`undervalued` malaysian market

Transcription

FBM KLCI 1690.92
9.39
KLCI FUTURES 1689.50
12.50
STI 2839.44
7.62
RM/USD 4.1320
CPO RM2611.00
18.00
OIL US$38.56
0.97
GOLD US$1234.70
10.40
PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.60 (INCLUSIVE OF 6% GST)
WEDNESDAY MARCH 16, 2016 ISSUE 2125/2016
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
www.theedgemarkets.com
Bar takes AG to court over
‘case closed’ declaration in
RM2.6b, SRC probes PA G E 2
5 HOME BUSINESS
Malaysia’s rich
looking to exit
the country
6 HOME BUSINESS
Is gaming tax next
to go up?
7 HOME BUSINESS
CPO export duty
augurs well for
downstream sector
15 HOME
15
Sarawak CM
expects many
Chinese voters to
return to BN
1617 FOCUS
See the gloriously
weird cars in
Amelia Island
this year
21 W O R L D
First Myanmar
civilian president
elected in decades
!
t
r
a
Mobius favours
Get snm
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‘UNDERVALUED’
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P
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MALAYSIAN
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Th
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MARKET
Sayys that the ringgit is undervalued
Says
underva
alued
by 2
28%.
8%. Kamarul An
Anwar
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Yimie
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age 4.
NGO cries foul over FGV’s claim
about labour conditions
5 HOME BUSINESS
@
WEDN ESDAY M ARC H 16 , 2 0 16 • TH EEDGE F I N AN C I AL DAI LY
2
For breaking news updates go to
ON EDGE T V
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— IBM
Bar takes AG to court
over ‘case closed’ in
RM2.6b, SRC probes
Legal body applies to set aside Apandi’s decision to clear
PM and instruct MACC to end investigations
BY LAW YIN-LY N
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KUALA LUMPUR: The Malaysian
Bar is seeking a judicial review of
the attorney-general’s (AG) decision to clear Prime Minister Datuk Seri Najib Razak of wrongdoing in relation to the transfers of
the “RM2.6 billion donation” and
funds from SRC International Sdn
Bhd into his personal accounts.
The Bar said it filed an application in the High Court seeking to
set aside Tan Sri Mohamed Apandi
Ali’s Jan 26 decisions exonerating
the prime minister and instructing
the Malaysian Anti-Corruption
Commission (MACC) to close its
three investigation papers on the
matter.
“The Malaysian Bar is of the view
that the discretionary prosecutorial powers conferred on the attorney-general by Article 145(3) of the
Federal Constitution are not absolute or unfettered, and the exercise
of these powers can be challenged
in a judicial review action.
“The scope and ambit of the discretionary prosecutorial powers,
and whether these powers were exercised in accordance with law on
the facts of any given case, should
be determined by the courts,” Bar
president Steven Thiru said in a
statement yesterday.
Stressing that the matter is of
critical public interest, Steven said
there should be no usurpation of
the judicial powers of the courts,
as it is for the courts, and not the
attorney-general, to decide on the
innocence or guilt of a suspect in
respect of any alleged crime.
He added that the independence of the MACC, in discharging its statutory duties under the
MACC Act 2009 as an investigative
and enforcement agency, must be
protected, and any impediment to
the performance of these duties
must be prevented.
“This matter involves serious
allegations of financial impropriety, including allegations of loss
And upon Apandi’s
disqualification,
the Bar wants the
court to issue an
order allowing the
solicitor-general
to exercise the
functions of the
attorney-general
in relation to the
request by the
MACC. Photo
by Bernama
of public funds, and has dire implications on the administration
of justice. It must therefore be resolved in a manner consistent with
the principles of the rule of law,”
he said.
The Bar’s judicial review application also seeks to disqualify
Apandi from making any further
decision on matters covered by
the MACC’s investigation papers.
The attorney-general reportedly
advised Najib on these matters,
said Steven.
And upon Apandi’s disqualification, the Bar wants the court to
issue an order allowing the solicitor-general to exercise the functions of the attorney-general in relation to the request by the MACC
— under the Mutual Assistance in
Criminal Matters Act 2002 — for
the commission to complete its
investigations in respect of the
RM2.6 billion donation.
The order, said the Bar, should
also enable the solicitor-general to
reconsider the MACC’s recommendations in the three investigation
papers, in deciding whether to
exercise the discretionary prosecutorial powers under Article
145(3). It should also enable the
MACC to continue with its probe
into the matters without interference, it added.
On Jan 26, Apandi informed the
media that he was satisfied that
Najib did not commit any criminal
offence in relation to the RM2.6
billion donation and SRC International cases.
He said RM2.6 billion was a donation from the Saudi royal family, while Najib had no knowledge
that money had been transferred
into his personal accounts from
the accounts of SRC International.
Meanwhile, Minister in the
Prime Minister’s Department Datuk Paul Low said the country is
reviewing plans to bar foreign political donations, Bloomberg reported.
Low is quoted as saying that a
committee working on a framework to regulate political funding also determined that anonymous donations should not exceed
RM1,000 and contributions must
be held in a bank account that
could be audited.
“Political donations from foreign interest and sources should
be prohibited,” Low, who chairs
the National Consultative Committee on Political Funding, said
in a statement. “This is necessary
as a safeguard against foreign influence on local politics as well
as the sovereignty of the nation.”
Low said the political funding
committee is on track to complete
its work within the set time frame
of a year.
Najib has said the work of the
group is targeted for implementation before the next general election due by 2018.
Ping An’s profit rises as banking revenue gains
BEIJING: Ping An Insurance
(Group) Co, China’s second-biggest insurer, said profit rose 38%
last year, as investment returns from
stock trading expanded and banking revenue increased.
Net income climbed to 54.2 billion yuan (RM34.54 billion) from
39.3 billion yuan a year earlier,
the company said in a statement
to the Hong Kong stock exchange
yesterday. The profit compares
with the 54.1 billion yuan median
estimate by 22 analysts surveyed
by Bloomberg.
The insurer benefited from volatility in the nation’s stock market.
Total investment income nearly
doubled to 103.2 billion yuan, the
company said in the statement. The
benchmark Shanghai Composite
Index surged more than 50% in the
first half of last year before faltering
in the second half, dropping 30%
from the June peak.
Written premiums from the life
insurance business jumped 19% to
299.8 billion yuan, Ping An said.
Ping An fell 0.9% to close at
HK$35 (RM18.73) in Hong Kong
trading before the earnings report,
extending this year’s decline to 19%.
— Bloomberg
China said
to draft rules
for Tobin tax
on currency
trades
S T E V E N YA N G & S A IJ E L K IS H A N
BEIJING/HONG KONG: China’s
central bank has drafted rules for
a tax on foreign-exchange transactions that would help curb currency
speculation, according to people
with knowledge of the matter.
The initial rate of the so-called
Tobin tax may be kept at zero to
allow authorities time to refine the
rules, said the people, who asked
not to be identified as the discussions are private. The tax is not designed to disrupt hedging and other
foreign-exchange transactions undertaken by companies, they said.
Imposing a levy on foreign-exchange trading would be the most
extreme step yet by policy makers
to prevent speculative bets against
the Chinese currency, after state-run
banks repeatedly intervened to support the yuan and the government
intensified a crackdown on capital
outflows. A Tobin tax would complicate plans by China to create an international reserve currency and could
undermine the leadership’s pledge to
increase the role of market forces in
the world’s second-largest economy.
“These measures can’t guarantee
volatility in the market will come
down since it’s difficult to identify if
currency trading is down to speculation or the genuine need of companies hedging their foreign-exchange exposure,” said Tommy Ong,
managing director for treasury and
markets at DBS Hong Kong Ltd.
The rules still need central government approval and it’s not clear
how quickly they can be implemented, the people said. The People’s Bank of China (PBoC) didn’t
immediately respond to a faxed
request for comment. PBoC deputy
governor Yi Gang raised the possibility of implementing the punitive
measure late last year in an article
written for China Finance magazine.
The move comes before the yuan’s planned inclusion in the International Monetary Fund’s reserve-currency basket this October.
The yuan has declined 4.5%
since a surprise devaluation in August spooked global investors and
spurred capital outflows. Bloomberg Intelligence estimates that US$1
trillion (RM4.13 trillion) left the
nation in 2015, driven by a combination of capital flight, repayment
of foreign-currency debt and purchases of overseas assets by Chinese citizens and companies.
“The levy will hurt market sentiment and make investors more
panicked, as this shows that existing capital controls are not enough
to curb outflows,” said Andy Ji, a
Singapore-based foreign-exchange
economist at the Commonwealth
Bank of Australia. “Now is not a
good time to roll out a Tobin tax
as the market is already concerned
about whether China will be able to
increase capital account convertibility in the coming years, and this
is another step backward to achieve
that goal.” — Bloomberg
4 HOME BUSINESS
Mobius favours
Malaysian market
‘China
remains an
enormous
growth
story’
BY Y IMIE YO N G
Says that the ringgit is undervalued by 28%
BY KAMARUL ANWAR & YIMIE YONG
KUALA LUMPUR: When Khazanah
Nasional Bhd executive director
Datuk Charon Wardini Mokhzani
asked seasoned emerging markets
investor Mark Mobius which markets he favoured, the expert replied that Malaysia features high
in his list.
Noting that the ringgit is undervalued by 28%, and that the
emerging markets in general are
currently trading at attractive
valuations, Mobius said it is time
to pick up stocks here, given the
emerging markets’ tendency to
enjoy longer bull runs historically
than market routs.
“We are very positive on Malaysia now … We figured the currency is undervalued by 28%, which
is why we have been buying Malaysian stocks,” said the executive
chairman of Templeton Emerging
Markets Group.
He was speaking at the Securities Commission Malaysia’s Global Emerging Markets Programme
Conference yesterday. Charon was
the moderator for Mobius’s panel
session.
Mobius, who has been investing in emerging markets for four
decades, rubbished fears of eroding fundamentals in Malaysia and
this region. According to him,
when the ringgit was valued at
4.21 against the US dollar towards
the end of January, it was valued
28.3% lower than the Malaysia/
US dollar Purchasing Power Parity
Index of 3.01.
While the ringgit has been recovering from the 18% rout last
year, it is still not far off from the
value Mobius cited. It closed 0.78%
lower at 4.137 per US dollar yesterday.
“Emerging markets have been
out of favour, and this makes me
very happy … We tend to go to
where sentiment is negative,” he
said. Last year, foreign investors
withdrew RM19.5 billion from Bursa Malaysia.
While Malaysia’s slower official
projected economic growth of 4%
to 4.5% this year has caused uneasiness among many investors,
Mobius argued that the projected
range is still impressive and it is
hard to etch a bigger growth rate
from a higher base. He also said
that not many countries can record
a trade surplus now, but Malaysia
can — although the figures have
been falling over the years.
Mobius observed that while
Malaysia’s stock market has seen a
slight recovery recently, the benchmark FBM KLCI is still far below
its peak closing of 1,892.65 points
two years ago.
At yesterday’s close of 1,690.92
points, the composite index was
trading at a projected 16.23 times
earnings for calender year 2016,
and 15.01 times earnings for 2017,
Bloomberg data showed. This compared with 2015’s price-earnings
ratio of 17.8 times.
Mobius also said that over the
past two decades, the MSCI Emerging Markets Index tended to have
a bear market that ran for an average of 14 months, versus bull markets that lasted for 69 months. The
losses during the routs averaged at
57%, which paled in comparison
to average gains of 358%. Malaysia
makes up one of the 21 emerging
markets in the index, which also
includes Brazil, Chile, China, Turkey, and Thailand.
Noting that emerging markets’
stocks can offer attractive yields
of between 4% and 6%, Mobius
said this presents opportunities
for funds to return to this side of
the world as developed markets
introduce more stimulus measures by postponing interest rate
hikes or cutting them to below
zero altogether.
“We see that the US markets have
peaked. So they are either going
sideways or down, which will be
good for emerging markets because
a lot of money came out from there
and went to the US [over the past
three years] because of expectations that stock prices will go up
and its currency was strengthening
on higher interest rates.
“Now that the Fed (US Federal
Reserve) has hesitated in recent
weeks with the idea of raising rates,
money exits in search of better opportunities,” Mobius said.
He also seemed excited by the
oil rout, saying “there are opportunities resulting from commodity
prices’ declines”. Although he is of
the view that crude oil prices have
bottomed out, Mobius said there
are still many opportunities from
the consolidation of the industry.
According to him, he recently had a discussion with a vessel
supplier for oil and gas-related
companies, which is still generating strong cash flows, although its
income statement showed losses
because it had to incur depreciation of its asset values according
to current market prices.
“When commodity prices pick
up over the next two to three years,
this company will do very well.
When the industry consolidates,
there will be less competitors. So
the company’s market position
will be stronger,” he said.
Be mindful of ‘megatrends’, says World Bank country director
BY KAMARUL ANWAR
KUALA LUMPUR: Monetary or fiscal stimulus measures can’t serve
as long-term fixes for an economy, World Bank economist Ulrich
Zachau has argued.
Instead, a country needs to be
mindful of what he calls “megatrends” affecting the long-term
economic prospects: an ageing
population, rapid technological
changes and climate change.
Zachau, the World Bank’s country director for Southeast Asia,
East Asia and Pacific, said Asia’s
median population age in 2050
will be 40 years old, a wide chasm
from the median of 29 years of age
in 2013. The US population will
see a relatively smaller jump to
41 years from 37.
This creates a conundrum for
economies, he said. On one hand,
an older population will result
in reduced working-age people.
Already, in Thailand, he said the
working age population has shrunk
by about 10%.
“But if working age increases significantly over time, this will create
huge issues for policymakers and
pension funds — and it can bring
huge implications,” he said.
Zachau said this in his speech
“Global Capital Markets Outlook
— Emerging Opportunities, Risks,
Uncertainties, and Implications to
Emerging Markets”, at the Securities Commission Malaysia’s inaugural Global Emerging Markets
Programme Conference yesterday.
According to the US Central
Intelligence Agency World Factbook, Malaysians’ median age was
estimated to be 27.8 years in 2015.
The Department of Statistics
Malaysia, meanwhile, showed that
between 2010 and 2015, Malaysians’ life expectancy increased.
Males were expected to live until
they were 72.5 years old in 2015,
versus 71.9 years in 2010. Women, meanwhile, had a projected
life expectancy of 77.4 years last
year, which was 0.8 year higher
than in 2010.
An increasing life expectancy
rate is one of the effects of improving technology, Zachau said,
but one problem that could result
from the increasing technological
sophistication is more automation.
In this manner, he said providing
quality education becomes indispensable to develop the workforce.
“But Malaysia has ranked poorly
in Pisa (Programme for International Student Assessment), and
far, far lower than Korea,” he said.
Zachau: Malaysia has ranked poorly
in Pisa, and far, far lower than Korea.
Photo by Sam Fong
In the 1960s and 1970s, Malaysia
and South Korea were neck and
neck in terms of economic growth.
Pisa, a triennial international
survey, put Malaysia in the 52nd
place out of 65 countries in 2012,
where students from this country had average scores that were
below those of Organisation of
Economic Co-operation and Development’s member countries
in all categories — mathematics,
reading, and science.
Meanwhile, Zachau said East
Asia contributed to the biggest
carbon footprint. Climate change
in Malaysia has also resulted in
natural disasters such as erosions
and floods, which he recommended the public sector to introduce
policy and regulation to mitigate
this issue.
Zachau, however, said that
while the world economy currently
has little bright spots, Malaysia’s
fiscal health is commendable.
He said the government’s debt
level of around 53% of the country’s
gross domestic product is comparatively low, and its budget shortfall
that is below 5% (at 3.2% last year)
gave it room to do any stimulus
measures for the short term.
He also said Malaysia has a
strong financial system, where access to credit is widespread thanks
to decades of work and systematic
development by both private and
public institutions. This is important to prevent missed business
and livelihood opportunities for
rural communities.
“Besides Asean, countries in the
Middle East were also looking to
benefit from Malaysia’s financial
services to strengthen their own
system,” Zachau added, noting
that Malaysia’s expertise in financial inclusion is now sought after
in many countries.
KUALA LUMPUR: Despite the
slowdown in China, the world’s
second-largest economy remains an enormous growth
story, says Templeton Emerging Markets Group executive
chairman Mark Mobius.
“China’s growth is decelerating, but compared with the
US, China still has an enormous
growth story,” Mobius said in a
speech at the Global Emerging
Markets Programme yesterday.
China posted a growth rate of
6.9% in 2015, the weakest pace
in 25 years.
The slowdown in China also
sparks concerns that it will have
an impact on other economies,
putting further pressure on declining commodities prices.
Mobius however thinks that
some of the fears regarding China’s sluggish economy are exaggerated.
He said although the growth
rate in 2014 was 7%, compared
with 10% growth in 2010, the
amount of increase in US dollar
terms was much more in 2014
compared with 2010.
“The size of the economy is
growing rapidly. Its foreign reserves are very high at about
US$3.3 trillion (RM13.63 trillion), the largest in the world,”
he explained.
Mobius noted that the slower
pace in growth was due to the
transition of the economy as
China is changing from a manufacturing-based economy to a
service-based economy.
This may have caused some
correction in the commodities
prices and affected commodity-based economies such as Brazil and Australia, but Mobius said
the raw material prices will recover when the supply decelerates.
He added that imports of
raw materials into China may
decline, but the economy will
not stop importing.
Meanwhile, Mobius said the
urbanisation in China will be
supporting the property market as the urban population in
China is still low compared with
the United States.
The urban population in
China was about 54% in 2014,
compared with 81% in the US,
according to the World Bank.
“Property prices have come
down, but in the long-term trend,
it is trending upwards,” he noted, adding that property sales
are expected to continue rising
as people move to the cities and
move from substandard housing.
Mobius also foresaw growth
in China’s infrastructure as the
demand for trains and subways
remains due to traffic jams. He
noted that almost every city is
building huge train stations to
meet the demand.
W E D N E SDAY MA RC H 16, 2016 • T HEED G E FINA NCIA L DAILY
HOME BUSINESS 5
NGO cries foul over
FGV’s claim about
labour conditions
RSPO panel shall review the complaint, make a final decision
KUALA LUMPUR: Sustainability
auditor Wild Asia is crying foul over
Felda Global Ventures Holdings
Bhd’s (FGV) claim that it has cleared
the plantation group of human trafficking and prevalent forced labour
in its oil palm estates in Jempol,
Negeri Sembilan.
In a statement published on its
website on March 4, FGV stated
that Wild Asia, as an independent verifier, had concluded in its
investigations that there were no
human trafficking cases found in
FGV’s plantations covering three
areas — Pasoh, Serting Hilir and
Palong Timur — in Jempol.
FGV said Wild Asia noted in its
report that: “Within the sample, our
worker interviews did not identify
“human trafficked” cases (as described in media reports) nor can
we conclude that “forced labour”
(as defined by SA8000) is prevalent.”
A SA8000 standard is a social certification standards for decent workplaces based on the United Nations
Declaration of Human Rights and
the conventions of the International
Labour Organisation which protect
the basic human rights of workers.
However, Wild Asia begs to differ
on FGV’s statement, saying it did not
endorse FGV’s statement which it
claims had been issued without its
consultation.
“FGVH (FGV) issued a public
statement on the findings of a technical assessment Wild Asia had conducted on behalf of FGVH,” said Wild
Asia in a recent Facebook post. “Wild
Asia would like to put on record that
it does not endorse FGV’s original
public statement, which has been
made without the consultation of
Wild Asia.”
The non-profit organisation
(NGO) said it was engaged to provide a technical assessment of FGV’s
current labour management.
“Wild Asia’s methodology for
the verification assessment was
designed around desktop reviews,
management and worker interviews,
as well as a five-day site visit to a
single palm oil mill complex (Negeri Sembilan),” it added.
As it had inked a non-disclosure
agreement with FGV, Wild Asia said
it is unable to make further statements on the issue.
FGV had engaged with Wild Asia
after The Wall Street Journal (WSJ),
in its report published in late July last
year, alleged that FGV had withheld
wages for its palm oil harvesters
working in its plantations in Jempol,
most of whom are foreign labourers.
FGV group president and chief
executive officer Datuk Mohd Emir
Mavani Abdullah said in the company’s March 4 statement that investigations into WSJ allegations were
also carried out by the Roundtable
on Sustainable Palm Oil (RSPO), of
which FGV is a member.
Malaysia’s rich looking
to exit the country
BY RAC H EL C H EW
KUALA LUMPUR: About 26% of
Malaysia’s ultra-high-net-worth individuals (UHNWIs) are considering changing domiciles — the second-highest rate in the world after
China, which stood at slightly over
30% — said international property
consultancy firm, Knight Frank.
Knight Frank (M) Sdn Bhd managing director Sarkunan Subramaniam said the lack of opportunities
in business and education could
contribute to this figure, despite the
government trying hard to improve
in these areas.
He was speaking at the launch of
Knight Frank’s annual ‘The Wealth
Report 2016’, which provides a global
perspective on prime property and
investment, yesterday.
“This trend will continue as Ma-
laysians have become more and
more international. Sometimes, it is
possibly due to lack of opportunities
here. Of course, our government is
trying to improve [the situation] and
this could be some of the push factor
[to encourage Malaysians to remain
in the country],” Sarkunan said.
He said if Malaysia continues to
be not as liberal — in terms of doing
business — as it used to be, it could
result in more Malaysians moving
to other more liberal countries in
the future.
He also noted that UNHWIs have
a growing appetite for properties
abroad, particularly in London in
the United Kingdom and Melbourne
in Australia.
“Malaysian developers are also
developing property projects overseas, so this is one of the reasons
why Malaysians are buying proper-
“Based on these independent
findings, there are no human trafficking cases or forced labour on
our three alleged plantations,” said
Mohd Emir.
However, a visit to RSPO’s complaint section on its website suggests
otherwise.
According to a RSPO letter dated
March 7 issued to FGV, the RSPO
Complaints Panel had reviewed
the independent assessment reports and decided to suspend its
certification of FGV’s Pasoh palm
oil mill until full clearance is given
based on the re-audits.
Further, RSPO said re-audits are
to be conducted on all three of its
palm oil mills — Pasoh, Serting Hilir
and Palong Timur — before certification can be reconsidered.
FGV is also expected to submit
a one-year time bound action plan
to address all major and minor issues highlighted by the Accreditation International Services report
across the company within 30 days
of the letter.
FGV must also submit a quarterly report on the progress made for
the period of one year, at the end of
which, the RSPO panel shall review
the complaint and make a final decision on closure.
Mohd Emir said that the company has an above board policy on the
hiring of foreign workers, and that
the group has zero tolerance towards
any form of harassment or abuse.
UHNWIs of various countries
consider changing domicile
(%)
35
30
25
20
15
10
5
0
Scomi Engineering issued three
notices by Prasarana since January
BY G H O C H E E Y UA N
KUALA LUMPUR: Prasarana Malaysia Bhd has issued three notices
to Scomi Engineering Bhd (SEB)
since January regarding the termination of the KL Monorail expansion contract that has granted
to the latter.
In a filing to Bursa Malaysia,
SEB revealed the first purported
notice it received was dated Jan
4, while the second dated Feb 18.
SEB was queried by Bursa on
the earlier two notices. It did not
disclose the receipt of the notices.
In a reply to Bursa, SEB explained that its solicitors, Messrs
Lee Hishammuddin Allen & Gledhill, had received a letter dated
March 11 from Prasarana’s solicitors stating that the latter will not
be relying on its two earlier purported notices to terminate the
KL Monorail expansion contract.
SEB said it had been advised by
its solicitors that by this conduct,
Prasarana, in effect, admitted that
these two notices are defective
and will not be used as a basis to
terminate the KL Monorail expansion contract.
Meanwhile, SEB said it will be
contesting both the validity of
Prasarana’s letter dated March 8,
which purports to be a notice of
remedy, and any attempt to terminate the contract, which was
received on March 9.
Prasarana issued a press statement last Wednesday, claiming
that Scomi Transit Projects Sdn
Bhd, a subsidiary of SEB, failed
to deliver 10 sets of new four-car
monorail trains by Dec 31, 2015
Under the notice for the KL
Monorail fleet expansion project,
Prasarana said it gave Scomi Transit Projects 60 days from March 8
to comply with the contract terms.
If Scomi Transit Projects fails
to do so, Prasarana said it would
be at liberty to terminate the principal contract and supplemental
agreements with Scomi Transit
Projects.
Wintoni fails to recover EGM papers
KUALA LUMPUR: Wintoni Group
Bhd has lost its legal proceedings
against Kang Choon Leu @ Kang
Chee Sim, who was allegedly in
possession of documents on the
company’s extraordinary general
meeting (EGM) that was called
to remove the board of directors.
Wintoni told Bursa Malaysia yesterday that the Kuala Lumpur High
Court had, last Thursday, dismissed
the legal proceedings against Kang
for failing or refusing to hand over
the meeting documents in connection with the EGM held on Sept 11.
Wintoni had applied for a consequential order that the company be excused from preparing the
minutes for the EGM, in view of
the ruling. But the court declined
to entertain the application for a
consequential order and advised
the company to make a fresh application in respect of such an issue,
said Wintoni.
Wintoni has instructed its solic-
itors to appeal against the judgement. “In view thereof, the company is unable to prepare and finalise
the minutes for the EGM until further notice,” it said.
Wintoni’s 10 minority shareholders requisitioned an EGM in
September 2015 to remove the entire board, including executive director Datuk Tey Por Yee.
The board resigned a day before the EGM. It told Bursa then
that the meeting’s chairman had
declared the resolution to remove
the directors as academic.
On Nov 11 last year, it launched
legal actions against Foong & Partners for failing to hand over documents and records in relation to
the EGM held on Sept 11.
Foong & Partners claimed that
the meeting documents had been
handed over to Kang, one of the
10 shareholders of the company
who called for the EGM. — by
Gho Chee Yuan
Yong Tai’s founder cum MD quits
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BY MEENA L A KSHA NA
MOST VIEWED STORIES ON
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ty overseas [from local developers
with projects abroad and to move
out from Malaysia],” he said.
“However, I don’t think 26% of
them seeking to change domicile is
very significant in the global market,” he noted.
As at last year, there were 993
UHNWIs in Malaysia, down by 15%
from a year ago. The report defined
UNHWIs as those with a personal
net worth of over US$30 million.
KUALA LUMPUR: Yong Tai Bhd’s
founder and managing director
(MD) Wong Liew Lin @ Liew Fat
Lin has resigned as the group’s
managing director effective yesterday.
In a bourse filing, the garment
maker said Wong’s resignation
was due to “other commitments
and busy schedule”.
Wong was appointed to the
board on Oct 2, 1997, and had
helmed the MD post since Nov
8, 1997. Wong founded Yong Tai
Group. His stake in Yong Tai stood
at 20.67% as at Nov 13, 2014, but
had been pared down to 0.52%
as at Jan 18 this year.
On June 25 last year, Yong Tai
saw the emergence of two new
substantial shareholders, Tan
Sri Lee Ee Hoe (9.18%) and Boo
Kuang Loon (7.16%).
Lee is also the director and
shareholder of PTS Impression
Sdn Bhd, which holds the licence
to produce and stage Impression
Melaka, and which Yong Tai announced it would be acquiring
last year.
Boo is the chief executive of
PTS Properties Sdn Bhd, Yong
Tai’s joint-venture partner in its
maiden property development
in Melaka, The Pines, a 29-storey
condominium hotel that it completed last year. Boo has been appointed as Yong Tai’s executive
director since Oct 7. — by Gho
Chee Yuan
6 HOME BUSINESS
Is gaming tax
next to go up?
Analysts neutral on
Top Glove’s SGX
secondary listing
After hikes in alcoholic beverage, cigarette duties
KUALA LUMPUR: Top Glove Corp
Bhd’s proposal to seek a secondary
listing on the mainboard of the Singapore Exchange (SGX) did not add
much excitement to the glove maker’s
share price that has retreated from
its record high of RM6.69 in January.
Analysts who track the stock concur
it is a positive move, as it provides the
world’s largest glove maker a platform
to tap into another equity market.
“Basically, a secondary listing is
a way for the company to market its
shares on an international platform,
and will provide better exposure to
foreign participants.
“From a shareholder’s perspective, it provides options to seek better valuations in the Singapore stock
market,” said TA Securities research
analyst Wilson Loo.
In its announcement to Bursa Malaysia on Monday, Top Glove noted
that it intends to explore with its substantial shareholders the possibility of
selling a portion of their shareholdings
in the company of approximately S$20
million (RM60.14 million) in value in
the open market in Singapore.
However, Maybank Investment
Bank Research said that Top Glove
already offers high liquidity, and the
S$20 million share sale by its main
shareholders works out to about 1%
of total shares issued, which will not
add substantially into its liquidity.
“Additionally, valuations of
SGX-listed glove players are also
below that of Bursa Malaysia-listed
glove players, hence the secondary
listing will not boost Top Glove’s valuations,” the research house said in
its note yesterday.
Meanwhile, MIDF Research said
Top Glove’s SGX listing will allow
the company to exercise flexibility
in terms of raising funds for both
growth and operations in the future.
BY L AW Y I N- LY N
KUALA LUMPUR: Following the
recent series of sin tax hikes, Hong
Leong Investment Bank (HLIB)
Research has brought up the possibility that gaming tax may be next
on the card for a review.
The last time there was a raise in
gaming tax for casinos was 18 years
ago, in 1998, and six years ago, in
2010, for number forecast operators
(NFOs), said HLIB Research analyst Sia Ket Ee in a note yesterday.
While the absence of gaming tax
revision during the Budget 2016 recalibration earlier in January was
a relief after absorbing the goods
and services tax last year, he noted
that duty/tax revisions in recent
years for the sin sectors had been
mostly done outside the tabling of
the national budget.
“With the recent excise duty hike
for alcoholic beverages by some
10% on March 1 and circa 40% for
cigarettes on Nov 15, we cannot
rule out the possibility of a review
in gaming tax up next,” he said.
Gaming tax, he added, contributes around RM2.8 billion or 1.6%
of the government’s revenue per
annum.
But on a more positive note, he
said the country’s fiscal position
now is in better shape after the
budget recalibration in January,
and the potential windfall revenue
from its spectrum sale, rehiring
programme of illegal workers and
et cetera.
“Coupled with the recent rally in
crude oil prices, a review in gaming
tax may not be imminent,” he said.
Still, if indeed a gaming tax hike
is in the works, Sia estimated that
for every 1% hike in gaming tax, casino operators like Genting Malay-
For every 1% hike in gaming tax, casino operators like Genting Malaysia’s bottom line
for FY16 would be negatively impacted by around 3%. As for NFOs, a 1% hike in gaming
tax/pool betting duties is estimated to negatively affect FY16 earnings for Berjaya Toto
by 6.5% to 7.5%. Photo by The Edge
sia Bhd’s bottom line for financial
year 2016 (FY16) would be negatively impacted by around 3%, and
around 1% for Genting Bhd.
As for NFOs, a 1% hike in gaming tax/pool betting duties is estimated to negatively affect FY16
earnings for Berjaya Sports Toto
Bhd by 6.5% to 7.5%.
“For Genting (target price [TP]:
RM10), the impact of a potential
gaming tax hike is less severe on
its earnings. We remain optimistic
about its long-term catalysts and
position to benefit from improvement from its subsidiaries and overseas operations, while enjoying risk
diversification.
“We continue to like Genting
Singapore [plc] (TP: SG$0.90 or
RM2.71) as we expect a less volatile year with a cleaner balance
sheet and lower bad debt provision. Main downside risks, in our
view, are on the regulatory front,
luck factor and execution,” said
Sia, who maintained his “neutral”
call on the gaming sector, with top
picks being Genting and Genting
Singapore.
Effective March 1 this year, the
excise duty on beer made from malt
of RM7.40 per litre and 15% ad valorem tax was changed to RM175
per 100% volume per litre.
The amendment represents a
shift from a volume-based tax structure to taxes based on alcohol content. In other words, the higher the
alcohol content in a product, the
higher the tax imposed.
Meanwhile, the local tobacco
industry has seen three rounds
of excise hikes between 2013 and
2015. Tax on tobacco was first raised
14% in September 2013, 12% in November 2014 and then a whopping
36% in November 2015.
AirAsia X eyes Russia flights
KUALA LUMPUR: AirAsia Bhd’s
long-haul low-cost unit, AirAsia X
Bhd, has added Russia to its route
prospects.
AirAsia Group chief executive
officer (CEO), Tan Sri Tony Fernandes, said he met Russian Federation Council chairman, Valentina
Matvienko, at an interactive meeting and business luncheon here.
In his Twitter account, the aviation tycoon said: “Now meeting
Russia Number 2 strong lady. AirAsia X will be flying to Russia soon.”
On the timeline, Fernandes,
in a short text message, replied:
“Wait and see”.
The meeting today was organised by the Asian Strategy & Leadership Institute (Asli), Russian Embassy in Malaysia and Business
Council for Cooperation with Malaysia.
Fernandes met Matvienko
at an interactive meeting
and business luncheon here,
in Kuala Lumpur. Photo by
Sam Fong
Also present were Second International Trade and Industry
Minister Datuk Seri Ong Ka Chuan,
Asli CEO Tan Sri Dr Michael Yeoh
and Business Council for Cooperation with Malaysia chairman Dr
Vladimir Sautov.
AirAsia X seems to be going
all out adding new destinations
this year, in line with its turnaround plan.
Earlier this year, AirAsia X CEO,
Benyamin Ismail, was reported as
saying the airline was also looking
at restoring flights to Tehran given
that Iran would offer a huge potential, while adding that London
and Paris remained under its radar.
AirAsia rose seven sen to
RM1.78 with 44.98 million shares
traded and AirAsia X gained halfa-sen to 30 sen with 34.56 million
shares transacted. — Bernama
BY S UPR IYA S UR E N D R A N
V& L AW Y IN - LY N
“Furthermore, as the company is
actively looking into mergers and acquisitions (M&A) of smaller players
and glove-related players, we think
the listing will assist in broadening the
company’s M&A horizon and boost
attractiveness to both potential targets and also future investors,” said
MIDF in its note yesterday.
Top Glove is expected to release
its quarterly result today.
UOB Kay Hian Malaysia analyst
Lester Chin Kent Lake told The Edge
Financial Daily that he expects Top
Glove’s earnings to be weaker in the
the second financial quarter ended
Feb 29, 2016 (2QFY16) due to the
weaker US dollar and the recovery
in latex prices.
Another analyst begs to differ, expecting Top Glove’s 2QFY16 results to
be as good as in 1QFY16, even though
the ringgit has strengthened by about
7% since January 2016.
“Based on [an] average basis,
[in] 1QFY16 (September to November 2015) the ringgit stood at 4.2919
against the US dollar, while in 2QFY16
(December 2015 to February 2016)
the ringgit was at 4.2673. The US dollar only depreciated 1% on a q-o-q
(quarter-on-quarter) basis,” she said.
“Drivers for the group include its
continuous cost efficiency and robust
demand for gloves. The Malaysian
Rubber Glove Manufacturers Association is expecting glove annual
growth rate at 6% to 8% this year,” the
analyst added.
For 1QFY16, Top Glove’s profit
more than doubled to RM128.3 million from RM48.7 million in 1QFY15.
Revenue, meanwhile, was at an alltime quarterly high of RM800.3 million, a 41% increase from RM567.6
million a year ago.
Top Glove’s share price was unchanged at RM5.35 yesterday, with
a market capitalisation of RM1.25
billion. The stock has fallen 21.5%
year-to-date.
AmResearch slashes Bumi
Armada’s fair value to 69 sen
KUALA LUMPUR: AmResearch
Sdn Bhd has maintained its “sell”
rating on Bumi Armada Bhd and
slashed its fair value to 69 sen —
from 86 sen — based on a larger
55% discount to its revised sum-of
parts of RM1.53.
In a note yesterday, the research
house said its forecast FY16-FY17
earnings have been cut by 5%-7%
due to lower offshore support vessel utilisation and margin assumptions.
On Monday, Bumi Armada announced that it had filed a suit in the
Supreme Court of Western Australia
against Woodside Energy Julimar
Pty Ltd to claim for damages arising
from the termination of its Armada
Claire floating production storage
and offloading (FPSO) contract.
The FPSO unit had been operating in the Balnaves Field, off
north-western Australia, since Au-
gust 2014. Bumi Armada had said
the contract’s termination was expected to impact the full-year 2016
financial results of the group.
Yesterday, AmResearch said besides the loss of revenues from Armada Claire, it remained concerned
that this may not be the final FPSO
termination as the EnQuest-operated Kraken project may face financial viability concerns if low crude
oil prices persist towards the end
of the year.
“Consensus estimates a FY16F
(forecast) loss of £56 million (RM329
million) for EnQuest, which has a
market capitalisation of £120 million — 12% of Bumi Armada.
“The US$1 billion (RM4.13 billion) Kraken FPSO, currently 80%
completed and expected to be delivered later this year, accounts for
21% of the group’s current firm order
book,” it said.
WE D N E SDAY MA RC H 16, 2016 • T HEED G E FINA NCIA L DA ILY
HOME BUSINESS 7
CPO export duty
augurs well for
downstream sector
But insufficient to improve its competitiveness, says analyst
THE EDGE FILE PHOTO
BY MEEN A L A KSHA NA
KUALA LUMPUR: The 5% export
duty on crude palm oil (CPO)
imposed by the government will
change the dynamic of the export of
the commodity and that will benefit
the downstream segment but not
the planters.
Nonetheless, the 5% duty may
not be sufficient to boost the competitiveness of the local downstream
sector compared with its Indonesian
counterpart given that the export
duty is even higher there.
When contacted yesterday, MIDF
Research analyst Alan Lim said the
implementation of the export duty
will result in an increase in exports
of processed palm oil.
“It will change the dynamic of the
exports, in terms of CPO exports,
which will decline but this will be
compensated by higher [exports of]
processed palm oil,” explained Lim.
On whether the drop in CPO exports will be significant, Lim said:
“We have to see the El Niño situation, because we believe the major
buyers are holding off their purchase
and consuming their own inventory but how long they can wait is
another question.”
After almost a year of a duty-free
policy applied to palm oil exports,
the Malaysian government is raising its CPO export tax from zero to
5% in April, a government circular
showed yesterday.
The circular, published on the
Malaysian Palm Oil Board website,
showed that the 5% rate was im-
After almost a year of a duty-free policy applied to palm oil exports, the Malaysian
government is raising its CPO export tax from zero to 5% in April.
posed based on a reference price
of RM2,500.34 per tonne for April.
Although the Malaysian palm oil
downstream sector is expected to
be boosted by the export duty, it is
insufficient to improve its competitiveness against Indonesia, Lim said.
“The Indonesian palm oil downstream sector will still have an advantage,” he said, noting that Indonesia imposes export duty of US$450
(RM1,858.50) per tone compared
with RM125 in Malaysia.
However, CIMB Investment Bank
analyst Ivy Ng said Malaysian refiners are expected to be more competitive against their Indonesian
peers due to lower transport cost
in Malaysia.
The Palm Oil Refiners Association
Of Malaysia chief executive officer
Mohammad Jaaffar Ahmad had
reportedly said Malaysia’s downstream sector was losing market
share to Indonesia’s downstream
sector after the Indonesian govern-
ment imposed a US$50 per tonne
levy on its CPO.
The new levy has caused Indonesian refiners to gain margin advantage as the levy has resulted in
lower domestic CPO price by US$30
to US$50 per tonne, boosting the
processing margins of downstream
processors in the republic.
Lim also said buyers are likely to
capitalise on the current zero rate
by buying more Malaysian CPO this
month before the 5% export duty
kicks in.
The palm oil export duty structure kicks in when CPO prices touch
above RM2,250 per tonne at 4.5%
and can go up to 8.5% when prices
exceed RM3,450 per tonne.
Ng said in her research note last
Thursday that CPO prices are likely to trade between RM2,300 and
RM2,700 per tonne in the first quarter of 2016 (1Q16) while Lim said
prices could trade up to RM3,000
per tonne in 2Q16.
HLT Global, Perak Transit
bound for ACE Market
BY G H O C H E E Y UA N
KUALA LUMPUR: HLT Global Bhd,
a glove-dipping lines designer and
fabricator, and Perak Transit Bhd,
which is a public transportation services provider, are both eyeing to
float their companies on the ACE
Market of Bursa Malaysia.
HLT plans to raise funds from its
initial public offering (IPO) to fund
its capital expenditure, including
the acquisition of a land parcel to
set up a new factory in the south
of the Klang Valley like Puchong,
Banting or Klang, its working capital
and to set up a dedicated research
and development facility to focus
on product development and process improvement.
The group is looking for one with
a built-up area of about 57,000 sq ft,
of which some 60% or 34,200 sq ft
will be earmarked for production.
It has yet to identify a suitable parcel of land for the purpose.
Currently, it operates from its
own factory in Puchong, which has
a gross production floor space of
23,666 sq ft.
It estimates the total cost for the
land buy and factory construction
to be between RM9 million and
RM12 million, based on an estimated land size of two acres (0.81ha).
Any additional funding needed
to fund the expansion will be met
through internally generated funds
and/or external borrowings.
Its IPO involves the issuance of
39.59 million new shares, of which
13.19 million shares will be offered
to the public and 26.39 million will
be privately placed to identified bumiputera investors. It is also offering 34.31 million ordinary shares in
the company for sale, of which two
million will be for application by
eligible directors and employees,
and 32.31 million will be offered
to selected investors.
The promoters of the IPO are its
chief executive officer Chan Yoke
Chun and deputy chairman Wong
Kok Wah. Both are substantial shareholders of HLT Global with 51% and
49% stakes, respectively.
Meanwhile, Perak Transit, the
operator of the integrated terminal
complex (ITC) known as Terminal
Amanjaya in Ipoh, Perak, which
was completed in 2012, intends for
its IPO to raise cash for its future
business expansion, repayment of
hire purchase facilities and working capital.
According to its draft prospectus, Perak Transit will use part of
its IPO proceeds to partly finance
the construction of another ITC in
Kampar, Perak.
It expects the approximate cost
of the construction of the ITC to be
RM128.33 million, and that construction can start by early 2016, to
be completed in 18 months.
The remaining cost and additional funds to put the ITC’s operations on stream will be financed
via a combination of internally
generated funds and bank borrowings, it added.
It estimates to procure financing
facilities of about RM90 million to
finance the construction of the ITC.
The group also plans to allocate
part of the IPO proceeds for the repayment of hire purchase facilities
from several financial institutions,
the sum of which it did not specify, which were used to finance the
purchase of stage buses.
The remainder will be for working
capital, including the employment
of 35 new staff for its terminal operations, and 45 new bus drivers — and
the defraying of the listing expenses.
Its IPO involves the issuance of
245 million ordinary shares, of which
58 million shares will be offered to
the public, while 187 million will be
placed to selected investors.
It is also offering 56 million existing shares for sale to selected investors.
Its promoters and substantial
shareholders are managing director
Datuk Seri Cheong Kong Fitt, executive director Datuk Cheong Peak
Sooi, Datin Seri Lim Sow Keng, CBS
Link Sdn Bhd, Muamalat Venture
Sdn Bhd, MTD Capital Bhd, Senandung Asas Sdn Bhd and Gemas
Perunding Sdn Bhd.
8 ST O C KS W I T H M O M E N T U M
Stocks with momentum were picked up using a proprietary algorithm by Asia Analytica Data Sdn Bhd and first appeared at www.theedgemarkets.com.
Please exercise your own judgement or seek professional advice for your specific investment needs. We are not responsible for your investment decisions.
Our shareholders, directors and employees may have positions in any of the stocks mentioned.
OCK GROUP BHD (-ve)
SHARES of telecommunication network
services provider OCK (fundamental: 2.4/3;
valuation: 1.1/3) rose 10.35% to 80 sen yesterday with 12.5 million shares done.
For the fourth quarter of financial year
2015 (4QFY15), revenue increased an outsized 87.2% year-on-year to RM108.4 million while net profit surged 86.6% to RM12.3
million, thanks to higher domestic and
regional revenue from telecommunication network services and an unrealised
revaluation gain of RM4.7 million on investment properties.
The company declared an interim dividend of 0.6 sen per share for FY2016, translating into a dividend yield of 0.8%. The dividend will go “ex” on March 28 and will be
paid on Apr 14. Having completed its rights
issue to raise RM132.0 million for business
expansion and working capital in December 2015, it has turned net cash in 4QFY15
with a net cash position of RM75.2 million.
As a network facilities provider (NFP)
licensee, OCK builds, owns and leases back
OCK GROUP BHD
HOME BUSINESS
telecommunication towers and rooftop structures to the eight telecommunication operators in Malaysia. Despite its venture into
green energy and provision of mechanical
and electrical services to construction sector, telecommunication network services
remain its main earnings driver, accounting for almost all of its total profit in 2015.
OCK stands to benefit from the networks
expansion undertaken by major telecommunications companies, which are expected to
invest heavily to expand their 3G and LTE
(Long-Term Evolution) coverage in Malaysia
over the next few years. Additionally, OCK
also seeks to expand its regional business in
ASEAN and China to tap into the growing
demand for telecommunication towers in
these emerging markets.
Established in 2000 and listed in 2012,
OCK is 39.8%-owned by Aliran Armada Sdn
Bhd and 13.6%-owned by Lembaga Tabung
Angkatan Tentera. The stock currently trades
at a trailing 12-month P/E of 23.4 times and
1.71 times book value.
Valuation score*
1.10
2.40
Fundamental score**
23.37
TTM P/E (x)
0.40
TTM PEG (x)
1.71
P/NAV (x)
TTM Dividend yield (%)
574.37
Market capitalisation (mil)
Shares outstanding (ex-treasury) mil 792.24
1.16
Beta
0.62-0.82
12-month price range
*Valuation score - Composite measure of historical return & valuation
**Fundamental score - 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
PALETTE MULTIMEDIA BHD (+ve)
SHARES of Palette (fundamental: 2.4/3; valuation: 0.3/3) closed 9.09% lower at 5 sen
yesterday despite being heavily traded, with
25.02 million shares changing hands. In comparison, its 200-day average volume was 421,
304.5. The heavy trade was despite a lack of
new announcements from the company except for its quarterly results, announced on
Feb 25, 2016.
Palette is a solution provider of broadband, wireless and networking products and
services.
The group had been making losses for
several years since 2008, turning profitable
only in 2015. For 4QFY15, its net profit was
RM304,000 compared to a net loss of RM4.863
million in 4QFY14. For the FY15 as a whole,
it registered a net profit of RM2.185 million
as compared to a net loss of RM6.836 million in FY14.
Revenue for 4QFY15 jumped by 31.17%
to RM1.068 million from RM796,000 in the
PALETTE MULTIMEDIA BHD
previous corresponding period. For the full
year financial year, revenue improved by more
than double to RM2.309 million compared
to RM1.117 million in FY14.
With regard to its prospects, the group has
successfully completed testing for its new
range of software defined network products
and is awaiting its full live trial and initial
purchase. according to its filing with Bursa
Malaysia.
The group said that iMedic system is “Palette’s entry into the new arenas of online
health care as well as IOT (Internet Of Things).”
Another innovative, Wifi SDCard product
that provides personal cloud storage to supplement the limited storage of smartphones,
will also be launched and expected to contribute to its revenue in Q2FY16.
Since the end of last year, the stock price
has jumped by 25%. At current price, it is
trading at a trailing P/E ratio of 7.31 times
and is 1.44 times its book value.
Valuation score*
0.30
2.40
Fundamental score**
7.31
TTM P/E (x)
TTM PEG (x)
1.44
P/NAV (x)
TTM Dividend yield (%)
15.98
Market capitalisation (mil)
Shares outstanding (ex-treasury) mil 290.53
1.20
Beta
0.03-0.06
12-month price range
*Valuation score - Composite measure of historical return & valuation
**Fundamental score - 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
TSR Capital’s unit bags
RM268.9m Kwasa Land
infrastructure job
BY M E E NA LAKS H A N A
KUALA LUMPUR: Developer Kwasa
Land Sdn Bhd, a unit of the Employees
Provident Fund, has awarded a twoyear RM268.9 million contract for common infrastructure works at its Kwasa
Damansara township to construction
and civil engineering works group TSR
Capital Bhd.
The deal was awarded to TSR Capital’s
wholly-owned unit, TSR Bina Sdn Bhd,
Kwasa Land said in a statement yesterday.
The job encompasses site clearance
and site preparation, earthworks, roadworks, drainage works, road furniture,
sewerage reticulation, water reticulation,
park and ride facilities, electrical infrastructure works, and soft and hard landscape works, said Kwasa Land.
It is to be completed within 104 weeks
by March 12, 2018.
This is the second infrastructure works
awarded by Kwasa Land, to date, for its
2,330-acre (943ha) Kwasa Damansara township, the statement further read.
The first infrastructure job, valued at
RM127 million, was awarded to WCT Holdings Bhd in September 2015; it encompassed the construction and completion
of common infrastructure works for a
designated area within the vicinity of the
main town centre and the Kwasa Sentral
mass rapid transit station.
Kwasa Damansara is located in the
vicinity of Kota Damansara and Petaling
Jaya, Selangor.
It is a mix of residential, commercial, recreational, institutional and educational developments which, when ready, would serve
a target population catchment of 150,000.
At market close, TSR Capital gained 1.5
sen or 2.91% to close at 53 sen yesterday,
valuing it at RM92.46 million.
Mustapa: Govt to set up national
committee to monitor TPP agreement
KENNY YAP
KUALA LUMPUR: The government will
establish a national committee to monitor,
facilitate and oversee the overall implementation of the Trans-Pacific Partnership (TPP) agreement.
International Trade and Industry (Miti)
Minister Datuk Seri Mustapa Mohamed
said the committee would consist representatives from ministries and government
agencies involved with the TPP agreement.
“We will inform our cabinet colleagues
before the national committee is set up as
we need the cooperation of all ministries,”
he told reporters after delivering a speech
at the Japan-Malaysia Invest Symposium
here yesterday.
Mustapa said the suggestion to set up
the committee was discussed with the
chairman of the parliamentary caucus on
the TPP agreement on Monday.
Meanwhile, Miti, in a statement, said
the committee and subsidiary bodies to
be established would mirror the set-up of
the TPP joint commission and subcommittees under the trade agreement.
A separate consultative committee
would be formed to gather feedback and
assess the impact of the TPP agreement
implementation from time to time.
“The committee will be made up of representatives of industry players, business
Mustapa: We will inform our cabinet colleagues
before the national committee is set up as we
need the cooperation of all ministries.
chambers, small and medium enterprises, non-governmental organisations and
various other local stakeholders,” it said,
adding that the government’s engagement
with the local stakeholders would continue
throughout the entire period before the TPP
agreement’s ratification by 2018.
“We hope the formation of both national
and consultative committees will assist us
in achieving our objectives, which are to
ensure that Malaysia will take advantage
of the opportunities and mitigate the challenges that the TPP agreement will bring,”
it added. — Bernama
TRC Synergy secures RM88m KLIA
air traffic control centre subcontract
BY SURIN MURUGIAH
KUALA LUMPUR: TRC Synergy Bhd has
secured a subcontract worth RM88 million to develop the new Kuala Lumpur Air
Traffic Control Centre at Kuala Lumpur
International Airport (KLIA) and other
locations.
In a bourse filing yesterday, TRC said
its unit Trans Resources Corp Sdn Bhd had
received the letter of acceptance from Advanced Air Traffic Systems (M) Sdn Bhd for
the subcontract.
The company said the project is expected
to contribute positively to its future earnings.
TRC Synergy gained 3.5 sen or 9.59%
to close at 40 sen yesterday, valuing it at
RM192.2 million.
1 0 P R O P E RT Y S NA P S H
T
FREE
transaction
data
latest
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listings
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Source: TheEdgeProperty.com
What are developments
priced in Bangsar?
Bangsar top 5 most expensive condominiums/apartments
by average price per sq ft
• Today, we continue our focus on Bangsar by looking at average prices on a
per square foot basis. Based on transactions analysed by TheEdgeProperty.
com, the average price of condominiums in the area was RM756 psf in 1Q2015,
remaining virtually unchanged (up 0.1% y-o-y) from the previous year.
• In the 12 months to 1Q2015, the RM601 – RM800 psf price range accounted for
the largest share of transactions (38.1%). This was followed by the RM8001 –
RM1,000 psf range (24.5%). Sales valued over RM1,000 psf accounted for only
14.2% of transactions.
• The condominiums offered in Bangsar consist primarily of large, exclusive,
family-style units.
• The most expensive projects were led by Ken Bangsar with an average
transacted price of RM1,338 psf. However, this is due to the sale of a studio unit
and does not reflect general price levels in Ken Bangsar.
• Despite being a decade old, Highbank Condominium was among the top most
expensive projects with an average selling price of RM1,023 psf. It has retained
its value well due to its location. The property enjoys a rare green environment
nestled in the hillside as part of the exclusive Sri Bukit Persekutuan residential
enclave.
• The least expensive projects were the older, low-cost apartments in the
neighbourhood led by Putra Ria Apartment (RM185 psf ) and its neighbour,
Apartment Haji Abdullah Hukum (RM199 psf ). Both are located opposite the
bustling Mid Valley Megamall.
Source: TheEdgeProperty.com
Bangsar top 10 least expensive condominiums/apartments
by average price per sq ft
The Analytics are based on the data available at the date of publication and may be subject to revision as and
when more data becomes available.
China Vanke’s core profit hits record
BY C L A RE JI M & DONNY KW OK
HONG KONG: China Vanke Co Ltd,
the country’s largest property developer, said its core profit rose 13.1% in
2015 to a new record, slightly below
forecasts, helped by a resurgence in
China’s property sales that has left
some government officials concerned
a real estate bubble may be forming.
In a statement, the developer
said its core profit, excluding items
such as sales of non-current assets,
grew to a record of 17.6 billion yuan
(RM11.21 billion) last year from 15.6
billion yuan in 2014. That was slightly below an average forecast of 18
billion yuan in a poll of 15 analysts
by Thomson Reuters SmartEstimate.
Net profit attributable to share-
holders climbed 15.1% to 18.1
billion yuan.
“In the short term, the market
segmentation will continue. Most
areas of China are still under great
destocking pressure,” chairman
Wang Shi said in the statement.
“In view of a substantial rise in
trading volume in 2015, the main
cities rank top in terms of destocking and some of them are even under pressure of insufficient stock
and (a) rise in housing prices,”
Wang said. “The group will continue active selling and smartly
respond to market changes.”
Senior Chinese officials raised
alarm over the country’s overheated
housing market during an annual
Parliament meeting in Beijing last
week, throwing the spotlight onto a
potential bubble forming in parts
of the property market.
Rattled by a rapid rise in home
prices in cities like Shenzhen and
Shanghai, Land Minister Jiang
Daming said China will announce
measures to boost land supply.
Standard & Poor’s warned last
week that competition for land in
top-tier cities could intensify, eroding developers’ profit margins. The
agency warned that developers will
face significant credit risk once the
government tapers price growth in
these cities.
Chinese real estate developers
are acquiring more land outside the
primary market — purchasing from
other companies and through re-
development — as escalating land
costs crimp profit margins.
Vanke has already acquired 28
plots of land in January and February
this year — five in China’s tier-one cities — mostly through joint ventures
with local developers in order to lower competition and bidding prices.
“All of the tier-one city land acquired by Vanke in January and
February cost less than half of the
expected selling prices,” Credit Suisse analyst Jinsong Du said in a
report last week.
“We expect this to make Vanke’s
return on equity more sustainable
than most peers,” Du said, adding
he expected the upgraded land
bank would lead to higher revenue
in 2017. — Reuters
Singapore developers post lowest new home sales in 14 months
BY POOJA THAKUR
SINGAPORE: Singapore developers sold the lowest number of new
homes in 14 months, as mortgage
curbs cooled demand in Asia’s second-most expensive housing market.
Developers sold 301 units in
February, down 7% from the revised
323 units in January, according
to data released yesterday by the
Urban Redevelopment Authority.
While annual sales rose just under
2% to 7,440 units in 2015, it’s still
half the clip recorded in 2013.
Singapore home prices have
dropped for nine quarters, the longest losing streak in 17 years, as property curbs cooled demand. An index
tracking private residential prices
fell 0.5% in the three months ended
Dec 31 from the previous quarter,
according to data from the Urban
Redevelopment Authority. That
took the annual decline in prices
to 3.7%, almost matching the 4%
drop in 2014, which was the first
year-on-year slide since 2008.
Singapore’s government began introducing residential property curbs
in 2009 as low interest rates and demand from foreign buyers raised
concerns that the market was overheating. They have included a cap on
debt repayment costs at 60% of a borrower’s monthly income and higher
stamp duties on home purchases.
Still, it is too early to relax property market cooling measures, as
doing so could result in a market
rebound, National Development
Minister Lawrence Wong said in a
written reply to Parliament on Feb 29.
Singapore was ranked the second-most expensive city to buy a
luxury home in Asia after Hong Kong,
according to a 2016 Knight Frank LLP
wealth report. — Bloomberg
MOST READ ON
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applications for
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The rise of outlet
centres
Forest City, first
artificial island to get
duty-free status
Mah Sing to
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Sarawak state govt
abolishes quit rent
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on P2P lenders
B R O K E R S’ C A L L / T E C H N I C A L S 11
FBM KLCI’s
bullish
trend well
supported
BY B ENN Y L EE
T
he market was a little bit cautious in
the early part of last
week, but rebounded
to close higher than
in the previous week.
Factors supporting the increase are
the stronger ringgit, rising crude
palm oil and crude oil prices. On a
macro scale, the European Central
Bank’s decision to lower interest
rates helped boost equity markets.
The FBM KLCI rose 0.2% to 1,696.54
points last Friday
The ringgit was firm against the
US dollar from last week and is
currently at 4.08 to the US dollar.
The resilient ringgit is a boost for
foreign investors as they continue to accumulate shares on Bursa
Malaysia. Net buying from foreign
institutions last week (Monday to
Friday) was RM1,036 million and
net selling from local institutions
and retail was RM1,016 million and
RM20 million respectively.
The volume was higher last week
compared with that in the previous
week. The average daily trading
volume in the past one week was
two billion shares compared with
1.8 billion shares two weeks ago.
The average trading value, however, declined from RM2.2 billion to
RM2.1 billion, a sign of more lower-cap stocks being traded.
For the FBM KLCI, gainers outpaced decliners four to three. The
top gainers for the week were Genting Bhd (+6.0% in a week), IOI
Corp Bhd (+4.2%) and Astro Malaysia Holdings Bhd (+3.9%). The
top decliners were Petronas Chemicals Group Bhd (-3.3%), Digi.Com
Bhd (-2.0%) and Genting Malaysia
Bhd (-1.6%).
Asian markets ended up firm
and mixed after a rebound in the
last trading days of the week erased
earlier losses. China’s Shanghai
Stock Exchange Composite index fell 2.2% in a week to 2,809.17
points last Friday. Japan’s Nikkei 225 index declined 0.4% to
16,938.87 points. Hong Kong’s
Hang Seng Index increased only
0.1% in a week to 20,199.60 points,
Daily FBM KLCI chart as at March 11, 2016.
and Singapore’s Straits Times fell
0.3% to 2,828.86 points.
The US market was slightly bullish, but European markets were
mixed. The Dow Jones Industrial
Average increased 1.2% in a week
to 17,213.31 points. Germany’s DAX
Index increased marginally higher
from last week to 9,498.15 points,
and London’s FTSE 100 declined
1% to 6,139.79 points.
The US dollar weakened against
major currencies last week. The US
dollar index futures fell from 97.3
points a week ago to 96.2 points.
Commodity exchange gold pulled
back for a correction and declined
0.7% in a week to US$1,251.10
(RM5,167.04) an ounce. US crude
oil (WTI) jumped 5.9% in a week
to US$38.49 a barrel, the highest in
three months. Crude palm oil on
Bursa Malaysia also rallied and increased 4.1% in a week to RM2,607
per tonne last Friday on lower production expectations in the next
few months.
The FBM KLCI managed to stay
above the long-term 200-day moving average after climbing above
it two weeks ago, and is also well
above the Ichimoku Cloud indicator. The index is able to rebound
above the support levels after a
pullback earlier last week, and this
shows that the market is still being
supported despite some uncertainty and volatility.
Momentum indicators continued to show a resilient trend. The
RSI indicator continued to increase
above its mid-level and the MACD
indicator climbed above its moving
average. The index is also trading
at the upper range of the Bollinger
Bands indicator.
The index tested and broke above
the resistance level at 1,700 points,
but failed to stay above this level.
Expect the index to break above
this level given the current bullish
support and momentum. If this happens, the index is set to trend higher towards the next resistance level
at 1,740 points in the short term, as
long as the index stays above the uptrend support level (line S1) and the
short- term 30-day moving average
at 1,670 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.
Top Glove’s SGX listing will broaden its M&A horizon
Top Glove Corp Bhd
(March 15, RM5.32)
Upgrade to buy with an unchanged target price (TP) of
RM6.76: Top Glove Corp Bhd has
announced its proposed listing on
the mainboard of the Singapore Exchange (SGX). This listing will entail
the secondary listing of and quotation for all the existing ordinary
shares of 50 sen each in Top Glove,
which are listed and quoted on the
Main Market of Bursa Malaysia.
The proposed listing will not
involve any new issuance of Top
Glove shares.
However, in order to provide liquidity and trading activity on the
mainboard of SGX, the company
intends to explore, with its substantial shareholders, the possibility
of selling a portion of their shareholdings in Top Glove amounting to approximately S$20 million
(RM60.16 million).
We view the proposed SGX listing positively as we think it will
provide foreign investors further access to the company. Currently, the
foreign shareholding of Top Glove
stands at above 30% and with this
listing, we are expecting there will
Top Glove Corp Bhd
FYE AUG (RM MIL)
Revenue
Gross profit
Finance costs
2012
2013
2014
2015
2016F
2017F
2,314.5
2,313.2
2,275.4
2,510.5
3,088.8
3,371.9
385.0
363.2
383.5
554.9
522.3
549.6
(0.1)
(0.7)
(4.2)
(4.2)
(12.7)
(12.7)
Profit before tax
240.7
242.2
216.3
363.5
509.6
536.9
Income tax expense
(33.4)
(39.4)
(32.7)
(82.3)
(76.4)
(80.5)
Net profit
207.3
202.8
183.6
281.2
433.2
456.4
10.4
10.5
9.5
14.5
16.5
15.9
PBT margin (%)
Net profit margin (%)
9.0
8.8
8.1
11.2
14.0
13.5
EPS (sen)
16.4
15.85
14.55
22.6
33.75
35.55
PER (x)
32.4
33.6
36.6
23.5
15.8
14.9
Net dividend (sen)
8.0
8.0
8.0
11.5
17.0
17.0
Dividend yield (%)
1.5
1.5
1.5
2.2
3.2
3.2
Source: Company, Forecasts by MIDFR
be an increased investor reach and
diversification of its investor base,
including allowing direct participation by investors in Singapore
in the equities of Top Glove.
Additionally, we think that the
company is also indirectly trying to
create liquidity access to its foreign
investors that manage larger funds
in Singapore and allowing flexibility
for these investors to trade either
in Singapore or Malaysia. This in
return will assist in reducing additional costs of investments needed
to invest in countries other than
Singapore.
On another note, this proposed
secondary listing will also allow
Top Glove to exercise flexibility
in terms of raising funds for both
growth and operations in the future. Furthermore, as the company is actively looking into mergers
and acquisitions (M&A) of smaller
players and glove-related players,
we think the listing will assist in
broadening the company’s M&A
horizon and boost attractiveness
to both potential targets and also
future investors.
We make no changes to our financial year 2016 (FY16) to FY17F
earnings forecasts for now, pending
its second-quarter FY16 results announcement and conference call
due today (Mar 16). Though we
made no changes to our earnings
forecasts at this juncture, we are
upgrading our call on Top Glove
to “buy” from “neutral” with an
unchanged TP of RM6.76. Our valuation is based on FY17 earnings
per share (EPS) of 71.1 sen pegged
to an unchanged price-earnings
ratio (PER) for FY17 of 19 times,
which is the company’s five-year
historical average PER.
Our upgrade to “buy” is premised on the fact that the stock has
shed 23% of its share price from its
historical high of RM6.95 back in
January 2016, and now has an upside of 30.3% from our TP. We think
the selldown in the stock has been
overdone due to the strengthening of the ringgit of late despite its
fundamentals being intact. Hence,
we would recommend investors to
relook the stock as its current valuation has turned more attractive
at 14.9 times FY17 PER. — MIDF
Research, March 15
14 B R O K E R S’ C A L L
Chin Hin’s AAC
manufacturing
its rising star
Chin Hin Group Bhd
March 15 (81 sen)
Not rated with a target price of
95 sen: While the roll-outs of several mega infrastructure projects,
such as mass rapid transit Line 2
(MRT 2), light rail transit Line 3
(LRT 3), the southern double track
and various highways, are expected to benefit Chin Hin Group Bhd,
the icing on the cake comes from
earnings growth prospects for its
manufacturing divisions. This is
supported by an expected improved
operational efficiency and expansion of manufacturing capacities.
We see the manufacturing of
autoclaved aerated concrete (AAC)
as its rising star. The product has
started to gain market acceptance,
especially the AAC blocks, a strong
substitute of clay or sand bricks.
We projected earnings growth
of 17.1%/23.4%/29.3% for financial year 2016 (FY16)/FY17/FY18,
mainly driven by the manufacturing
divisions. Based on 11 times calendar year 2017 (CY17) earnings
per share (EPS), we arrive at a fair
value of 95 sen. While Chin Hin is
believed to be the largest distributor
of building materials in Malaysia,
generating over RM800 million of
revenue from this segment, we see
its earnings growth to be driven by
the manufacturing divisions.
We are positive on the prospects
for its AAC manufacturing business after our recent visit to the
plant in Serendah, Selangor. The
state-of-the-art machinery supplied
by Wehrhahn GmbH, a German
manufacturer, is highly automated.
Management said the plant is operating 24 hours a day to cope with
Segment volatility poses risk
to TA Enterprise
TA Enterprise Bhd
March 15 (53.5 sen)
Downgrade to hold with a lower
target price (TP) of 55 sen: We
downgrade TA Enterprise Bhd
from a “buy” to a “hold”, as we
expect weak market sentiment
to hamper earnings stability. To
recap, losses at TA Enterprise’s
investment holding segment
were the main drag on the group’s
earnings in the past three quarters. These were attributable to
investment securities held, which
were affected by the slowdown in
the market in general. Volatility
in this segment poses earnings
risk to TA Enterprise.
The completion of Trump
International Hotel (slated for
June 2016) will boost development profit in financial year 2016
(FY16), but this will dissipate in
the following quarters, as prospects for the remaining projects’
launches remain subdued. TA
Enterprise is looking at launching the next phase of Damansara
Avenue (Activo suites) and the
Dutamas project, but we have
Chin Hin Group Bhd
FYE DEC (RM MIL)
Revenue
Gross profit
Ebitda
Ebitda margin (%)
Ebit
PBT
PAT
EPS (sen)
PER (x)
Gross dividend (sen)
Dividend yield (%)
ROE (%)
2014
2015
2016F
2017F
2018F
1,219.4
88.5
75.0
6.2
61.9
43.2
30.2
6.0
13.8
na
na
na
1,199.2
102.6
74.4
6.2
59.7
38.8
30.2
6.0
13.8
na
na
12.3
1,221.5
125.4
90.4
7.4
71.8
46.1
35.4
7.0
11.8
1.5
1.8
12.0
1,305.2
156.6
118.9
9.1
90.8
58.3
43.7
8.6
9.6
2.0
2.4
12.6
1,350.9
176.4
130.5
9.7
105.2
67.9
56.5
11.2
7.4
3.0
3.6
14.7
TA Enterprise Bhd
Source: TA Securities
strong customer demand.
To meet the increasing demand,
the group has allocated RM10 million out of the RM41 million initial
public offering (IPO) proceeds to
expand the existing AAC manufacturing facilities, and to purchase
new equipment and machinery.
Upon completion of the expansion targeted by the end of 2016,
production capacity will increase
from 375,000 cu m to 600,000 cu m.
The AAC manufacturing division
produces blocks, lintels, floor and
wall panels marketed under the
brand of “Starken”.
We understood that Starken is
currently the largest AAC manufacturer in Malaysia. The group is
supplying AAC products to various
renowned developers. It has penetrated into foreign markets, and
exports AAC products to Indonesia, Australia, New Zealand, Hong
Kong, Taiwan and Singapore. Its
AAC products are certified as green
conservatively assumed contributions from these to only start
to kick in from FY17.
As of end-December 2015,
TA Enterprise’s market share in
trading volume and value stood
at 6.3% and 3.6% respectively.
Although TA Enterprise’s broking
business remains an attractive
merger and acquisition target,
timing is a risk given the softer
market outlook.
We cut FY16/FY17F (forecast)
earnings by 43%/65% to factor in
deferred property development
launches, lower contributions
from investment holdings and
lower value traded assumptions
for the stockbroking business.
This is in line with the challenging
operating environment ahead.
We have a “hold” rating with a
sum-of-parts-based TP of 55 sen.
Our TP ascribes a 70% discount
to revised net asset value for TA
Global Bhd (previously 65%) and
0.5 times book value (previously
0.7 times) for its broking business. — AllianceDBS Research,
March 15
products, eco-friendly building
materials by the Singapore Environment Council.
We arrive at a fair value of 95 sen,
based on 11 times CY17 EPS. The
fair value is higher than 77 sen in
our IPO note dated Feb 23, 2016,
in which our valuation was based
on 11 times CY16 EPS. We think
the target price-earnings ratio of
11 times is justifiable. This is given
that several mega projects, such as
MRT 2, LRT 3, the southern double
track and various highway projects,
are expected to benefit Chin Hin,
being the market leader in the distribution of building materials. This
is besides the growth potential of
its manufacturing divisions, especially the AAC and precast concrete
divisions.
We project earnings growth of
17.1%/23.4%/29.3% in FY16/FY17/
FY18, to be driven by capacity expansion in its manufacturing divisions. — TA Securities, March 15
FYE DEC (RM MIL)
Revenue
Ebitda
Pre-tax profit
Net profit
Net profit (pre ex)
Net profit growth (pre ex) (%)
EPS (sen)
EPS pre ex (sen)
EPS growth pre ex (%)
Diluted EPS (sen)
Net DPS (sen)
BV per share (sen)
PER (x)
PER pre ex (x)
P/CF (x)
EV/Ebitda (x)
Net dividend yield (%)
P/BV (x)
Net debt/equity (x)
ROAE (%)
2015A
2016F
2017F
2018F
723
249
68.9
2.20
2.20
(97.9)
0.13
0.13
(98)
0.13
0.04
115
415.5
415.5
4.8
14.7
0.1
0.5
0.4
0.1
1,205
309
167
69.7
69.7
3,063.1
4.07
4.07
3,063
4.07
1.22
119
13.1
13.1
7.1
11.8
2.3
0.5
0.4
3.5
979
274
126
50.6
50.6
(27.5)
2.95
2.95
(27)
2.95
0.89
120
18.1
18.1
4.6
13.0
1.7
0.4
0.3
2.5
1,183
338
185
77.0
77.0
52.3
4.50
4.50
52
4.50
1.35
124
11.9
11.9
5.1
10.4
2.5
0.4
0.3
3.7
*TAE changed FYE from Jan to Dec in FY15
Source: Company, AllianceDBS Research, Bloomberg Finance LP
Banks’ earnings expected to return to growth path in 2016
Banking sector
Maintain overweight: Banks’ total
net profit slipped 0.1% year-onyear (y-o-y) to RM5.33 billion in
the fourth quarter of 2015 (4Q15).
Although 4Q15 net earnings were
below our expectations, this was
the best performance following
2% to 6% y-o-y net profit declines
in the past five quarters. The improvement in 4Q15 mainly came
from a pickup in net interest income growth, as well as smaller
increases in overheads and loan
loss provisioning.
The drop in banks’ 2015 net profit was seen as a foregone conclusion by the market, given the upward reversal in credit costs and
hike in cost of funds during the
year. Malaysian banks’ net profit
(excluding CIMB Group Holdings
Bhd) fell 2.5% in 2015, primarily
dented by a 177.4% y-o-y surge in
loan-loss provisioning. However,
net and non-interest incomes rose
by stronger momentum of 6% to
7% in 2015 versus 2.3% and 0.2%
respectively in 2014.
We expect banks to resume positive earnings growth in 2016 and
project a net profit increase of 7.2%.
In our view, earnings growth will
come from a narrower increase in
loan-loss provisioning and overheads. Two banks will also start
to realise cost savings from their
mutual separation schemes (MSS)
implemented in 2015. Net interest
margin contraction in 2016 is likely
to be narrower than in 2015, given
a smaller increase in banks’ cost
of funds.
In spite of the macro headwinds
putting pressure on banks’ asset
quality, the industry has success-
Banks’ quarterly net profit and y-o-y growth
RM mil
7,000
Total net profit
Y-o-Y growth (RHS)
%
20
6,000
15
5,000
10
4,000
5
3,000
0
2,000
-5
1,000
0
4Q’11
-10
2Q’12
4Q’12
2Q’13
4Q’13
2Q’14
4Q’14
2Q’15
4Q’15
Source: CIMB research, company
fully kept its gross impaired loan
(GIL) ratio at 1.6% in September to
December 2015; 1.6% is an all-time
low since the monthly data was first
made available in 1998. For 2016,
we expect a moderate increase in
the GIL ratio to 1.8%.
We remain “overweight” on Malaysian banks, as we envisage better
earnings growth in 2016. Other potential rerating catalysts for the sector include: i) attractive valuations,
as most banks now trade below
their historical five-year average
price-earnings ratio and price-tobook valuation; ii) an enticing dividend yield of 4.2% in 2016; and iii)
an expected slowdown in, if not
an end to, the equity fundraising
spree. RHB Capital Bhd remains
our top pick.
We estimate that loan loss provisioning will still increase in 2016,
but by a smaller 31.7% y-o-y (versus the 177.4% y-o-y jump in 2015).
We also project that the increase
in overheads will be narrower at
3.6% in 2016, compared with 6.3%
in 2015, thanks to cost-saving benefits from the MSS implemented by
RHB Capital and Hong Leong Bank
Bhd last year. Top-line growth is
expected to be softer in 2016, with
both net and non-interest incomes
slowing from 6% to 7% in 2015 to
4% to 5% in 2016 respectively. —
CIMB Investment Bank, March 14
Sarawak CM
expects many
Chinese voters
to return to BN
KUCHING: The Barisan Nasional
(BN) is confident of winning back
considerable support from the Chinese in the coming Sarawak state
election, said Chief Minister Tan Sri
Adenan Satem.
He believes the “wind of change”
is coming due to a slew of policies
he has implemented since he took
over from Tun Abdul Taib Mahmud
in 2014.
“There is a change, a shift back
[of support] to BN,” he said in an interview with Bernama at his office
here yesterday.
He was asked on the voting trend
of the Chinese in Sarawak and what
he expects in the state election.
“There has been [a change], I notice, because of my policies regarding the Chinese — one, they are not
‘pendatang’ (immigrants), recognition of the Unified Examination
Certificate, admission of Chinese
graduates into the state civil service
and Sarawak Foundation and so on.
“I think they are quite acceptable and I believe there is a change
of mind on their part but whether
it is enough or not, I don’t know,
but definitely there is a shift back
to BN,” he said.
As for problems in the allocation
of seats among BN component parties, he said his approach is through
persuasion for them to accept the
decision he would make rather than
to issue warnings.
He acknowledged that the existence of two Chinese-based parties, Sarawak United People’s Party (SUPP) and the United People’s
Party (UPP), on the BN side could
be a problem.
“Now if there is a shift back to
BN, they (the Chinese) have to decide which party to vote for, UPP or
SUPP, and that will result in dividing them. So the best way is to have
a direct BN candidate,” he added.
Asked whether the BN component parties had agreed to the suggestion for direct candidates, he
said some had agreed reluctantly,
but they all accepted the rationale for it.
On whether the Sarawak government has done enough for the
Chinese, he said it is up to them
(Chinese) to decide because he has
done the best for them. — Bernama
H O M E 15
Adenan recounts close
shave with death
Says he owes it to himself to help those less fortunate than him
BY AZM AN UJA NG
KUCHING: Sarawak Chief Minister
Tan Sri Adenan Satem spoke yesterday of his close shave with death
due to a heart ailment three years
ago and how he was “ready to go”.
He said God had given him a
new lease of life to “do what I have
to do”.
“Three years ago, I was very sick.
I was at the IJN (National Heart
Institute in Kuala Lumpur) and in
Singapore. And there was a time I
thought I was going. I called all my
relatives, my children and grandchildren.
“They all came and you know
when you call all your children and
grandchildren, you know what it’s
all about. I was ready to go. But God
is great and I recovered and I was
back to normal.”
In an interview with Bernama at
his office here, Adenan said: “When
God gives me a new lease of life, he
must be trying to drop a message to
give me a hint of what I have to do.”
Adenan, who took over from Tun
Abdul Taib Mahmud two years ago,
said that he had been very lucky
in life and that God had been very
kind to him.
“I have a very good life and so
on, even a successful one, and I owe
it [to myself] to help those who are
less fortunate than I am,” he said.
He revealed his philosophy in
life, saying that in doing what he
did as a leader, he would always
ask himself if his late mother would
have approved of it or not.
“That is my policy; I would ask
myself until today if my mother
would give her blessing,” he added.
On the emergence of the “Sarawak for Sarawakians” sentiment,
Adenan said: “I have made it very
clear that there is no talk of cessation from the Federation. We don’t
want to leave Malaysia. Malaysia
will be forever. But that doesn’t
mean we cannot fight for our autonomy, which had been agreed
on under the Malaysia Agreement,
and under the Inter-Govermental
Committee reports and recommendations, the Cobbold Commission and the Malaysia Act. We
want these rights, which we had
way back in 1963, to revert back
Sarawak state govt abolishes certain quit rents
KUCHING: The Sarawak state government has abolished payment of
certain quit rents, Chief Minister
Tan Sri Adenan Satem announced.
“Referring to the announcement
made on Feb 26 on ‘the remission
of land rent’, I would like to specify that this remission will apply to
smallholder agriculture land, which
is less than 100 acres (40.47ha), and
residential land.
“With effect from March 15, land
rent shall no longer be charged on
these lands. All arrears and surcharges, if any, are hereby waived,” he told
a press conference here yesterday.
He said the decision would affect 360,422 titles with land rent,
amounting to RM8.58 million or
19% of total land rent.
“173,752 titles are smallholder
agriculture land (less than 100 acres)
with land rent amounting to RM3.62
million or 8% of total land rent, and
186,670 titles are residential land with
land rent amounting to RM4.96 million or 11% of total land rent,” he said.
Adenan (right) and Sarawak
Minister of Resource
Planning and Environment
II Datuk Amar Awang
Tengah Ali Hassan (centre)
announcing the abolishment
of certain quit rents at
a press conference in
Kuching yesterday. Photo by
Bernama
According to Adenan, Sarawak is
the first and only state to make such
a decision.
When asked about those who
had already paid up in advance,
he said the state government
would refund them.
He said the cabinet would discuss
matters relating to assessment rates
for residential, commercial and industrial properties from time to time.
“The cabinet will discuss the mat-
Hundreds pay last respects to Bernama correspondent
KUALA LUMPUR: A sombre mood
enveloped the compound of the late
Bernama New Delhi correspondent
M Santhiran’s (pic) house in Taman
Puchong Intan, Puchong, near here
yesterday as hundreds of people
gathered to pay their last respects
to the veteran journalist.
Among those present were Bernama general manager Datuk Zulkefli
Salleh, deputy editor-in-chief (foreign news service) Ahmad Zukiman
Zain and deputy editor-in-chief (economic news service) Mikhail Raj
Abdullah.
to us. Because over these years,
there have been an erosion of
state rights as far as Sarawak is
concerned.”
Concerning his comment that
certain old policies were “stupid”, he
said: “When I say the word ‘stupid’,
I’m referring to the policy, not the
people who made the policy. And
because [of ] the consequences of
the policy, all this flip-flop about
the education policy, downgrading
of English [language] and so on,
now we are at a disadvantage. But
it’s not too late; I want Malaysians
to be proficient in their mother
tongue and Bahasa Malaysia. You
know our national language, and in
English, you know the international
language.” — Bernama
The late Santhiran’s remains
were later taken to the Jalan Bunga Kertas Batu 14 Crematorium,
Puchong, here for the cremation
ceremony scheduled at 3pm.
Santhiran’s remains, accompanied by his eldest son S Rutran, 18,
arrived at the Kuala Lumpur International Airport from New Delhi
on Malaysia Airlines flight MH191
at 6.42am yesterday.
Rutran, on behalf of his family, said he was thankful to the
Malaysian High Commission in
New Delhi for expediting the re-
patriation of his father’s remains.
“The Malaysian High Commission in New Delhi has facilitated the
repatriation process and I would
also like to thank all Bernama staff,
who have helped us a lot and those
who came to pay their last respects,”
he said.
A neighbour, Sahul Hamid, 64,
said Santhiran’s unexpected death
would be deeply felt by him.
“Santhiran and I often did our
recreation together at a park in our
residential area prior to his New
Delhi posting. He was a very caring
neighbour and I am very sad that I
have lost a dear friend,” said Sahul,
who moved into the residential area
15 years ago.
Santhiran, 48, who was admitted
to the Primus Chanakyapuri Hospital in New Delhi last Friday due
to food poisoning complications,
died on Sunday.
He leaves behind wife D Malarvili, 47, a teacher, and two sons,
Rutran, 18, and Nahvin, 16.
He joined Bernama in October
2002, and was assigned to New Delhi
in October 2015. — Bernama
ter and also whether July 22 should
be made a public holiday in Sarawak to commemorate our selfgovernance. I will make the announcement on these two matters
later on,” he said. — Bernama
BERNAMA
16 FO CU S
See the
gloriously weird
cars in Amelia
Island this year
BY HA NN A H EL L IOTT
WE
PIX BY BLOOMBERG
1966 Abarth 1300 OT Periscopio
A super-lightweight rarity was moulded in a three-piece clamshell configuration and
features a bare-minimum interior, with a fibreglass-only interior and drilled aluminium
pedals. The Periscopica air-cooling intake on the roof helps cool the driver, since water
and oil-cooling pipes running through the cockpit would make the cabin interior too
hot over long distances. Estimated price: US$600,000 (RM2.48 million).
EVERY year in March, collectors, drivers and enthusiasts gather in
Amelia Island, off Florida, to ogle some of the world’s most beautiful
and expensive automobiles. (Think perfect, sought-after Ferraris
and Porsches.) The cars on this list are not those cars. Instead, here’s
a look at the true oddities — often with sky-high price tags — that
make a show such as the Amelia Island Concours d’Elegance ( held
last weekend) so much fun. These stunners have something better
than good looks: They’ve got personality. — Bloomberg
19
M
gi
tr
an
Inside the Abarth, the tuning specialist Carlo Abarth developed his 1300 OT Periscopio
from a Fiat 850 chassis. It has a 145hp, inline four-cylinder engine, and a five-speed
manual transmission.
19
Th
d
re
se
b
re
m
1941 Lincoln Zephyr
It comes complete with gold-plated hardware, a painted, wood-grain instrument
panel, and woollen upholstery. A rare example of art deco automobile design, it has a
12-cylinder engine that gets 120hp on a three-speed manual transmission. Estimated
price: US$300,000 (RM1.24 million).
1976 Triumph TR6
Heralded in the 19th century for making bicycles and subsequently for stylised designs on motorcycles and racing cars, the Triumph marque is now owned by BMW. Its
most celebrated model, the TR6 shown here, has a 2.5-litre, six-cylinder engine and
a top speed of 161kph. It has fewer than 16,093km on its four-speed manual gearbox
and the original “Inca Yellow” paint job. Estimated price: US$50,000 (RM206,500).
1959 MG MGA 1500 Coupe
Coated in proper British Racing Green, this MGA comes with left-hand drive, the original radio, and even a stopwatch. It has an inline four-cylinder engine and a four-speed
manual gearbox. The car was made by the old British brand called MG, which is best
known for its open-top, two-seat sports cars. MG has undergone various changes since
its inception in 1924; its current iteration, which sells cars (mostly in Europe) under the
MG brand name, started in 2009. Estimated price: US$55,000 (RM227,150).
19
O
af
tr
to
15
FO CU S 17
BERG
1973 Fiat 130 Coupe
It was launched in Geneva in 1969
as Fiat’s flagship automobile, intended to challenge rival cars from
BMW and Mercedes. This 130 Coupe
has a 3.2-litre V6 engine that will hit
201kph at top speed; it comes with a
four-speed manual gearbox. Fewer
than 4,500 were built, and the vast
majority of them have stayed in Europe. Estimated price: US$60,000
(RM247,800).
d
m
er
o
1953 Muntz Roadster
Made by Earl “Madman” Muntz in Los Angeles, this roadster used a Lincoln V8 engine and cost nearly twice a Cadillac’s price at the time. It has a four-speed automatic
transmission developed by General Motors, along with novel-for-the-time seat belts
and a padded dashboard. Estimated price: US$325,000 (RM1.34 million).
Celebrities including Grace Kelly and Clark Gable owned Muntz cars, some of which
were covered in a vinyl snakeskin print and featured an AM radio and an eight-track
player. Company founder “Madman” Muntz was known for his eclectic, eccentric nature and for the high price of his rare creations.
io
d
id
st
ce
he
1937 Cord 812 Custom Roadster
The brand was a division of the famed Auburn Automobile Co based in Auburn, Indiana in the late 1920s. (Reliability problems and allegations of financial fraud had
reduced the brand by 1938, when it was sold.) This roadster was revolutionary on
several fronts when it debuted: It had front-wheel drive, no running boards along the
bottom, and headlights hidden in the front fenders. The “coffin” nose perfectly represented the art deco aesthetic. It comes with its original V8 engine and four-speed
manual transmission. Estimated price: US$80,000 (RM330,400).
1958 Porsche 597 Jagdwagen
Offered by Jerry Seinfeld, the 1958 Porsche 597 Jagdwagen was developed by Porsche
after World War II. It comes with a flat four-cylinder engine and a five-speed manual
transmission, plus four-wheel-drive. This one has its original vinyl seat covers, fabric
top, and side curtains. Only 49 of these jalopies made were sold to civilians; a total of
15 exist today. Estimated price: US$425,000 (RM1.76 million).
1965 Lamborghini 350 GT
This is not your typical Lamborghini; it’s much more refined. Some might say it even
looks like a Ferrari. (Gasp!) The 350 GT was the first supercar commissioned by Ferruccio Lamborghini himself. It has aluminium coachwork, one-piece ovoid headlamps,
and a V12 engine tuned to 270hp. Zero to 96kph takes 5.8 seconds. Top speed is 254kph.
The Lambo comes with a five-speed manual gearbox and has fewer than 98,169.98km
on it. Estimated price: US$750,000 (RM3.1 million).
18 H O M E
28.4 million summonses
issued from 2010 to 2015
With compound value of RM1.6b, says home ministry
KUALA LUMPUR: The Royal Malaysian Police (PDRM) issued 28.4
million traffic summonses with a
compound value of RM1.6 billion
from 2010 to 2015.
The home ministry said based
on the PDRM Traffic Cops Record
system, of the total, 14.6 million
were backlogged summonses worth
RM1.5 billion.
“A total of 13.8 million of the
Shelter for
battered
husbands needed,
says psychologist
KUALA LUMPUR: The proposal to set up special shelters for
men abused by their wives is
relevant and necessary, a psychologist said.
Universiti Kebangsaan Malaysia psychology lecturer Muhammad Ajib Abd Razak said
in Western countries, such
shelters had long existed, with
various modules and intervention methods used comprehensively to help the victims.
“In the West, the people
have an open attitude and
keep to the principles of human
rights,” he told Bernama here.
However, he said, the proposal might not yet sink in
because of society’s negative
perception, stigma and prejudice against abused husbands.
“The husband is seen, in
the context of cultural practices, religion, race and ethnicity, as a symbol of leadership and guidance for the
wife,” he said.
He added that the proposal must take into account the
confidentiality and safety of
those concerned.
“The proposal is seen as giving men a way to resolve their
family issues.
“They also need help, such
as counselling and advice, from
ulama or family members,” he
said. — Bernama
summonses were settled during
the same period,” it said in a written answer to Teresa Kok (DAP-Seputeh), which was distributed at
the Parlianment lobby yesterday.
Kok had earlier enquired about
the number of traffic summonses
issued by PDRM since 2010, the
number of compounds yet to be
settled by motorists, and how far
an increase in traffic compounds
could curb road mishap increases.
According to the ministry, the
proposal to raise the compound
rates as stated by Inspector-General
of Police Tan Sri Khalid Abu Bakar
was aimed at creating awareness
among road users to exercise care
on the road.
It said the value of the maximum
compound had never been studied
since the Road Transport Act 1987
was enforced, Bernama reported.
Last month, Khalid said the police were considering suggesting
that the RM300 traffic summons
be increased to a higher amount.
The suggestion was raised because
it was discouraging to see no improvement in the number of traffic
offences recorded during Ops Selamat 8 for the Chinese New Year
season. — Bernama
Federal territories get 39,416
affordable homes
PUTRAJAYA: As of Feb 29, a total of
39,416 affordable homes had been
built, were under construction or
had been approved for development in the federal territories, said
Federal Territories Minister Datuk
Seri Tengku Adnan Tengku Mansor.
He said the houses were provided
under the Federal Territory Affordable Housing Project (Rumawip) and
the 1Malaysia Civil Servants’ Housing Programme (PPA1M).
They included 2,500 houses that
had been completed, 24,463 that
were under construction and 12,453
that had been approved for development, he said.
Tengku Adnan said another
23,478 units were being planned
for construction.
He said the Rumawip and
PPA1M were part of the ministry’s oath, which targeted building 80,000 houses in the federal
territories.
“We will continue building more
affordable homes for the people,”
he said in his speech, which was
read out by Deputy Federal Territories Minister Datuk Dr Loga Bala
Mohan at the presentation of the
ministry’s 2015 Excellent Service
Awards here yesterday.
A total of 80,000 units of affordable homes were being planned for
the federal territories by 2020, with
50,000 of them in Kuala Lumpur,
20,000 in Putrajaya and 10,000 in
Labuan. — Bernama
Ministries to discuss
steps to handle heatwave
KUALA LUMPUR: A meeting is
to be held today at the natural resources and environment ministry to discuss what measures
to take in view of the current hot
and dry weather caused by the El
Nino phenomenon. Its minister
Datuk Dr Wan Junaidi Tuanku
Jaafar said the meeting, to be
held at 2.30pm, would discuss
the need to establish a ministry-level national committee
on the matter. Representatives
of several other ministries and
agencies will also attend the
meeting, he told Bernama at the
Parliament lobby. It is feared that
the current hot and dry weather,
which is expected to last up to
June, may adversely affect the
biodiversity in the country and
give rise to haze. — Bernama
No charges against two
Australian journalists
KUCHING: The two Australian journalists, who allegedly
breached the security line during Prime Minister Datuk Seri
Najib Razak’s visit to a mosque
in Sarawak, will not be prosecuted, according to police. Eroglu Levent and Linton Joshua
Besser, from Australian news
network ABC, were arrested in
Kota Sentosa near here on Saturday. Sarawak CID chief SAC
Dev Kumar said police submitted the investigation papers to
the deputy public prosecutor
on Monday. “Police received
instructions that no charges will
be filed against the two. Instead,
they will be deported under Section 18(3)(h) of the Immigration
Act 1959/63,” he said in a statement here. — Bernama
Najib has no income from
any company — JPM
BAUXITE ACTIVITY RESUMES ... Two months after a moratorium on bauxite mining was enforced on Jan 15,
work resumed yesterday on the transport of the ore and the clearing of bauxite deposits in Kuantan Port. The temporary cessation of
activity was ordered by the cabinet to allow a standard operating procedure to be introduced to control the pollution arising from the
activity. Photo by Bernama
Datuk Abd Aziz Aban said the investigation involves an allocation
of RM880,000 to repair 441 houses
of flood victims in Tanah Merah.
“From our investigation, which
began on Feb 14, we found that six
contractors and nine subcontractors
entrusted to repair the houses had
only used RM550,000, while the remaining amount was believed to have
been embezzled by a third party.”
He said this to reporters after
handing over duties as Kelantan
MACC director to Datuk Moh Samsudin Yusof, who is formerly Putrajaya MACC director.
Abd Aziz, who will take over
Moh Samsudin’s post in Putrajaya,
said the investigation into the case,
which had entered the final stage,
KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak does
not receive income from any
company, the Prime Minister’s
Department (JPM) told Dewan
Rakyat in a written reply yesterday. Responding to Dr Ko
Chung Sen (DAP-Kampar), JPM
also said the prime minister did
not receive any corporate credit card benefits. To a question
from Wong Chen (PKR-Kelana
Jaya), JPM said the government
exercised prudent spending
with regard to the prime minister’s protocol expenses during
official visits in 2015 and 2016.
“The protocol expenses were
limited to necessities without
affecting the main objective of
the official visits,” according to
JPM. — Bernama
PM condemns Ankara
bomb attack
Fifty being investigated over missing funds
KOTA BARU: Fifty individuals,
including one with a “Datuk” title, are being investigated and
have been called to give their
statements on the alleged misappropriation of funds meant for
repairs of houses of flood victims
in Kelantan.
State Malaysian Anti-Corruption Commission (MACC) director
IN BRIEF
was done under Section 16 of the
MACC Act 2009.
Moh Samsudin, who served in
Kelantan from 1995 to 1999, said he
would continue the efforts undertaken by Abd Aziz to combat corruption in Kelantan, and strengthen
the existing cooperation with the
state government and relevant departments. — Bernama
KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak
condemned in the strongest
terms yesterday the bombing
in Ankara, Turkey, on Sunday, saying there is a need for
governments to increase their
efforts in international intelligence cooperation to fight terrorism. “Malaysia condemns in
the strongest terms the bombing that took place in Ankara.”
— Bernama
COMMENT 19
As embassies move to
Nine Elms, demand
for luxury flats wanes
BY LIM YIN FOONG
Chinese 100 yuan banknotes and a US one dollar banknote are seen in this picture illustration. For more than 20 years, China has
kept the yuan’s value against the dollar in a very tight range. Photo by Reuters
The real reason to
worry about China
Time may come for it to break away from currency union with US
BY N A RAYA N A KOC HERLAKOTA
T
he world’s largest currency union contains
about 1.7 billion people
and accounts for more
than a third of global
economic output. It
also may be headed for a break-up
— and that’s a risk to which policymakers everywhere should be
paying a lot more attention.
I’m talking, of course, about the
United States and China. For more
than 20 years, China has kept the
yuan’s value against the dollar in a
very tight range. Although the exchange rate isn’t actually pegged
(the Chinese currency has appreciated at a rate of about 2% per year
against the dollar over the past 10
years), financial markets have come
to expect little short-term volatility,
and were unpleasantly surprised
when the yuan dropped 1.9% in one
day against the dollar last August.
This connection between the
yuan and the dollar has important
implications for the impact of US
monetary policy on China. Changes
in the US Federal Reserve’s interest-rate target affect the US economy in part by causing the dollar
to appreciate against other currencies, such as the euro and the yen.
If China holds its exchange rate
to the dollar stable, the Fed’s moves
will also cause the yuan to appreciate against those other currencies,
putting downward pressure on Chinese inflation and employment at
a time when this might not be appropriate for the Chinese economy.
Over the past couple of decades,
China has been able to offset the
effects of Fed policy by varying its
relatively large level of public investment. It has always been clear,
though, that China would no longer
want to use fiscal policy in this way
once its economy was sufficiently
developed.
The country’s currency moves
over the past few months suggest
that it might have reached this
point. In other words, the time may
have come for China to break away
from its currency union with the US.
Any such break-up presents
a big problem. Many businesses and financial institutions have
entered into contracts that make
sense only under the premise that
the exchange rate is not going to
vary much over time. If, say, a Chinese firm owes a lot of US dollars
to a lender, a sudden change in the
yuan to dollar exchange rate can
make the debt unbearable, precipitating a default that would harm
both the borrower and the lender.
These risks matter not only for the
Chinese economy, but also for the
state of global finance and for the
US economy.
As far as I can tell, US economic
policymakers aren’t putting much
emphasis on the potential repercussions of a break-up of the China-US
currency union. This approach
could be justified if the economy
in question were the size of, say,
Argentina’s (which ended its currency peg with the US in the early
2000s). But it’s not. US and Chinese
policymakers must recognise the
global importance of their currency
union and pursue its inevitable dissolution in a much more collective
and deliberate fashion.
US monetary policy should be
at the top of their agenda: There’s a
significant risk that if the Fed keeps
tightening in 2016, it could force
an abrupt break-up. The resultant disorder in the world economy
would not serve Americans well.
— Bloomberg View
Narayana Kocherlakota is a
Bloomberg View columnist. He
served as president of the Federal
Reserve Bank of Minneapolis from
2009 through 2015.
ON paper, the Nine Elms redevelopment project certainly has a lot
going for it. Described by London
Mayor Boris Johnson as “the most
important regeneration story in
London”, Nine Elms is reportedly
the last major development site
close to central London. It will see
the development of 20,000 new
homes, including the massive Battersea Power Station project, over
a 20-year period.
The proposed relocation of the
US embassy from Grosvenor Square
to new US$1 billion (RM4.13 billion) premises in Nine Elms has
resulted in what some in the media call “the embassy effect”, with
the Dutch embassy following suit
and the Chinese government rumoured to have shortlisted the area
for its new embassy as well. This
has sparked anticipation of Nine
Elms becoming London’s newest
diplomatic quarter and inspired numerous luxury apartment projects
in the vicinity, including Embassy
Gardens by Ireland’s Ballymore and
Malaysia-owned EcoWorld, which
boasts plans for a “world-first” concept pool bridging two apartment
blocks.
Add to the mix improved transportation links with the extension of
the London Underground’s Northern Line and a recent Knight Frank
report identifying the area as an
emerging commercial property
“hotspot” for investors and it’s no
wonder the area has been popular
with property buyers, particularly
those purchasing off-plan from
abroad.
Recent news, however, indicates
that interest in Nine Elms’ luxury
homes seems to be waning. City AM
reported that more than 50 flats at
the Battersea Power Station development had seen their sale prices
slashed, some with discounts of
as much as 38%. Citing data from
property search engine Propcision,
the London business daily also noted that since last year, 197 properties in the development had been
put up for resale, of which 76 units
had seen price reductions since the
third quarter of 2015.
Speaking to IBTimes UK, Propcision co-founder Michelle Ricci qualifies that while the data
seems to indicate a downward
trend, prices were not necessarily
below market value. And indeed,
Battersea Power Station Development has said in response to
these reports that the 10% of the
development’s purchasers who
have resold their units have seen
an average 30% price growth. This,
however, does not discount the
possibility that prospective sellers
are cutting prices because they
are increasingly nervous about
the outlook going forward, and
some are even walking away from
their commitment to purchase.
Head of property agent Glentree
International Trevor Abrahmsohn
told the Evening Standard recently that Asian buyers for new-build
property in areas such as Nine
Elms — mainly from Malaysia,
Singapore, Hong Kong and China — were willing to forfeit their
10% deposits and cut their losses
before completion. He cites tax
changes as “the straw that broke
the camel’s back”, referring to the
extra 3% stamp duty charged on
buy-to-let or second homes that
will come into effect this April. This
follows a move by the government
in end-2014 to increase stamp duties on properties worth over £1.5
million (RM8.8 million) to 12%.
Nine Elms was already experiencing a wave of “flat-flipping” last
year, according to a Financial Times
report in July 2015. Some have taken this as an indication of foreign
investors wanting out of their uncompleted investments as they fear
a glut of luxury homes in London.
Research by LonRes, Dataloft and
Property Vision released in January 2015 showed there were about
54,000 homes, most of them priced
around £1 million, in the pipeline
for the area spanning Earls Court,
Regents Park, Tower Bridge and the
South Bank. However, only 3,900 of
those worth over £1 million were
sold in 2014.
In 2015, sales of new-build flats
in prime London areas, such as
Kensington and Chelsea and Westminster were down 47%, according
to data from London Residential
Research, the Evening Standard
reports. And the outlook is not any
better, with Morgan Stanley expecting a 10% to 20% drop in newbuild, high-end residential pricing
this year. This weakening market
sentiment has been attributed to
not just the potential oversupply of
upmarket apartments. Other factors include reduced affordability
in light of higher stamp duties and
the relative strength of the pound
sterling against Asian currencies,
as well as worries about the slowing
Chinese economy, falling commodity prices, and the UK’s forthcoming
referendum on its European Union
membership.
Naysayers will no doubt say they
could see this coming, and that
it is a sign of the market adjusting to more realistic levels. This
is happening amid criticism that
developers have been building
expensive homes to cash in on
the recent house price boom and
strong foreign demand for London homes, even as the capital city
faces a severe shortage of affordable homes for locals. Nine Elms
remains exciting and promising
over the longer term because of
its scale, but against the current
backdrop, expectations will need
to be toned down.
Lim Yin Foong was founding editor
of Personal Money, a Malaysian
personal finance magazine published by The Edge Communications.
She is currently based in the UK.
20 W O R L D B U S I N E S S
Indonesia 2016 growth
forecast cut to 5.1%
World Bank sees revenue miss will constrain government spending
JAKARTA: The World Bank has
trimmed its 2016 growth forecast
for Indonesia, saying a miss on the
government’s revenue target will
constrain government spending.
In a quarterly review of Indonesia’s economy released yesterday,
the multilateral lender revised the
growth outlook to 5.1% from 5.3%
in December.
At about the same time, the International Monetary Fund issued its
annual Indonesia policy review, in
which it forecast economic growth of
4.9% this year, up from 4.7% in 2015.
The World Bank said its downward revision stemmed from weaker-than-expected global conditions
and constraints the government faces
on spending, which mean growth
will depend more on private sector
spending.
Filepic of shipping containers seen at
Tanjung Priok Port in north Jakarta.
Indonesia will probably miss its 2016
revenue target by 275 trillion rupiah.
Photo by Reuters
Indonesia will probably miss its
2016 revenue target by 275 trillion
rupiah (RM86.5 billion), the bank
said. It projected revenue of 1,547
trillion rupiah, about 3% higher than
last year, not taking into account a
BoJ holds fire on fresh
stimulus after rate move
tax amnesty plan the government
has announced.
The government’s revenue target is 1,822 trillion rupiah. A sizable
shortfall can force cuts in state spending, as Indonesia has a law limiting its
How to beat the rise of
the trading machines
BY S WAHA PATTANAI K
TOKYO: Japan’s central bank yesterday held fire on unleashing
more stimulus, after its surprise
introduction of negative interest
rates earlier this year was slammed
as a desperate bid to stir growth.
The decision was widely expected, as policymakers gauge
the impact of their unprecedented
move, but analysts predicted the
Bank of Japan (BoJ) will be forced
to act again after the world’s number three economy shrank in the
last quarter of 2015.
“Sluggish economic activity and
the stronger yen suggest that policymakers will have to announce
more easing soon, probably next
month,” said Marcel Thieliant from
research house Capital Economics.
The policy announcement was
the BoJ’s first since it shocked markets in January by unveiling a below-zero interest rate policy, effectively charging commercial banks
to deposit some of their reserves
in its vaults.
The unprecedented move for Japan’s central bank is aimed at giv-
ing banks an incentive to lend out
money and, in turn, stoke growth
in the wider economy.
But the plan was widely panned
as a “Hail Mary” that was unlikely
to boost loans, given already weak
demand from both businesses and
ordinary people.
BoJ chief Haruhiko Kuroda cited financial market turmoil and
slowing growth in China as he
ushered in the -0.1% rate for new
reserves, and said the bank may
go even further into negative territory.
The bank pointed to a “moderate recovery” in Japan’s economy
for staying its hand yesterday, but
conceded that exports and industrial production have been weak
because of a slowdown in emerging economies.
It made no change to its ¥80 trillion (RM2.93 trillion) asset-buying plan.
The BoJ’s policies are a cornerstone of Prime Minister Shinzo
Abe’s big spending, easy money
growth plan, dubbed “Abenomics”. — AFP
fiscal deficit to 3% of gross domestic
product (GDP).
According to the bank, the government “has two policy options:
expand the deficit within the fiscal rule of 3% of GDP and reduce
non-priority spending.”
Assuming the government takes
both options, the World Bank expects
2016 expenditure disbursement to be
limited to about 91% at 1,906 trillion
rupiah, and the fiscal deficit to reach
2.8% of GDP. The government’s original plan was for 2.2%. — Reuters
LONDON: There is a glimmer of hope
for the humans whose jobs in financial services are under threat from
computers that can do their jobs faster and more cheaply. Buy-side firms
are spending more on paying traders than on technology, a new study
shows. But only a select few bankers
will beat the rise of the machines.
Asset managers spent an estimated US$15.6 billion (RM64.4 billion) on
trader compensation and technology
in 2015, up 4% from the previous year,
according to Greenwich Associates.
The share allocated to paying humans rose by five percentage points to
69%, with the bulk of the trading staff
budget earmarked for actual traders
rather than support staff.
The willingness to fork out more
money for traders may seem odd
when lay-offs on bank trading floors
are creating a glut of supply. Sales,
trading and research headcount in
fixed income, currencies, commodities and equities has fallen by 23%
globally in the past five years, according to analytics firm Coalition. And
there’s no end in sight to the trend
with the likes of Deutsche Bank and
Credit Suisse announcing more layoffs this year.
Still, not everyone has the skills to
land a job in asset management. Buyside firms want traders with a good
cross-asset grounding rather than
tunnel vision in a world where, for
example, what happens to equities or
bonds can hinge on swings in oil. The
ability to read and deal with increasingly whimsical financial markets is
also crucial at a time when 10% asset
price drops can be quickly followed by
gains of the same magnitude. Computers aren’t necessarily able to anticipate such irrational moves.
Ideal candidates need to twin such
skills with the ability to find and access liquidity even in difficult times.
Balance sheet constraints have taken
a toll on market-making and banks
have fewer staff to handle buy-side
relationships. Also useful will be the
ability to process large amounts of
data, some ability to programme and
a fearless approach to quantitative
analysis. The lucky few humans who
tick all these boxes can look forward to
machines becoming their colleagues,
not their usurpers. — Reuters
Australia to introduce tax incentives to encourage start-up investment
SYDNEY: Australia’s Prime Minister
Malcolm Turnbull said yesterday his
government will this week introduce
legislation to stimulate greater investment in start-ups, as Australia
looks to transition its economy away
from a slowing mining sector.
Australia has proposed amend-
ed tax laws that would allow retail
investors a 20% income tax rebate,
capped at US$200,000 (RM826,000)
per year on any start-up investments,
while a 10% tax rebate for venture
capital investors in established startups wishing to expand will also be
permitted.
Turnbull said the legislation will
be introduced as early as today.
The new tax laws are a key element of Australia’s plan to encourage
greater risk-taking to ease the pain
of an economic transition amid an
end to the investment phase of a lucrative mining boom that sustained
its economy for more than a decade.
“We have been from an economy that was fired up by the mining
construction boom ... but inevitably it was going to tail off so what
comes next? What comes next is
innovation,” Turnbull told reporters
in Canberra. — Reuters
IN BRIEF
Asciano broken up in
A$9.05b joint takeover
SYDNEY: Australian logistics
giant Asciano said yesterday
it was recommending a A$9.05
billion (RM28 billion) takeover
deal between two rival local and
international suitors, breaking
up the company’s ports and rail
assets. The announcement ended a bidding war for Asciano,
a major Australian rail, freight
and port operator, between a
consortium led by Canada’s
Brookfield Infrastructure Group
and a group led by Australia’s
Qube that includes a Chinese
sovereign wealth fund. Qube
will split the port business with
Brookfield, whose consortium
members include government
wealth fund the Qatar Investment Authority. — AFP
Bangladesh’s central bank
governor quits over heist
DHAKA: Bangladesh’s central
bank chief resigned yesterday,
after hackers stole US$81 million
(RM334.5 million) from the nation’s foreign reserves in one of
the biggest bank heists in history, the finance minister said. The
audacious cyber-theft has embarrassed the government, triggered outrage in the impoverished country, and raised alarm
over the security of the country’s
foreign exchange reserves of
over US$27 billion. Yesterday,
the finance minister said Atiur Rahman had stood down at
his request, after revealing that
the Bangladesh Bank governor
failed to inform authorities of
the theft for a month. — AFP
Indonesia’s February trade
surplus tops US$1.14b
JAKARTA: Indonesia produced
its largest trade surplus in seven
months in February, as exports
declined at the slowest annual
pace since October 2014. The
February surplus was US$1.14
billion (RM4.7 billion), far larger
than the US$80 million median
in a Reuters poll. Southeast Asia’s
largest economy, which mainly
exports commodities, has long
been struggling with weak prices for its main products such as
coal, palm oil and tin, as well
as oil and gas. In February, exports contracted for the 17th
straight month, falling 7.8% from
a year earlier to US$11.3 billion,
data from the statistics bureau
showed. — Reuters
Toyota says near agreeing
to monthly wage rise
TOKYO: Toyota Motor Corp yesterday said it was close to agreeing to a monthly base wage increase of ¥1,500 (RM55) for the
coming year, which would be half
of the ¥3,000 rise demanded by
its labour unions. “The details are
being finalised regarding a provisional agreement to meet the
union’s original request for bonus and to offer a wage increase
of ¥1,500 per month for the average union member,” a Toyota
spokesman said. The company
said it was also planning to meet
in full the unions’ demand for a
one-off bonus worth 7.1 months
of wages. — Reuters
W O R L D 21
Russia begins Syria withdrawal
BY MA X D EL A N Y
& L AYA L A B OU RA HAL
MOSCOW: Russia began withdrawing its forces from Syria yesterday, a
move hailed as a potentially “positive
step” for a new round of United Nation (UN)-backed peace talks seeking
to end the conflict.
Warplanes at Moscow’s Hmeimim
air base in Syria were being loaded with military equipment and
prepared to fly back to Russia, the
defence minister announced, after
Mass killer
makes Nazi
salute as he sues
Norway state
BY GWL A DYS FOU C HE
SKIEN (Norway): Mass killer Anders
Behring Breivik made a Nazi salute
at the start of a court case yesterday
in which he is accusing the Norwegian state of inhuman treatment
by keeping him in isolation after
he massacred 77 people in 2011.
The far right militant appeared
in public for the first time since his
2012 trial. In that time, he has had
just one visitor, his mother, who
was allowed into prison and gave
him a hug shortly before she died
of cancer in 2013.
Wearing a black suit, white
shirt and golden tie, the 37-yearold raised his right arm in a Nazi
salute as he arrived. He did not
say anything. He had shaven off a
beard and short blond hair from
the previous trial.
It was considered too dangerous
to hear the case in Oslo and the
court is sitting inside the prison’s
gymnasium, whose walls are lined
with timber wall bars and a climbing
wall as well as two basketball hoops.
Breivik will argue that his isolation in the Skien jail violates a
ban on “inhuman and degrading
treatment” under the European
Convention on Human Rights, as
well as depriving him of a right to
family life.
“He wants contact with other
people,” his lawyer, Oeystein Storrvik, told reporters before the March
15-18 trial.
Oslo’s office of the Attorney General says there is no case to answer,
saying in pre-trial documents: “there
is on evidence that the plaintiff has
physical or mental problems as a
result of prison conditions”.
The judge’s verdict — there is
no jury — will be issued in coming
weeks. Breivik killed eight people
with a bomb in Oslo on July 22,
2011, and gunned down 69 others
on an island nearby, many of them
teenagers. He is serving Norway’s
maximum sentence of 21 years,
which can be extended.
In prison he has a three-room
cell with a television and a computer
but no Internet access. He is allowed
out into a yard for exercise. He only
meets guards and medical personnel — even Storrvik has to speak to
him through glass. — Reuters
President Vladimir Putin said its military goal had been “on the whole”
completed.
Putin on Monday ordered the
withdrawal of “the main part” of Russia’s forces after talks with long-standing ally, Syrian President Bashar
al-Assad.
The surprise move won backing
from Angola’s Ambassador Ismael
Gaspar Martins, who holds the Security Council’s rotating presidency
this month.
But hopes for a breakthrough at
the Geneva talks remained remote
with both sides locked in a bitter
dispute over Assad’s future.
As the talks enter its second day,
UN envoy Staffan de Mistura was expected to hold his first official meeting with the Syrian opposition High
Negotiations Committee (HNC), who
has repeatedly said that Assad could
not be part of Syria’s political future.
But the withdrawal of the Russian
troops — which began airstrikes in
support of the regime in September, sparking condemnation from
IN BRIEF
Western powers — is expected to put
more pressure on Assad to negotiate
during the Geneva talks.
The Russian ambassador to the
UN Vitaly Churkin also said the
Kremlin’s move would boost chances
of a diplomatic solution to the conflict now in its sixth year.
The White House said President
Barack Obama had spoken to Putin
following Russia’s announcement,
and discussed the “next steps required to fully implement the cessation of hostilities”. — AFP
First Myanmar
civilian president
elected in decades
Htin Kyaw will take office on April 1
BY KELLY M AC NAM ARA
& HLA-HLA HTAY
NAYPYIDAW (Myanmar): Myanmar’s lawmakers yesterday elected
a close aide and long-time friend
of Aung San Suu Kyi to become the
country’s first civilian president in
decades, a historic moment for the
formerly junta-run nation.
Htin Kyaw, 69, hailed his elevation to the top post as “Suu Kyi’s
victory”, a clear nod to her plan for
him to serve as a proxy for the Nobel laureate who is constitutionally
barred from becoming president.
Members of parliament (MPs)
erupted into applause after victory
was announced following a lengthy
ballot count by hand in the capital
Naypyidaw in which Htin Kyaw
took 360 of 652 votes cast.
Suu Kyi’s choice of Htin Kyaw
to act in her place is seen as a testament to her absolute faith in his
loyalty.
“This is sister Aung San Suu Kyi’s
victory,” the newly elected president told reporters after the vote.
Htin Kyaw will take office on
April 1, replacing incumbent Thein
Sein’s five years of army-backed
SAO PAULO/BRASILIA: Brazil’s former president Luiz Inacio Lula da
Silva will likely accept a position in
President Dilma Rousseff ’s cabinet,
but planned to travel to Brasilia yesterday to discuss his options with her
in person, a source said on Monday.
Brazil’s top three papers also reported late on Monday that Lula
WASHINGTON: American lawmakers voted on Monday to label
Islamic State (IS) group atrocities in Syria and Iraq “genocide,”
and called for setting up Syrian
war crimes tribunal under United Nations (UN) authority. The
House of Representatives unanimously passed a non-binding
resolution pressuring President
Barack Obama’s administration
to call attacks against Christians, Yezidis and other minorities “war crimes, crimes against
humanity and genocide.” In a
second measure, representatives
voted 392 to three for a resolution urging the White House to
urge the UN Security Council to
immediately establish a Syrian
war crimes tribunal, calling actions by the Syria’s government
and others “gross violations of
international law amounting to
war crimes and crimes against
humanity — AFP
Vatican to approve sainthood for Mother Teresa
VATICAN CITY: Mother Teresa
was to be cleared to become a
saint yesterday after a Vatican
panel recognises a second miracle attributed to the late nun
famed for her work with the
poor of Kolkata. The committee
of senior clerics that approves
elevations to sainthood is due
to meet from around 0900 GMT
with the long-awaited green
light seen as a formality, less
than two decades after her
death. Pope Francis will then
sign a decree approving the
canonisation of the 1979 Nobel peace prize winner and
announce a date and venue
for it to happen. — AFP
IS commander ‘Omar the
Chechen’ dead, US confirms
Htin Kyaw (second from left) and Suu Kyi (centre) leaving the parliament in Naypyitaw,
Myanmar, yesterday. Suu Kyi’s choice of Htin Kyaw to act in her place is seen as a
testament to her absolute faith in his loyalty. Photo by Reuters
quasi-civilian leadership that has
been lauded for steering the nation
out from the shadow of outright
military rule.
The two other candidates who
were also running in yesterday’s
election will now become the coun-
try’s joint vice-presidents.
They are retired general Myint
Swe, an army-backed candidate
who remains on Washington’s
sanctions list and won 213 votes,
and ethnic Chin MP Henry Van
Thio, who gathered 79 votes. — AFP
Brazil’s Lula likely to take cabinet position — source
BY CAROLINE S TAU FFE R
& LISANDRA PA RAG UAS S U
US Congress calls IS
atrocities ‘genocide’
was expected to accept a ministerial position in the coming days, after
a crusading federal judge was given jurisdiction to rule over money laundering charges presented
against him.
Any decision to arrest Lula would
now be made by Federal Judge Sergio
Moro, who oversees a sweeping investigation into kickbacks at state-run oil
firm Petrobras and approved the detention of dozens of senior executives.
State prosecutors filed for the arrest of Lula last week after charging
him with money laundering for concealing ownership of a beachfront
condo, in a case that had been separate from the investigation overseen by Moro in the southern city
of Curitiba.
Accepting a cabinet position
would give Lula immunity from
Moro, though not from Brazil’s Supreme Court. — Reuters
WASHINGTON: A top Islamic State (IS) group commander
known as “Omar the Chechen”
is dead after suffering injuries
in a US-led coalition strike in
northeastern Syria, the Pentagon confirmed on Monday. The
announcement would appear to
clear up the fate of the notorious
Omar al-Shishani, a week after a
US official said the most-wanted
militant had been targeted in a
March 4 attack on the jihadist’s
convoy. Shishani — the nom de
guerre of Tarkhan Batirashvili —
was one of the IS leaders most
wanted by Washington. — AFP
Canada gives computers
to Syrian refugees
OTTAWA: Canada is providing
7,500 refurbished computers to
Syrian refugees and hopes to give
them a leg up in school and in
job searches with new technology skills training, it announced
on Monday. The computers are
to be distributed by resettlement
organisations through an existing Computers for Schools
programme that makes computer equipment available “at
little or no cost to those who may
not otherwise have access to
technology and opportunities to
learn digital skills,” said a statement. — AFP
22
live it!
WE
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
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SWING FOR CHILDREN
Naza TTDI’s annual charity
golf event continues its
journey in helping the less
fortunate among us
BY HANNAH M ERICAN
O
ne of the most important things in
life is to give back to the community
and Naza TTDI is doing just that with
their Swing For the Children charity
golf event. The event which will take
place tomorrow at the Kuala Lumpur
Golf & Country Club aims to raise RM500,000 and
the money is to be distributed evenly to 20 children’s
charity homes nationwide.
The money will be used to assist in improving
the quality of life and education of under-privileged Malaysian children. Between the period
of 2003 and 2011, the Naza Charity Golf Tournament has raised a total amount of RM7.8 million
for various charitable organisations. This noble
effort will also include prizes for lucky participants including a Peugeot 308 for a hole-in-one
prize and three grand lucky draw prizes for trips
to Istanbul, Maldives and Yangon.
Charities that benefit from this fundraiser will
include the Ti-Ratana Welfare Society, Pertubuhan
Rumah Amal Cahaya Tengku Ampuan Rahimah
(Ractar) and the Spastic Children’s Association
of Selangor and Federal Territory (SCAS FT) all
of which would do a great deal for underprivileged children.
The Ti-Ratana Welfare Society is a shelter that
provides education and care to underprivileged
children in the community. More than half of
the children at the society come from broken
families and a background check is done before they move in to the shelter. The Ti-Ratana
Welfare Society currently runs three orphanage
homes for boys and girls, three old folks homes
and one women’s shelter. All children who live
at the shelters must attend school and complete
their education until SPM level. There have been
several success stories from the centre, with a
girl receiving a scholarship to study nursing at
International Medical University and a boy receiving a scholarship from Megatech University
to study engineering.
Established in 1990 by Yang Amat Mulia Tengku
Puan Sri Datin Seri Puteri Nor Zehan Binti Sultan
Salahuddin Abdul Aziz Shah Alhaj, RACTAR is a
non-profit organisation (NGO) that offers a home to
orphaned and poor girls from all over the country.
The girls that live in the home have gone through
a great deal in their lives and are either orphaned,
abused or abandoned. This NGO is dependent on
public donations and corporations. The centre offers vocational training services to all girls living
there. At the moment, there are 50 girls staying at
RACTAR aged between five and 28. The home has
also recently partnered with the United Nations
High Commissioner for Refugees to accommodate a 17 year old Rohingya refugee with a seven
month old baby.
The SCAS FT is an organisation that helps disabled people with cerebral palsy by giving them
education therapy and rehabilitation training at
the centre. There are currently 102 disabled people receiving therapy and training at the centre.
The association is equipped with various services including physiotherapy, speech therapy and
occupational therapy. Facilities at the organisation include clinics, classrooms, hydrotherapy
pool, training kitchen and special sports training
equipment. The SCAS FT has been funded solely
by private corporations and individual donations,
after government grants ceased in 2014.
The Edge Media Group is the official media
partner for the Swing for Children golf tournament.
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live it! 23
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
MUSIC
BY HANNAH M ERICAN
A Siti Nurhaliza and friends concert
PICK OF THE DAY
(From left) Hafiz, Celcom Axiata chief of sales and marketing officer Zalman Aefendy Zainal Abidin, Siti, Yonder Music founder and chief
executive officer Adam Kidron and Faizal.
MALAYSIAN songstress Datuk Siti Nurhaliza will
be celebrating her 20 year reign of the local music
industry with her special concert Datuk Siti Nurhaliza & Friends on April 2. The live concert by Celcom
Axiata Bhd will be held at Stadium Negara with a
star-studded line-up exclusively for Xpax customers.
Considered one of the longest reigning singers
in the Malaysian music industry, Siti has a multiple list of accomplishments to her never-ending
résumé. She is the first Malaysian artist to perform
a solo concert at the Royal Albert Hall in London
and won over 200 awards locally and internationally. Aside from her music, she runs her own beauty
brand, SimpliSiti Di Hati and also her own charity
foundation Yayasan Nur Jiwa.
The concert will be the first of Yonder Music live
events and will showcase duets between Siti, Anggun, Afgan, Faizal Tahir, Hafiz Suip and Cakra Khan.
They will be accompanied by a 47 piece orchestra
featuring The Gotham All Stars, a funky band of
players hailing from New York City. The Gotham
All Stars have previously worked with big names in
the music industry including Mariah Carey, Justin
Timberlake and Katy Perry.
Xpax customers will stand a chance to catch this
exclusive concert as they will be giving away 2,500
exclusive twin passes to anyone who is active on
Yonder Music. They can do this by sending an SMS
<ON SITI> to 28882 and to subscribe to any monthly
internet pack. This will activate the Yonder Music
app. To find out more visit www.xpax.com.my for
ticketing options.
Personal
ASSISTANT
CO MPI L ED BY HA NNAH M ER ICAN
WORK. LIFE. BALANCE
WATCH some of Shakespeare’s best film adaptations with Kuala Lumpur Performing Arts
Centre’s (KLPac) World’s Best Movies: William
Shakespeare 400 years this week. In celebration of 400 years of Shakespeare, KLPac will
be presenting some of the playwright’s work
that has been adapted to film. The films chosen
have been curated by Datuk Faridah Merican
and Joe Hasham OAM. Films in the screening
include Shakespeare in Love, Gnomeo & Juliet
and West Side Story. Entry is subject to first
come first serve basis. The movie screenings
will be on from today until Saturday and starts
at 8pm. Admission is free. KLPac is located at
Jalan Strachan, Sentul, Kuala Lumpur. For
more information call (03) 4047 9000.
GET your hands on Coldplay’s latest album A Head Full
of Dreams which is out in record stores nationwide and
released by Warner Music Malaysia. Featuring hits such
as Adventure of a Lifetime and Hymn for the Weekend, the
album also includes collaborations with Beyoncé, Noel
Gallagher and Tove Lo. Produced by renowned record
producer Rik Simpson and Norwegian duo Stargate,
expect lots of uplifting and positive songs. The album
was recently nominated for British Album of the Year
at 2016 Brit Awards. A Head Full of Dreams is priced at
RM54.90 nationwide.
CATCH renowned jazz singer Ian Shaw perform
at No Black Tie tonight. Performing a mixture
of jazz standards and re-worked contemporary
songs (Joni Mitchell, David Bowie and Michel
Legrand) as well as songs from his album The
Theory of Joy. Known as one of the most distinctive, original and creative jazz singers the
United Kingdom has produced, Shaw has been
voted ‘Best Jazz Vocalist’ twice at the BBC Jazz
Awards. Shaw will be performing tonight and
tomorrow night at 9pm. There will be a cover
charge of RM70. No Black Tie is located at 17
Jalan Mesui, off Jalan Nagasari, Kuala Lumpur.
Visit www.noblacktie.com.my to find out more.
CHECK out the exhibition entitled Liew
Kwai Fe- Siapa dia
Tong Sam Pah? At
Richard Koh Fine
Art today. A solo exhibition by Liew Kwai
Fei, the series explores how ideology
infuses meaning into
signs. Liew analyses
how signs function as
well as their associations and meanings
by highlighting the subtleties and intricacies of
their work in society’s every day consumption
and thinking. Through his artwork, he is able
to actively engage in the subject matter and
make him examine certain forms of ideology
and symbolism. The exhibition will be on until March 31 from 11am to 8pm daily. Richard
Koh Fine Art is located at Level 2, Bangsar
Village II, Jalan Telawi 1, Bangsar Baru, Kuala
Lumpur. To find out more call (03) 2283 3677.
WEDN ESDAY M ARC H 16 , 2 0 16 • TH EEDGE FI N AN C I AL DAI LY
24 F E AT U R E
You deserve a better financial adviser
They have power to profoundly improve lives, but also to do great harm
BY NI R KA I SSA R
Financial advisers are often
p e rc e i v e d a s
dishonest, and
consistently
rank among the
least trustworthy professionals.”
So proclaims the Capital Ideas
Blog of the University of Chicago’s Booth School of Business
in a post about a new study that
finds that 7% of advisers have
been disciplined for misconduct.
My Bloomberg colleague Barry Ritholtz rightly calls this an
astonishingly high number, but
the business of financial advice
suffers from an even more astonishing problem: Precious little is
required to become a financial
adviser.
Want to be a financial adviser in the United States? All you
have to do is pass the Uniform
Investment Adviser Law Examination, a three-hour exam that
covers a variety of law and investment-related subjects. Just
pay the US$165 (RM682) exam
fee and answer 72% of the questions correctly — a feat that realistically requires several weeks
of study — and you’re in.
Ever heard anyone complain
about how difficult it is to pass
the investment adviser exam?
Now you know why.
Compare this laughably low
bar with the prerequisites to practice medicine, law or accounting.
Each of these professions requires
formal education, a famously rigorous licensing exam, and then
continuing education — none of
which is required of investment
advisers. My guess is that very
few people would trust a doctor,
lawyer or accountant whose only
credential is passing a three-hour
exam. So why aren’t we demand-
Want to be a financial adviser in the US? All you have to do is pass the Uniform Investment Adviser Law Examination, a three-hour
exam that covers a variety of law and investment-related subjects.
ing more of financial advisers?
Advisers have the power to
profoundly improve lives by encouraging saving and responsible investment. But like other
professionals, they also have the
power to do great harm, as we are
reliably reminded every few years
in the media or the courts with
a fresh variation of the financial
scandal theme.
The answer to these scandals
is always the same: more regulation. Yet no industry is more
regulated than financial services,
and we still aren’t seeing better
outcomes. Yes, regulation is absolutely necessary, but we need
to own up to the fact that too
many advisers don’t have a clue
as to what’s in the regulations or,
more fundamentally, are not adequately trained to do their jobs.
It’s time for financial advisers
to join the family of professions in
substance, and not just in name.
We should require that aspiring
advisers complete a minimum
amount of undergraduate or graduate-level coursework in finance,
accounting, or economics, and
pass a multi-day comprehensive
exam that covers — at a minimum
— law and regulation, economics,
financial statement analysis, and
portfolio management.
Advisers should also be bound
by a code of ethics that aims higher than what current regulations
mandate. Given the ever-increasing pace of financial innovation,
continuing education should simply be mandatory for maintaining
a licence.
A better trained and more accountable corps of advisers would
undoubtedly raise the quality
of financial advice. It may also
reduce the high rate of misconduct because: i) advisers will be
required to invest substantially more time, money and effort
into joining the profession, and
will thereby have more to lose
by engaging in misconduct; ii)
a high hurdle for licensure will
naturally discourage less serious
candidates who may be inclined
to cut corners as advisers; iii) a
rigorous admission standard will
raise the value and prestige of
advisers’ careers, reducing the
temptation to bend the rules; and
iv) advisors will be properly inculcated in high ethical standards.
Granted, it would be unfair
and impractical to impose new
licensing requirements on already
licensed advisers, but there is no
reason why all advisers shouldn’t
undertake continuing education.
The number and diversity of investment options today would
have been unthinkable to an adviser who began his or her career
two decades ago. We implore investors to keep up with financial evolution — shouldn’t we
demand at least that much from
advisers?
Without better training, more
regulation will never be enough
to improve advisers’ behaviour.
If investment advisers want to be
trusted professionals, they must
first become a profession. If they
don’t, count on more horror stories about unethical, fraudulent
or errant financial advisers.—
Bloomberg
Nir Kaissar is a Bloomberg Gadfly
columnist covering the markets.
He is the founder of Unison Advisors, an asset management firm.
He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young.

`undervalued` malaysian market

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