron Highlands, although
disheartening, is wrongly blamed on
Natural Resources and Environment
Minister Datuk Seri G Palanivel. He
had inherited the manifestation of
years of total neglect by everyone
ranging from the residents who work
the land to the regulatory authorities,
including the state and federal governments. The serious degradation
of the once pristine environment is
due to unregulated development.
Though farming is back breaking,
farmers are ever willing to explore
the jungle, opening land (legally or
illegally), against all adversities, to
produce the food we enjoy. For most,
it is an opportunity to make money.
For others, it is the only livelihood
they have known for generations.
For a few, it’s the greed, resulting in
unscrupulous land clearing, often
leased to foreign workers, mainly
(illegal) Bangladeshis. Over 15,000
of them are estimated to be in the
area. Some bring along their families, entering as tourists, and making
a living as contract farmers. How is
this possible? Is this their fault? Obviously not, especially since we are not
new at importing foreign workers .
Cameron Highlands produces
over 60% of our vegetable and flower
supply, with the balance imported.
Increasing population, growing affluence with increased purchasing
power have resulted in exponential
growth in demand, with more land
being cleared for cultivation (legally or illegally). Though this is good
for the people’s economic well-be-
Flood damage seen at a section of Cameron Highlands a week after landslides
occurred in the area in November. Photo by Bernama
ing, it is not so for the environment.
The authorities and the government
(both state and federal) did nothing to strike a balance, e.g. develop
organised farming clusters, in tandem with the increase in demand,
over the last 50 years. Thus, in the
absence of any regulated approach
by the government, the “market”
had developed its own methodologies, exploited by a few corrupt
individuals who worked with local
enforcement authorities to expand
their activities as they pleased.
So, we could either ignore the
problem and hope it goes away, or
shut the place down, to avoid further
destruction and loss of lives. But,
we need to right the wrong now. It
requires a coordinated, firm and
committed approach, with longterm implementable and practical
strategies, to restore Cameron Highlands to its former glory and ensure
it remains a sustainable eco-system.
This would create a situation where
the livelihoods of the 36,000 resident, and 15,000 foreign workers are
sustainable, and the environment
provides comfort to the thousands
who find solace in its mild climate.
Three is no point pointing fingers
at the foreign workers for our failure to
regulate the situation. They are opportunists, and are here to make a living.
Over 80% of these foreign workers
stay overnight in farms, where most, if
not all their waste, including human
waste, goes into our river system. The
reasons, firstly, are that there is no allocated accommodation elsewhere,
and secondly, the travel time to the
farms is extremely challenging, taking up to 2½ hours to travel 20km.
There are no proper access roads
to farms, with almost all road networks constructed and maintained
by farmers. There is little or no effort from the authorities to provide
these basic infrastructures. Roads
washed away during heavy rain are
rebuilt by the farmers themselves to
ensure perishable produce reaches
collection points on time. The inadequate collection points are also
built and organised by the farmers.
Why aren’t the authorities assisting
these communitie, who are indeed
tax-paying rakyat?
There are no dedicated disposal
areas for farm waste for the entire
Cameron Highlands. Most, if not
all farms, dump their waste into the
fringes of farms, along roads and river banks, with most of it ending up
in rivers during heavy rain. Designated areas for farm waste disposal
should be assigned, where waste is
composted and recycled as organic
or biofertilisers, ensuring sustainability. Although municipality solid
waste should be incinerated, sadly,
the incinerator in Cameron Highlands
has not been in operation since it was
commissioned. Why? Because, over
52% of our waste is organic, and will
only burn if fuel (diesel) is added.
farms, and reallocate these to registered farmers.
*Get the Agro Bank to finance technology acquisition, adoption and
incorporation. Consider extending
leases to beyond 10 years if farms
comply with good practices.
*Get all farm owners to provide
housing for workers.
*Charge a levy, calculated on a per
acre basis, with the frequency of
payment to be mutually agreed.
*State/federal authorities should provide adequate access roads to all farms
to enable the use of 3-ton trucks instead of the ageing Land Rovers.
*Any farmers who fail to comply with
the rules should have their licences
revoked and their farm leases terminated. This includes employing
illegal workers, illegal land clearing,
improper waste disposal, improper
drainage infrastructure and failure to
provide workers’ quarters, etc.
*Provide technical support to
farmers to reduce crop damage,
excessive use of chemicals, erosion
control, etc. Currently, the best consultants are the chemical salesmen
(for crop production) and bulldozer
drivers (for land clearing).
*There must be commitment from
the government and farmers. Then,
a concrete long-term action plan,
adhered to by all, is needed. Since
it took over 30 years to cause the
destruction we experience today, it
may take another 30 years to remedy
the situation.
Righting the wrongs:
*Stop opening new land/farms
temporarily. Register all existing
farms, including their location,
size, owner(s), number of workers, etc. (create and maintain a
database).
* Systematically reforest all cleared
area that is not farmed or unsuitable
for farming, including steep slopes,
river banks and catchment areas.
*Group farms into manageable
clusters, with good access roads
and collection points for easy
monitoring. Anyone farming beyond their allocated area must be The opinions expressed in the article
stopped and their licence revoked. are the writer’s own and may not re* Evacuate or confiscate all illegal flect the views of the publisher.
14 H O M E
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
Klang port risks trial
PKA given till Monday to record a settlement in RM720m lawsuit
BY V A N B A L AGA N
SHAH ALAM: The Shah Alam High
Court has given the Port Klang Authority (PKA) until Monday to settle
a RM720 million suit filed against
turnkey contractor Kuala Dimensi Sdn Bhd (KDSB), failing which it
will proceed with the trial. Judicial
Commissioner Datuk Azimah Omar
issued that ultimatum yesterday as
the matter had been dragging on for
some time.
“This is the third time the matter
is before me. I had fixed the case for
trial but parties inform me now that
it is for settlement,” she said in response to lawyers asking for a short
adjournment. She fixed Monday for
them to either record a settlement or
be prepared to go to trial.
Earlier, lawyer D Nimalan, who
appeared for PKA asked a short adjournment as the counsel handling
the matter is overseas.
“It is not that we do not want to
settle the matter but could not get
the parties together to negotiate,”
he told Azimah.
Lawyer Chetan Jethwani, who represented KDSB, later told reporters
that PKA had submitted a proposal to
settle the suit and other cases pending in the Kuala Lumpur High Court.
“We obtained the proposal last
week but I will have to get back to
my client this week for instructions,” he said.
On Nov 24, PKA counsel Lim Chee
Wee, from legal firm Skrine & Co, said
the court will have to be informed if
there is withdrawal of the suit. In a
statement to the The Edge Financial
Daily, Lim said the evidence produced and findings of facts made by
a High Court judge in the criminal
trial against former transport minister
Tun Dr Ling Liong Sik had a material
impact on this suit.
Ling was acquitted of three charges of cheating Putrajaya regarding the
Port Klang Free Zone land deal. The
Edge Financial Daily had reported
that PKA had decided to withdraw
its RM720 million suit against turnkey
contractor KDSB over the PKFZ fiasco.
It is learnt that the PKA board
unanimously agreed to discontinue the suit in a special meeting in
Putrajaya on Nov 21.
It was also decided at the meeting that it would initiate negotiations with KDSB for it to withdraw
its suit against PKA.
PKA filed the suit against KDSB
on Sept 25, 2009, seeking rectification of the agreement signed on Nov
12, 2002, for the land worth RM1.88
billion. It sought a declaration that
it should not be charged interest of
RM720 million on the balance purchase price of the land under the
agreement and sought a refund of
the interest paid to KDSB.
PKA contended that mistakes
and fraud were involved in the
agreement and that the value of
each square foot of the land should
be RM21 and not RM25. It also said
the purchase price was inclusive
of interest as stated in the agreement and that it would be paid
over 15 years.
PKA’s decision to withdraw
comes just two months after Tan
Sri Kong Cho Ha was appointed its
chairman. PKA is under the purview of the transport ministry and
Kong is a former transport minister.
Sources said the PKA board’s
decision came after lawyers Skrine
& Co had issued a letter saying the
case was weak.
PKA is said to have written to the
Attorney-General and the ministry
for their advice.
The Edge Financial Daily also
reported that the advice to withdraw was because of implications
from Ling’s criminal trial.
It is learnt that some of the witnesses in this suit were the same
and the acquittal had seriously impacted the decision. The board is
also said to have weighed the cost
of continuing the lawsuit and losing the case.
It is said that some RM3 million
had already been spent on the PKA
cases and up to RM1.5 million may
be incurred on this case alone. —
The Malaysian Insider
Sabah education chief denies crucifix ban
KUALA LUMPUR: The Sabah education department has come out
in defence of a public high school
over allegations that it prohibited
Christian students from wearing the
crucifix, saying there is no such ban.
A local daily reported yesterday
that Sabah Education Department
director Datuk Jame Alip had said
the department had never banned
anyone from wearing religious symbols in schools.
“Students can wear crucifixes or
other religious symbols, provided
they are not too big or meant for
‘accessorising’,” he was quoted as
saying. He said that the school had
never banned anyone from wearing
religious symbols.
But the English daily reported
that parents were required to inform the school and fill up some
forms to allow a student to wear
religious symbols, including the
crucifix, to school.
The school principal said this
was to curb an increasing number of students wearing necklaces
and other accessories in school for
reasons other than religious use.
On Monday, the Sabah newspaper Daily Express reported that
students of Sekolah Menengah Ken
Wah in Keningau were prohibited
from wearing the crucifix unless
they obtained permission from the
school’s disciplinary board.
It said the regulation came under the personal hygiene category.
Among others, one of the rules is
that sudents are not allowed to wear
jewellery and religious symbols.
A concerned parent told the media that he came to know about the
regulation after attending a briefing for parents of newly enrolled
students on Nov 7.
“Her explanation about makeup, jewellery and hair was normal for any school but I was taken
aback when the teacher said that
students are also not permitted to
wear the crucifix without getting
prior approval from the disciplinary board,” the parent said. — The
Malaysian Insider
Brothers charged
with 11 counts
of making false
claims worth
RM8m
KUALA LUMPUR: An owner
of an engineering company
and his younger brother were
charged in the Sessions Court
yesterday with 11 counts of making false claims for the purchase
of electronic goods, worth almost RM8 million, between
2008 and 2011.
Siblings Lim Ann Kok, 60,
and Lim Ann Liang, 47, pleaded
not guilty to all charges.
They are jointly charged with
submitting false invoices which
they knew contained false statements on the purchase of Electronic Dimmabe Ballast 26-42W,
valued at between RM192,400
and RM1.46 million.
The invoices were submitted
to obtain a bankers acceptance
facility from Malayan Banking
Bhd.
The Lim brothers are alleged
to have committed the offences
at the Pudu Maybank Trade Finance Centre between Dec 31,
2008 and Oct 6, 2011.
Deputy public prosecutor
Wan Ahmad Nidzam Wan Omar
offered bail at RM200,000 for
each of the accused and to have
them surrender their passports
to the court.
However, lawyer Ashok Kandiah, representing the Lim
brothers, said Ann Kok had to
travel to New Zealand where his
daughter is undergoing medical
treatment, while Ann Liang has
business dealings in Singapore.
Judge Rosbiahanin Arifin
allowed the brothers bail of
RM150,000 in one surety each.
She also ordered them to surrender their passports, but they
can request the return of the
documents when they need
them. The court set Jan 9 for
mention. — Bernama
Exploring opportunities in machinery industries
KUALA LUMPUR: Representatives
of 33 machinery and hardware
companies from Taipei participated
in a business matching session with
hundreds of Malaysia-based small
and medium enterprises (SME) in
Kuala Lumpur on Monday.
Led by the New Taipei City Economic Development Department, the
delegation was welcomed by Minister
in the Prime Minister’s Department
Datuk Dr Wee Ka Siong, representative
from the Taipei Economic and Cultural
Office in Malaysia His Excellency Lo
Yu Chung and the Commissioner of
New Taipei City Economic Development Department Yeh Hui Ching.
Speaking at the opening ceremony, Wee called for greater cooperation between SMEs in Taiwan and
Malaysia and expressed admiration
for Taiwan’s production capability
and advanced technology. He is
confident the collaboration can
greatly benefit Malaysian SMEs.
Lo said he believes the event
has far-reaching significance as the
two nations have a track record of
working well with Malaysia’s vibrant
SMEs to create opportunities and
for mutual benefit.
According to Yeh, Taipei’s SMEs
are an integral part of Taiwanese
industrial development. He said all
products such as machine tools, industrial machinery, general machinery, power machinery and mechanical components in this delegation
have been carefully selected and that
he is confident of finding suitable
support in the Malaysian market.
The Taiwanese delegates showcased products including stamping
beds, food and beverage machinery,
3D printing machines, metal working
machines, electronic control systems,
cutting technology, machine components, tooling, process technology, medical equipment, automation
equipment and turnkey solutions.
Many of the products and services
are strongly competitive and rival
those from Europe, the United States
and Japan.
Chairman of New Industries Taipei City Industrial Association Reynold Chun Ming Wu (front, left), president of the Federation of
Malaysian Foundry and Engineering Industries Associations Tan Poh Seng (front, right) and Wee (centre) at the business matching
session. Photo courtesy of Taipei Economic and Cultural Office in Malaysia.
16 C O M M E N T
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
The good, the bad and the ugly
If Europe goes into recession, the impact of lower oil prices on the global economy will be negated
BY
MOHAMED A EL-ERIAN
T
he net overall impact of
this year’s 28% plunge
in oil prices is positive
for the global economy. But it isn’t universal, and it comes with
negative dimensions that need to
be well understood, lest they end
up reversing the benefits.
The good comes from the boost
that lower oil prices provide to
consumers and manufacturers in
oil-importing economies. It is the
equivalent of a significant tax cut
at an opportune time, especially
for Western consumers.
And while part of this benefit
may go to governments because
of the way oil taxes are imposed
in certain countries, particularly
in Europe, the overall global effect will be to boost consumption
and lower manufacturing costs in
countries that have been struggling
to overcome prolonged malaise in
growth and jobs.
There is also a positive distributional effect within these economies, although it is marginal rather than decisive. Because energy
spending constitutes a bigger part
of the budget for lower-income
families, lower oil prices help counter some forces that have worsened
the inequality of income, wealth
and opportunities.
Yet it would be foolish to ignore
the risks of lower oil prices. For one
thing, they lead to immediate cuts
in energy companies’ investment
budgets, both in the traditional
sector and among promising alternative technologies.
As a result, longer-term energy
potential will be undermined, both
overall and in its more environmentally friendly components.
In addition, the lower oil prices,
which would normally be seen as
producing “good” disinflation in
oil-importing countries, could accentuate the general deflationary
tendency in Europe — one that
could be quite detrimental to the
continent’s immediate and longer-
term economic well-being.
While I believe the favourable income effects help offset this threat,
it would be wrong to ignore it given
that Europe is already in uncharted
economic terrain.
A third risk relates to certain
segments of the financial markets.
Look for the plunge in oil prices to
be disruptive for the commodities
markets as a whole, and for securities issued by energy companies
and oil-exporting countries.
Given the weight of investments
in these securities in certain emerging-markets and high-yield indexes, the result could mean generalised pressure to sell in these asset
classes.
Besides these three bad outcomes, there is also the ugly: The
possible reaction of certain oil-producing countries that are particularly hard hit by the price declines.
Nowhere could this prove more
consequential than in Russia.
Roiled by sanctions, a collapsing
currency and large capital flight,
Russia now faces the effects of a
sharp fall in oil revenue. Companies
pushed to the brink may be looking
for government support at a time
when the authorities’ ability to respond is curtailed by the decrease
in their own revenues.
The effect will be to strengthen
the winds of recession, inflation
and financial instability in Russia.
How this affects the global economy depends in great part on Russian President Vladimir Putin (pic).
Up to now, Putin has been able to
resort to regional geopolitical adventures, most notably in Ukraine,
to counter and divert popular dissatisfaction in Russia over the domestic economy. And he has done
so notwithstanding the resulting
imposition of Western sanctions
on his country.
Will the additional domestic
downturn lead Putin to change
course on Ukraine as a way of lifting
Western sanctions and alleviating
overall pressures on the economy? Or will the internal pressure
push him to extend his regional
adventures?
Should Putin take the second
course, the West may impose more
economic sanctions, including on
the energy and financial sectors,
and Russia would probably follow
with counter-sanctions on energy
supplies to Europe.
This could push Europe into
recession — which would negate
much of the good impact that lower oil prices have had on the global
economy. — Bloomberg View
Mohamed El-Erian is the chief
economic adviser at Allianz SE.
China rate cut is cold comfort for struggling developers
PROPERTY developers, among
China’s most heavily leveraged
companies, will get a negligible
lift from the country’s first benchmark interest rate cut in two years
as sales slip and banks pull back
on lending to the sector.
After a long bull run, China’s
property market, which makes up
about 15% of its economy and is
the main driver of demand in some
40 industries from cement to steel,
has grappled with soft prices and
mounting inventories for at least
six months.
That prompted China’s central
bank to cut its benchmark lending
rates by 40 basis points (bps) to
5.6% on Nov 21, reversing in part
its drive to cool a sector that many
feared had become so bloated by
speculative froth that it was crowding out other forms of investment.
But the lowering of the lending
benchmark will bring only marginal relief to the sector’s biggest
headaches — too much unsold
stock and tight liquidity.
“The fundamental problem of
China’s housing market is oversupply,” said Ding Zuyu, co-president
of real estate services firm E-House
(China) Holdings Ltd, and a few
home buyers encouraged by the
rate cut wouldn’t change that.
New home prices in China
dropped for a seventh consecutive month in November from the
previous month, a survey by the
China Real Estate Index System
(CREIS) showed.
The force of the cut will also be
enfeebled because bank lending to
the property sector is in decline,
having dropped 23.3% in the third
People standing in front of residential buildings in Shanghai, China on Dec 2. Property developers, among China’s most
heavily leveraged companies, will get a negligible lift from the country’s first benchmark interest rate cut in two years as
sales slip and banks pull back on lending to the sector. Photo by Reuters
quarter from the previous three
months, Reuters calculations from
central bank data showed.
“The impact on property will
be limited because for developers,
funding access is more critical than
borrowing cost,” said Su Aik Lim,
Fitch Ratings analyst.
“Even if interest cost falls, access
to borrowing is poor, so weak de-
velopers still cannot avoid a liquidity crisis when their sales slow.”
Standard & Poor’s said this week
liquidity was a key risk for some
developers, while forecasting a
5% fall in average selling prices
in 2015.
Moody’s expects residential
property sales to shrink between
0% and 5%, too.
All of which will make banks
yet more wary about lending to
the weaker players, which leaves
them ever more reliant on their
ability to keep generating cash.
“The biggest most reliable
source of funding is property sales;
it is more important to boost sales
than obtaining more construction
loans,” said David Ng, property an-
alyst with Macquarie Securities.
Larger players, such as Vanke,
Country Garden, China Overseas
and Shimao Property, have already been increasing their asset
turnover in a bid to improve cash
flows, taking market share from
the smaller fry.
Fitch estimates that the share
of the top five developers, based
on accumulated sales, has risen to
11% in September from 8% in end2013, which also gives them bigger
elbows in the scrum for financing.
“Banks are lending to companies that can sell faster, so they
get their money back quickly and
renew their loans more comfortably,” said Ng.
That virtuous circle for the most
successful becomes increasingly
vicious for the strugglers as sales
growth remains in the doldrums.
“From the demand side, the
rate cut will not stimulate demand
sufficiently for cities that face oversupply,” said Lim.
He added that lower interest
costs would be of only slim benefit
to even the most indebted builders.
“From the borrowers’ perspective, interest expense accounts for
only 5% of home selling price; the
impact from a 40bps cut will only
cut interest expenses by about 6%
to 7%, or around 0.3% of selling
price.”
It’s a point not lost on apartment
hunters like Li, a 37-year-old finance professional who would like
a second home in Beijing.
“Compared with the huge
amount for a housing down payment, what’s the use of the moderate rate cut?” she said. — Reuters
F E AT U R E 1 7
W E D N E SDAY D EC E MBER 3 , 2014 • T HEED G E FINA NCIA L DAILY
Thailand’s troubled democracy
Country has had so many coups and violent political strife has been chronic
Thai soldiers directing
traffic near the Democracy
Monument in Bangkok
on June 1. Thailand’s
army seized power in a
military coup on May 22
after months of street
demonstrations against
the elected government.
Photo by Reuters
BY TON Y JORDA N
T
hailand is a prosperous nation with strong
banks, modern factories, flourishing tourism, a growing middle
class and other typical
markers of a successful democracy. Which is exactly what it lacks.
Thailand has had so many coups
in its modern history that scholars
sometimes refer to the last 82 years
as its “coup season”.
In between, violent political strife
has been chronic. The latest round
features deadly street clashes, politically tainted corruption trials
and the army taking control after
an election derailed by protests. In
contrast to political activists almost
everywhere, the ones in Thailand are
demanding less democracy.
Thailand’s army seized power
in a military coup on May 22 after
months of street demonstrations
against the elected government. All
protests and political gatherings of
more than five people are banned.
The military junta says an election
will be held in 2016, provided the
nation’s decade-long political divide can be healed and a new constitution drafted.
The last election, in February
2014, was blocked by anti-government groups and former prime
minister Yingluck Shinawatra was
removed from office by the Constitutional Court. She was popular
among rural voters who supported
her brother, former prime minister
Thaksin Shinawatra, who was ousted in the last coup in 2006 but directed policy from abroad through
his sister and her Pheu Thai party.
Protests began in October 2013
against an amnesty bill that would
have absolved Thaksin, a billionaire
tycoon-turned-politician, after his
conviction for corruption. They
killed at least 25 people and evolved
into a wider push to upend Thaksin’s electoral dominance, which is
based, the protesters claim, on vote
buying and favours for the poor.
Subsidies for rice farmers helped
Thaksin and his allies win the last
five elections with support from
the vast northeast of the country.
His opponents include civil servants, middle-aged royalists and
the Democrat Party, which led a
court-installed government during
the last deadly uprising in 2010.
Thailand has had a dozen coups
since the country’s seven-century
reign of kings ended with a bloodless 1932 putsch that turned the
Kingdom of Siam into a constitutional monarchy. The economy
was kick-started by US economic
aid that rewarded Thailand’s postwar campaign against communism,
then propelled by Japanese and
European manufacturers tapping
Thai workers to make cars and disc
drives for world markets.
Thailand has had more than 20
prime ministers since 1946 when
King Bhumibol Adulyadej assumed
the throne.
The economy has proved resilient, bouncing back from the Asian
currency crisis in 1997, the devastating tsunami in 2004 and crippling
floods in 2011. About two-thirds of
Thailand’s 67 million people live in
rural areas and more than 90% are
Buddhists.
Bangkok’s urban middle class
and royalist elite have resisted ced-
ing control after Thaksin drew rural
voters to the polls, swelling turnout to more than 75% in the last
two elections. They reject the idea
that they’re thwarting democracy,
saying the damaged political system can only produce a credible
government after it’s swept clean
of Thaksin’s influence.
His supporters, enraged by the
way their repeated victories have
been overturned, have joined the
cycle of stalemates and sporadic violence. A gradual accommodation might involve more power
sharing with regional governments,
though that could take a generation or more.
The worst outcome could be a
break-up of the country or even
a civil war. While the 86-year-old
king, whose portrait hangs in most
homes and shops, has intervened
in the past to calm his subjects,
he’s seen as too ill to do so now.
— Bloomberg View
PDPA — one year on, what we have achieved so far
BY ED WI N L EE YON G CIEH
THE Personal Data Protection Act
2010 (PDPA) is the very first legislation in Malaysia that seeks to comprehensively protect personal data.
As we do not have a general Privacy
Act in place and our Federal Constitution does not expressly recognises
the right to privacy (although our
Court of Appeal in one particular case
held that the right to life and liberty
(Article 5) is arguably broad enough
to include the right to privacy), the
PDPA is certainly a very much needed piece of legislation that Malaysians
have long been waiting for.
So when the PDPA was passed in
June 2010, it was seen as a positive
move by our government towards
recognising the importance of protecting personal data of individuals
in Malaysia. It also signals a milestone for Malaysia in bridging the
gap between Malaysian laws and
international trends in protecting
personal data. To prevent the misuse and disclosure of personal data
to unauthorised third parties, governments around the world have
enacted legal regimes on personal
data protection. In Asean, Malaysia
and Singapore are the only two countries which have enacted a comprehensive data protection legislation.
Three years down the road, the
PDPA finally came into force on Nov
15, 2013. One would have thought
that given the time that it took for the
PDPA to come into force after it was
passed by Parliament in June 2010,
most data users (i.e. companies/organisations/individuals who either
alone or jointly in common with other
persons process any personal data or
have control over, or authorise the
processing of, any personal data)
would have put aside sufficient time
and resources to make sure that they
take the necessary steps to establish,
review and strengthen internal policies, procedures, processes and systems that govern the management
and handling of personal data in order to comply with the law.
Unfortunately, that was not the
case. When the government announced that the PDPA will come
into force on Nov 15, 2013, many
companies and organisations were
rushing into getting themselves
PDPA-compliant, as they were only
given a three-month sunrise period
to ensure compliance with the law.
Hence, we saw a spike in companies
and organisations busy churning
out privacy policies and notices.
Data users who were required
to register themselves with the Personal Data Protection Department
(PDP Department) were also uncertain with the registration process. Perhaps due to inadequate
publicity or low awareness, some
data users were not even aware of
the registration requirement, which
had resulted in them being late in
submitting their registration forms.
Meanwhile, some companies and
organisations (especially small and
medium enterprises) chose to take
a “wait-and-see” approach, conveniently ignored the fact that the
PDPA applies to every company,
organisation and individual in the
country, and not just the big boys.
It has been one year since the
coming into force of the PDPA. Let’s
examine what we have achieved so
far, what could have been done, and
what else we all can do.
While the deadline for data user
registration is already over, the PDP
Department has acknowledged that
the three-month sunrise period was
relatively short (Singapore’s PDPA,
which has also recently come into
force, provided an 18-month sunrise
period). As such, the PDP Department adopted an unofficial stand by
stating that they will still accept late
applications for registration, provided it was accompanied with a letter
stating the reason(s) for the delay.
As at November 2014, the PDP
Department registered more than
7,000 data users from various industries. Abu Hassan Ismail was
appointed the first Personal Data
Protection Commissioner. The current commissioner is Mazmalek
Mohamad. Several regulations and
orders have also been enacted, and
the PDP Department has initiated
public consultations on various
guidelines to deal with specific
topics such as the management
of CCTV images, direct marketing,
employee data, consent requirements as well as general rules on
compliance with the PDPA.
As for companies and organisations, some of them, especially large
companies and organisations, have
already put in place certain procedures and processes to ensure
compliance with the law. However,
the approaches have been rather
diverse. Depending on the nature
and size of the business, some have
put in extensive procedures and
complex processes (such as banks,
insurance companies, telcos), while
some have just put up a privacy policy on their websites, thinking that
by doing so, they have complied
with the law. This can be attributed
partly to the different levels of understanding on compliance with
the law and interpretation of the
PDPA, and partly to other reasons
such as no clear guidelines from the
authorities on the interpretation of
the PDPA.
There are still a lot of grey areas
under the PDPA which require further clarification. Under the PDPA,
in order for a data user to process an
individual’s personal data, he must
obtain consent from the individual, and the consent must be in a recordable form and capable of being
maintained properly by the data user.
If a body corporate is found guilty
of an offence under the PDPA, officers
of the body corporate will automatically be held severally and jointly
liable together with the body corporate, unless they can prove that the
offence was committed without their
knowledge, consent or connivance;
and that they have taken all reasonable precautions and exercised due
diligence to prevent the commission
of the offence. Non-compliance with
the PDPA may result in penalties of
up to RM500,000 and/or three years’
imprisonment.
What is certain is that the PDPA is
here to stay, and it is no longer “business as usual”. The intent of the PDPA
is not to inhibit business or to stifle
the legitimate use of personal data.
Rather, it is meant to grow businesses
by giving consumers confidence that
their personal data will be protected
and processed in good hands.
Edwin Lee Yong Cieh is a senior associate at Christopher & Lee Ong, the
Malaysian associate firm of Rajah
& Tann Asia network. This article is
for information purposes and does
not constitute legal advice.
18 W O R L D B U S I N E S S
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
Oil drillers to idle more rigs
Gearing up for a slowdown as crude tumbles
BY RUJUN SHEN
SINGAPORE: Offshore drillers globally are increasingly considering
warm stacking their rigs to take
them temporarily off the market,
as they gear up for a slowdown in
the hunt for oil with crude prices
sliding to five-year lows.
Rigs in warm stack maintain basic operations and most of the crew,
and can be put to use once the owner gets a contract. Drillers put rigs
in warm stacks to lower operational
costs, and to keep them sufficiently
ready for quick deployment, meaning they are hoping a downturn
won’t be a prolonged one.
Rigs can also be cold stacked, or
shut down, which typically happens
when an owner does not expect to
find work for an extended period
of time.
Oil prices have fallen about 40%
in the past six months, with international benchmark Brent dropping below US$68 (RM232.56) to
a five-year trough and nearing the
marginal production cost of the
most expensive offshore projects.
“Six months ago, no one talked
about stacking rigs,” said Thomas
Tan, chief executive officer (CEO)
of Kim Heng Offshore & Marine
Holdings Ltd, a Singapore-based
oilfield service firm. “In the last few
weeks, the talk of stacking started.”
Tan said his firm has received
JAKARTA: Shares in Indonesia’s biggest coal miner PT Bumi Resources Tbk rose the most yesterday in
over four months after three of its
units filed for protection from US
creditors after failing to make debt
interest payments.
The filing comes a week after
Bumi Investment Pte Ltd, Bumi Capital Pte Ltd and Enercoal Resources
Pte Ltd also obtained a six-month
SPH ‘building ecosystem
around media’
SINGAPORE: Singapore Press
Holdings (SPH) is “building an
ecosystem around the media”
through its investments and
partnerships in related businesses such as online classifieds and education, chairman
Lee Boon Yang was quoted by
The Straits Times as saying.
SPH’s transformation into a
full-fledged print and digital
media company, supplemented by its other investments in
media-related firms and its
property business, are part
of efforts to boost earnings in
the long term and “bring SPH
back on to the growth path”, Lee
added. He was responding to
shareholders asking about the
company’s strategy in the face
of a rapidly evolving media, and
its plans to ensure that revenue
and shareholder dividends “remain sustainable”.
Thailand to set up telecoms holding company
A worker checking a used drill head at an oil drilling and production island off the coast of Germany. Offshore drillers globally are
increasingly considering warm stacking their rigs to take them temporarily off the market. Photo by Reuters
enquiries to stack dozens of rigs
over the past few weeks. Kim Heng
currently services four rigs in warm
stack around Singapore. The company serves about 60 rigs a year in
different stages of operations, including providing repair, maintenance and logistics services.
Seadrill Ltd, the world’s largest
driller by market value until recently, expects to see a pickup in stack-
ing and scrapping next year, its CEO
said. And Transocean Ltd, which
owns the world’s largest offshore
drilling rig fleet, said it may retire
additional rigs because of a sluggish market.
Transocean and Seadrill are
among Kim Heng’s customers.
Drillers, who provide rigs on hire
to oil producers, are in a pinch because day rates to hire rigs have
fallen this year while supply grows.
The day rate for a top specification drillship, which can work in water up to 3,658m deep, was recently
quoted at as low as US$400,000,
down from US$600,000 last year.
Even rates for jack-up rigs, generally
working in water depth below 122m,
have started to weaken in recent
months after holding up relatively
well earlier in the year. — Reuters
Bumi units file for US creditor protection
BY EVEL I N E DA NUBRATA
IN BRIEF
moratorium in a Singapore court
against legal action from creditors.
Both moves give Bumi Resources, which was hard hit by a sharp
drop in coal prices, more time to
restructure its debts.
Bumi shares gained as much as
12.2% yesterday, their biggest jump
since July, outperforming a 0.5% rise
in the Jakarta stock exchange index.
According to the US filing, Bumi
Resources and its three units have
missed several interest payments
Blackstone to sell IndCor for US$8.1b
SINGAPORE: Blackstone Group LP said it will sell its US industrial platform IndCor Properties to affiliates of Singapore sovereign
wealth fund GIC Pte Ltd for US$8.1 billion (RM27.70 billion).
As a result of the deal, IndCor will no longer pursue an initial
public offering filed in September, Blackstone said in a statement.
Reuters reported in November that GIC was leading a consortium
to buy IndCor from Blackstone in a deal valued at about US$8 billion
including debt. Chicago-based IndCor was formed in 2010 as a portfolio company of Blackstone, and has a footprint of warehouses and
distribution centres across the United States, according to its website.
GIC has stepped up its real-estate purchases in recent months,
buying office buildings in Tokyo and investing in Australian student
accommodation as a way to diversify its portfolio and secure better yields. GIC is estimated by the Sovereign Wealth Fund Institute
to manage around US$320 billion in assets. Real estate accounted
for 7% of its portfolio in the financial year to April 1, according to
its annual report. The deal is expected to close in the first quarter
of 2015. — Reuters
since September on debts worth
a total US$1.37 billion (RM4.68
billion).
Bumi Resources has to reach
an agreement with its creditors or
undergo a restructuring process
under Indonesian law to achieve “a
meaningful recovery” for its units
and affiliates, chief financial officer
Andrew Beckham said in the US
court documents.
Bumi Resources has an interest
in 67 entities incorporated in var-
ious jurisdictions. These entities
have either started a restructuring
process or are preparing a restructuring plan, as well as negotiating
with various creditors on their debt
repayments.
Bumi Resources is part of the
sprawling family-owned Bakrie
Group conglomerate, which has
aggressively expanded into energy,
plantations, property and other businesses, mainly through debt-funded
acquisitions. — Reuters
Singapore to adopt Euro 6
standards for petrol vehicles
SINGAPORE: Singapore will adopt
the environmentally cleaner Euro
6 fuel emission standards from late
2017 for vehicles powered by petrol,
a government agency said.
The country, which is currently
on Euro 4 for petrol-powered vehicles, will adopt the new standards
from Sept 1, 2017, the National Environment Agency said.
Euro 6 is the latest engine emission standard set by the European
Union (EU), which imposes strict
rules on tailpipe gas emissions of
new vehicles sold in EU member
states.
Euro 6 fuel has a minimum sulphur content of 5 parts per million
(ppm) while Euro 4 has a minimum
sulphur content of 50ppm.
It was not immediately clear
if Singapore refineries are able to
produce petrol meeting Euro 6
standards. The city state’s refineries might have to upgrade existing
units to produce the lower sulphur
oil product which could be costly, a
South Korean refining source said.
The new regulation will also reduce nitrogen oxides and fine particulate emissions, the environment
agency said. — Reuters
BANGKOK: The government
plans to create a National Backbone Holding Co to operate
the country’s telecommunications infrastructure to promote
a digital economy. Creating
the holding company will be
aimed at reducing redundancies in telecom network investment, which could result in
lower service fees, said Pansak
Siriruchatapong, one of eight
members of the panel working
on the digital economy policy. “The establishment of [the
company] needs to be settled
after a national digital economy
committee... is set up by January,” he said. — Bangkok Post
Jaya hit by S$15.63m
claim notice
SINGAPORE: Mainboard-listed Jaya Holdings said yesterday that the company had on
Sunday received a claim notice
from the purchaser of its subsidiaries in connection with an
alleged breach of warranties
under the sale and purchase
agreement (SPA). The Straits
Times reported Jaya as saying the purchaser is claiming
S$15,625,000, (RM40,949,600)
being the cap amount agreed
for all claims arising from the
SPA. Jaya announced in February that it will be selling its entire business to Mermaid Marine Australia for S$625 million.
Spackman seeks TV
post-production house
SINGAPORE: Catalist-listed Spackman Entertainment
Group, a South Korean entertainment production group,
was reported by The Straits
Times as saying yesterday that
it has entered into a non-binding MoU with an independent
third party, Hyun Duk Shin,
for the proposed acquisition
of 51% or more of the issued
and outstanding share capital
of Fireworks Co Ltd. Fireworks
is a post-production house that
creates high-end visual effects
for TV commercials, music videos, films and digital media.
20 FO CU S
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
WE
Deflationary forces at play
As the rising dollar and falling commodity prices drive inflation rates down around the world, Schroders
fund managers suggest investing carefully in a diverging environment
S TORI ES BY JOA N NG
T
he US economy is
showing signs of life,
but emerging-market
economies have yet to
benefit from a rise in
exports. Meanwhile, Japan, Europe and China are still experiencing significant weakness. “For a
very long time we’ve had economic
convergence. We’re now moving
to an environment of divergence,”
says Bob Jolly, head of global macro at London-based asset manager
Schroders. “The most likely scenario
is that you start getting some very big
swings in relative market pricing.”
Yet, one common theme that
investors can probably count on
dominating the first part of 2015 is
deflation or disinflation. Oil prices
have fallen below US$80 ($104) a
barrel, pushing the cost of energy
down to lows not seen since before
the global financial crisis. Oil is not
the only commodity that has become cheaper: The Thomson Reuters/Jefferies CRB commodity-price
index is down some 4% on a yearto-date basis. Also, several different factors are pushing consumer
prices down the different major
economies. At Schroders’ 2014
International Media Conference
on Nov 13 and 14, fund managers
and economists sounded warnings
about the potential effects of lower
prices on investment portfolios.
Positive on the US
Keith Wade, chief economist at the
firm, believes the fall in commodity prices will mostly be positive
for the US economy and the US
consumer. “A lot of people take a
very bearish tack on this. But it actually works like a tax cut,” he says.
“People have to spend their money
on energy and food. If the price of
those things comes down, it gives
them more real income. And when
you look at what has caused the fall
in commodity prices, it’s not all
owing to the fall in demand. Quite
a lot of it is due to better supply. In
agriculture, we had a very good
year for harvest this year around
the world. That’s why food prices
have been coming down.”
Wade says there have also been
some genuine supply side benefits
in the energy sector. The shale gas
boom in the US is one. “But more
recently, we’ve seen a surprise increase in production from Libya.
And we’ve also seen Saudi Arabia
saying that it’s not willing to cut
production.”
Given the expectations for continuing economic strength in the
US, Schroders believes US equities
are set to outperform. Matt Ward,
fund manager for US equities, is
bullish on the technology space.
“I think 2015 is a more interesting
year for tech than 2014.” Through
much of this year, he says, technology stalwarts such as Intel and
Microsoft did well because of geo-
At Schroders’ 2014 International Media Conference on Nov 13 and 14, fund managers and economists sounded warnings about the
potential effects of lower prices on investment portfolios
Gautrey thinks 2015’s big headline
will be the emergence of a billion
mobile Internet users in India and
China.
political risks, concerns about the
US Federal Reserve’s intentions to
reduce the size of its asset purchase
programme, and slowing growth in
China. “Also, as Windows XP’s sun
was setting, you had this artificial
lift in corporate renewal of PCs and
PC licences.”
Now, however, Ward thinks investors should look at tech stocks
that will benefit from secular
growth. In particular, he believes
the next big story driving stocks
will be the cloud. “These are cycles
that come in every 20 years. The
mainframe story gave way to client
server architecture. Cut to 20 years
later, this whole thing is predicated on cloud. The way I see cloud
is basically a chance for someone
to outsource or rent his Internet
infrastructure. That’s cheaper for
enterprises, more nimble, more
scalable; it goes to mobile more
quickly, it’s quicker to update, it
has lower total cost of ownership.
Gartner predicts 20% growth rates
on cloud, while overall tech is grow-
Wade: People have to spend their money
on energy and food. If the price of those
things comes down, it gives them more
real income.
ing at about 4.5%. That’s where I see
the opportunity,” Ward says. “We
try to invest in companies such as
salesforce.com or Workday, where
you’re getting an enormous secular
growth profile.”
Ward is co-fund manager for the
Schroder ISF US Large Cap fund,
which currently has an overweight
position on storage and data management solutions provider NetApp.
His fund also has an underweight
position on Microsoft. “Old tech is
probably up 10% in 2014 and new
tech is probably down 10%,” Ward
says. Admittedly, the so-called new
tech companies have hefty forward
price-to-sales ratios of some 20
times. “But therein lies the opportunity. You have to think about the
20%-plus secular growth profiles
of these companies, you have to
move out a few years, give them a
normalised operating margin, and
just count back. All these companies
are actually very attractive relative
to their growth. We’ve had an enormous pullback. Since March, the
At the beginning of 2014, 99% of the
world thought bond rates were going
to rise, says Chorlton. ‘They got it
spectacularly wrong.’
top five highest-growing stocks are
down 50% on a price-to-sales basis.”
European corporate earnings
growth
In Europe, the threat of deflation
is much greater. Wade, the economist, notes that in economies such
as Spain and Greece, there is genuine deflationary pressure. However, he also expects to see some
stabilisation in deflationary forces.
“I think a lot of the fall in inflation
has really been due to commodity
prices coming down. A couple of
years ago, inflation in the eurozone
was about 3%. But most of that was
because of food and energy. Now,
food and energy [prices] have fallen.
We’ve seen inflation come down to
1% or just slightly below,” he says.
(See chart.)
However, the base effect should
contribute to some stabilisation going forward. Also, the euro has been
weakening against the US dollar.
Wade expects this trend to continue
as the US economy strengthens and
the European Central Bank (ECB)
considers forms of asset purchases,
much like the US Fed did following
the financial crisis. “We expect deflationary forces will ease.”
Rory Bateman, head of UK and
European equities at Schroders,
says the ECB’s quantitative easing
will be very positive for European
equities. “[When the US Fed did]
QE, it was very positive for the
Standard & Poor’s 500. It stimulated animal spirits, not only at
the corporate level but also at the
consumer level. Within Europe, the
wealth effect will be much less. But
I believe QE will be a positive for
equities, particularly if you think
about where we are,” Bateman
says. “Europe is trading at 13 times
2015 earnings. And it’s at a very depressed level. There’s never been
a greater differential in terms of
corporate profitability between US
and European companies. We’re
talking about depressed valuations
on depressed earnings. As a contrarian investor, that to me sounds
incredibly attractive.”
Bateman sees earnings for European companies rising on the
back of an improving economy,
corporate restructuring and depreciation in the euro. “We haven’t
seen much earnings growth over
the last three years. It’s all been rerating. That’s because we have faced
significant currency headwinds. If
that currency weakness continues
and you get 10% depreciation in
the euro, that will deliver corporate earnings growth of 3% to 5%,”
he says. “We’re also seeing plenty
of opportunities at the corporate
level where companies are restructuring.” Some examples of this,
he adds, are French telco Orange,
packaged food company Danone
and chemicals firm Arkema.
He is also very positive on the
European banks. “We are anticipating double-digit earnings growth at
the banks next year as provisions
ease off and margins expand. These
guys have been provisioning very
expensively in the run-up to the
AQR tests,” Bateman says, referring to the ECB’s asset quality review. “The stress tests have been
resolved so there should be much
less provisioning going forward.
The ECB is funding their balance
sheets at a much lower rate. And
they’re also selling more savings,
asset management-type products.”
Selective in Asia and emerging
markets
For the emerging markets, global deflationary forces will have
a mixed impact. “There’s a very
definite difference now between
the first 10 years of this century
and today,” says Craig Botham,
emerging markets economist at
Schroders. “In the first 10 years,
you had a common tide lifting all
boats: essentially China and globalisation. Now, we’re seeing a
more divergent path.”
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Diversity crucial in a world
of disinflation
As an example, Botham points
to Japan’s exporting of deflation
to the region. The Japanese government, under the leadership of
Prime Minister Shinzo Abe, is hoping to inflate its way out of a public debt burden that is more than
twice the size of its GDP. “But the
expansion of Japanese monetary
policy, which ultimately exports
Japanese deflation to the rest of the
region, is of particular concern for
economies that compete a lot with
Japan either by region or industry,
or both. South Korea, China and
the Philippines are particularly exposed,” he says.
Botham believes the Philippines
is in a good position. “Although the
Philippines exports a lot to Japan
and has a lot of competition with
Japan, it’s part of the Japanese supply chain. The devaluation of the
yen has boosted exports to Japan.”
South Korea, on the other hand,
has suffered. And Botham thinks
corporates in Taiwan and China,
which are trying to move up the
value chain, are also at risk. “Earlier
this year it seemed as though Japanese exporters were happier just
to increase profits without fighting
for more market share by cutting
prices. I think the more certainty
they have that this cheaper yen is
a more permanent phenomenon,
the more likely they are to start
fighting for market share because
they know they can sustain these
lower prices.”
James Gautrey, a global equities fund manager, says he is playing this story by favouring Japanese exporters. “We think there’s
a very strong story in terms of the
exporters. There are some worldclass firms in Japan which, over the
last 10 years or so, have struggled
against their Korean counterparts.
That currency tailwind is now firmly
in their favour and still underpriced
in markets.”
For the rest of the Asian market, Gautrey thinks next year’s big
headline will be the emergence of
a billion mobile Internet users in
India and China. “It’s significant
because of just the sheer numbers
involved in this. Telecoms is a very
capital-intensive industry. It benefits from scale. And when we start
talking about numbers as high as
a billion, these are numbers that
even the best-run telcos in the developed world, the Verizons of the
world, can only dream of.”
To capture this growth, Gautrey
says it is important to pick the right
companies. “In Europe, we had the
same data story. But that was not
really translating into any benefits
for the operator. What we need to
see is that the conditions are right
for the operators to benefit. We
think India is exactly that market,”
he says. “Idea Cellular is a particular stock we’ve been invested in for
about three years now. It’s a pure
play on Indian mobile. But I’m very
encouraged when I meet the management teams of Vodafone Group,
Bharti Airtel and Idea, which are
the three big incumbents out there.
They all get it. They all understand
what they’re doing.”
What makes India different is
that the operators are charging extra for data as opposed to giving it
away, Gautrey says. “In India, we
think we’re at the absolute tipping
point now. Smartphone penetration
is around 13% or so, but the appetite
for data is massive. And one of the
big differences is that mobile devices are the only way [via which]
people access the Internet. It’s not
a substitute for the PC. Companies
that can capture that value are very
well placed.”
In China, Gautrey sees the same
dynamics in demand for mobile
Internet. However, he is far more
interested in the country’s dotcoms.
“China has firewalled off competition. It has prevented Amazon.
com, Google and Facebook [from]
coming into the market [to] let its
own domestic champions grow. So
Alibaba Group Holding, Baidu and
Tencent Holdings, we think, are the
three most interesting platforms
there. And they still have a long
growth run rate ahead of them.”
Interest rate risk
Deflationary forces could also pose
a risk to interest rate assumptions
next year. At the moment, consensus expectation is for the US Fed
to begin raising the Federal Funds
Rate in the middle of next year.
Wade thinks this would be the right
move, given the current strength
of the US economy. “Things are a
little bit distorted because energy
prices have come off so much. But
that will actually support growth
later on. Then, as wages begin to
accelerate, people will say: ‘Hang
on; the Fed is behind the curve’.”
However, he acknowledges that
what actually happens may be quite
different. “There is what we call a
feedback loop. If the US dollar appreciates significantly on Fed tightening, then the Fed might look at it
and think: ‘Well, hang on a minute;
we don’t need to tighten because
a stronger dollar is deflationary
for the US economy’,” Wade says.
“There have been periods, such
as the late 1990s, when we had the
Asian crisis, when the dollar rose
very strongly. And the Fed, which
was preparing to tighten policy,
backed away because everybody
talked about deflation.”
Andy Chorlton, head of US multi-sector fixed income, thinks that
by buying long-dated US Treasuries, investors will be able to escape
some of the worrying about the
Fed’s interest rate action. “We find
it quite hard to make money out of
the direction of rates. At the beginning of this year, 99% of the world
thought bond rates were going to
rise. And they got it spectacularly
wrong,” Chorlton says. Instead, he is
betting on the rise of liability-driven investment among US pension
and insurance funds. LDI strategies
focus on the predictability of cash
payouts in the future.
While popular in Europe, this
strategy is now catching on in the
US. “In the 2000s in the UK, the
yield curve was inverted for a long
period of time. Why? Lots of pension funds were buying fixed income, buying duration. That’s now
part of the conversation in the US,”
he adds. Chorlton points to a KPMG
statistic saying that some £650 billion (RM4.51 billion) of UK pension
money is in an LDI framework of
some sort. “The entire size of the
long-dated corporate bond market in the US is US$1 trillion. And
someone owns that trillion dollars already.” A UK-sized pension
market move to LDI would therefore drive long-term yields down
significantly.
“Whatever the Fed does, and I’m
not overly bothered to be honest
with you, it is not going to impact
the different classes of the yield
curve in the same way. Everyone
seems to forget that,” he says. “The
yield curve will become much more
segmented and we do think there’s
some value in the long end of the
US curve. You are going to see a
change in the shape of the yield
curve. It may not invert, but we
think it will certainly flatten.” —
The Edge Singapore
SINCE 2011, inflation has in fact
been slowly trending lower across
the major economies of the world.
And Remi Ajewole, fund manager
of multi-asset portfolios at Schroders, thinks that situation is unlikely to change anytime soon. In
Japan, recent quantitative easing
(QE) by the central bank has led
to a pickup in consumer prices.
But as real wage growth is still
negative, she does not think this
trend is sustainable. Meanwhile,
in China, excess capacity has led
to significant declines in producer prices for the country’s manufacturers.
In Europe, Ajewole points to
a chronic lack of demand. “The
European Central Bank (ECB) has
tried to address this by bringing
interest rates extremely low. But
that low rate hasn’t necessarily
been transferred to consumers
or corporates. The transmission
mechanism is broken,” she says.
The reason for this is partly the
murky balance sheets of Europe’s
banks. “Unfortunately, lending to
corporates and households is in
negative territory. This is deflationary because if the bank isn’t
lending, it is affecting aggregate
demand.”
This disinflationary phenomenon is, in turn, creating a divergence in the macroeconomic environment, Ajewole says. The US,
for instance, is reporting better
economic growth. “A lot of this
is [because of ] the way the US
economy is structured. Growth in
the US is very much tied to consumption growth.” China, Europe
and Japan, however, are reporting
differing levels of weakness. And
this divergence is leading to a divergence in monetary policy. The
US Federal Reserve, for instance,
has ended its asset purchase programme. The Bank of Japan has
stepped up its level of QE. And the
ECB is contemplating it.
What does that mean for investors? “It means that there will
be winners and losers. So, as an
investor, you need to identify
what the winners are and get out
of the losers,” Ajewole says. And
in such a situation, multi-asset
strategies are particularly useful.
“We’re unconstrained and can
invest in a wide range of asset
classes, from equities to bonds
to currencies. We can be flexible.
Ajewole: A divergence in monetary
policy means there will be winners
and losers. As an investor, you need to
identify what the winners are and get
out of the losers.
We can identify those winners
and we can short the losers. We
can actually generate positive
returns in an environment that’s
generally quite challenging for
most other investors.”
At the moment, Ajewole is
bullish on the US dollar. “The
trade-weighted dollar since the
early 2000s has been on a declining trend,” she says. That decline
coincided with a long period of
inflation. “Now we’re facing a
deflationary trend, which means
the dollar is going up.” Inversely,
commodity prices are likely to
fall. “There is a tight relationship
between commodity prices and
the dollar. When the dollar is
appreciating, commodity prices
tend to fall,” she says. Historical
trends aside, commodity prices
will also suffer from the lack of
demand in Europe, deleveraging
and over-capacity in China.
Finally, Ajewole likes North
American equities. “It’s good to
have growth. But preferably, you
would want an economy that has
a combination of strong growth
and slightly lower inflation. The
reason is that it means you have
a central bank that can be quite
dovish. That tends to be good
for risk assets, such as equities,”
she says. Right now, the US and
Canada are both enjoying rising
growth and falling inflation. “And
don’t forget, the US is a heavily
consumer-laden economy. Falling oil prices are good for the
consumer. It means more money in your pocket.” — The Edge
Singapore
22 W O R L D B U S I N E S S
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
Investors shun
China-HK stock link
There are concerns about ownership rights and complicated trading procedures
KA NA NI SH I ZAWA
& ED UA RD GI SMATULLIN
HONG KONG: Institutional investors are shying away from the
Shanghai-Hong Kong stock link
due to uncertainty about ownership rights and complicated trading procedures, according to an
industry body.
Most long-term asset managers aren’t going to buy mainland
shares through the programme in
the near term because investors
Mitsubishi
UFJ units
downgraded
MONA MI Y U I
& SHI NGO KAWAM OTO
TOKYO: Mitsubishi UFJ Financial Group Inc units were
among five Japanese lenders
downgraded by Moody’s Investors Service yesterday after
it cut the nation’s credit rating.
Bank of Tokyo-Mitsubishi
UFJ Ltd and Mitsubishi UFJ
Trust and Banking Corp, part of
Japan’s biggest banking group,
were lowered one level to A1
with a stable outlook, Moody’s
said in a statement. Sumitomo
Mitsui Banking Corp, Shizuoka
Bank Ltd and Chugoku Bank
Ltd also had their long-term
debt ratings cut.
Moody’s on Monday lowered Japan’s rating to A1, the
fifth-highest grade, citing uncertainty over whether Prime
Minister Shinzo Abe’s administration will achieve its
deficit-reduction goals and
succeed in boosting growth.
— Bloomberg
and regulators aren’t comfortable
with their ability to enforce ownership of the equities, Mark Austen,
chief executive officer of the Asia
Securities Industry and Financial
Markets Association, said yesterday in Hong Kong. Requirements
to deliver shares to a broker before
selling them are also sapping interest, he said.
While investors maxed out the
13 billion yuan (RM7.2 billion)
daily quota for Shanghai shares
on Nov 17, buying through the
link has fallen short of the limit
each day since then. Foreigners
briefly turned net sellers of socalled A-shares on Monday for
the first time. About 95% of large
funds aren’t ready to invest because of operational and compliance reasons, Andy Maynard, the
Hong Kong-based global head of
trading and execution at CLSA
Ltd, said last week.
There is no stated mechanism
in the stock connect, existing Chinese law or Shanghai Stock Ex-
change rules “for confirming the
identity of beneficial owners of the
A-shares,” Asifma said in a report
issued yesterday with Thomson
Reuters. “There remains uncertainty as to how owners of the A-shares
assert or pursue their claims as
shareholders in China.”
The exchange link is part of China’s effort to open up its capital
account, increase global use of the
yuan and turn Shanghai into an
international financial centre. —
Bloomberg
China’s 4th richest man seeks
growth with Dalian Wanda’s IPO
BY M ATTHE W M I LLE R
& CLARE JI M
BEIJING/HONG KONG: Wang Jianlin plans to raise as much as US$6
billion (RM20.5 billion) from selling shares in Dalian Wanda Commercial Properties Co Ltd to help
fund the expansion of an empire
built at speed using cheap government land.
China’s fourth-richest man with
a net worth of US$13.2 billion, according to Forbes, has opened
100 Wanda Plaza mixed-use developments from 21 just four years
ago. Wang is aided, he has said, by
land bought at half the price others
would have paid, from authorities
betting on his ability to boost local
economies.
Dalian Wanda Commercial
Properties is now China’s largest
in the sector with 178 projects in 112
cities across 29 provinces, many anchored by malls and hotels alongside office and residential towers.
On Monday, it won approval in
Wang: China’s outbound
investment is an
inevitable trend.
Hong Kong to conduct the biggest
initial public offering (IPO) in Asia
Ex-Japan in four years.
“Dalian Wanda has a lot of projects and they all need money,” said
a person familiar with the listing
plan. “After the IPO, it can also issue bonds which will help lower
funding costs.”
Wang has tried to list Dalian
Wanda Commercial Properties before. Regulatory reasons scuppered
a Hong Kong IPO in 2005, and its
application in Shanghai lapsed
earlier this year with the bourse
saying submitted documents were
out of date.
Wang, a former member of the
People’s Liberation Army, now
plans to take the developer into
the world’s 10 largest cities over
the next decade, beginning last
year with Los Angeles, Chicago,
London, Madrid and Gold Coast.
“China’s outbound investment
is an inevitable trend,” Wang told
the Apec CEO Summit in November. — Reuters
E.ON’s ‘bad power’ spin-off promises little upside
BY OL A F STORB ECK
LONDON: E.ON is coming clean
on dirty energy. In a historic move,
Germany’s largest utility is exiting
conventional generation and bundling unwanted risky assets into a
new company to be spun off.
The remaining E.ON will concentrate on distribution and green
electricity. While both management
teams will benefit from focus, this
“bad power” spin-off will struggle
to offer a tempting investment case.
Chief executive Johannes Teyssen
is facing up to the reality of German
energy policy. Berlin’s decision to
phase out nuclear power and grow
renewable energy, paired with falling
demand for electricity, has blasted
utilities’ business models.
The supply of subsidised electricity from wind turbines and solar
panels fed into the grid on a preferred basis has more than tripled
since 2003. That has crowded out
gas, coal and nuclear and dragged
down wholesale electricity prices.
Operating profit from E.ON’s
conventional power generation fell
by two-thirds between 2010 and
2013. Many of the group’s conventional plants no longer earn their
cost of capital. It’s akin to a financial
crisis for the power sector.
But E.ON’s balance sheet is now
more trustworthy than that of a
bank loaded with subprime se-
curities in 2008: the group took a
€4.5 billion write-down on Nov 30.
Demergers usually spell dissynergies as costs are duplicated. Here,
the value of dedicated managements
is almost certainly worth more given the strategic challenges in power.
Both companies operate in entirely
different segments of the market.
The snag is that there is only so
much E.ON can do to make the spinoff attractive to new shareholders.
The unit, with an estimated onethird of group earnings before interest, taxes, depreciation and amortisation (Ebitda), could be worth
around €10 billion. It will take E.ON
assets in Brazil and Russia, although
these will add currency risk as much
as emerging-market sparkle.
As a business in run-off, the new
company will need a generous dividend to lure income investors.
Hence E.ON is keeping debt with
the parent. Capex will be low, so
cash generation should be healthy
in the short term.
It is unclear just how long the
cash will continue. Germany wants
to drive the share of renewable
energy from 25% to 45% in 2025.
Potential new subsidies for conventional power plants for providing back-up capacity could alleviate
the pain, although the government
has yet to be persuaded. E.ON’s
share price reaction — up 4% at
€14.84 — looks overdone. — Reuters
IN BRIEF
Nomura Holdings expects
higher annual revenue
after rating hike
TOKYO: Nomura Holdings Inc
forecast it would earn a few
hundred million dollars in additional revenue after Moody’s
Investors Service lifted its credit
rating on Japan’s biggest investment banking and brokerage
group. Nomura will get an additional US$250 million (RM855
million) in revenue annually
over the next 18 months, it said
in a presentation at an investors
conference in Tokyo yesterday.
Higher ratings help to lower
funding costs. The upgrade to
Baa1 from Baa3 also makes it
easier for Nomura to expand
sales in the global fixed-income
market. — Reuters
Northern Star bullish
on gold find near
Australian mine
MELBOURNE: Gold miner
Northern Star Resources Ltd
said yesterday it had made a
“significant” gold discovery below an old open-pit mine next
to its Kanowna Belle gold mine
in Western Australia. Drilling at
White Feather hit “spectacular”
grades of more than 5,300g per
tonne from about 200m underground, Northern Star said. At
a time when other gold miners
have been forced to slash exploration spending to conserve
cash amid a sharp drop in gold
prices, Northern Star is spending A$50 million (RM146 million) drilling in areas previously
mined above ground. — Reuters
China Minsheng up by
10% limit on insurance
firm’s investment
SHANGHAI: China Minsheng
Bank shares rose by their 10%
daily limit in Shanghai during
afternoon trade yesterday, after
the bank announced Anbang
Insurance Group had bought
5% of its shares. The company’s
Hong Kong-listed shares rose
more than 5%. The bank said
on Monday that China’s Anbang Insurance Group currently holds 5% of its shares, which
it said was due to Anbang’s favourable assessment of China
Minsheng’s business prospects.
In the next 12 months, Anbang
will be allowed to expand its
position in Minsheng through
private placement. — Reuters
Takata to comply with
US order to expand
regional recall
TOKYO: Takata Corp is preparing to comply with a US order
to expand a region-specific recall nationwide, the Nikkei said
yesterday, a move that’s likely to
add millions more to the tally of
cars called back to replace potentially deadly air bags. The US
National Highway Traffic Safety
Administration (NHTSA) last
week gave Takata until yesterday
to declare that its air bag inflators
are defective and issue a national
recall. If it does not, the NHTSA
could begin steps to fine the Japanese company up to US$7,000
(RM23,940) per vehicle, as well
as force a recall. — Reuters
W O R L D B U S I N E S S 23
WE D N E SDAY D EC E MB ER 3 , 2014 • T HEED G E FINA NCIA L DAILY
Australia’s RBA keeps
rates at record lows
It expects growth a little below trend for several quarters
BY WAY N E COL E
SYDNEY: Australia’s central bank
kept interest rates at record lows
for a 16th straight month yesterday,
saying subpar economic growth
could extend this unusually lengthy
period of stability for some time yet.
There was little relief for the
hard-pressed local dollar as the
Reserve Bank of Australia (RBA)
repeated the currency was overvalued given the ongoing slide in
prices for many of the country’s
commodity exports.
“Overall, the Bank still expects
Hacker
group targets
company
financial info
WASHINGTON: A hacker group
has tapped into email accounts
of executives in more than 100
companies that could give them
lucrative access to market-moving information, a United States
security firm said on Monday.
San Francisco-based FireEye
Inc said the mysterious group,
dubbed Fin4, showed deep familiarity with the way businesses
work and appeared to target the
accounts of officials with knowledge of mergers and acquisitions
and other valuable corporate secrets. FireEye said Fin4 has gone
after access to email accounts of
companies’ top executives, legal
counsel, outside consultants,
and researchers.
Some two-thirds of the companies Fin4 has targeted since
mid-2013 are in the pharmaceutical and healthcare industries, where there has been a
surge of large deals in the past
year, FireEye said.
FireEye said that of the companies it knows were targeted
by the group, all but three were
listed on the New York Stock
Exchange or the Nasdaq Stock
Market. But it would not divulge their names, citing client
confidentiality. “Fin4 knows
their targets,” the FireEye report said. “We can only surmise how they may be using
and potentially benefiting from
the valuable information they
are able to obtain.
“However one fact remains
clear: access to insider information that could make or break
stock prices for dozens of publicly traded companies could
surely put Fin4 at a considerable trading advantage.”— AFP
growth to be a little below trend for
the next several quarters,” said RBA
Governor Glenn Stevens following
the bank’s monthly policy meeting.
“On present indications, the most
prudent course is likely to be a period of stability in interest rates.”
The cash rate has been at 2.5%
since August last year as the A$1.6
trillion (RM4.6 trillion) economy
struggles with the winding back of
mining investment and declining
terms of trade. So sharp has been
the fall in export prices, notably for
iron ore, that investors are wagering
rates might have to be cut again.
Interbank futures imply around
a 60% probability of an easing by
August next year, even though RBA
officials have shown no sign of contemplating such a move.
Perhaps sensing the shifting
winds, Deutsche Bank AG has
changed its call and now predicts
the RBA will lower rates by 50 basis points in two instalments over
2015.The bank’s chief economist,
Adam Boyton, cited a moderation
in the housing market, a shrinking
terms of trade and his expectation
of rising unemployment as reasons
for the change.
The drop in commodity prices
has certainly eaten into sources of
national income, from export earnings to company profits, wages and
tax receipts.
Yet a decade-long boom in mining investment is also greatly boosting the volume of resources Australia can ship abroad. As a result
net exports added a healthy 0.8
percentage points to gross domestic
product (GDP) in the third quarter,
reinforcing expectations for a solid
rise in growth overall.The GDP report is due today. — Reuters
Indonesia reviews
subsidised fuel policy
JAKARTA: As global oil prices
tumble, Indonesia’s new government said yesterday it is
reviewing its subsidised fuel
policy to ensure consumers are
not being charged above the
market rate. In his first major
economic policy decision, President Joko Widodo last month
announced a more than 30%
hike in fuel prices, expected
to save up to US$11.5 billion
(RM39 billion) next year, to
help fund his reform agenda
and tackle the current account
deficit. But since then, global
crude prices have fallen nearly 10% as supply growth led
by the United States shale oil
boom exceeded demand. “We
keep reviewing fuel prices and
will coordinate with the finance
ministry to recalculate and find
an effective subsidised price,”
Energy Minister Sudirman Said
told reporters. — Reuters
‘Vale mulling listing of
base metals business’
‘Ebola batters Liberia, Guinea,
Sierra Leone economies’
WASHINGTON: The Ebola outbreak in West Africa is taking a
heavy toll on the economies of
Liberia, Sierra Leone and Guinea, all of which face negative or
slower growth next year because
of the virus, the World Bank said
yesterday.
The bank said growth estimates
for the three countries hardest hit
by Ebola had tumbled since its previous analysis in October, and that
projections showed the outbreak
was costing them more than US$2
billion (RM6.8 billion) in lost income over the 2014 to 2015 period.
VANCOUVER/TORONTO: Brazil’s Vale SA is considering listing part of its global base metals business, two sources with
knowledge of the matter said
on Monday, as the miner looks
to fund capital projects amid a
collapse in iron ore prices. The
sources said the world’s top iron
ore producer is likely to retain a
majority interest in the new entity if it proceeds with the plan.
The second source said there
had been significant discussion
inside Vale about listing the base
metals assets, which have fared
better than its iron ore business
due to steadier prices. — Reuters
India govt rejects
Mallya as airline chief
BOMBAY: The Indian government has rejected the reappointment of liquor baron Vijay
Mallya as head of his grounded and debt-laden Kingfisher
Airlines Ltd. Kingfisher, once
India’s second-largest airline
by passenger share, is under
growing pressure to repay debts
of nearly US$1.5 billion (RM5
billion) owed to a consortium
of largely state-run banks. The
company said the ministry of
corporate affairs had rejected
Mallya’s application for reappointment, a move required
under government regulations,
without detailing why. — AFP
Projections show the
outbreak was costing
the countries more
than US$2 billion in
lost income over the
2014 to 2015 period
For this year, gross domestic
product growth estimates in Liberia were projected to fall to 2.2%,
compared with forecasts of 2.5% in
October and 5.9% pre-crisis. In Sierra Leone, 2014 growth was now
forecast at 4%, down from previous
estimates of 8% in October and
11.3% pre-crisis, the World Bank
said.
It lowered its 2014 growth forecast for Guinea to 0.5%, compared
with 2.4% in October and 4.5%
pre-crisis.
It said all three countries had
been growing rapidly in recent
years and through the first half of
2014.
The bank added that, for 2015,
it was projecting negative growth
of minus 2% in Sierra Leone, down
from a 7.7% growth forecast in October and 8.9% before the crisis. It
IN BRIEF
Chipmakers to merge
in US$4b deal
also forecast negative 2015 growth
for Guinea of minus 0.2% versus
October’s estimate of 2% growth
and a pre-outbreak forecast of 4.3%.
“In Liberia, where there are signs
of progress in containing the epidemic and some increasing economic activity, the updated 2015
growth estimate is 3%, an increase
from 1% in October, but still less
than half the pre-crisis estimate
of 6.8%,” the bank said.
The report comes as the World
Bank group president Jim Yong
Kim begins a two-day visit to
West Africa to discuss ways of addressing the outbreak.
The World Health Organization
said on Monday that some 5,987
people had died of Ebola in Liberia, Sierra Leone and Guinea.
— Reuters
SAN FRANCISCO: Chipmakers
Cypress Semiconductor Corp
and Spansion Inc announced
plans to merge on Monday in
a US$4 billion (RM13.7 billion)
deal bringing together two key
makers of components for “Internet of Things” devices. “This
merger represents the combination of two smart, profitable,
passionately entrepreneurial
companies that are No 1 in their
respective memory markets
and have successfully diversified into embedded processing,” said T J Rodgers, Cypress
founding president. — AFP
W O R L D 25
W E D N E SDAY D EC E MBER 3 , 2014 • T HEED G E FINA NCIA L DAILY
Japan kicks off campaign
in ‘Abenomics referendum’
PM promises to make the country ‘shine again at the centre of the world’
BY TORU YAMANAKA
SENDAI: Official campaigning
kicked off in Japan yesterday before a Dec 14 election which Prime
Minister Shinzo Abe has described
as a referendum on his faltering
“Abenomics” growth blitz.
“I promise to make Japan a country that can shine again at the centre
of the world,” Abe told hundreds of
voters at his initial stump speech in
the northern port of Soma.
The town lies around 40km from
the Fukushima Daiichi nuclear
plant, which was sent into meltdown by the 2011 tsunami. Its fragile
economy and ageing populace are
a stark reminder of the challenges
Abe’s government faces as it struggles to reinvigorate Japan’s lethargic
economy.
“There will be no revival of Japan without Fukushima’s reconstruction, which I vow to speed
up” Abe said.
More than 1,180 candidates nationwide are vying for 475 legislative
seats in the powerful lower house
of parliament, with Abe’s Liberal
Democratic Party (LDP) seen likely
to cruise to a comfortable majority.
The 60-year-old premier still has
Abe (second from right)
giving high fives with
well-wishers during his
stumping tour for the
Dec 14 general election in
Sendai, Miyagi prefecture
yesterday. Photo by AFP
two years left in his mandate, but
he called the vote in the wake of
his decision last month to delay a
planned sales tax rise to 10%.
A levy rise in April, from 5% to
8%, slammed the brakes on growth
and pushed the country into recession in the July to September
quarter.
Ratings agency Moody’s on Monday downgraded Japan’s credit rat-
Hong Kong protest
founders to surrender
HONG KONG: The three original
founders of Hong Kong’s pro-democracy Occupy Central movement
tearfully announced yesterday they
will surrender by turning themselves
in to police today and urged protesters still on the streets to retreat.
“As we prepare to surrender, we
urge the students to retreat, put
down deep roots in the community and transform the movement,”
said Occupy Central leader Benny
Tai, who added that the decision to
surrender is a commitment to the
rule of law and based on “the principle of peace and love”.
The announcement came after
hundreds of pro-democracy protesters clashed with police on Sunday
leaving dozens injured, in one of
the worst nights of violence since
rallies began over two months ago.
“Surrendering is not an act of
cowardice, it is the courage to act
on a promise. To surrender is not
to fail, it is a silent denunciation of
a heartless government,” Tai said.
He praised the bravery of frontline occupiers, saying it was time
for protesters to leave “this dangerous place”.
Tai, Chan Kin-man and Chu Yiuming founded the Occupy Central
civil disobedience group in early
2013 to push for political reforms,
but have increasingly taken a backseat as more radical student groups
came to the fore. — AFP
ing by one notch to A1, citing “rising
uncertainty” over the country’s debt
situation and Abe’s faltering efforts
to kick-start growth.
Critics have derided the vote,
which will cost taxpayers about
US$500 million (RM1.71 billion),
as “an election without a cause,”
but Abe has insisted the poll is
necessary as a referendum on
his controversial big-spending,
easy-money policies.
For voters, the state of the economy, streamlining the size of Japan’s
parliament, and better child care
programmes to lure more women into the workforce are the top
three issues, according to a survey
published by the Asahi newspaper
on Monday.
Some 34% of surveyed voters
said they would vote for the LDP,
followed by 13% for the main opposition Democratic Party of Japan.
The survey showed that Abe’s cabinet maintained an approval rating
of 40%, nearly flat from 39% seen in
the same survey taken a week ago.
The opposition has criticised the
conservative leader for his decision
to expand the role of the Japanese
military, as well as efforts to restart
nuclear power after the Fukushima
crisis. — AFP
Canadian, Indonesian on trial
over Jakarta school sex abuse
BY P RE S I M ANDARI
JAKARTA: A Canadian and an Indonesian went on trial yesterday accused of sexually assaulting children at a prestigious Jakarta school.
Neil Bantleman and Ferdinand Tjiong deny committing abuse at
the Jakarta International School, which has long been favoured by
expatriates and wealthy Indonesians in the capital but is now facing
the worst crisis in its 60-year history.
They are the most prominent figures caught up in a wide-ranging
issue that has also seen cleaning staff accused of raping a young boy,
and the revelation that a suspected serial paedophile sought by the
FBI used to teach at the school.
School administrator Bantleman and teaching assistant Tjiong,
who face up to 15 years in jail if found guilty, have received strong
support from parents, many of whom believe they are innocent.
After the initial allegation emerged in April that cleaners had raped
a nursery school boy, more parents made abuse claims.
The first trials began in August, with five cleaners facing charges
of child sex abuse.
However, several of the cleaners who originally confessed have
since recanted, claiming they were beaten by police. Their trials are
continuing. — AFP
China will not go to war for North Korea, says retired general
BAIJING: China will not step in to
save neighbouring North Korea if the
Pyongyang regime collapses or starts
a war, a retired People’s Liberation
Army general said, possibly signalling waning patience in Beijing with
its wayward, nuclear-armed ally.
“China is not a saviour,” Wang
Hongguang, formerly deputy com-
mander of the Nanjing military region, wrote in the Global Times
newspaper, which is close to the
Chinese Communist Party.
“Should North Korea really collapse, not even China can save it,”
he said.
The outspoken Wang has made
critical comments about North
Korea before, and it was not clear
whether his words indicated a policy
shift regarding Pyongyang.
China has long been the isolated
North’s key ally and aid provider.
“China has no need to light a fire
and get burnt,” Wang said. “Whoever
provokes a conflagration bears responsibility. It is not necessary for
China’s younger generation to fight
a war for another country,” he said.
Wang criticised North Korea for its
nuclear development, using it as
an example of how its interests can
differ from China’s and saying it had
“already brought about the serious
threat of nuclear contamination in
China’s border area”. — AFP
IN BRIEF
AC/DC drummer
pleads not guilty over
drugs, kill threat
WELLINGTON: AC/DC drummer Phil Rudd has pleaded
not guilty to charges of drug
possession and threatening
to kill, his lawyer told a New
Zealand court yesterday.
Rudd was excused from appearing when his case came
up briefly in the District Court
in the North Island coastal
city of Tauranga, where he
was arrested on Nov 6 when
police raided his waterfront
mansion. But the 60-yearold’s lawyer Paul Mabey said
that since the veteran rocker
last appeared before the court
in November, he had filed a
notice entering a not guilty
plea to all charges. — AFP
Pakistan air strikes
and ground fire
kill 24 militants
PESHAWAR: The Pakistan
military said yesterday it had
killed at least 24 militants in
air strikes and ground fighting in northwestern tribal areas bordering Afghanistan,
as part of ongoing offensives
in the region. Air strikes took
place in the restive North Waziristan tribal district, where
the army launched a major
operation in June targeting
Taliban and Haqqani network
militants. Ground troops,
meanwhile, traded fire with
militants in Khyber agency,
where Taliban fighters are
based. — AFP
Suspected Shebab
rebels massacre 36
in north east Kenya
NAIROBI: Gunmen have massacred 36 people in northeast Kenya in the latest attack by suspected militants
from Somalia’s al-Qaeda-affiliated Shebab rebels in the
troubled region, officials
said yesterday. A group of
gunmen attacked a quarry near the town of Mandera yesterday morning.
After spraying tents where
the quarry workers slept with
gunfire, the militants then
weeded out non-Muslims and
shot them in the head. Some
of the victims were also beheaded, police sources and
reports said. — AFP
British reporter
convicted of contempt
by Bangladesh court
DHAKA: A Bangladesh
court yesterday found an
award-winning British journalist guilty of contempt for
questioning the official death
toll of three million in the
country’s 1971 independence
war. Judges from a special
war crimes court ruled David
Bergman’s blog in November
2011 had “hurt the feelings of
the nation”. It ordered him
to pay a 5,000-taka (RM222)
fine or go to prison for seven
days, according to prosecutor
Tureen Afroz. — AFP
26 WORLD
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
Three surrender in Thai
corruption probe
At a time of heightened sensitivity surrounding the palace months after military coup
BY A MY SAWI TTA LEF EV R E
BANGKOK: Two Thai army officers
and a civilian have answered a
police summons, police said, in
a widening corruption investigation that has also led to the arrest
of high-ranking policemen and
relatives of Princess Srirasmi, the
wife of the Crown Prince.
The investigation comes at a
time of heightened sensitivity surrounding the palace months after
the military launched a coup. The
revered but ailing King Bhumibol
Adulyadej, 86, was admitted to hospital in October and underwent an
operation to remove his gallbladder.
Last week, some senior police
officers and civilians were arrested
in the crackdown into alleged police graft including charges ranging from bribery to defaming the
monarchy.
Among them were three people
with the Akrapongpreecha surname, the royal name bestowed on
Srirasmi’s family when she married
Crown Prince Vajiralongkorn in
2001, police said.
Witthaya Theskhunthot, a civilian, and army officers Sergeant
Nathakorn Yasri and Sergeant Thiraphong Chochampi, were the lat-
est suspects to surrender to authorities.
“Altogether three people turned
themselves in,” Major-General
Chanthep Saesawet, deputy commissioner of the Metropolitan Police Bureau, told Reuters.
“The two army officers are being detained by the army and one
civilian surrendered to police on
Monday night at a television broadcasting station.”
The men turned themselves in
three days after Crown Prince Vajiralongkorn asked the government
to strip his wife Srirasmi’s family of
the royal name.
Police say Lieutenant General
Pongpat Chayapan, a former head
of the Central Investigation Bureau,
was the ringleader. Pongpat and
several others were charged under
harsh lese-majeste laws for allegedly citing the monarchy for personal
benefit. The suspects have not been
allowed to comment publicly on
the charges, which include money-laundering and oil smuggling.
Police last week displayed slides
showing antique Buddhist statues, gold bars, stacks of cash and
cars seized at safehouses allegedly linked to some of the suspects.
— Reuters
MEXICO CITY: A peaceful rally
over the presumed massacre of
43 Mexican students ended with
violence in the capital on Monday, and the president’s popularity sank to new lows on his
second anniversary. Thousands
marched along Mexico City’s
main boulevard, chanting for
President Enrique Pena Nieto
to resign and waving blackened
flags of the country in anger over
the case of the missing students.
As night fell, a small group of
masked protesters armed with
bats threw firebombs at banks
and broke the windows of
several shops along Reforma
Boulevard, which is popular
with tourists. Hundreds of riot
police protecting the Senate
used fire extinguishers to repel
the protesters. — AFP
British complaints
on ban on MPs’ Hong
Kong visit ‘useless’
Man who went on spending
spree with father’s credit
cards jailed 27 months
KICK SCOOTER DELUXE... Kick scooters are already a common sight in most major cities, either ridden by children
on the way to school or commuters completing the final leg of the daily journey into the office. But what makes MINI’s CitySurfer
stand out is that it has an electric motor integrated into its rear wheel hub that gives the scooter a top speed of 25kph. Its lithium ion
battery — which is an integral part of the frame — is good for 25km before it needs recharging. The CitySurfer can recapture energy
via braking while running on the motor and use it to top up the battery. When the battery is dead, the scooter still operates like a
normal kick scooter and the cell can be recharged via the 12V power socket found inside most cars. Photo by AFP
Ceasefire in Lugansk ‘agreed in princple’
KIEV: Ukraine and pro-Russian rebels have “agreed in principle” on
a ceasefire in the eastern war-torn
region of Lugansk, one of the ex-Soviet state’s two separatists provinces,
the Organisation for Security and
Cooperation in Europe (OSCE) said.
“All agreed in principle to a total
ceasefire along the entire line of
contact between Ukrainian Armed
Forces and those under control of
the (Lugansk People’s Republic), to
be effective from 5 December,” the
Peaceful protest over
43 missing Mexicans
ends in violence
BEIJING: China rebuffed as
“useless” yesterday complaints
from British Prime Minister
David Cameron about a ban
on a group of British lawmakers from visiting Hong Kong,
saying the former colonial power would reap what it sowed.
Cameron believes China’s
decision to prevent the trip is
mistaken and has only served
to heighten concerns around
the territory, his spokesman
said on Monday. On Sunday,
the chairman of parliament’s
foreign affairs committee said
Chinese embassy officials had
told him he and other British
lawmakers would be refused
entry to Hong Kong to monitor
progress towards democracy
there. — Reuters
Lebanese army
detains wife and
son of IS leader
BEIRUT: The Lebanese army
detained a wife and son of Islamic State (IS) leader Abu Bakr
al-Baghdadi as they crossed from
Syria in recent days, security officials said yesterday.
The officials declined to give
the name or nationality of the
woman whom they described as
one of his wives. The Lebanese
newspaper As-Safir reported the
army had detained her in coordination with “foreign intelligence
apparatus”.
It said she had been travelling
with a fake passport accompanied by one of her sons. IS has
seized wide areas of Iraq and
Syria, Lebanon’s neighbour to
the east, declaring a “caliphate”
over the territory it controls.
Investigators were questioning her at the headquarters of
the Lebanese defence ministry,
As-Safir reported.
The Lebanese security forces
have waged a crackdown on IS
sympathisers in Lebanon and
the intelligence services have
been extra vigilant on the border
crossings. — Reuters
IN BRIEF
OSCE said in a statement released
on late Monday.
“They also agreed that the withdrawal of heavy weapons would
start on 6 December,” the statement added.
The two sides signed a Russian-brokered truce on Sept 5 in
the Belarussian capital Minsk that
helped stem some of the bloodiest
fighting but it has been frequently
broken and followed by hundreds
of deaths on both sides.
The heaviest battles now rage
around the devastated airport of
the main rebel-held city of Donetsk,
centre of the self-proclaimed
Donetsk People’s Republic that
also proclaimed independence
from Kiev.
Fighting has intensified at
the airport in recent days, but a
separatist source told AFP that a
new round of negotiations about
a broader Donetsk ceasefire was
due to begin yesterday afternoon.
The Ukrainian military announced on Monday that a temporary truce had been agreed for the
territory surrounding the Donetsk
airport, although an AFP reporter
heard heavy shelling in the area
yesterday morning.
The rebel source said the negotiations would involve senior
Ukrainian military figures and
General Alexander Lentsov —
the deputy head of the Russian
ground forces. — AFP
SINGAPORE: A jobless man
helped himself to credit cards
and cheque books that belonged to his family members,
The Straits Times reported, and
used them to fund a shopping
and gambling spree. In less
than three months, Nicholas
Tian Weijie paid for a raft of
items including iPhones, movie
tickets and restaurant meals,
causing losses amounting to
S$36,850.36 (RM96,498). Only
S$700 has been recovered. Yesterday, he was sentenced to 27
months in prison after admitting to 99 offences between
last December and February
this year.
Foreign worker jailed for
assaulting police officer
during Little India riot
SINGAPORE: A construction
worker was sentenced to a year
in prison yesterday for assaulting a police officer during the
Little India riot last year, The
Straits Times reported. Ganesan Periyaiah, 25, is the 22nd
individual to be dealt with over
last year’s incident. The Indian
national threw a glass beer bottle at the female police officer.
live it! 27
WE D N E SDAY D EC E MB ER 3 , 2014 • T HEED G E FINA NCIA L DAILY
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Zen TODAY
First you take a drink, then the drink takes a drink,
then the drink takes you. — F Scott Fitzgerald
IT’S BACK!
Urbanscapes 2014 ascends to Genting
BY CA RMEL DOMI N I C
U
rbanscapers, consider yourselves warned. Malaysia’s creative arts festival celebrates 12
years of Urbanscapes with a
month of activities which included satellite shows featuring Scottish post-rock band Mogwai (Nov 30)
and American comedy rock duo Tenacious
D (Dec 1) before the full-fledged festival on
Saturday at the Horse Ranch, Resorts World
Genting.
At the country’s longest-running creative
arts festival, guests have the opportunity to
explore creative arts, culinary and cultural
offerings while enjoying a thrilling line-up
of local, regional and international bands.
Come Saturday, festival goers can look
forward to the rousing sounds of the Los Angeles-based indie rock band, Local Natives.
Playing alongside it will be the legendary
American college rock outfit, The Lemonheads whose cover of Simon & Garfunkel’s
“Mrs Robinson” provided them with the
much-needed breakthrough in their salad
days. Grammy Award-winner Kimbra, the
New Zealand-born single-named art-pop
songwriter and Jagwar Ma, the Sydney-based
psychedelic/dance band will be performing
at Urbanscapes.
Fans of our own local artistes can look
forward to OJ Law and his versatile range
of catchy melodies intertwined with infectious guitar beats and unforgettable vocals.
Singer-songwriter Ali Aiman will serenade
festival goers and the talented singer Najwa will give fans the opportunity to experience sounds from her new EP that features
darker undertones with sombre, minimalistic echoes.
The other acts that complete the festi-
Lemonheads
Horse Ranch, the venue of Urbanscapes 2014,
in Resorts World Genting
val line-up are June Marieezy, Faiq and the
Manja Mob, Azmyl Yunor & Orkes Padu, The
Cotton Field Scarecrowes,Cashew Chemists,
Paperplane Pursuit, Jumero and Dirgahayu.
Known for its off-beat festival sites, Urbanscapes is the first to introduce a highland
festival experience to the expanding Malaysian festival circuit. Since its inception, it
has supported Malaysian grassroots movements, fuelled home-grown entrepreneurs
and provided a platform that has launched
the careers of many artistes.
Festival goers can expect local brand
offerings from clothes to sports attire to
high-quality, distinctive canvas art. Among
the brands that will make an appearance
at the festival are Ash Be Nimble, Mosaic
Bijoux, Psychedelic Store, Nyo, Trendy Bellaz, I’ll Studio, Third Culture, URBN8, CanvasPick, Prototype gallery, Huggaz, Homu
store, Robe Du Jour, Wild Baby, Sun Off A
Beach just to some.
Urbanscapes is transforming the assumption that stables are just for horses. Wandering through the festival grounds will take the
crowd to “The Democratic People’s Republic
of North Bangsar”, a mock parody country
with a back story that is hilarious — and
perhaps, plausible. Produced by Terry &
The Cuz and Kuah Jenhan, “North Bangsar”
offers an experience much like walking into
a film set. Visitors to the festival will get to
meet its mayor — Jenhan — and explore the
town, get a “prescription” from a Chinese
medicine hall and participate in the “local”
activity of choice. Or you could explore the
sounds, shapes and power of water with The
Biji-Biji Initiative’s interactive water tower.
This tower will also light up in the night —
turning it also into an art installation.
For more information, check out urbanscapes.
com.my and to buy your Urbanscapes tickets,
visit www.ticketpro.com.my. Tickets can also
be bought at physical outlets throughout the
country. For the full list, look them up at www.
ticketpro.com.my/jnp/ticket-outlets/index.html.
28
live it!
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
WE
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Personal
ASSISTANT
COMPI L ED BY LLEW -ANN P HANG
WORK. LIFE. BALANCE
NATIONAL
legend Tan Sri P
Ramlee, back in
1962, directed a
film entitled Ibu
Mertuaku which told
the tale of a tragic
love affair between a
small-time musician
Kassim Selamat and
Sabariah Mansoor
whose very wealthy mother separates the
two. Hariry Jalil writes and directs a stage
play called Surat Sabariah which depicts
the tale of Kassim and Sabariah as they
live in the basement of a house and argue
over his passion for music. Jegela brings
the couple’s son Tajuddin on a journey
through his parents’ story. The play stars
Azman Hassan, Aloeng Silalahi, Razak
Osman and Sherie Merlis as Sabariah. To
be staged from tomorrow until Sunday at
the Damansara Performing Arts Centre’s
(DPAC) Black Box in Petaling Jaya from
8.30pm, tickets are priced at RM35 for
adults and RM25 for students. Tickets can
be obtained at www.dpac.com.my. Call the
box office at (03) 4065 0001/0002 for details.
NEED a new bag
for your year-end
holiday? IVD Ideal
Vision Distribution
is holding its OffSeason Clearance
Warehouse Sale on
luggage, bags and
accessories. From
today until Sunday,
enjoy clearance
sale discounts of up to 70% on brands
including Samsonite, Caseman, American
Tourister and Case Logic, among others.
Open from 10am to 10pm, the sale is at
The School in Jaya One, Jalan Universiti,
Petaling Jaya.
Furry red
INVASION
Genting to host fun and familiar musicians in Elmo Makes Music
BY C ARM E L DO M I NI C
IF you’ve not heard about it yet,
myBurgerLab is in the spirit of giving
in the season of Advent, leading up
to Christmas. For 25 days leading up
to Christmas, you can claim a burger
everyday with the myBurgerLab Advent
Calendar 2014 that is priced at RM100.
Choose from the bomb, chicken and egg
dilemma, fat Elvis, A++, gojira, curry
crunch, spicy Hawaiian, sarong burger,
Swisstake, kick in the face, hangover,
yellow submarine, geisha, beautiful mess,
jammin with Elvis and say cheese2. The
calendar comes in the form of a card
with 25 dates on it and each day at 4pm,
myBurgerLab will announce the burger
of the day at which point you can claim
your burger. Get your card at the outlets in
OUG, Kuala Lumpur, or Sea Park, Petaling
Jaya, and it can be used at either Labs or
the new one in Bandar Sunway.
S
ome 45 years ago, Joan Ganz
Cooney and Lloyd Morrisett
discussed the platform which
they would provide pre-schoolers with the advantage and opportunity of learning a thing or
two as the kids sat fastened in front of the
television set. It was after this discussion
and deliberation that Sesame Street was
mooted to disseminate an educational presentation of alphabets, numbers
and other important lessons through Jim
Henson’s colourful muppets with funny
names and characteristics to match.
One would not know the struggles or
challenges the crew had encountered
to keep itself relevant over the past four
decades but Sesame Street should pride
itself on the 159 Emmy Awards and eight
Grammy Awards it has amassed as of this
year, and the estimated 77 million Amer-
ican kids who had watched the series by
the year 2008.
Of the many muppets — Kermit the
Frog, Oscar the Grouch, Cookie Monster,
Bert and Ernie, Miss Piggie, Mr Snuffleupagus — it was a furry red thing with
an orange nose which emerged in 1985
with the name, Elmo, that turned out to
be a sensation. A funny character who
refers to himself almost always in the
third person, Elmo proved to be popular enough by 1998 that he was given
his own full segment on Sesame Street
called Elmo’s World.
Elmo came to Malaysia, more specifically to the highlands of Genting, late
last month to appear in his own musical
Elmo Makes Music, thanks to Christopher
J Harper, the talent behind this musical.
In an exclusive interview with The
Edge Financial Daily, Harper reveals his
foresight and enthusiasm — two traits
that are essential to produce a live pro-
duction of this magnitude and to have it
shared across borders. The 38-year-old,
who hails from Mississippi in the United States, said: “Elmo Makes Music is a
teaching show, just like Sesame Street and
one of the main points of the live show is
that the characters use their imagination,
ingenuity and their creativeness to make
their own musical instruments because
the story line is such where situations
arise that require them to be spontaneous with whatever resources that are
available to them.”
This is in line with the original objective of the television show — to educate
and encourage children to think out of
the box while also teaching them to work
through the restrictions that could potentially limit their abilities.
The family-oriented musical that
is 90 minutes long has 15 dedicated
cast members who perform 25 songs
designed to have a little something for
par
wri
wr
wa
pri
the
tain
wh
pet
on
the
dan
ally
pan
in t
live it! 29
WE D N E SDAY D EC E MBER 3 , 2014 • T HEED G E FINA NCIA L DAILY
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
01. Harper posing with the
characters from Sesame
Street. Photos by
Patrick Goh
02. Harper speaking
enthusiastically about
the show.
01
N
e it
old,
nitsa
and
w is
on,
ake
use
ons
taare
ecate
t of
ork
po-
hat
ted
ngs
for
parents and their children.
“The beauty of this production is that it is
written to have adult humour because the
writers know that parents are going to be
watching too and so, while it is written to
primarily entertain and educate the kids, at
the same time, the adults will also be entertained. It crosses both levels,” Harper said.
He proceeds to give an example of a scene
whereby Bert (the banana-looking muppet), who does a disco number, will come
on stage dressed in a white suit, similar to
the one John Travolta wore in the 1977 hit
dance movie Saturday Night Fever. Bert usually dons a striped T-shirt and olive green
pants. Hence, when he emerges on stage
in the white ensemble, to the children, it’s
02
hysterical, but for the parents, the scene will
take them back to images of John Travolta
grooving to the Bee Gees’ songs.
“So, both the kids and the parents are
entertained by this scene but for different
reasons yet, at the same time, they get to
share the funny moment,” Harper explains.
Harper is grateful for the various roles he
has held backstage over his 20-year career
in live stage productions.
“The opportunity to experience the whole
gambit of everything — from being in charge
of making the costumes and making sure
that they last for the whole tour to doing
the make-up for the cast to designing the
backdrop for the production — in my opinion, plays a pivotal role because you take
everything that you have learnt into account,
especially when you venture into directing
or choreographing,” he mused.
Having done over 25 live productions, one
would think that Harper might find it hard
to have a favourite but he says this particular live musical is his favourite.
“It has the best combination of songs from
the older and latest version of Sesame Street.
Also, the way that the show progresses is very
fluid from one scene to the next. The other
thing that fascinates me about this production is one particular UV (black light) number that has dancing feet. There have been
many UV numbers in past productions, but
somehow, this one just fascinates me. Usually, when people ask me how a UV scene
PICK OF THE DAY
“I CREATED this fragrance like a trigger to reveal all of man’s potential,”
says Theirry Wasser who created Guerlain’s latest scent, the L’Homme
Ideal. Packaged in a mysterious form, the scent comes in a square, facetted and luxurious bottle, complete with a masculine heavy cap that is
matte and borrows its guilloche detailing from the watchmaking world.
Wasser labels the fragrance as smart, handsome and strong and says
the key to the perfume is the ‘amaretto’ accord that makes a strong
enough impression and an almond finish to encapsulate an irresistible
man. Guerlain is available at the Parkson KLCC, Parkson Pavilion, Sogo,
Isetan Gardens Mid Valley and Isetan KLCC and the L’Homme Ideal EDT
is priced at RM244 for the 50ml bottle or RM340 for the 100ml package.
is engineered, I will simply say it’s magic!”
he said with obvious exuberance.
As the conversation progressed, Harper
recollects how he would not be living this
illustrious career if not for his older sister.
Having been dragged along by his parents
for one of his sister’s school productions,
the then five-year-old Harper was fascinated
just watching his sister singing as a chorus
member and decided there and then that he
wanted to do just that for the rest of his life.
Also as the younger sibling, Harper said he
was forced to be his sister’s dancing partner
for all her home dance show productions
that were staged in their hall for their parents. This, he noted, sparked his interest to
go into choreographing.
For Harper, being on stage is not about
the attention, but the smiles and laughter he
will be able to inevitably give the audience
through his performances either on stage
as one of the muppets or in this case, the
director of the musical.
“I do like performing on stage but what I
honestly like is seeing the reaction on people’s faces. Like for instance, when I played
the Cookie Monster. As I was walking out, I
saw kids wearing the Cookie Monster T-shirt
or some putting their hands out for a highfive or asking for a hug and looking so excited… that is the best feeling in the world.
It honestly is. I live for the small moments
of seeing their faces light up when the muppets come out. That’s what makes my day,”
Harper said.
Elmo Makes Music will show at the Genting
International Showroom until Jan 3. Tickets
are priced from RM88 to RM158 for adults.
Log on to http://www.rwgenting.com/en/
entertainment/2014/sesame_street/index.
htm for a preview of the show, showtimes
and promotions.
3 0 S P O RT S
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
Chelsea seeks another
Bridge of sighs for Spurs
After a draw at Sunderland, Mourinho’s men eager to get back to winning ways
BY TON Y JI MEN EZ
LONDON: Chelsea will look to
stretch one of the longest unbeaten sequences in the top flight when
the runaway leaders entertain
arch-rivals Tottenham Hotspur
today.
There has been little love lost between the fans of both sides since
Spurs beat Chelsea 2-1 at Wembley in the first all-London FA Cup
final in 1967.
The Stamford Bridge club, how-
N Korea hopes
football school
will unearth
next Messi
BY PATRI C K JO HNSTON
MANILA: Argentine captain Lionel Messi is the most popular
player among students at the
Pyongyang International Football School, a fledgling facility
North Korean officials hope will
unearth a talent like the Barcelona great.
North Korean leader Kim Jong
Un was the driving force behind
the school, which opened in June
last year, according to the country’s Asian Football Confederation official Han Un Gyong. The
facility caters for 200 boys and
girls aged nine and above who
are chasing dreams of soccer
stardom.
Han, who sits on the AFC’s
executive committee, said students are selected from around
the country after scouting and
playing in trial matches.Han told
a small group of reporters on
the sidelines of the AFC’s award
ceremony in Manila: “I go to the
school and I ask them who is
very good, best player? They all
say ‘Messi’.
“They read books about Messi. Through the Internet, they
can watch all the matches at the
Pyongyang International School.”
She said work began on the
new school in 2012, shortly after basketball-loving Kim came
to power following the death of
his father, Kim Jong Il, in late
2011. Interest in football soared
in North Korea after their appearance at the 2010 World Cup.
Han said she would love fourtime World Player of the Year
Messi to come and see the facility.
What would it mean to North
Korea if Messi came?
“Oh please,” she gasped. “Our
children love him.” — Reuters
ever, can boast a proud 24-year
unbeaten home streak against the
team from White Hart Lane, stretching back to 1990 when Gary Lineker scored one of the goals as the
visitors triumphed 2-1 in the old
First Division.
Chelsea have yet to taste defeat
in 20 matches in all competitions
this season and, after dropping two
points in a 0-0 draw at lowly Sunderland last Saturday, Jose Mourinho’s men will be keen to instantly
get back to winning ways.
“I wouldn’t say we are happy
with a point but one is better than
no points,” Belgium goalkeeper Thibaut Courtois told the club website
on Monday.
“If you score early then you know
the opposition have to come at you
and there will be more space but
we couldn’t do that and it was a
difficult match.”
Chelsea are six points ahead of
second placed Manchester City
after 13 Premier League games
and Courtois is hungry to keep
churning out victories.
“We don’t have to focus on clean
sheets, the most important thing is
to win games,” he said.
“Obviously it’s nice to keep a
clean sheet but I’d rather win a
match 2-1. It’s good that we haven’t lost a match but we want to
win rather than draw.”
Spurs are in seventh place, 13
points adrift of Chelsea, and will
go to Stamford Bridge buoyed by
their 2-1 comeback victory at home
to Everton last Sunday. — Reuters
Neuer joins Ronaldo, Messi
on Ballon D’Or shortlist
ZURICH: Manuel Neuer became
the first goalkeeper since 2002 to
make the final shortlist for the FIFA
world player of the year award on
Monday when he was included
alongside Cristiano Ronaldo and
Lionel Messi in the final three.
Argentina and Barcelona forward Messi, winner on four occasions, made the shortlist for the
eighth time in a row and Portugal’s
Ronaldo, winner in 2008 and last
year, for the fourth time running.
Germany coach Joachim Loew,
Real Madrid’s Carlo Ancelotti and
Atletico Madrid’s Diego Simeone
were selected for the Coach of the
Year award.
The final ceremony will take
place in Zurich on Jan 12.
Germany and Bayern Munich
goalkeeper Neuer helped his country win this year’s World Cup and
often doubled up as a sweeper,
rushing out of his penalty area to
intercept opponents’ attacks.
He is the first goalkeeper to make
the final three since compatriot
Oliver Kahn was included in the
shortlist in 2002. — Reuters
Viva Zapata! Sub
rescues 10-man Napoli
with late goal
MILAN: Substitute Duvan Zapata
headed a stoppage-time equaliser to give 10-man Napoli an unlikely 1-1 draw after hosts Sampdoria had controlled most of their
Serie A encounter on Monday.
Sampdoria, leading 1-0 thanks
to Eder’s second-half strike, appeared set for maximum points
after Napoli defender Kalidou
Koulibaly was given a second
yellow card for a trip on the Brazilian forward in the 85th minute.
Napoli then stunned the Luigi
Ferraris crowd when Colombian
Zapata escaped the attention of
four defenders and stooped to
head in Faouzi Ghoulam’s cross
in the second minute of added
time. Napoli’s point took them
up to joint third alongside Genoa
on 23 points, one ahead of Sampdoria. Juventus are top with 34
points followed by AS Roma on
31. — Reuters
Iraqi Abbas devastated
by knee injury
SYDNEY: Sydney FC’s Iraqi midfielder Ali Abbas was devastated after suffering a knee injury
which will sideline him until 2016
and has ruled him out of January’s Asian Cup, his club coach
Graham Arnold said yesterday.
Abbas tore his anterior cruciate ligament, medial ligament
and damaged the capsule at the
back of his left knee after being
tackled by Western Sydney Wanderers midfielder Iacopo La Rocca in last Saturday’s derby. The
28-year-old, who was recently
recalled to the Iraq squad for
the first time since he sought
asylum in Australia in 2007, will
be sidelined for 14 to 15 months.
— Reuters
Liverpool’s Balotelli
apologises for post
Players must lead a healthy lifestyle,
says Tengku Abdullah
KUANTAN: Footballers, especially national players, must be disciplined and lead a healthy lifestyle
to ensure success in competitions,
including the 2014 AFF Suzuki Cup
said Football Association of Malaysia (FAM) President Tengku Abdullah Sultan Ahmad Shah.
Tengku Abdullah said for Malaysia to succeed in the competition and reach the final of the AFF
Suzuki Cup, coach Dollah Salleh’s
boys must be disciplined and practise a healthy lifestyle.
“I was informed that national
IN BRIEF
striker Safee Sali was spotted smoking. I must remind the players that
smoking is unhealthy. They must
practice a healthy diet, sleep early
and have a positive mind because
these are the winning factors.
“If players can be focused and be
confident, they can be successful,”
he told reporters yesterday.
Safee was heavily criticised after
a picture of the striker, smoking a
cigarette during the AFF Suzuki Cup
competition in Singapore, went viral on social media.
The FAM secretary-general Da-
tuk Hamidin Mohd Amin said Safee
had already apologised and had
promised not to repeat the offence.
Tengku Abdullah said making it
to the semi-finals was just the first
step towards achieving the FAM’s
intended target of reaching the final.
“Based on the track record since
2008, we have found it difficult to
beat Vietnam but I hope this year
will give us a positive result. The
players must be confident,” he said.
Malaysia face Vietnam in the first
leg semi-finals at the Shah Alam
Stadium this Sunday. — Bernama
LONDON: Liverpool striker
Mario Balotelli apologised yesterday for his social media post
which appeared to contain potentially racist and anti-Semitic
references. Balotelli, who made
the post on his Instagram page
on Monday, will be investigated
by the Football Association, according to British media reports.
The 24-year-old Italian later deleted the post. “I apologise if I’ve
offended anyone,” Balotelli said
on Twitter. “The post was meant
to be anti-racist with humour. I
now understand that out of context it may have the opposite effect.” — Reuters
T-Team Signs Two Uzbekistan National Players
KUALA TERENGGANU: T-Team
has signed two Uzbekistan national players to spearhead their
challenge in the Premier League
next season. Chief operating officer Mohd Syahrizan Mohd Zain
said T-Team is still looking to sign
another foreign player of quality to fill the third slot. The two
Uzbekistan players who signed
for T-Team are striker Farhod
Tadjiyev and midfielder Sadriddin Abdullaev. Both the former
Lokomotiv Tashkent players are
28 years old. — Bernama
S P O RT S 3 1
W E D N E SDAY D EC E MBER 3 , 2014 • T HEED G E FINA NCIA L DAILY
Chong Wei to sue Razif,
daily over doping claim
‘Just because I have a doping case now, you can’t simply say anything’
REUTERS
KUALA LUMPUR: Embattled national badminton hero Datuk Lee
Chong Wei, who has been provisionally suspended for an alleged
anti-doping violation, has sent a legal notice to Razif Sidek over claims
that he had been using the banned
substance dexamethasone for a
long time.
A local daily reported yesterday
that Chong Wei had sent a letter of
demand to Razif and a Malay daily
through law firm Song and Partners
last week.
“The allegations are not true.
Just because I have a doping case
now, you can’t simply say anything.
Australian Open
tweaks heat
policy for 2015
tournament
MELBOURNE: Australian Open
organisers have tweaked their Extreme Heat Policy for next year’s
tournament after being accused
of forcing players to perform in
“inhumane” conditions during
a heatwave in January. Despite
water bottles melting, ballboys
collapsing and players vomiting
and passing out when temperatures exceeded 40°C for four
days at this year’s tournament,
play was stopped for only four
hours on the outer courts.
There was a groundswell of
criticism from players, mainly
over the lack of transparency
about when the policy would be
implemented as it was entirely at
the discretion of the tournament
referee and not triggered by temperatures reaching a certain level.
Tournament director Craig
Tiley said yesterday the addition
of a roof over a third show court,
the Margaret Court Arena, would
mitigate the effects of hot weather and he hoped the changes to
the policy would make matters
clearer to players.
“The heat policy will be applied at the referee’s discretion,”
Tiley told reporters. “The decision on implementing the heat
policy will take into account the
forecast once the ambient temperature exceeds 40° C and the
Wet Bulb Global Temperature
(WBGT) reading exceeds 32.5.
When conditions exceed these
levels the referee is taking into
account the forecast and state
of play.”
Rather than use the raw Celsius readings to assess the heat, organisers prefer to use the WBGT
composite, which also gauges
humidity and wind to identify the
perceived conditions. — Reuters
Does he have any proof to justify his
claims?” he was quoted as saying
in the report.
Chong Wei’s urine sample was
found to have traces of dexamethasone during a random test at the
World Badminton Championships
in Copenhagen in August.
Dexamethasone is a type of steroid medication usually used for
rehabilitation from injuries.
A second test carried out on his
B-sample at the Oslo University Hospital in Norway on Nov 5 confirmed
the presence of the substance.
The Badminton World Federation (BWF) then announced on
Nov 11 that Chong Wei was provisionally suspended.
Razif, who is also a former national player, was quoted by Malay
daily Kosmo! as saying that Lee, 32,
had been using dexamethasone for
a long time.
He had also alleged that officials within the Badminton Association of Malaysia were aware of
the matter.
Youth and Sports Minister
Khairy Jamaluddin responded by
calling the claim unsubstantiated
and urged people not to speculate
until the BWF hearing. — The Malaysian Insider
Malaysia kicks off women’s World
Team Championship in style
WOMEN’S WORLD TEAM SQUASH CHAMPIONSHIP
KUALA LUMPUR: Malaysia got off
to a perfect start at the 2014 Women’s World Team Squash Championship after securing two straight
wins in the preliminary Pool C
matches held at the Mark Sachvie
Squash Centre in Canada.
The national squash side led by
world No 1, Datuk Nicol David secured a comfortable 3-0 win against
host country, Canada, before doing the same against Mexico in
the second match, played late on
Monday, according to the tournament website.
In the first match against Canada, Low Wee Wern produced a brilliant display to put Malaysia ahead
by defeating Danielle Letourneau
11-6, 11-2, 11-5.
Nicol however, faced stiff resistance from Samantha Cornett
before emerging with a 11-6, 11-8,
9-11, 11-3 victory before Delia Arnold wrapped up the comfortable
win by edging Nikki Todd 11-6,
12-10, 11-5.
In the second game against Mexico, Wee Wern also gave Malaysia
a good start by defeating Nayelly
Hernandez 11-5, 11-6, 11-3 before
Kazakhstan’s Almaty
seeks place in Olympic
history
ALMATY: Inspired by the success of neighbours Russia in
staging the Olympics in the
southern resort city of Sochi,
Kazakhstan has set its sights
on hosting the 2022 Winter
Games in its former capital of
Almaty.”We will prove that Kazakhstan is a powerful country
which is capable of staging the
world’s biggest sports events.”
Kazakhstan, which is mostly
known to the Western public
through the British-American
mockumentary Borat: Cultural
Learnings of America for Make
Benefit Glorious Nation of Kazakhstan, currently looks like
the favourite in the race for the
right to host the Games. — AFP
Pocock has no regrets
over protest arrest
SYDNEY: Wallabies flanker David Pocock has made no apologies for his arrest following an
environmental protest at the
weekend, despite his employers issuing him with a written
warning. The Zimbabwe-born
26-year-old was among seven
protestors who chained themselves to equipment at a blockade at Whitehaven Coal Ltd’s
Maules Creek mine in the Leard
State Forest last Sunday. All
were granted conditional bail
after arrest, while Pocock was
also given a written warning for
breaching their code of conduct by the Australian Rugby
Union, which was endorsed by
his Super Rugby side, the ACT
Brumbies. — Reuters
Gloucester signs All
Blacks prospect Marshall
Malaysia and Canada line up before their Pool C meeting, which Malaysia won.
Nicol contributed the second point
after disposing Diana Garcia 11-5,
11-3, 11-4.
Delia then wrapped-up the second consecutive win for Malaysia
after breezing past Karla Urrutia
11-4, 11-3, 11-5.
Malaysia, seeded third in the
tournament, would play Guatemala, later yesterday before con-
cluding their pool matches against
sixth seed, the United States, today.
Based on the tournament format, the top two teams from each
of the four groups qualify for the
quarter-finals tomorrow.
For the record, Malaysia’s best
achievement was a third placing
in the past four editions — 2006,
2008, 2010 and 2012. — Bernama
Former IOC VP Pound backs squash inclusion
NIAGRA-ON-THE LAKE (Canada):
Former International Olympic Committee vice- president Dick Pound is
confident the IOC will drop regulations limiting the number of sports
on the Games programme and says
squash should be brought into the
Olympic fold. Pound, also the former
president of the World Anti-Doping
Agency, said the sport had women to
thank for raising standards and bringing squash into the Olympic debate.
Speaking at the opening ceremony
IN BRIEF
of the Women’s World Team Championship in Canada, Pound said squash
deserves its place on the programme
and promised to work to get it there.
“As a member of the International
Olympic Committee, [I cannot help
thinking]that squash should be in
the Olympic Games,” he said in his
opening address. “If that happens,
it will be a direct result of the high
level of the women’s game ... which
will make the difference. So you have
both opportunity and responsibility.”
Later this month, an IOC session
in Monaco will vote on a list of recommendations as part of President
Thomas Bach’s Agenda 2020, which
could usher in the most significant
changes to the Olympics in decades.
Squash and a joint softball/baseball bid lost to wrestling for a spot at
the 2020 Games in Tokyo but the IOC
is looking at changing the seven-year
rule for a sport’s inclusion to tap into
potential new viewers and sponsors.
— Reuters
LONDON: Former New Zealand Under-20 international
Tom Marshall has agreed to
join Gloucester for the 2015/16
season, the English Premiership rugby club announced
yesterday. Auckland-born Marshall, 24, can play at centre, on
the wing or at full back and
is currently playing for Super
Rugby side the Chiefs. He previously played for Crusaders.
“Tom’s played a significant
number of Super Rugby games
and has impressed whilst with
both the Crusaders and the
Chiefs,” said Gloucester director of rugby David Humphreys
in a statement released by the
club. — AFP
Season over for
Clermont’s Kolelishvili
PARIS: Clermont’s Georgian international flanker Victor Kolelishvili is likely to be ruled out
for the rest of the rugby season
with a serious knee injury, the
Top 14 club said yesterday. The
25-year-old completely ruptured the cruciate ligament
in his right knee and suffered
meniscus damage during last
Saturday’s loss which saw Clermont toppled from the Top 14
summit by Toulon. The club
said in a statement they expect
the 31-times capped player to
be ruled out for “about seven
to eight months”. — AFP
3 2 S P O RT S
WEDN ESDAY DEC EM B ER 3 , 2 0 14 • TH EEDGE F I N AN C I AL DAI LY
Tiger makes comeback
from back injury
He has not won a major title since the 2008 US Open
BY JI M SL AT ER
ORLANDO: Tiger Woods returns
to competition after a four-month
injury layoff this week at Isleworth,
the same gated community where
his historic golf career began to
unravel five years ago.
Woods, who has played only seven events in 2014 due to a nagging
back injury, will make his comeback starting tomorrow at the Hero
World Challenge, an 18-player invitational event that benefits his
charity foundation.
Seven of the world’s 11 top players will compete, including eighthranked Australian Jason Day in
his return from a back injury and
11th-rated Jordan Spieth, coming
off a victory in last week’s Australian Open, but not world No 1 Rory
McIlroy.
“We’re thrilled about the depth
and talent of our field,” Woods said.
Woods, ranked 24th, moved the
event this year from California to
the same neighborhood where he
drove into a fire hydrant in late
November of 2009. That began a
series of revelations unveiling a
sex scandal that led to Woods’ divorce from wife Elin in 2010 and
damaged his once-perfect image
with major sponsors.
Woods, a 14-time major champion chasing the record 18 majors
won by Jack Nicklaus, has not captured a major title since the 2008
US Open.
Back, knee and leg injuries have
hindered his pursuit of Nicklaus
in recent years and Woods turns
39 later this month. No player has
ever won more than three majors
beyond his 39th birthday, some-
Tiger has played
only seven events
this year due to a
nagging back injury.
thing Woods must achieve if he is
to catch Nicklaus.
The Challenge will be the first
tournament for Woods since he
named Chris Como as his new
swing consultant last month following a split with swing coach
Sean Foley in August.
“I’m excited to be back competing,” Woods tweeted two weeks ago
when he announced he was working with Como.
Woods underwent a microdiscectomy on March 31 to ease pressure on a pinched nerve, a surgery
that caused him to miss the Masters
and US Open.
This year, Woods missed two
cuts plus a secondary cut at Torrey Pines and withdrew from two
other events.
He has finished 72 holes only
twice this year — sharing 25th at
Doral in March in his final event before surgery but wincing in pain at
shots and when bending to pick his
ball out of the hole and taking 69th
at the British Open in July. — AFP
Slump made me stronger, says world No 1 Park
REUTERS
SEOUL: World No 1 Park In-bee
(pic) believes a prolonged slump
after her breakout year in 2008 has
made her a stronger golfer.
The South Korean, who married
her swing coach earlier this year,
said that 2014 had been the most
consistent season of her career, even
though she won just one major. Park
was on a tear in 2013, winning three
majors in a row and claiming six titles on the leading LPGA Tour.
“Of course, I had a great year last
year, so this season’s three wins may
seem a little less compared to that,
but I am very happy with myself this
year. The biggest accomplishment
for me was that I consistently made
it to the top 10 more than previous
years and showed a more consistent
performance,” she said.
Park was a top 10 finisher in 17 of
the 22 LPGA tournaments she entered
in 2014, six more than the previous
year, a consistency that has brought
her near the US$10 million (RM34.2
million) mark in earnings. Park burst
on the scene in 2008 when at 19 she
World Cup warm-ups announced
SYDNEY: A series of cricket World Cup warm-ups were announced
yesterday with South Africa facing Sri Lanka and New Zealand, England taking on the West Indies and Pakistan, and Australia against
reigning champions India.
A total of 14 games will be played at Adelaide, Melbourne, Sydney
and Christchurch from Feb 8-13 ahead of the tournament proper,
jointly hosted by Australia and New Zealand, starting on Feb 14.
The matches are not official one-dayers and will operate under
slightly different rules, with up to 15 players able to be used but no
more than 11 players at any one time.
“The public will be welcome to attend warm-up matches which
will be ticketed but free of charge,” said the International Cricket
Council. — AFP
WA R M U P S C H E D U L E :
Feb 8: India v Australia at Adelaide
Feb 9: South Africa v Sri Lanka
at Christchurch; New Zealand
v Zimbabwe at Christchurch;
England v West Indies at Sydney,
Pakistan v Bangladesh at Sydney
Feb 10: Ireland v Scotland at
Sydney; India v Afghanistan at
Adelaide
Feb 11: New Zealand v South
Africa at Christchurch; Sri Lanka v Zimbabwe at Christchurch;
Australia v UAE at Melbourne;
England v Pakistan at Sydney
Feb 12: West Indies v Scotland
at Sydney, Ireland v Bangladesh
at Sydney
Feb 13: Afghanistan v UAE at
Sydney
became the youngest player to win
the US Women’s Open, but she failed
to build on that success. Her next win
on the US tour took four more years
to arrive though she found some success on the Japanese tour.
“I think everyone goes through
that,” she said of her slump. “But I
also think that I’ve been able to sustain this good run because I survived
the difficult times. I rose, then fell
to the very bottom, but got back on
top again and I think that has made
me stronger.” — Reuters
Webber has ‘no recollection’
of high-speed crash
SAO PAULO: Former Formula One
driver Mark Webber has “no recollection” of the high-speed crash
that left him “bruised and concussed” at the World Endurance
series race in Brazil.
The 38-year-old Australian’s
Porsche 911 made contact with
Matteo Cressoni’s Ferrari on the
final corner of the six-hour race
in Sao Paulo and slammed into a
track barrier.
A statement on the Australian’s
official website (www.markwebber.
com) said he suffered “bruising and
concussion.”
Webber added: “I’ve got no recollection of the accident or how it
happened — the team is looking
into the details to find out more.
“I’m quite sore this morning and
am pretty bruised and have got a
stinking headache.
“Thanks to the medical team at
the track and here at the hospital
who did a great job and are looking
after me very well.
“On a positive note it’s great that
the boys in car No 14 managed to
bring home the victory which is a
fantastic way to finish off the season. I’m already looking forward to
getting out there again next year.”
Webber was taken to hospital in
Sao Paulo where he will undergo
further checks before returning to
the United Kingdom later this week.
The 2009 Formula One world
champion and current McLaren
Mercedes driver, Jenson Button,
tweeted: “Glad to see @AussieGrit
is OK after his shunt at Interlagos @
FIAWEC, that was a big one matey.”
After a 12-year career in Formula
1, former Red Bull driver Webber
joined the Porsche team in the Endurance series where he finished
ninth overall. — Reuters
IN BRIEF
Pantani probe officers
threaten to sue
RIMINI (Italy): Police involved
in investigating the death of top
Italian cyclist Marco Pantani
have threatened to start defamation proceedings following
new press reports questioning
their professionalism, their lawyers said on Monday. Pantani
died of acute cocaine poisoning
in a Rimini hotel room on Feb
14, 2004. However a fresh investigation into the death of the
34-year-old cyclist was reopened
by prosecutors last month after
fresh evidence emerged which,
it is claimed, supports the theory
of foul play. Media reports have
since speculated that key evidence found in Pantani’s hotel
room may have been contaminated because several investigators did not wear gloves, and that
a bottle found close to Pantani’s
body was not analysed. — AFP
Malaysia can retain AUG
overall title in Palembang
PUTRAJAYA: The Malaysian
contingent that will be competing in the Asean University
Games (AUG) in Palembang,
Indonesia can defend the overall title says the chef-de-mission (CDM) of the Malaysian
contingent, Prof Datuk Abdullah Mohamad Said. He said the
main medal hopes would hinge
on swimming, athletics and karate. He said Malaysia, which
won 60 gold, 47 silver and 72
bronze medals at the previous
AUG hosted by Laos in 2012,
should be able to repeat this feat.
Malaysia with 332 athletes will
be competing in 20 sports led by
karate exponent Lim Chee Wei,
as the flag bearer. Lim won the
Kata gold medal at the Incheon
Asian Games. — Bernama
Don’t ban bouncers,
says India’s Sehwag
MUMBAI: Banning bouncers
following the death of Australia’s
Phillip Hughes would be unfair
on bowlers because batsmen always have the option of ducking
under short-pitched deliveries,
former India opener Virender
Sehwag said yesterday. “It was
very sad that Hughes died in
such a way. But it’s part of cricket and injuries are part of any
sport,” Sehwag told reporters.
Batsmen have been hit on the
helmet by quite a few bouncers.
“But it’s a weapon for the bowlers
so they should not be robbed of
it,” he said. — Reuters
Clarke to bear Hughes’
coffin at funeral
SYDNEY: Australia skipper Michael Clarke will be one of the
pallbearers and will lead tributes
at the funeral of his close friend
Phillip Hughes today, Cricket
Australia announced. The funeral in Hughes’ hometown of
Macksville will be attended by
the Australian Test squad as well
as past and present luminaries of
the game including Mark Taylor,
Sir Richard Hadlee, Brian Lara,
Virat Kohli, Ravi Shastri, Shane
Warne, Mike Hussey, Ricky Ponting, Brett Lee, Adam Gilchrist and
Glenn McGrath. — AFP