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https://theedgemalaysia.com/node/62315

Hot Stocks: PPB leads plantation stock rise after Mistry’s bullish CPO price forecast

English

KUALA LUMPUR (Dec 2): Plantation stocks, led by major PPB Group Bhd, rose today after a bullish forecast on the price of crude of palm oil (CPO) by a prominent industry expert. Analyst Dorab Mistry, in his latest outlook on CPO prices, said there is a possibility that CPO prices may touch RM3,000 per mt by March next year. Mistry’s forecast is normally taken seriously by edible oil market players. At 12.30 pm midday break, the plantation index on Bursa Malaysia rose to 8,894.57 points after it climbed 14.52 points or 0.16%. It had earlier hit a high of 8,900.77 points. On the stock exchange, PPB Group Bhd was a top gainer with trades of 47,500 shares.  It rose 14 sen or 0.9% to RM15.00. Genting Plantations Bhd rose 4 sen or 0.4% to RM11.04 on trades of 19,300 shares. TH Plantations Bhd rose 7 sen or 3.9% to trade higher at RM1.87 on trades of 142,000 shares. TSH Resources Bhd was up 4 sen at RM2.85 at noon. In a note, Kenanga Research highlighted what the prominent analyst has said about CPO prices. Mistry has said CPO prices may hit higher levels if Brazil implements a higher biodiesel mandate. Between December this year and March next year, he expects CPO prices to increase higher with a predicted range of RM2,600 to RM2,900 per mt. But Kenanga research analyst Alan Lim Seong Chun warned that soyabean oil will start to complete very aggressively with CPO at RM2,900. “We gather that his (Mistry) short term bullish view is premised on good biodiesel demand in Indonesia and poor CPO output currently in Indonesia.” Lim said pending the latest Malaysian Palm Oil Board data on Dec 10, he is maintaining his ‘neutral’ call on the sector. “We expect all planters to benefit from higher CPO prices…We opine TSH would be closely watched as we expect it to benefit additionally from better CPO prices and superior fresh fruit bunches volume growth.”

https://theedgemalaysia.com/node/54566

Queensland the ultimate winner in Million Dollar Memo contest

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KUALA LUMPUR: Although Indonesia’s Rusman Salem Mustam, vice-president for international business development at ADR Group of Companies, may have won the Million Dollar Memo challenge organised by Tourism Queensland, the clear winner is Queensland’s tourism industry. The winner of A$1 million (RM3.16 million) worth of incentive travel was announced by Australian Minister for Tourism, Manufacturing and Small Business, Jan Jarratt, in Port Douglas in Queensland last Wednesday. Tourism Queensland CEO Anthony Hayes said Queensland’s tourism industry would be the ultimate winners of the Million Dollar Memo. “When these 20 finalists return to their workplaces, we want them to tell their bosses that Queensland is the best place in the world to reward their staff,” he said in a statement announcing the winner. The eight-day incentive challenge involved 20 finalists from all over the world who travelled to various attractions in Queensland, hoping to win the A$1 million worth of travel experiences to the state for their co-workers. The campaign had been in the works for 18 months and was launched in March. Companies worldwide were invited to compete in the challenge by sending a 60-second video on what makes their companies a great place to work and why Queensland is the ultimate reward destination. A total of 291 entries were received — 70% from the Asia-Pacific — and this was whittled down to a top 70-shortlist and then a final 20. Representatives from the 20 companies then met in Queensland for the final phase of the competition — an incentive challenge event held over the last eight days of August in the Gold Coast, the Sunshine Coast and the state’s tropical north including the Great Barrier Reef. Tourism Queensland worked with integrated marketing agency Sapient Nitro on the Million Dollar Memo campaign. Both previously worked together on the Best Job in the World campaign in 2009. “All work places are cluttered with information, what’s a universal idea that’s easily identifiable? You mention Memo and everybody understood it,” said Tourism Queensland marketing executive director Steve McRoberts. The challenge is part of Tourism Queensland’s four-year strategy aimed at positioning the Sunshine State as Australia’s leading destination for incentive travel. “We wanted something to ignite this strategy, to let people know we’re here and we’re a worthy destination and we can deliver,” McRoberts said of the Million Dollar Memo challenge. While the leisure market remains an important segment and incentive travel is booming in Queensland, Tourism Queensland “took a good look” at the incentive travel market and saw the potential for further growth. Incentive travellers spend 2.5 times more per day than international visitors. It is estimated that incentive travellers spent about A$334 million each year in Queensland and Tourism Queensland aims to grow the amount to A$600 million in five years. The Million Dollar Memo campaign is geared towards that goal, having generated A$14 million worth of publicity for Queensland around the world so far, according to Tourism Queensland. Up to Aug 19, the campaign’s website milliondollarmemo.com had attracted 811,000 visitors, generating 2.4 million page views. According to Tourism Queensland estimates, the campaign message has reached an audience of around five million, including the entrants’ personal contacts, business networks, customers and suppliers. The marketing activity undertaken by these companies has an approximate media value of A$6 million. One difference between the Best Job campaign and Million Dollar Memo may be the “multiplier” effect from the buzz generated by employees of companies that sent in entries. This is because where the Best Job campaign was an individual effort; the Million Dollar Memo campaign involved the entire company. And what exactly did the 20 finalists do in Queensland?Travelling to popular destinations in Queensland, the finalists experienced the ultimate incentive travel holiday flying in helicopters, cooked with celebrity chefs and snorkelled at the Great Barrier Reef, among other things. The finalists also pitted their skills and strength against each other in cooking competitions and beach games.   The finalists were assessed and judged based on specific criteria such as creativity, team spirit, participation, leadership, appreciation of Queensland as an incentive reward destination as well as interaction with each other, Tourism Queensland representatives and media members. “My experience at the Million Dollar Memo challenge exceeded my expectations. Mixing with 19 people from different cultures is certainly an eye-opener for me,” said Jeff Wong, Malaysia’s representative from Hong Leong Assurance Bhd. Another finalist Shawn Alister Godwin, a Brisbane-based architect, said the experience was slightly different for him since he has been to most of the destinations. “But I think it’s great for others who haven’t been here. And some of these things in my backyard, I have taken for granted. I mean in my 39 years, I have never cuddled a koala before,” he said. As for Rusman, he has become everyone’s favourite colleague at work for winning a holiday for the entire company. In a statement by Tourism Queensland, Rusman said it was an honour to have won the Million Dollar Memo. “As part our prize, the ADR Group will bring as many of our employees, clients and partners to Queensland as possible,” he said. Hayes said that while the judges had difficulty choosing just one finalist, Rusman demonstrated that he, more than any other finalist, had earned the A$1 million in Queensland travel rewards for his company. “Throughout the entire event, Rusman showed us that he was a fantastic ambassador for both his company and Queensland,” he said. “His enthusiasm for the challenges we set, his obvious love of Queensland and his strong sense of leadership, teamwork and adaptability make him a worthy winner.” Tourism Queensland’s partners in the Million Dollar Memo campaign include Virgin Australia, Etihad Airways, Gold Coast Convention Bureau, Business Events Sunshine Coast, Tourism Whitsundays Convention Bureau and Business Events Cairns & Great Barrier Reef.   This article appeared on the Media & advertising page, The Edge Financial Daily, Sep 8, 2011.

https://theedgemalaysia.com/node/87033

Sir Richard Branson's Caribbean island paradise reopens

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(RELAXNEWS) - After burning to the ground in a spectacular fire two years ago, Sir Richard Branson’s luxury Caribbean Necker Island hideaway has reopened for business. It was a headline-grabbing event in 2011, when the main house was set ablaze by a suspected lightning strike forcing guests, including actress Kate Winslet, to flee. The actress was also lauded as a hero for hauling Branson’s 90-year-old mother Eve to safety. But the main Great House resort on Necker Island, Branson’s private island hideaway in the British Virgin Islands, has been restored after a two-year renovation. Inspired by Balinese designs, each of the eight guest rooms features a balcony, king-size beds and en-suite bathrooms. The Master Suite, meanwhile, clocks in at 1,500 square feet (140 square meters) and offers panoramic views of the tropical island, a two-person Jacuzzi and a kitchenette. Necker Island - its Great House and six individual Bali cabins -  can accommodate up to 30 guests plus six children. The price tag for renting out the island paradise? A round US$60,000 a night. The 74-acre island has hosted a bevy of celebrities and powerful elites including Diana, the Princess of Wales, Princes William and Harry, and former British prime minister Tony Blair.

https://theedgemalaysia.com/node/14768

KLCI stays in the red at mid-day, ringgit slumps

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KUALA LUMPUR (May 16): The FBM KLCI remained in negative territory at the mid-day break on Wednesday in line with the tumble at regional markets, while the ringgit slumped against the US dollar. Asian shares fell and the dollar rose broadly on Wednesday after efforts to form a new government in Greece collapsed, fuelling fears that a second election in June could precipitate Athens' exit from the eurozone and deepen the bloc's debt crisis, according to Reuters. In addition to Greek jitters, financials pulled Hong Kong shares down more than 2% after a mainland newspaper reported flat loan growth for the first two weeks of May by the country's "Big Four" state-owned banks, adding to concerns about an economic slowdown following weak data last week, it said. The FBM KLCI lost 14.71 points to 1,546.36 at 12.30pm, weighed by losses at key blue chips and index-linked plantation stocks. Losers thumped gainers by 635 to 96, while 223 counters traded unchanged. Volume was 514.28 million shares valued at RM743.62 million. The ringgit fell 1.09% to 3.1145 versus the greenback, crude palm oil futures for the third month delivery lost RM32 per tonne to RM3,177, crude oil fell US$1.34 (RM4.17) per barrel to US$92.64 while god lost US$7.46 an ounce to US$1,536.75. At the regional markets, Hong Kong's Hang Seng Index slumped 2.66% to 19.365.50, Japan's Nikkei 225 lost 1.45% to 8,771.66, South Korea's Kospi lost 2.4% to 1,853.33, Taiwan's Taiex fell 1.34% to 7,296.56, Singapore's Straits Times Index was down 1.31% to 2,838.99 and the Shanghai Composite Index shed 0.44% to 2,364.28. On Bursa Malaysia, Tenaga fell 25 sen to RM6.20, CIMB down 11 sen to RM7.21, Maybank lost five sen to RM8.58, Batu Kawan fell 64 sen to RM17.80, Dutch Lady and KLK fell 60 sen each to RM31.70 and RM22.30 respectively, Aeon Credit lost 48 sen to RM10.44, HLFG down 40 sen to RM11.36, PPB 38 sen to RM15.56, BLD Plantations down 35 sen to RM8.48, Nestlé down 32 sen to RM54.56, TDM down 31 sen to RM4.28 and F&N down 26 sen to RM18.52. Luster was the most actively traded counter, with 25.62 million shares done. The stock rose 12.5 sen to 16 sen. Other actives included Sanichi, Ariantec, Astral Supreme, SPMC, JCY, Petronas Chemicals and Naim Indah Corp. Gainers included KrisAssets, Luster, RHB Capital, Petronas Chemicals, Warisan, PLB and Wing Tai.

https://theedgemalaysia.com/node/94118

Nakamichi seeks control of key subsidiary

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KUALA LUMPUR: Following the removal of Nakamichi Corp Bhd CEO Lo Man Heng yesterday, the major shareholders see taking control of key subsidiary Tamabina Bhd as the next step to put the company back onto a firmer footing, according to executives close to the shareholders. Tamabina holds timber concessions in Sabah. The major shareholders of Nakamichi are Goh Kheng Peow and See Thoo Chan, who collectively own 32.94% equity interst. See is also non-executive chairman of Nakamichi. The pair had first unsuccessfully tried to oust Lo last month. Tamabina is controlled by Lo and his wife Lai Yun Fung, who together hold a 34.3% stake and serve as directors of the company. Nakamichi owns 51% equity interest in the timber firm. The executive said it would be difficult for the company and Lo to work together following the unpleasant boardroom battle at the Nakamichi level. “Together with Lo, Nakamichi is seeking to remove Lo’s wife at Tamabina’s AGM,” the source said. Following the removal of Lo, he said, Nakamichi would first seek to terminate the winding-up petition initiated by the former CEO against the company on July 31 for amounts he claimed as due to him. On June 17, Lo and Tamabina filed suit against Nakamichi claiming a total sum of RM11.79 million which they allege was advanced to the company. If the demands were not met, Lo and Tamabina threatened to wind up Nakamichi. Nakamichi filed a counter claim against Lo, Lai, Lo’s sister Lo Shwu Fen and Nakamichi chief financial officer Lee Jyh Kiong for breach of fiduciary duties. The counter claim also sought the release of Tamabina’s audied accounts and damages and losses to be assessed as a result of the failure to deliver the profit guarantee made by the timber concessionaire. The boardroom tussle was triggered by Tamabina failing to meet the profit guarantee and the failure to present the share certificates which served as collateral for the profit guarantee obligation. The profit guarantee was part of a corporate exercise in 2008, when Nakamichi acquired a controlling stake of 51% in Tamabina for RM30 million cash from Shwu Fen and Yap Siaw Lin. See lodged a police report on June 5 about the missing Tamabina share certificates. Under the agreement between Nakamichi and Tamabina, Yap and Shwu Fen were required to deposit their 49,000 shares in the timber concession with the listed company as collateral for the profit guarantee. In the event the vendors fail to settle the shortfall in the profit guarantee, Nakamichi is entitled to sell all or part of the shares to recover the shortfall. On the vacant CEO position, the executive close to the major shareholder said there are a few candidates and the board will select someone soon. Nakamichi’s prospects are dependent on Tamabina, considering the latter is a core subsidiary. Nakamichi has been loss-making since the 2010 financial year ended Dec 31 (FY10) when it lost RM376,000. It incurred a net loss of RM2.84 million last year and RM3.64 million for FY11. Revenue also halved last year to RM9.97 million from RM18.18 million in FY11. Tamabina’s acquisition came with a profit guarantee for three financial years. However, Tamabina failed to fulfil the agreement in 2011, posting only RM3 million profit after tax. It is worth noting that the vendors guaranteed that Tamabina would achieve an audited consolidated PAT not less than RM12 million a year from the financial year ended June 30, 2010 to 2012. It is uncertain whether Tamabina met the profit guarantee for FY12 as it has yet to furnish the audited accounts. This article first appeared in The Edge Financial Daily, on July 30, 2013.

https://theedgemalaysia.com/node/64220

#Midday Market* KLCI pares gains, but stays above crucial 1,800-level

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KUALA LUMPUR (Nov 28): The FBM KLCI pared some of its gains but stayed above the crucial 1,800-point level at the midday break on Thursday, in line with the buoyant regional markets. At 12.30pm, the FBM KLCI added 5.03 points to 1,803.49. The index had earlier risen to its intra morning high of 1,805.46. The top gainers included BAT, United Plantations, Datasonic, PPB, Daibochi, Petronas Gas, Maybank and Tenaga. The actives included DSC Solutions, China Stationery, Asia Media, Sumatec, Instaco, Tiger Synergy and Barakah. The decliners included Dana Infra, F&N, ibraco, Uzma, Can-One, Fima Corp, GAB, UMS and Lysaght. Affin IB vice president and head of retail research Dr Nazri Khan said going forward, he expected local stocks to stage more solid rebound on Moody upgrades of Malaysian rating and positive regional strength following China absence of market painful reforms, Japanese liquidity pump priming and tame data from USA labour market/inflation figures which offset worries that the Federal Reserve could reduce stimulus sooner than expected. “Over the past week, we see the local stock market dips lower on profit-taking dragged by the cautious release of the latest US Federal Reserve meeting minutes and the OECD slower global growth forecast. “On the technical front, oscillators are mixed with daily stochastics turning lower from overbought levels while MACD close to flash golden crossover reinforcing an upside break ahead especially if FBMKLCI find near term support at 1,790 which is the 50 day moving average. The market however could take on a defensive posture if the FBM KLCI reverses down and violate 1,790 support level,” he said. Elsewhere, Asian shares were in a buoyant mood, with Japanese stocks charging towards a 5-1/2 year peak on Thursday after the yen fell sharply on the back of relatively positive U.S. economic data, while two major regional currencies slumped, according to Reuters. U.S. jobless claims unexpectedly fell last week and the November Thomson Reuters/University of Michigan consumer confidence improved from a preliminary reading, while the Chicago PMI held up better than expected last month after surging in October, it said.

https://theedgemalaysia.com/node/34198

CIMB Research: Sell on Tanjung Offshore at RM1.53

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KUALA LUMPUR: CIMB Retail Research has a Sell call on Tanjung Offshore at RM1.53, which is trading at FY11 price-to-earnings of 9.6 times and price-to-book value of 1.2 times. In its technical outlook on Tuesday, July 27 it said the bearish engulfing pattern formed yesterday suggests that the RM1.59 high could probably be its near term peak. If the candles fail to take out this resistance soon, expect further weakness in prices as the candles would likely swing towards the RM1.45-RM1.38 zone. The 38.2% FR at RM1.34 could also be a magnet for prices. Indicators are showing signs of exhaustion. MACD histograms are losing some momentum here while its RSI has also hooked downward. “Unless the RM1.59 level is taken out, we would rather stay defensive in the immediate term. Our strategy is to unload on strength,” it said.

https://theedgemalaysia.com/node/27910

#Update* Sunway 4Q net profit surges 677% to RM1.14b, declares 5 sen dividend

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KUALA LUMPUR (Feb 27): Sunway Bhd  posted a net profit of RM1.14 billion for the fourth quarter to December 2013, up by 677% compared to RM146.56 million in the fourth quarter of 2012. Revenue recorded was RM1.34 billion, compared to revenue of RM1.24 billion in previous year's corresponding quarter. Sunway declared an interim dividend of 5 sen per share, bringing total dividends for FY2013 to 10 sen. For the full year of 2013, the company reported net profit increasing to RM1.50 billion from RM438.83 million in the previous financial year. Annual revenue was RM4.73 billion compared to RM4.13 billion recorded in 2012. “The group’s strong financial results were due to improvement in performance recorded by all the business divisions, with the two core businesses of property and construction leading the way, fair valuation gains from investment properties and financial effects from the adoption of the new FRS 10,” said Sunway in a press statement. Reviewing the results in further detail, Sunway said for the full FY2013, the group’s core net profit surged 38% to RM482.7 million from RM350.7 million in 2012. The Group’s core net profit for the fourth quarter was RM157.5 million compared to RM114.2 million in the previous corresponding quarter. “In addition to core net profit, there were fair valuation gains, impact from the new financial reporting standard FRS 10 and other non-recurring items amounting to RM1,017.8 million.” The new FRS 10, which took effect from 1 January 2013, required the group to consolidate the financial position and financial results of Sunway Real Estate Investment Trust and the adjustments were to be made retrospectively. Sunway said it has a record construction order book of close to RM4 billion and unbilled property sales of RM2.4 billion which will underpin its performance going forward. On outlook, it said: “In 2014, we are also looking forward to our maiden launch in Sunway Iskandar, a RM30 billion integrated township development in Medini Iskandar. “The Citrine, which is the first phase of Sunway Iskandar, is expected to be launched in Q2 2014 with a Gross Development Value (GDV) of  RM300 million.” It expects its 34.5% associate Sunway REIT to continue to perform well and its construction business to benefit from the buoyant construction sector.

https://theedgemalaysia.com/node/78863

Opportunities in emerging markets

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Emerging markets today represent approximately 30% of global market capitalisation, and their attractiveness stems mainly from their rapid economic growth which, on average, has been five times faster than that of developed nations. Per capita GDP in many emerging markets has been increasing at a rapid pace, giving rise to a middle class demanding more consumer goods and services. In addition, they have low debt-to-GDP ratios as well as foreign reserves which often surpass those of developed countries.  Many emerging markets are blessed with favourable demographic trends and substantially younger populations. As long-term investors in emerging markets, we are today seeing a wealth of untapped private equity opportunities in emerging economies, especially among small- to medium-sized companies. This is largely due to expanding and dynamic economies which tend to contain a higher proportion of smaller, faster growing businesses than developed, mature economies. This article will explore the investment opportunity that emerging market private equity represents for the long-term investor. A new take on private equityThe type of private equity approach prevalent in emerging markets differs significantly from that common in most developed markets. Leveraged buyouts, which are more common in developed markets, are less common in emerging markets due to a combination of factors, namely the relative immaturity of debt markets, lack of available bank capital, prohibition of majority foreign ownership and a strong culture of family ownership. Indeed, given the advantages conferred by local knowledge and local relationships, loss of the previous management could be damaging for these companies. Instead, opportunity frequently comes from small- to medium-sized, rapidly growing businesses looking for “expansion” capital or financial expertise to take the business to a new level of development. The bulk of potential investments tend to lie among smaller companies that display high growth characteristics. This means that the private equity investor is investing at the time of highest growth potential for the company. This potential is further accelerated by the rapid economic growth paths of many emerging market economies. In addition, emerging market industries also tend to be fragmented into many small businesses, which may offer private equity investors the opportunity to participate in industry consolidation. The use of private investment in public equity, or “PIPE” investments, is more common in emerging markets, particularly India, than in developed countries. Often the free floats and stock market turnover of smaller listed companies are less significant, making it difficult to accumulate significant positions through public markets. For example, in India, out of approximately 5,000 listed businesses on the country’s two main stock exchanges, as few as 500 achieve monthly stock turnover above US$1 million and together represent about 90% of the overall market capitalisation. In these circumstances, PIPE investments provide an attractive way to gain exposure to a class of small- and medium-sized, illiquid, yet growing, companies. Not only can investors build significant minority stakes but they can also have added shareholder rights accorded in the private equity deal negotiation. Such shareholder rights could provide a measure of downside protection for investments that might otherwise be deemed too risky. Private equity — potential benefitsUnlisted companies are less subject to short-term market swings than listed companies, and so are not exposed to extremes of investor sentiment in the same way. In addition, the closed end nature of the investments provides an element of freedom from a short-term outlook which means the private equity fund manager generally cannot be pushed into inappropriate investment decisions by the threat of sudden and large asset flows either in or out. This can have tangible benefits for long-term returns. Investing in unlisted companies and becoming involved as a shareholder at board level provides much greater potential to influence company decisions and behaviour. Private equity investors are often closely involved in determining the strategic direction of a company and improving corporate governance policies, not only in their role as board members, but also contractually. Being on the inside brings the investor significant depth of knowledge and understanding about a company. No one asset category does well all the time and adding a private equity element to an investment portfolio is an effective way to diversify. Private equity can complement a portfolio by providing a longer-term, more illiquid component. Furthermore, studies have shown that bear market weakness tends to be less severe for private equity so this limited downside tends to smooth overall returns from portfolios containing both private equity and publicly quoted assets. Finding opportunitiesIn our view, the most interesting private equity opportunities are currently to be found in China, Southeast Asia (particularly Vietnam) and Brazil. Broadly speaking, consumer-related industries and those in healthcare, industrials and light infrastructure present particularly attractive opportunities due to the nature of emerging market economies, but the individual opportunities depend largely on the level of development within countries, and the industries on which economic development is centred. For example, investment needs differ widely between Singapore and Brazil or between Indonesia and India. Brazil is focusing heavily on the construction of new roads and transport links, whereas in India we are seeing rapid expansion of the healthcare and pharmaceuticals industry. In Indonesia, there is a fast growing consumer population. Private equity penetration in emerging markets is still considerably lower than in developed markets, despite recent increases in activity, especially in Asia. This low penetration has created abundant opportunities for the private equity investor. Main risksThe main risks in investing in private equity in emerging markets include exit liquidity risk, corporate governance issues, and political and foreign exchange risks. The latter three are present with many emerging markets investments in other asset classes and are not specific to private equity. Exit liquidity can be effectively mitigated through deal structuring, and investor value added to ensure a successful IPO or trade sale. Structuring helps provide liquidity in both successful and struggling investments, the latter via downside protection such as put options or convertible bonds. In the capital market arena, improving shareholder protection has reduced the risks relative to developed markets but there is still work to be done. In order to minimise corporate governance risk, thorough due diligence on the company and management team prior to investment is key. It’s also critical to ensure international legal jurisdiction in order to give the highest likelihood of enforcing the law if ever required. Foreign exchange risk can be mitigated by targeting either export or import focused companies to counter depreciation or appreciation of local currency. Unlisted companies are exposed to macro-economic and political risk to much the same degree as listed companies. However, the impact can arguably be greater because of a lack of regular reporting and transparency in private companies. However, on the plus side, investing in these companies and becoming involved as a shareholder at board level provides much greater potential to influence company decisions and behaviour, thus significantly reducing the exposure to this type of risk. It’s also important to remember that a private equity position is usually less liquid than an equivalent investment in public equity, and also that management fees charged on committed capital are higher than for typical investments in a mutual fund or index. To summarise, we believe private equity investment is a growing area of interest for investors and it has a key role to play in enhancing access to the strong economic growth characteristics, favourable demographics and relatively secure public finances offered by public investment in emerging and frontier markets. Furthermore, the low level of private equity penetration in emerging markets relative to developed markets means there is a wealth of untapped opportunities. Private equity has much to offer the long-term investor as a complement to a traditional emerging market portfolio of public equities and hence, we believe it merits attention. Dr Mark Mobius is executive chairman, Templeton Emerging Markets Group.   This article first appeared in The Edge Financial Daily, on February 19, 2013.

https://theedgemalaysia.com/node/86026

#Hot Stock* Patimas jumps 10%, court order in focus

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KUALA LUMPUR (May 15): Patimas Computers Bhd jumped as much as 10% before trading flat after the firm said the court has ordered that legal action by the company’s creditors be restrained. At 10.09am, Patimas was traded at five sen with some 29 million shares done after rising as much as 0.5 sen to 5.5 sen earlier. The stock was the fifth most-active entity on the exchange. A dealer told theedgemalaysia.com over telephone that Patimas is seen as a "speculative stock" due to its price and substantial trading volume. Over the last six months, Patimas had reached an intraday high of 20.5 sen on January 17, 2013 after falling to a low of 1.5 sen on December 5, 2012. Patimas said yesterday the court has decided that legal action by the firm’s creditors be restrained and stayed for six months from May 9 this year. The restraining order allows Patimas to focus on formalising its proposed schemes of debt arrangements without having to divert its attention and resources to defend itself against legal action by lenders.

https://theedgemalaysia.com/node/66953

KLCI stays in positive territory at mid-day break as regional markets rise

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KUALA LUMPUR (Aug 6): The FBM KLCI stayed in positive territory at the mid-day break on Monday, in line with the rise at key regional markets. At 12.30pm, the FBM KLCI added 3.69 points to 1,638.73. There were 320 gainers and 278 losers, while 309 counters traded unchanged. Volume was 471.72 million shares valued at RM594.09 million. The ringgit rose 0.80% to 3,1046 versus the US dollar; crude palm oil futures gained RM9 per tonne to RM2,944, crude oil fell 28 cents to US$91.12 while gold gained US$2.10 an ounce to US$1,605.57. Asian shares rallied to a three-month high and the euro touched a one-month high against the dollar on Monday, as a stronger-than-expected U.S. jobs data and emerging optimism for European action on the debt crisis bolstered risk appetite, according to Reuters. But caution is likely to remain until concrete measures are taken, which may be weeks away, and investors in the meantime will be looking to data out of China starting Thursday -- from trade to bank loans and investment -- to give the global economic outlook a further lift, it said. China's central bank on Sunday pledged to intensify monetary policy fine-tuning and improve credit policy to bolster the world's second largest economy, said Reuters. At the regional markets, Hong Kong’s Hang Seng Index rose 1.87% to 8,714.70, Hong Kong’s Hang Seng Index jumped 2.05% to 20,069.40, the Shanghai Composite Index gained 0.41% to 2,141.43, Taiwan’s Taiex was up 1.18% to 7,302.48, South Korea’s Kospi added 1.91% to 1,884.06 and Singapore’s Straits Times Index gained 0.94% to 3,080.12. On Bursa Malaysia, BAT gained RM1.26 to RM51.56, Dutch Lady gained RM1.20 to RM40, United Plantations was up 50 sen to RM26.50, GAB added 48 sen to RM14.58, Carleberg 38 sen to RM12.54, Oriental 30 sen to RM7.93, while Aeon, F&N and Aeon Credit added 20 sen each to RM9.90, RM21.06 and RM11.30 respectively, while UMW was up 13 sen to RM9.89. GPRO was the most actively traded counter in the morning session with 20.76 million shares done. The stock rose three sen to 29.5 sen. Other actives included TMS, Patimas, SapuraKencana, Metronic, Tanco, Axiata, Iris Corp and Permaju. Decliners included KLK, Fiamma, UMS, Parkson, MMHE, MESB, Hong Leong Bank and PPB.

https://theedgemalaysia.com/node/35083

HDBSVR sees FBM KLCI dropping couple of points on Wednesday

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KUALA LUMPUR: Hwang DBS Vickers Research said it could see the benchmark FBM KLCI – which has stood fairly resilient by treading within a 6-point range the past five days – dropping a couple of points on Wednesday, Aug 11. This follows an overnight fall on Wall Street. Key U.S. equity indices – despite staging a late rebound – were still down between 0.5% and 1.2% at the closing bell. The initial downbeat sentiment was subsequently lifted by the Federal Reserve’s decision – while maintaining the federal funds rate – to reinvest proceeds from expiring mortgage-backed securities in longer-term Treasury securities, effectively keeping an accommodative stance as the pace of economic recovery is anticipated to be more modest. On Bursa Malaysia, four new European-style cash settled call warrants will be listed. They are: (a) BJCorp-CC (exercise price of RM1.00; exercise ratio of 2 warrant-to-1 share); (b) HSBC-C7 (exercise price of HKD78.00; exercise ratio of 40 warrant-to-1 share); (c) Plus-CC (exercise price of RM3.50; exercise ratio of 4 warrant-to-1 share); and (d) IOI Corp-CO (exercise price of RM4.90; exercise ratio of 6 warrant-to-1 share).

https://theedgemalaysia.com/node/45220

KNM Group expects stronger earnings this year

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KUALA LUMPUR: KNM Group Bhd, which has seen its earnings on a decline, expects better earnings this year underpinned by its all-time high order book of RM4.5 billion. “Generally, we expect this year to be better than last year. If you are looking from the order backlog alone, we should be better this year,” executive chairman and CEO Lee Swee Eng told the media after addressing a forum organised by Germany Trade & Invest and the Malaysian-German Chamber of Commerce and Industry (MGCC) yesterday. Lee said about 95% of KNM Group’s projects came from the overseas market and that the group was still “more foreign driven” in terms of income. According to him, Germany is the group’s largest overseas operation and it contributes about 50% of the group’s total revenue. He also pointed out that its Malaysian operations contributed about 30% of the group’s revenue, and it was looking to improve its business with the growing domestic opportunities in the oil and gas industry. For FY10 ended Dec 31, KNM Group’s net profit dipped 49.6% to RM131.2 million from RM260.55 million the previous year, while revenue shrank to RM1.55 billion from RM1.83 billion due to lower job orders, lower contribution margins and higher operating costs.Basic earnings per share contracted to 13.34 sen from 26.29 sen previously, while net assets per share stood at RM1.73 as at Dec 31. OSK Research noted that for the past two years, the group had enjoyed a tax incentive, helping to charge up its bottom line. “We think the tax incentive will continue to play a big role for the company. In fact, 4QFY10 earnings were lifted by a tax incentive of RM14 million (versus RM19.5 million in 3QFY10),” the research house said in a note. Asked if the group was keen on the development of marginal oilfields, Lee said: “We are not into marginal oilfields. You need deep pockets for marginal oilfields. Our pockets are very shallow as we have already spent €350 million (RM1.7 billion at the exchange rate then) to buy Borsig.” In a move to complement its existing product lines, KNM Group  announced in early 2008 the €350 million cash deal to acquire Berlin-based process equipment maker Borsig and its group of companies. Lee also said KNM Group was not concerned about its debt level, which had dropped significantly to about RM1 billion currently from the RM1.7 billion to RM1.8 billion level following the acquisition of Borsig in mid-2008. “Our high debt level has been reduced. The high debt was largely due to our investment in Borsig, but the company is doing well. I don’t see any concern with RM1 billion [of debt].” On the group’s outlook, Lee said it would continue to move up the value chain by looking at opportunities through acquisitions and joint ventures, noting that the group had a healthy cash position of about RM296 million. Last December, KNM Group’s wholly owned subsidiary KNM Process Systems Sdn Bhd secured a £450 million (RM2.2 billion) engineering, procurement, construction and commissioning (EPCC) contract for a biomass and waste recycling centre project in England. Asked if the group was looking into further acquisitions in Germany, Lee said: “We have not identified any. But if the opportunity knocks at our door and it is technology driven, and some high-end products, we will look into it. KNM Group’s share price fell one sen yesterday, closing at RM2.55, with 4.69 million shares traded. The counter has contracted 10.2% year to date. This article appeared in The Edge Financial Daily, March 1, 2011.

https://theedgemalaysia.com/node/2001

My Say: Sustainability and Equator Principles in Islamic banking

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Much attention has been focused on the growth of Islamic finance in the last decade, particularly in Malaysia. From very humble beginnings, the Islamic finance industry is now worth billions of US dollars in assets and has recorded consistent growth over the last few years. Indeed, Malaysia has successfully pioneered many initiatives to help develop and encourage the use of Islamic finance, not just locally but globally. Many factors contribute to the success of Islamic finance. One of its key strengths has been its ability to position itself with ethical values based on the framework of the syariah. For example, speculation is prohibited as it is viewed as harmful to society, and therefore unethical. Besides this, the need for tangible assets in financing transactions prevents excessive leveraging. These features helped to place Islamic finance in a relatively safer position vis-a-vis conventional finance. While Islamic finance has done well, its penetration into non-Organisation of Islamic Conference (OIC) countries has been limited. One reason could be that non-Muslims may have misconceptions or lack knowledge of the values underpinning Islamic finance. This could make acceptance of Islamic finance difficult. Perhaps it is time Islamic finance players consider aligning their values with the ethical values practised in conventional finance as a way of promoting Islamic finance in non-OIC countries. One such common value is the need to encourage sustainable practices to preserve the environment. Sustainability and IslamSustainability is not something unique to the world of conventional finance. An examination of fundamental Islamic beliefs would show that it is encouraged by Muslims. Islamic scholars have also promoted the importance of environmental preservation as part of its religious values. Prof Dr Yusuf Abdullah Ali al-Qaradawi, a world-renowned Islamic scholar (who was awarded the Tokoh Ma’al Hijrah by the Malaysian government in 2009), for example, mentioned in his writings: “It has been repeatedly mentioned in the Quran: Forbidden from spoiling the earth after Allah (Exalted and Almighty) has created it suitable and well prepared for successive human generations. It announced that Allah does not like spoiling or those who spoil in life, this includes spoiling the environment, polluting it or being aggressive with it. Also it is forbidden to abuse it in any way that would make it deviate from the purpose that Allah has created it for.” A simple Google search reveals many articles and points of view on the Internet stating the view that sustainability and the preservation of the environment is one of Islam’s key values. One such article by the Council on American-Islamic Relations noted there are at least 700 verses in the Quran that exhort Muslims to reflect on nature. Interestingly, despite the ethical importance of social and environmental sustainability in Islam, very few Islamic banks in the world actually mention any concept of sustainability in their vision. A quick review of 10 established Islamic banks in various countries shows that only one out of 10 mentions sustainability in its annual report. In fact, the champions of sustainability in the financial services industry have tended to be the global conventional banks and also some of the local conventional banks. While the practice of sustainability is still struggling to become part of the banking culture among Malaysian banks, global banks have long taken the initiative to ensure that their financial practices are in line with sustainability standards by adopting sustainability practices such as the Equator Principles. Equator PrinciplesOne manifestation of some global banks’ commitment to the environment is the adoption of the Equator Principles. These principles, put together by ABN Amro, Barclays, Citi (formerly Citigroup) and WestLB in October 2002, are an attempt to embed the sustainability criteria into credit evaluation processes. As at October 2009, some 67 financial institutions across the world have subscribed to these principles and many more are considering even expanding them to other areas of credit beyond the initial area of project financing. A key feature of these principles is embedding within the credit evaluation process, social and environmental considerations and extending the monitoring process to cover these areas as part of the ongoing assessment. It also demonstrates the bank’s commitment to play its role in encouraging its customers to “do the right thing”. Case studies have shown that there are benefits in being seen to comply with such principles, and the question now is: what are the compelling reasons for Islamic banks to do so? Championing social and environmental sustainability There are six main reasons why Islamic banks should champion social and environmental sustainability as part of their core banking model and not just as a Corporate Social Responsibility initiative. Ethical orientationA syariah-based business model is derived from the idea that Islamic banks are not only responsible to their immediate shareholders, but owe a fiduciary duty to society, or ummah, as a whole. It has been argued that some Islamic banks currently focus too much on making their products and contracts syariah-compliant, rather than embracing syariah principles in a holistic manner. Thus, embracing social and environmental sustainability would demonstrate a more comprehensive and ethical approach to doing business for Islamic banks. Profitability and market shareMany banks that have taken the path of sustainability have discovered that being socially and environmentally responsible does not necessarily arrive at the expense of profitability. In fact, many banks actually flourish because of it. As customers become more environmentally aware, many banks find their competitive position and market share strengthened after aligning their business strategy with environmental preservation. Risk managementProjects which are heavily exposed to social and environmental risks are arguably more exposed to business risks, as they would find themselves in a difficult position against business legislations and pressure groups. Indeed, good risk management is one of the key reasons why the Equator Principles are adopted by some banks, as they provide the banks with a framework to extend their social and environmental assessment as part of the overall credit assessment. This arguably is not an additional burden to Islamic banks, which pride themselves on having much deeper knowledge of their customers’ economics and the nature of the projects they finance. Market differentiationIslamic finance is currently in danger of being perceived as being indistinguishable from its conventional competitors. As Islamic finance gains wider acceptance and becomes more mainstream, the industry comes under increasing pressure to demonstrate its distinctiveness. Championing ethical business practices can play a role in terms of spearheading Islamic finance’s competitive edge. In addition, it may help to address some of the misconceptions of Islam by explaining its values in ways that conventional players understand, for example by adopting a global best practice such as the Equator Principles. First mover advantageWhile it is true that sustainable practices are still voluntary in Malaysia, it will not take long for them to become a “must”. Sustainability is one of the three goals set forth by the government in the New Economic Model (NEM). In the NEM, it is mentioned that environmental sustainability will be achieved by rejecting the traditional approach to economic growth that has neglected the environment. To realise this goal a few policies have been proposed, and interestingly there is a proposed policy to facilitate bank financing for green investment. This is exactly the idea adopted in the Equator Principles. Generation YGeneration Y (Gen Y) makes up of most of the workforce in this new age. In view of this, in 2009, PricewaterhouseCoopers in Malaysia conducted a survey among the firm’s Gen Y employees to gauge their perspectives and expectations of the future work environment. Sustainability was one of the subjects covered. The key findings are: 86% would seek employers with social responsibility values that reflect their own; 77% would consider leaving an employer if its social responsibility values were no longer in alignment with their own; and 62% say that an employer’s policy on climate change is important. Hence, it is obvious that sustainability is a concern to Gen Y. Adopting the Equator Principles may help Islamic finance players attract and recruit employees as the bank’s values align more closely with those of its employees. ConclusionSustainability initiatives should be part of the next evolution for Islamic banks. In the future, it will not be sufficient for Islamic banks to assert that their financial products have been approved by syariah scholars, they must also demonstrate that their entire business model is based on the higher values of syariah. The concept of embracing environmental and social sustainability presents Islamic banks an opportunity to demonstrate their distinctiveness in the financial industry. Adopting global best practices such as the Equator Principles helps in articulating Islamic banks’ values in a way that is understood by the global community. Nik Shahrizal Sulaiman is an executive director of PricewaterhouseCoopers (PwC) Malaysia and a member of the PwC Global Islamic Finance Team This article appeared in Forum page of The Edge Malaysia, Issue 802, Apr 19 - 25, 2010

https://theedgemalaysia.com/node/75715

#Hot Stock* Maybank recoups some losses after sell-down

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KUALA LUMPUR (March 18): Malayan Banking Bhd rose in morning trades to recoup some losses caused by late sell-down in heavy trades of 24.6 million on Friday, amid talks that the Parliament could be dissolved this week. “Last Friday, Maybank shares were dumped by funds in late trades, losing 21 sen or 2.2%. This was one of the reasons for the KLCI to plunge. Today, investors who see value in it might have jumped in to buy but I don’t know how long this can sustain,” said a senior dealer. At 11.52 am, Maybank gained 6 sen or 0.7% to RM9.06 after hitting a high of RM9.08 and a low of RM9.03, on trades of  9.84 million shares. The stock was the top turnover and fourth most active stocks against a 7.98-point fall in the key BFM KLCI that stood at 1619.66. As the local stock market has been volatile ahead of the general election, some funds are taking the opportunity to enter and leave the market to make profits, said an analyst. Last Monday (March 11), Maybank rose sharply after a positive report by Credit Suisse was circulated to its clients. The stock rose 13 sen or 1.4% to RM9.26 on heavy volume of 19.98 million shares on that day. But the next day, it fell to RM9.20 and slid further in the week. While stating that Maybank has “defensive qualities  to withstand potential selling pressure in the run-up to general election”, Credit Suisse noted that Maybank stood out as the only local bank to deliver slightly better-than-expected results in the fourth quarter of 2012 compared to its peers. But still Maybank, which has the lowest foreign ownership among the large banks, could not escape the fate of being dumped last Friday as election looms. The general election must be held before end-April.

https://theedgemalaysia.com/node/18779

Brokers' Digest

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CBS Technology Bhd (Sept 16, 58.5 sen)BUY: Following our recent meeting with management, we realised that our forecasts for the company’s existing businesses had been too conservative. Therefore, after making changes to the profit guarantee contribution, we revise our earnings forecast higher by 65.5% for FY2009 ending Dec 31, and 8.5% for FY2010. We are now assuming a RM4 million in profit guarantee for FY2009, RM5.5 million for FY2010 and none in FY2011. Nevertheless, the change in assumption would have no impact on the stock’s valuation, as the FY2010 difference is only an extra RM500,000 and our “buy” call is based on FY2010 earnings estimates. Meanwhile, no changes are expected on the company’s FY2011 earnings estimates. CBS Tech currently has an order book of RM16 million and is bidding for contracts worth RM30 million. Given that investors are optimistic on the equity market and after revising upwards our FY2010 earnings forecast by 8.5%, we increase CBS Tech’s fair value to the stock’s historic high of 72 sen, pegged at nine times FY2010 PER. We do not discount the possibility of the company’s FY2010 PER expanding beyond 10 times in the near future if the equity market were to appreciate towards its peak valuation cycle. — OSK Research (Sept 14)   Halex Holdings Bhd (Sept 16, 94 sen)BUY: The group claims strong R&D capabilities and has committed 1% of total revenue for such purposes. Some RM1.5 million proceeds from the initial public offering will also be used to fund more R&D to improve the quality of their products. Each of the three core business activities has its own R&D team and facilities, which further proves the commitment of the group towards R&D. The management believes that with such commitments toward R&D, the respective business units will stay ahead of their competitors. The recent outbreak of the A(H1N1) virus has created public awareness in personal hygiene. We expect strong revenue growth from the group’s healthcare products unit in light of this fact. With a stable average gross margin of 26% for FY2006/08, we expect the unit to be an important contributor to the group’s overall bottom line in the near future. The group’s revenue has grown at a cumulative average of 12.34% during FY2005/08. At the same time, cumulative average net profit grew at 19.78%. The group reported a lower gross margin of 26.88% in FY2008 ended Sept 30, from 32.17% in FY2007, while net profit margin for FY2008 was 5.83% compared with 11.08% in FY2007 due to higher raw materials cost and lower margins for its agrochemical products. — SJ Securities (Sept 16)   QSR Brands Bhd (Sept 16, RM3.20)OUTPERFORM: In our view, QSR’s main strength is its leading position in a defensive business. The group commands around 70% of Malaysia’s pizza market and 11% of the Western quick-service restaurants such as pizzas, burgers, fried chicken and seafood market. Pizza Hut is the biggest pizzeria chain on both sides of the Causeway, while KFC, with 531 outlets in Malaysia, Singapore, Brunei and Cambodia, is the region’s leading Western quick-service restaurant chain. QSR offers a cheaper entry into the KFC business, with the added attraction of the growing Pizza Hut business and higher dividend yields. Some of the potential re-rating catalysts are the higher average ticket prices and success in new markets and so is our top pick in the F&B sector. We maintain our forecasts and target price of RM5.30, which implies 65% upside. Our target price is still pegged to a forward PER of 16 times, which factors in a 10% discount to the average valuation of bigger F&B producers. QSR remains an attractive growth story with a three-year EPS CAGR of 11.9%, which is the highest in the sector. — CIMB Research (Sept 16)     Alam Maritim Resources Bhd (Sept 16, RM1.80)BUY: Alam is making inroads in the offshore installation and construction segment with its maiden project along the coast of Terengganu while looking to secure a similar job in Sarawak. Work on this segment in Terengganu is 68% completed, with full completion expected by 3Q2009. Although Alam has yet to register any revenue from the venture due to the unusual nature of the contract, we understand that this would most likely be recognised in 4Q2009. Alam will be expecting two more vessels this year, following disposal of two crew boats recently and two delays — a plan to upgrade equipment on the vessels — bringing its fleet to 31 vessels. Alam is expected to take delivery of seven more vessels in FY2010F ending Dec 31, bringing its vessel count to 38. EPS is expected to be around 20 to 27 sen, or an increase of 4% to 11% for FY2009 to FY2011. Alam is trading at nine times PER average, a 10% discount to the oil and gas sector average of 10 times. We believe Alam deserves to be in line with the sector’s average as it is well-positioned to ride the next upcycle with a strong track record. — AmResearch (Sept 16)     Kurnia Asia Bhd (Sept 16, 70.5 sen)OUTPERFORM: With new management strategy that focuses on enhancing claims management, branch operations reconfiguration and developing alternative channels, Kurnia is confident it will be able to reduce management expenses from 21.7% in FY2009 ended June 30, to 15% in three years’ time. However, we have assumed our conservative management expense ratio of 20% in FY2009 ending Dec 31, and gradually reduce it to 19.5% in FY2010 and 19% in FY2011. Its capital adequacy ratio has not yet reached the 130% requirement by Bank Negara Malaysia. However, it already surpassed the 100% mark and this is expected to reach 130% by year-end. We are positive on this matter as we believe Kurnia has been given time by the authorities to delay the need to meet the requirement immediately. Management ruled out any potential fund-raising for this matter, as it believes the requirement will be met by retention of its earnings. We maintain our “outperform” recommendation on the stock based on 11 times FY2010 EPS. New fair value is 87 sen against 30 sen previously to reflect the upward revision in earnings forecasts. Note that there is an upside potential on its earnings and fair value should the widely expected change in motor tariffs materialise. — RHB Research (Sept 14)     Proton Holdings Bhd (Sept 16, RM4.38)BUY: Developments in the local auto sector have reinforced our positive view on Proton since early this year, centred on favourable government policies and major structural changes at Proton. This is leading to positive news flows off a largely depressed valuation base and provides a strong catalyst for share price re-rating. It is understood that emphasis of the revised NAP would shift to R&D rather than merely attracting investments in assembly of completely knocked down kits. This would be in order for the local auto industry to move up the value chain. These policies would be to Proton’s advantage, as it encourages R&D activities and investments in Malaysia, considering that Proton is the only local auto player in Asean with pure R&D capabilities and facilities. Others are merely assemblers or are involved at the tail-end of R&D. We retain our “buy” call on Proton and maintain our fair value of RM4.80 per share, pegged to 0.8 times FY2010F, ending March 31, and adjusted net tangible assets of RM6 per share. When talks were initiated with Volkswagen in 2006, Proton’s valuation was re-rated upwards to over one time its adjusted NTA and 0.7 times book value. — AmResearch (Sept 16)   This article appeared in Capital page of The Edge Malaysia, Issue 773, Sep 21-27, 2009

https://theedgemalaysia.com/node/88143

#Opinion* What is Mahathir driving at?

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SO Tun Dr Mahathir Mohamad has said it. Openly. That Umno's GE13 performance (seen by the party as a big achievement) was because the Malays had no other choice but to support it. In short, the "achievement" was nothing great despite Umno "patting itself on the back". Question – why is he saying this? And now? But before that, Mahathir's  remarks this time had also "highlighted" the poor state of affairs in the party – something which he had done before. But this time he gave an updated version linking it to the recent GE13. So back to the question – why is he saying all that now? To an political observer with close links to Umno, Mahathir wants contests in the party. Or pushing for contests to be held at the coming party polls. His comments were centred around branches and divisions but to the observer, Mahathir could possibly mean top posts as well – although he did not mention this specifically. At least for now. Mahathir is no ordinary politician. He does not say things just for the sake of saying it. All is calculated. For a reason. Ironically, his comments came when some in Umno are already calling out loud that the top two posts in the party should not be contested. But Mahathir is asking for Umno to change – or rather to go back to its old self when the party "fought for agama, bangsa and negara" and not for a privileged few or the elites as in Umno now. How do you do that? How do you change if not by making changes in leadership? The observer agreed that Umno must not stop contests from being held and must be brave to talk back and criticise instead of nodding their heads in agreement to what the leaders say. "However, the yes-man syndrome and no contests started during Mahathir's era," he said. Said a political commentator: "I do not want to read too much into what he said but yes it does look like that." That Mahathir is pointing or prompting for top posts contest which to him is "to save Umno". But both the observer and commentator say the sorry state of Umno now was "Mahathir's doing". And as for Umno people making money as he pointed out in his blog, "happened during his time also", said the duo. Both say Mahathir is still using the racial card when the world has changed. "His racial rhetoric drove away many Malays from Umno and also non-Malays who had looked up to Umno." Meaning if Umno had not done well in GE13, he too must share the blame for he had campaigned for the party as well. Supporters of Mahathir will counter that of course. But taking what Mahathir had said now, it's like a preamble of things to come as far as Umno goes. And it's not going to be pretty.

https://theedgemalaysia.com/node/93897

Ministry to introduce people exchange programme

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PUTRAJAYA (July 26): The Urban Wellbeing, Housing and Local Government is planning to introduce People Exchange Programme soon in a bid to help the people in rural areas, who have certain skills, to earn extra income. Its minister, Datuk Abdul Rahman Dahlan, said the programme would also help the people in coping with the rising cost of living. "For example, if a civil servant can play a musical instrument, he or she can teach music lessons during weekends. "If a woman or a university student knows how to take care of children or babies, she can offer her service to families in her condominium or residential area," he said at the ministry's monthly assembly here yesterday. Abdul Rahman said the ministry would also set up residents representative committee in urban residential areas to bring urban community closer to the government. He said the committee would have the same functions as the Village Development and Security Committee.

https://theedgemalaysia.com/node/48178

FBM KLCI slips on profit taking

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KUALA LUMPUR: The FBM KLCI slipped at mid-morning on Tuesday, April 26 as mild profit taking chipped away its gains from early trade, in line with the generally tepid sentiment at key regional markets. At 10am, the benchmark index was down 2.49 points to 1,521.56, weighed by losses at blue chips including Genting, Petronas Dagangan, Hong Leong Bank and KLK. Losers led gainers by 295 to 112, while 234 counters traded unchanged. Volume was 212.06 million shares valued at RM159.28 million. Asian stock markets inched lower on profit taking on Tuesday while the euro dipped before the this week's Federal Reserve meeting where investors will look for indicators on its plans to exit the ultra-easy monetary policy, according to Reuters. Investors appeared to be reluctant to wager big bets before the April 26-27 Federal Open Market Committee meeting, it said. At the regional markets, Japan’s Nikkei 225 fell 0.98% to 9,577.64, Hong Kong’s Hang Seng Index lost 0.70% to 23,970.54, Singapore’s Straits Times Index down 0.27% to 3,179.18, the Shanghai Composite Index shed 0.13% to 2,961.13 and Taiwan’s Taiex slipped 0.04% to 8,947.25. Meanwhile, South Korea’s Kospi edged up 0.12% to 2,218.63. Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi said that due to the Dow Jones Industrial Average’s negative tone last night, the FBM KLCI could remain benign today. “We expect further range trading for the FBM KLCI. As such, invest with a short-term time horizon,” he said in a note to clients on April 26. Among the decliners, BAT fell 80 sen to RM46.98, PPB lost 18 sen to RM16.52, HPI 15 sen to RM3.52, Hong Leong Bank and KLK fell 14 sen each to RM10.26 and RM20.74, Nilai 11 sen to 78 sen, Petronas Dagangan 10 sen to RM15.80 and Genting eight sen to RM11.50. Gainers included Lysaght, ViTrox, Parkson, Allianz and Tradewinds. The actives included Iris, Tanco, Infortech, Tricubes, Smartag, ConnectCounty, DBE Gurney and Asia Media.

https://theedgemalaysia.com/node/28043

Money Flows

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From Jan 26 to 29, investors purchased RM29.02 million worth of the top 20 stocks on Bloomberg’s buying-on-weakness list, while RM7.25 million flowed out of the top 20 stocks on its selling-on-strength list. Public Bank-Foreign, which topped the buying-on-weakness list, lost six sen or 0.5% during the period, which resulted in investors acquiring RM7.53 million worth of the stock. As at Jan 29, Public Bank-Foreign stood at RM12 apiece. Public Bank Bhd also saw investors buying RM2.73 million worth of its shares after the stock fell by 0.83% w-o-w. Public Bank’s share price had shed 10 sen over the week and closed at RM11.88 on Jan 29. Investors purchased RM4.32 million worth of Maxis Bhd shares after the stock declined two sen to end the week at RM5.38. This represented a w-o-w drop of 0.37%. DiGi.Com Bhd, also saw buying interest after its share price lost two sen, or about 0.09%, during the period in review. As a result, investors bought RM1.71 million worth of the company’s shares. On Jan 29, DiGi closed at RM21.86. AEON Co (M) Bhd’s share price declined by 0.76%, a drop of four sen, to close the week at RM5.25. This weakening in its share price resulted in investors acquiring RM1.31 million worth of the shares. PLUS Expressways Bhd led the selling-on-strength list as investors sold RM2.39 million worth of shares between Jan 26 and 29. The counter gained one sen, or 0.3%, during the period in review to close at RM3.31. PLUS is proposing to acquire a majority stake in India-based Indu Navayuga Infra Project Pvt Ltd for a total of RM74 million, according to its announcement to Bursa Malaysia. Indu Navayuga holds a concession to widen and maintain an existing highway in Tamil Nadu. According to PLUS, on the first commercial operation date (COD), Indu Navayuga shareholders will sell a 49% stake for RM57.3 million, with the remaining 25% stake worth RM16.7 million to follow on the third anniversary of the COD. Investors sold RM760,000 worth of Kumpulan Europlus Bhd shares after they rose by 4.5 sen, or 10.84%, over the period. The counter closed at 46 sen on Jan 29. Mulpha International Bhd saw its share price gain 2.5 sen between Jan 26 and 29 to end the week at 50 sen apiece. This 5.32% change resulted in investors liquidating RM520,000 worth of Mulpha shares. Mulpha saw its share price jump after EON Capital Bhd announced that it was rejecting Hong Leong Bank Bhd’s RM4.92 billion offer to acquire its entire assets and liabilities on Feb 2. Mulpha had previously announced its intention to diversify into financial services and was seeking Bank Negara’s permission to begin negotiations and make an offer for EON Cap. Investors sold RM410,000 worth of shares in Hong Leong Industries Bhd after the counter rose three sen, or 0.63%. The stock closed at RM4.79 on Jan 29. Shell Refining Company (Federation of Malaya) Bhd rose 14 sen, or 1.32%, over the week to end at RM10.74. This triggered an outflow of RM380,000 from the counter. This article appeared in Capital page, The Edge Malaysia, Issue 792, Feb 8-14, 2010 

https://theedgemalaysia.com/node/40997

FBM KLCI remains in red at mid-day

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KUALA LUMPUR:  The FBM KLCI remained in negative territory at the mid-day break on Wednesday, Dec 1 in line with most key regional markets as investors stayed on the sidelines after the overnight dip at Wall Street. Most regional investors were also staying on the sidelines, awaiting employment and retail sales data due out in the US later today as well as ahead of the factory orders and ISM non-manufacturing index to be released on Friday. Worries on the euro zone sovereign debt crisis still weigh heavily on Asian investors, as Standard and Poor's placed Portugal's A-minus credit ratings on review for a possible downgrade, citing uncertainties related to a potential financial rescue by the EU and the IMF. At Bursa Malaysia, the FBM KLCI slipped 0.27% or 3.96 points to 1,481.27, weighed down by key blue chips including Maybank, CIMB, Sime Darby and Petronas Chemicals. Losers beat gainers by 450 to 169, while 249 counters traded unchanged. Volume was 390.68 million shares valued at RM596.79 million. The ringgit strengthened 0.14% to 3.1590 versus the US dollar; crude oil was up 17 cents per barrel to US$84.28 and gold added US$3.03 an ounce to US$1,389.05. At the regional markets, Hong Kong’s Hang Seng Index and the Shanghai Composite Index fell 0.28% each to 22,943.37 and 2,812.31 respectively; Japan’s Nikkei 225 was down 0.02% to 9,935.00 and Singapore’s Straits Times Index shed 0.06% to 3,142.97. Meanwhile, Taiwan’s Taiex gained 1.4% to 8,489.48 and South Korea’s Kospi Index rose 0.93% to 1,922.32. At Bursa Malaysia, Nestle fell 40 sen RM43, PPB down 26 sen to RM17.62, Tased lost 18 sen to RM7.30, BAT fell 16 sen to RM44.10, Sunway City fell 14 sen to RM4.51, BHIC down 13 sen to RM4.03 and Carlsberg down 11 sen to RM5.84. Maybank lost eight sen to RM8.43, CIMB, MISC and Gamuda fell four sen each to RM8.40, RM8.64 and RM3.65 respectively, while Sime Darby, Petronas Chemicals and Tenaga shed three sen each to RM8.65, RM5.32 and RM8.47 respectively. Gainers included KL Kepong, Keck Seng, Negri Sembilan Oil Palms, Tahps, Tradewinds, Tradewinds Plantations, BLD Plantations and Parkson. The actively traded stocks included Petronas Chemicals, Harvest, KNM, JCY, Karambunai, Mithril and SAAG.

https://theedgemalaysia.com/node/80782

#Hot Stock* MBF hits 9-yr high amid demands for higher takeover offer

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KUALA LUMPUR (Mar 14): MBF Holdings Bhd (MBFH) soared as much as 17% to its highest in over nine years amid minority shareholders' unhappiness over the takeover offer  by the diversified company's controlling shareholder,  dealers said. At 10.47 am, MBFH shares were traded at RM1.75 with some 955,000 shares done, placing the stock among ten top gainers. The stock had earlier risen as much as 26 sen to RM1.78 --  its highest since June  2003, Bloomberg data show. A dealer said the gains in MBFH shares were due to investors are asking for a higher offer from Tan Sri Dr Ninian Mogan Lourdenadin, who is offering RM1.50 a share to take over the firm. "The public will reject the offer as they are not happy. Minority shareholders are hoping that the acquirer will offer a higher price,"  the dealer told theedgemalaysia.com. The edgemalaysia.com yesterday received calls from some shareholders saying they were even prepared to go to court on this. Ninian had owned 87% of MBFH when he offered to buy the remaining shares of the firm at RM1.50 each on February 6 this year. He also offered to acquire its remaining warrants at 50 sen each and outstanding redeemable convertible secured loan stocks issued by MBFH’s wholly-owned subsidiary Wellink Invesments Ltd at RM4.64 each. For the exercise to succeed, the acquirer will have to secure an acceptance level of more than 90% of the remaining 13% stake he plans to acquire. This means Ninian's stake in MBFH will have to go up to 98.7% for the takeover to go through. However, that has not happened so far. Exchange filings show that his latest reported equity portion had only touched 92.77%. As such, the deadline for the offer has been extended to April 3 from original date on March 20. Minority shareholders are unhappy with the offer as they feel the price does not reflect the true value of the firm. The offer price of RM1.50 per MBFH share is a 37% discount to the company's latest reported book value per share of RM2.37. MBFH’s website indicates that the firm was initially set up as a private limited entity on October 10 1963 before it was converted to a public limited company on October 21 that year under the name Island Hotels & Properties (M) Ltd. The firm had, subsequently, changed its name to Island Hotel & Properties (M) Bhd and Pacific Development Credit Bhd on April 15 1966 and May 26 1976 respectively before adopting its current name on July 20 1981. MBFH’s businesses include real estate, financial services, and education. The firm also operates tea, coffee, cocoa plantations.

https://theedgemalaysia.com/node/80077

CPO futures closes lower

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KUALA LUMPUR (Oct 25): Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed lower today on the back of a stronger ringgit coupled with profit taking activities, dealers said. Phillip Futures Sdn Bhd Derivative Product Specialist David Ng told Bernama a stronger ringgit would curb buying interest from oversea buyers. However, the undertone of the market remained bullish and stood to gain further following the government's announcement to allocate RM243 million for the replanting of palm oil, rubber and cocoa, as well as, forest plantation in the 2014 Budget. Prime Minister and Finance Minister Datuk Seri Najib Tun Razak presented next year's budget in Parliament today. Meanwhile, spot month November 2013 eased RM14 to RM2,458, December 2013 fell RM17 to RM2,445, January 2014 dropped RM20 to RM2,444 and February 2014 declined RM21 to RM2,446 a tonne. Volume decreased to 30,546 lots from 44,093 lots on Thursday while open interest dipped to 178,072 contracts from 198,848 contracts yesterday. On the physical market, November South eased RM10 to RM2,450 a tonne.

https://theedgemalaysia.com/node/56566

Puncak Niaga denies going for arbitration

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KUALA LUMPUR: Puncak Niaga Holdings Bhd has denied that it plans to go for arbitration pertaining to the takeover of its water assets by the Selangor government through Kumpulan Darul Ehsan Bhd (KDEB). The Edge Financial Daily had reported on Dec 10 that Puncak Niaga planned to seek international arbitration for the takeover of its water assets due to a deadlock in the negotiations with the Selangor government. In a statement yesterday, Puncak Niaga strategic resource and public relations division executive director Datuk Dr Muzahet Masruri said the company “categorically denies the contents of the said article”. The article had quoted an executive of Puncak Niaga as saying that the company was looking at arbitration as it could not agree on the latest offer by the Selangor government and was doubtful if the state would come back with an improved offer. Puncak Niaga had on Dec 4 agreed in principle to the revised offer by KDEB but imposed several conditions. Among the conditions were: i) That the total equity contribution to be paid to Puncak Niaga should include a compound return of 15% per annum for the loss of future earnings as a result of the sale of its water concession business to KDEB; ii) The debts due and outstanding from Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) to Puncak Niaga in relation to the supply and sale of water should be paid as the services had already been rendered; iii) Waiver of the requirement for the acquisition of the water assets by Pengurusan Aset Air Bhd (PAAB) to be undertaken concurrently with the acquisition of the stake by KDEB; and iv) Removal of the requirement of due diligence post-acceptance of the offer in order for the exercise to be completed as quickly as possible. Puncak Niaga had also said details of KDEB’s offer showed that the actual proceeds payable to all water concession holders are far below the RM9.65 billion announced earlier by the Selangor government. “For instance, the amount offered to Puncak Niaga for its stakes in Puncak Niaga Sdn Bhd and Syabas is only RM1.555 billion and not RM5.594 billion as informed by the Selangor government,” it said in a statement. Puncak Niaga had given KDEB a week from Dec 4 to revert with a response. In a filing with Bursa Malaysia yesterday, Puncak Niaga said it has received a letter from KDEB to request an extension until Dec 31 to revert with an appropriate response to Puncak Niaga’s letter. This article first appeared in The Edge Financial Daily, on December 13, 2013.

https://theedgemalaysia.com/node/92473

'TPPA will enslave Malaysia's poor to corporate America'

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KUALA LUMPUR (July 16): The Trans-Pacific Partnership Agreement (TPPA) will enslave Malaysia's poor to corporate America, said some 150 angry protesters outside Parliament today. "The parliamentarians are sleeping or Parliament is dead," said PSM's national chairperson Dr Nasir Hashim leading the protest against the 18th round of TPPA negotiations in Kota Kinabalu which started yesterday. "TPPA is for the US corporations and their cronies," he hit out, demanding that the government table the contents of the TPPA in the Dewan Rakyat to allow for public assessment. “We will be stuck, and we will not be able to make changes to the system if it is not beneficial to the foreign companies. "We will have to away with tariffs. Without tariffs, the local industries will be destroyed," said Nasir, cautioning that the TPPA would impact Malaysia's sovereignty and domestic economy. "We will be tied to a culture of dependancy like what our colonial masters had once done. We will become a colony of America," he added. Representatives of some 40 non-governmental organisations present also supported the demand. The TPPA is being negotiated among 12 nations including, Malaysia, and it is expected to be sealed by the end of the year. Other countries are Brunei, Chile, New Zealand, Singapore, the United States, Australia, Peru, Vietnam, Mexico and Canada as well as Japan. The protesters were closely watched by 20 police personnel when they gathered along the road leading to Parliament. Among the concerns raised by civil society movements were the removal of tariffs and access to government procurement as well as drug subsidies and local businesses which are highly reliant on subsidies. Objecting to the international trade relation was also former prime minister Tun Dr Mahathir Mohamad, said the deal is similar to other bilateral agreements which was not beneficial to Malaysia. In the early 2000, the Free Trade Agreement (FTA) between the US and Malaysia was shelved after four years of negotiations. It was revealed that Malaysia could not agree to some 60 conditions raised. Echoing Mahathir's sentiments, Nasir said that while PSM and the NGOs are not averse to economic growth and development, it must be done of a level playing field. In their memorandum, the groups demanded that the negotiation are made public and tabled in Parliament for scrutiny as well as a cost benefit analysis presented. The US Embassy has previously said that the agreement will not have an adverse effect on the country as the terms and protection offered to foreign investors are akin to those in existing bilateral agreements. However, PSM's national treasurer A Sivarajan, dismissed the assurance saying that while the relevant ministries had given assurance that certain drugs will be given compulsory licensing to ensure it can be produced at lower cost, the question remains just how many drugs can be issued the licence. "We had a private meeting with the embassy’s (Economic Affairs Counsellor) Paul Brown and he had admitted that the big foreign pharmaceuticals had invested a lot for research and now they want to get their money back by increasing the duration of the patents to reap profit. "We asked what will happen to peoples' lives? He said if the Malaysian government wants to protect their peoples' lives, they have to pay more. "With our health budget cut down, how are they going to take care of the people? People living with HIV, the number of people getting government sponsorship is getting fewer by the year," he said. He stressed that a caucus on the bilateral trade is enough to shed light on the TPPA as it is not legally binding. Sivarajan then led a small delegation to meet with International Trade and Industry Minister Datuk Seri Mustapa Mohamed in Parliament, who accepted the memorandum. Asked on the criticisms expressed, Mustapa repeated that Malaysia’s sovereignty would not be affected under the TPPA. “We are sovereign nation. We will defend the sovereignty of our country,” Mustapa told reporters “It’s still under discussion. Nothing has been finalised yet," he said when asked if it would affect the production of generic drugs.

https://theedgemalaysia.com/node/89912

Highlight: Abnormal trades due to liquidity

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KUALA LUMPUR: The brokerage involved in the transaction of several stocks last Friday that almost hit limit-down described the selldown as a result of last minute orders and liquidity issues that drove the prices down. "We received major buy and sell orders from clients quite late in the trading day and we had to execute them by closing time,” said K&N Kenanga Holdings Bhd head of dealing Chan Tuck Kiong. The orders came from foreign brokers whose ultimate clients were US funds. It is learnt that the orders were part of a portfolio rebalancing of funds being carried out in the region and not only Malaysia. According to Chan, the firm's brokers had to clear the transactions by quickly keying in orders during closing time and around 40 million shares changed hands. The maximum amount of orders per transaction is half a million shares. So for some stocks, the brokers had to key in 44 orders within minutes. "The sheer volume drove down the prices,” Chan explained, adding that the buying and selling were benchmarked at about 30% of the closing price."The benchmark was the closing price. That was the mandate,” he said. Chan described the trades as symptomatic of a lack of liquidity in the shares, causing the prices to come down steeply or go up sharply. Eyebrows were raised over the sharp rise and fall in a number of shares traded during closing time last Friday, with eight stocks deviating by up to 30% in prices from their normal trading range earlier in the day. Shares in TDM Bhd, Batu Kawan Bhd, Coastal Contracts Bhd, CB Industrial Product Holding Bhd, and Hap Seng Plantations Holdings Bhd hit limit-down last Friday on heavy selling volume. Berjaya Sports Toto Bhd was down by 24%, closing at an eight-year low. Shares in Star Publications (M) Bhd and JCY International Bhd went up by 29.72% and 36.36% respectively. The counters regained their footing yesterday with all six closing limit-up. Star and JCY shed 24% and 26% respectively. A broker close to the transactions ruled out sabotage, fraud, computer glitch or error in trading."No rules were broken and Kenanga did not trade out of range,” said the broker. Market regulators confirmed the transactions were genuine and not a result of market manipulation."It would have been handled differently had the orders come in earlier, but we only had 10 minutes to execute [the orders],” the broker said. It is believed that the foreign funds switched stocks as part of a portfolio rebalancing process. For funds that benchmark against the FTSE Emerging Markets Index, the portfolio rebalancing is done in March, June, September and December. The FTSE Emerging Markets Index, which is a performance benchmark for listed securities in emerging countries, fell by 4.2% last Thursday due to Bernanke's comments — the steepest one-day decline since September 2011. On the rise in share prices of Star and JCY, fund managers said it is notable that Star has historically high dividend yields and regional tech stocks such as JCY have been depressed for some time, indicating a change in the funds' strategy. While the reasons for the selldown were not disclosed, it is believed to be a response to the worsening global market sentiment. US Federal Reserve chairman Ben Bernanke remarked last week that its bond buying programme would end by the middle of 2014. US-based Levitt Capital Management founder and chief investment officer Robert Levitt said the fund had pared down several profitable positions in Malaysia to reduce its exposure risk. However,he remains positive on Malaysia's prospects in the long term. "Longer term, we remain bullish on Malaysia. Asian economies are still the envy of the globe,” Levitt said. This article first appeared in The Edge Financial Daily, on June 25, 2013.

https://theedgemalaysia.com/node/52498

Miti to meet Japanese embassy on steel impasse

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KUALA LUMPUR: The International Trade and Industry Ministry’s (Miti) decision to extend the deadline for the decision on hot rolled coil (HRC) imports came as no surprise to the industry given the divided views on a 35% hike in import duty. The issue has become bigger with the involvement of foreign parties, particularly downstream players and manufacturers whose inputs are steel. Sources said the Japanese embassy is meeting with Miti today to get a commitment from the ministry that import duties on HRC will not be increased. Miti seems to need more time to make up its mind. Last Thursday, the ministry announced that the deadline for a decision whether to increase import duty on HRC had been extended from July 30 to Aug 28. Notably, at a public hearing in June, some Japanese players under the Japanese Chamber of Trade and Industry Malaysia threatened to pull out of Malaysia if the petition to raise import duty was successful. Industry observers note that five Japanese players have equity ownership in many downstream companies and export certain products to Malaysia. However, Miti’s delay in making a decision is taking a toll on downstream players as many are in a dilemma over getting adequate supplies for the next one month. Industry players note that the one-month delay would make it difficult to place import orders as shipment takes 45 to 60 days. “If we were to place our orders and the government decides to hike the import duty, then we would have to pay a large amount on arrival of the shipment. While we are not surprised by the extension, it is very frustrating as it muddles our planning and production,” a downstream player told The Edge Financial Daily. The government received a safeguard petition from Megasteel Sdn Bhd, representing the domestic industry producing HRC, alleging that imports into Malaysia had increased from 2007 to 2010 and caused serious injury to the local industry. Megasteel, the sole producer of HRC or flat steel in the local market, is seeking an additional 35% duty on imported HRC, which would raise it to 60%. The government initiated a preliminary safeguard investigation whereby a preliminary determination was supposed to be made by July 30. Megasteel chairman Tan Sri William Cheng argues that the country has been flooded with imports of HRC by “unscrupulous importers” who are exploiting loopholes in the import regulations. If the situation continues, it will lead to plant shutdowns and retrenchment of workers not only by Megasteel but by supporting and downstream industries as well, Cheng said, defending the need to raise the trade barrier on the import of HRC. HRC is used as base material in various industries such as automotive, construction, electric and electronics, fabrication, engineering and manufacturing. Industry observers note that Megasteel is reliant on the domestic market as it is not competitive enough to export its products due partly to the lack of economies of scale. Apparently, Megasteel’s financial health will be threatened if the import of HRC continues to climb. The company is highly geared due to its large spending of RM3.2 billion to set up its flat steel plant. As at end-June 2010, Megasteel had current liabilities of RM3.28 billion and non-current borrowings of RM785.4 million. “If this continues and the duty is hiked, it would kill the industry. A lot of smaller players will not be able to survive. As it is, the current duty is already a hindrance to them. Margins are suffering,” said a downstream player who declined to be named. “We could possibly close shop before Megasteel if the import duty goes higher. This would also result in unemployment and plant shutdowns,” he said. A random check on public-listed downstream steel players’ financials showed Yong Kong Galvanising Industries Bhd, which manufactures galvanised steel, posted substantially lower profits in the latest quarter due to higher input costs which could not be passed on to customers in proportion. For 2QFY11 ended June 30, Yung Kong’s net profit plunged 82% to RM876,000 from RM4.9 million in the previous corresponding quarter. Revenue fell 7% to RM116 million from RM124.9 million previously. For the six months ended June 30, it made a net loss of RM2.4 million compared with a net profit of RM10.1 million in the previous corresponding period.  Revenue rose to RM277.7 million from RM242.3 million. In notes accompanying its quarterly results, Yung Kong noted that the pending decision on the petition by Megasteel for safeguard on HRC is causing uncertainty in the steel industry. “However, the management remains optimistic and pro-active to take all the necessary precautionary actions to react to the changing environment in the steel industry,” it said. At last week’s press conference, Malaysian Iron and Steel Industry Federation (Misif) president Chow Chong Long said it would be detrimental to the iron and steel industry if the government were to impose an additional 35% duty on imported HRC. He pointed out that the new duty would affect a wide range of industries, including electrical and electronics, automotive and other export-based manufacturers. According to Chow, some foreign companies have already notified the World Trade Organisation about the petition for the imposition of an additional import duty on HRC. This article appeared in The Edge Financial Daily, August 1, 2011.

https://theedgemalaysia.com/node/52729

Daim’s son buys into Sanichi

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KUALA LUMPUR: Datuk Md Wira Dani Abdul Daim, son of former finance minister Tun Daim Zainuddin, surfaces as a new substantial shareholder of ACE Market-listed Sanichi Technology Bhd, which incidentally saw its share price doubling over the last two days on heavy volume. Md Wira, 33, bought 10 million shares or 6.12% of the loss-making precision moulds and tools maker yesterday, according to the filing with Bursa Malaysia. A total of 10 million shares crossed for RM6 million or six sen per share in a direct off-market deal yesterday. The transacted price was about 20% below the market price 7.5 sen the stock was fetching on the open market at the time shares were crossed. Sanichi was traded between seven sen and 10 sen yesterday before settling at 9.5 sen, a shade below its 52-week high of 10 sen on Aug 30 last year and below its net asset per share of 14 sen as at March 31, 2011. The 58.34 million shares that changed hands on the open market yesterday were about 36% of Sanichi’s share base of 163.5 million. Similarly, Sanichi saw 27.99 million shares change hands on Tuesday, some 52 times its volume of 532,200 shares the day before. In retrospect, news of Md Wira’s emergence as a new substantial shareholder in another small-cap stock, Petrol One Resources Bhd, in May this year also buoyed the latter’s stock price. Shares of the small oil & gas service provider, formerly known as Changhuat Corp Bhd, fell later the same month after it proposed a rights issue. Md Wira bought 3.21 million shares or 6.38% of Petrol One under a private placement exercise in early May. Formerly deputy chairman of Catalist-listed Magnus Energy Group Ltd, Md Wira was appointed as non-executive director at Singapore-listed The Think Environmental Co Ltd in April this year. Md Wira is actively involved in his family’s merger and acquisition business activities, said The Think Environmental’s 2011 annual report. “These activities include those related to power resources in the coal and oil sectors in Malaysia, Indonesia and Africa as well as flagship banking assets and strategic alliances associated with it,” the report read. Notably, Sanichi’s major shareholder, PFM Capital Sdn Bhd, had been paring its holdings on the open market. Its holdings were reduced to 18.95% or 30.98 million shares after selling 5.608 million shares or about 3.43% stake between July 21 and July 27 in the open market, separate filings showed. For the nine months ended March 31, 2011, Sanichi made a net loss of RM2.3 million on the back of RM8.86 million revenue, significantly lower than the RM3.3 million net profit and RM15.7 million topline it booked in the previous corresponding period, mainly due to a decrease in both local and export sales. In notes accompanying its 3Q results on June 13, Sanichi said it was facing a challenging year for FY2011 ending June 30, given its “very tight cash flow position”. This article appeared in The Edge Financial Daily, August 4, 2011.

https://theedgemalaysia.com/node/62801

Malaysia’s foreign reserves to shrink further — CIMB

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KUALA LUMPUR: Malaysia’s foreign reserves are expected to shrink further on the back of the US Federal Reserve scaling back its quantitative easing (QE) and investor concerns about emerging markets’ narrowing growth and yield differential with advanced economies, said CIMB. In a research note dated Feb 10, CIMB economist Lee Heng Guie estimated that the country’s foreign reserves would be 6.3% lower by end-2014 to US$126.4 billion (RM422.18 billion) compared with US$134.9 billion in 2013. He noted that persistent portfolio outflows caused Malaysia’s foreign reserves to decline by US$1.8 billion month-on-month to US$133.1 billion as at end-January from US$134.9 billion as at end-December 2013. Lee said the outflows were mainly because foreigners had accelerated their selling to RM3.6 billion of domestic equities in January compared with RM1.6 billion in December 2013. “This brought their cumulative net selling to RM9.3 billion between October 2013 and January 2014 and their shareholdings to 23.5% in December, down from 23.6% in November,” Lee wrote in the note. “Foreign selling of equities persisted for four months in a row,” he added. Lee pointed out that in bond markets, foreign investors bought RM1.4 billion of bonds, bringing their total holdings to RM233.4 billion as at end-December 2013. Foreigners owned 29.4% (29.5% in November) of Malaysian government bonds and 44.9% (45.1% in November) of Malaysian government securities. “Our channel check indicated that foreigners were selling long-dated bonds in January. Bank Negara Malaysia expects their net selling to be compensated by buying by domestic institutional investors.” This article first appeared in The Edge Financial Daily, on February 12, 2014.

https://theedgemalaysia.com/node/41182

FBM KLCI slips below 1,500-point level at mid-morning

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KUALA LUMPUR: The FBM KLCI slipped below the 1.500 level at mid-morning on Monday, Dec 6 amidst cautious trade after the marginally weaker close on Wall Street last Friday on the back of conflicting economic data, including higher retail sales but worse than expected unemployment claims. At 10am, the FBM KLCI fell 1.45 points to 1,499.53, weighed by losses including at DiGi, MISC, Genting and Maybank. Gainers led losers by 195 to 174, while 193 counters traded unchanged. Volume was 143.75 million shares valued at RM152.37 million. At the regional markets, Japan’s Nikkei 255 slipped 0.30% to 10,147.45 and South Korea’s Kospi was down 0.16% to 1,954.19. The Shanghai Composite Index gained 0.23% to 2,849.05, Taiwan’s Taiex rose 0.84% to 8.696.60, Singapore’s Straits Times Index was up 0.81% to 3,198.15 while Hong Kong’s Hang Seng Index opened 0.7% higher at 23,482.13. On the Malaysian market, RHB Research Institute Sdn Bhd said Friday’s closing proved its concerns valid, as the FBM KLCI failed to earn a confirmation candle on Friday to secure further upside potential on the chart. In fact, with a “dark cloud cover” candle on the board, plus the flabby technical readings overall, investors may continue to unload, fearing further deterioration on the technical layout, it said. The research house said the immediate support levels near the 10-day and 40-day Simple Moving Averages of 1,494 and 1,498 should hold the index’s downside to avoid further profit-taking pressure. “Otherwise, the index would head towards the recent low of 1,474 and the critical level of 1,450. Losing 1,450 will kick-start a major correction signal on the 20-month uptrend on the FBM KLCI, we fear,” it said. DiGi fell 42 sen to RM24.38; MAHB fell 38 sen to RM5.86, EON Capital, Daibochi and Hong Leong Bank lost nine sen each to RM6.85, RM2.50 and RM9.40 respectively, MISC, QSR and KNM fell seven each to RM8.72, RM5.69 and RM1.93 respectively, Genting down six sen to RM10.60 and Maybank fell two sen to RM8.46. Gainers included Nestle, PacificMas, BAT, Batu Kawan, KLK, Tadewinds, Dutch Lady and Kluang. Careplus, which made its debut on the ACE Market today, was the most actively traded counter. The stock added three sen to 26 sen with 12.84 million shares done. Other actives included Key West, K-Star Sports, Mithril, Baneng, MLabs, Tadewinds Corp, JCY, Scomi and LCL.  

https://theedgemalaysia.com/node/42786

Mild bounce in glove makers

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KUALA LUMPUR: Glove manufacturers were among the major gainers in late afternoon trade on Friday, Jan 7 as investors saw value in the counters which had been hammered down recently. At 3.37pm, Hartalega was up 24 sen to RM5.66, Supermax 23 sen to RM4.47 and Aventa 16 sen to RM2.64. The FBM KLCI rose 2.79 points to 1,571.16. Turnover was 2.01 billion shares valued at RM2.38 billion. Gainers beat losers 490 to 326 while 299 stocks were unchanged. Glove makers fell sharply towards the later part of 2010 on concerns about oversupply, weaker demand and soaring latex prices. However value has started to emerge in some of companies. Among them was Adventa, where analysts had recently rated it an OUTPERFORM given the potential re-rating catalysts of 1) higher OBM glove sales, 2) establishment of own distribution channels, and 3) better product mix from higher nitrile sales.

https://theedgemalaysia.com/node/89825

Rafizi: Protesters' right to express dissatisfaction

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KUALA LUMPUR (June 24): It is the protesters' right to express dissatisfaction in front of the Parliament earlier, said Parti Keadilan Rakyat strategy director Rafizi Ramli. Rafizi told reporters after the swearing-in of Parliament members that the protesters had the right to do so and he understood the gravity of the issue that they were contending with. "As far as I know, there is no law that prohibits them from expressing their dissatisfaction," Rafizi said. Bernama reported that 12 people who declared themselves as members of the Malaysian Undergraduates Solidarity Movement were arrested by police this morning as the group endeavoured to enter the Parliament compound. This incident occurred while members of Parliament were being sworn in. The group, who were allegedly members of the "Black 505" protest, tried to break through a police cordon and created a commotion along Jalan Parliament. An observer said one of the protestors landed a punch on a police officer's face during the incident. Other protestors threw obscenities at police while arrests were made.

https://theedgemalaysia.com/node/62193

Proton board not seeking other parties for takeover offer

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KUALA LUMPUR (March 15): Proton Holdings Bhd’s board of directors has picked Affin Investment Bank Bhd as an independent adviser for the non-interested directors and shareholders in relation to DRB-Hicom Bhd’s takeover offer. “The board of directors of Proton wishes to confirm that the board is not seeking any other person to make a take-over offer of its voting shares or voting rights,” it said in a statement to Bursa Malaysia. Proton also advised the holders of the offer shares not to take any action until they have received the independent advice circular from the independent adviser. On Wednesday, Proton received a notice of unconditional take-over offer from Maybank Investment Bank Berhad, on behalf of DRB-Hicom which had extended a mandatory take-over offer to acquire all the remaining 274.55 million Proton shares or 49.99% at RM5.50 cash per share.

https://theedgemalaysia.com/node/79988

Solution available for Kajang standoff, says expert

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Last Updated: 2:02pm, Nov 11, 2013 PETALING JAYA (Nov 11): The standoff amongst the Kajang Municipal Council (MPKj) council can easily be resolved with the Local Government Act 1976 which provides the framework to deal with such disputes. Petaling Jaya City Council (MBPJ) councillor Derek Fernandez said the Selangor state government should investigate the allegations made against MPKj president Datuk Hasan Nawawi Abd Rahman as reported in fz.com today. “Where there is an allegation of impropriety against the president, resulting in a vote of no confidence against him, it is incumbent on the state to move immediately to investigate the complaint,” said the planning and local government law expert. According to an audit conducted by the Selangor Financial Officer, MPKj lost RM10 million in revenue after Hasan gave a discount on development charges to developers involved in eight projects in the township. A second audit by the State Secretary confirmed the earlier audit, saying it was a breach of Section 33 of the said act and by right, should be a cause for disciplinary action or even an investigation by the Malaysian Anti-Corruption Commission (MACC). According to Fernandez, if there was insufficient evidence, then the complaint had to be dismissed and the councillors notified. Whereas, if there is assumed evidence, then the state must relieve the president of duties pending the final determination. “The deputy president is then sworn in, and as provided under the law, exercises the power of the president as an acting president. This way there is no disruption of the council's work as a statutory body. “The councillors are obliged to attend the meetings and as they took an oath of office, they must attend it if the deputy president chairs it, pending the final determination on the allegations,” he added. Fernandez pointed out that Section 10 (1) of the act defines local authority as “not less than eight and not more than 24 councillors with the president.” “Hence, no decision made can be a decision of the local authority, unless this quorum is satisfied,” he pointed out. The problem with the state government making decisions within the local governments, such as planning approvals, Fernandez added was that it may be beyond their jurisdiction and open to challenge. As far as the allegations against the councillors go, it should be treated in a similar professional manner, stated Fernandez. Hence the reason, a minimum of eight councillors were needed to operate. “If there is prima facie evidence against the councillor then they should be relieved of duties pending a final determination. "All these investigations and a disciplinary hearing must he held within 30 days and a decision immediately made, and not dragged on,” he stressed. The law, added Fernandez, also requires the president and councillors to report any power abuse or allegation of corruption to the MACC and the state secretary. For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation.

https://theedgemalaysia.com/node/1736

Hua Yang unit sells land parcel to Tesco

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The township was first developed in 1999 with a gross development value (GDV) of RM616 million to cater to the growing university student population there. "This will certainly benefit residents, especially university students residing in the township, as it will be a one-stop destination for their everyday needs. Fresh food, groceries and household needs and even apparels, are under one roof," Hua Yang Bhd's chief operating officer Ho Wen Yan said in a press statement yesterday. Bandar Universiti Seri Iskandar is located within the education park that houses higher education institutions such as Universiti Teknologi Mara (UiTM), Universiti Teknologi Petronas (UTP), Institut Perdagangan Mara (IPM) and Institut Kemahiran Belia Negara (IKBN). Hua Yang said property prices in the township had been kept at an affordable rate ranging between RM119,800 and RM238,000 to ensure that university students and families were able to afford the residential units. Moving forward, Hua Yang will continue to provide affordable homes, with ongoing nationwide projects such as Symphony Heights in Selayang (RM160 million in GDV), Metro Pengkalan in Batu Gajah (RM160 million in GDV) and Taman Pulai Indah in Johor (RM818 million in GDV).

https://theedgemalaysia.com/node/25197

RHB sees good earnings growth in ILB

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Integrated Logistics Bhd (Jan 13, 97.5 sen)Upgrade to outperform at 89.5 sen, fair value raised to RM1.24: Integrated Logistics Bhd (ILB) has signed up idX as the tenant for its new warehouse in Wujiang, 50km from Shanghai. The US-based interior design firm with international clients such as Nike, Ralph Lauren, Tommy Hilfiger, Starbucks and Calvin Klein has taken up the entire 280,000 sq ft of phase 1 of the project. ILB is planning phase 2 with a total area of 240,000 sq ft. Phase 1 cost the company about RMB110 million-RMB120 million (RM54 million-RM59 million while phase 2 would cost only RMB30 million-RMB40 million as the bulk of the basic infrastructure for the entire project has been put in. ILB’s China associate Foversun, a tank farm owner/operator in the Yangtze Delta region, was listed on the Catalist Board of SGX under the name Hengyang Petrochemical Logistics Ltd on Oct 9, 2009. During its IPO, 18 million new shares priced at S$0.38 (91.58 sen) per share were offered to investors by way of private placement, raising gross proceeds of S$6.8 million that would largely be used to finance part of its new tank farm project called Deqiao Phase 1. At the last traded price of S$0.455 and its enlarged share base of 118 million shares, Hengyang boasts a market value of S$53.7 million. ILB’s 25.4% stake in the company (diluted from 30% previously) is therefore worth RM32.8 million or 17 sen per ILB share.We understand that there is a possibility that ILB may embark on a new warehouse project in the eastern central part of China, backed by a long-term tenancy signed with a multinational. We understand that if this happens, the new warehouse project may boost ILB’s top line in China by 30%. We have yet to reflect this possibility in our forecast. Despite the credit crisis, cold room rates in Dubai have held up due to a shortage. This augurs well for ILB’s 50%-owned warehouse currently under construction in Dubai that is substantially equipped with cold room facilities. The project is expected to be fully completed by end-2010. We are raising ILB’s indicative fair value by 33% from 93 sen to RM1.24 based on 13 times revised FY12/10 earings per share (EPS), at a 30% premium to our benchmark one-year forward target price-earnings ratio (PER) for the transport and logistics sector of 10 times to reflect ILB’s superior earnings growth visibility with the good execution of its second wave of investment/expansion in China. — RHB Research Institute, Jan 13 This article appeared in The Edge Financial Daily, January 14, 2010.

https://theedgemalaysia.com/node/73360

Gold down nine sen at RM127.93 per gramme at 9.30am

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KUALA LUMPUR (NOV 18): The physical price of gold as at 9.30am stood at RM127.93 per gramme, down nine sen from RM128.02 at 5pm last Friday.

https://theedgemalaysia.com/node/22783

#Today's Diary* What to expect on Nov 24, 2009

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1. Information Communication and Culture Minister Datuk Seri Dr Rais Yatim attends the ministry's 2009 Quality Day at Kompleks Kraftangan's auditorium, Jalan Conlay at 8.30am 2. Higher Education Minister Datuk Seri Mohamed Khaled Nordin attends the ministry's Innovation Day at Complex E auditorium, Putrajaya at 8.45am 3. Tun Dr Mahathir Mohamad attends a briefing on the proposed amendment to the Islamic Family Law (Federal Territories) Act to Perkim and Islamic non-governmental organisations heads at Dewan Muslimin, Masjid Wilayah Persekutuan, Jalan Duta at 9am 4. Dewan Rakyat sitting at Parliament at 10am 5. Deputy Education Minister Datuk Wee Ka Siong attends the Malaysian Teachers' Education Institute Convocation at Sri Siantan Hall, Perbadanan Putrajaya Complex, Precinct 3, Putrajaya at 2.15pm

https://theedgemalaysia.com/node/35185

Kumpulan Euro sells 55m Talam shares or 1.94%

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KUALA LUMPUR: Kumpulan Europlus Bhd disposed of 55 million shares of Talam Corporation Bhd or a 1.94% stake for RM5.79 million. KEuro announced on Thursday, Aug 12 the disposal was made at an average price of 10.5 sen per share. “The disposal gave rise to a net profit of RM2.49 million or 0.53 sen per ordinary share. The net assets of KEuro also increased by 0.53 sen to 19 sen per ordinary share. “The effect of the disposal has reduced the gearing ratio of the company from 2.95 to 2.84. (Based on audited financial statement as at Jan 31, 2010),” said KEuro. The company said the book cost of the shares was RM3.30 million. The shares arose from conversion of redeemable convertible secured loan stock-D on May 31, subsequent to the acquisition of the loan stocks on May 20.

https://theedgemalaysia.com/node/34784

Hong Leong Bank denies allegations

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KUALA LUMPUR: Hong Leong Bank Bhd, which is suffering another round of allegations from its union amid an ongoing trade dispute, refuted claims that it has barred its Muslim employees from praying. “Hong Leong Bank categorically affirms that it is respectful of all religious practices. The bank respects the religious beliefs of all its employees and is supportive of their freedom to practice their faith,” the bank said in a statement yesterday. “The allegations against the bank that it didn’t allow some NUBE (National Union of Banking Employees) members to pray at the Kelantan and Kuantan branches’ prayer room (surau) is a gross distortion of facts. “The bank would like to state that these NUBE members were not staff of the particular branches and, accordingly, could not be allowed access into the secured area [containing the main vault]where the surau is also located.” It added it is the standard security policy of any financial institution that no one except the staff of that branch is allowed access to its secured area. The bank noted it is currently involved in a trade dispute with NUBE, which has been referred by the Minister of Human Resources to the Industrial Court. “The recent spate of allegations by NUBE against the bank should be viewed in that light,” it said. This article first appeared in The Edge Financial Daily, on January 10, 2014.

https://theedgemalaysia.com/node/13188

Malaysia's Meritus take step closer to F1 dream

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KUALA LUMPUR: GP2 chief executive officer Bruno Michel has welcomed Meritus Racing’s intention to race in Europe by 2011.The Malaysian outfit, who are the only Asian team granted a licence to compete in GP2 Asia, last week announced their plans to race in GP2 Europe in  2011 with an eye to be ready to compete in Formula One fiveyears later. That plan moved closer to becoming a reality when Michel said he will welcome Asia’s most successful racing team — who have won an incredible 32 international titles since 1996 — with open arms. “Meritus have a special place in GP2 Asia, and I would welcome in advance, not only their participation in the third year of the GP2 Asia Series, but also if they decided to come to the GP2 main series (in Europe),” said Michel. “Meritus have integrated well in the new world of GP2 and have shown they can compete at the highest level, a level of motorsport that has produced champions like Nico Rosberg, Heikki Kovalainen and F1 world champion Lewis Hamilton.” GP2 is the F1 development series for drivers and teams. One of the new F1 teams ‘CamposF1 have spent the last four GP2 Europe seasons training and developing their motorsport technology. Meritus have similar aspirations and are taking a step-by-step approach to achieve their ultimate goal — to race in Formula 1. The first step is to provide the necessary training to develop a National Malaysian Motorsport Technical (MMT) centre and establish a place of engineering excellence to train Malaysian engineers and technical staff ready to design and produce formula cars for export and hopefully to design a Malaysian F1 car by 2016. Meritus have impressed Michel with their ability to secure podium finishes and fastest laps in GP2 Asia, despite racing against established European teams, who have the added advantage of testing during the European season. “I was very impressed with Meritus’ first season. In the second season, the team for some reasons did not capitalise on their first podium in Shanghai. A pity, and I hope they get the result they deserve in their third season with us,” said Michel. Meritus have a reputation of unearthing talented drivers with F1 pilots such as Narain Kartikeyan, Takuma Sato and Recardo Rossett all Meritus graduates. Former McLaren F1 driver David Coulthard’s first tests in a slicks and wings formula car was with Meritus in 1990. Seven years from now, with proper planning and preparation, a Malaysia team could be in F1. With Michel’s blessings, it could start with GP2 Europe in 2011.

https://theedgemalaysia.com/node/52001

Gerakan: Charge, if not release 6 PSM detainees

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KUALA LUMPUR: The Gerakan has called on the government to release the six members of Parti Sosialis Malaysia detainees if no offences have been committed by them. Gerakan deputy president Datuk Chang Ko Youn said on Monday, July 18 that if the six had indeed committed offences, then they should be charged without delay. “The continued detention and the uncertainty surrounding the whole episode will undermine the image of the government in the eyes of the world. “The country upholds the Rule of Law and protection of fundamental human rights where anyone detained must be informed of  the grounds of detention and shall be charged promptly if there are sufficient evidence to charge the person,” he said. Chang, who is also Gerakan human rights and law bureau chief, said by keeping the people guessing without any satisfactory public explanation does not augur well for Malaysia's record in human rights protection. “Waging an ideological campaign without the use of force or violence is not a heinous crime and shall not be treated as criminal.  Thus a public statement on the circumstances leading to the arrest and detention of the six PSM detainees shall be made forthwith,” he said.

https://theedgemalaysia.com/node/14689

$130 billion a year wasted on poor quality education: UN

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PARIS (Jan 29): A quarter of a billion children worldwide are failing to learn basic reading and maths skills in an education crisis that costs governments $129 billion annually, the UN's cultural agency warned in a report Wednesday. Inadequate teaching across the world has left a legacy of illiteracy more widespread than previously thought, UNESCO said in its annual monitoring report. It said one in four young people in poor countries was unable to read a sentence, with the figure rising to 40 percent in sub-Saharan Africa, The United Nations defines "youth" as people aged between 15 and 24, although UNESCO's definition varies across regions. "What's the point in an education if children emerge after years in school without the skills they need?" said Pauline Rose, the director of the nearly 500-page Education for All Global Monitoring Report. In a third of countries analysed, fewer than three-quarters of existing primary school teachers were trained to national standards, while 120 million primary age children across the world had little or no experience of school, the UNESCO report found. "The cost of 250 million children not learning the basics is equivalent to $129 billion, or 10 percent of global spending on primary education," the report said. Thirty-seven countries monitored by the report are losing at least half the amount they spend on primary education because children are not learning, UNESCO said. In developed countries including France, Germany and the United Kingdom, immigrant children lag behind their peers, performing far worse on minimum learning targets. Indigenous groups in Australia and New Zealand face similar problems, it said. The report called for global education policies to focus not only on enrolment rates but also on equal access and better teaching. "Access is not the only crisis -- poor quality is holding back learning even for those who make it to school," UNESCO director general Irina Bokova wrote in the report's foreword. She said it was clear that the educational targets set in 2000 by the UN's Millennium Developments Goals would not be reached. Rose said "new goals after 2015 must make sure every child is not only in school, but learning what they need to learn".

https://theedgemalaysia.com/node/71231

Bioeconomy an attractive growth proposition for M'sia

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ONE of the key drivers in propelling the nation towards becoming a high-income, fully developed economy by 2020 lies in identifying high-growth economic areas. Based on our history and track record, agriculture economic activities have always been a Malaysian forte, creating strong leverage for growth in biotechnology. In 2005, the government recognised biotechnology as one of the key strategic drivers that will drive greater social and economic development. This was followed through with the creation of the National Biotechnology Policy (NBP), Malaysia's biotechnology Master Plan (2005-2020), championed by the Ministry of Science, Technology and Innovation, and to be implemented by the Malaysian Biotechnology Corporation Sdn Bhd (BiotechCorp). Seven years on, the Malaysian biotechnology industry has flourished significantly. At the end of Phase 1 of the NBP, the industry charted a commendable performance with RM5.4 billion worth of investments while generating a total of RM13.5 billion in revenue and creating 54,776 job opportunities. Contributing 2.2% to the GDP, the industry has the potential to spur the country towards becoming a high-income economy in the context of the New Economic Model. Today, we stand at an interesting new juncture for biotechnology as further impetus is created through the announcement of Bioeconomy Initiative Malaysia (BIM). It is a framework to implement the action plan outlined in the NBP for the development of the biotechnology industry in various fields and is envisaged to be one of the engines to improve the national economy. The initiative was endorsed by Malaysia's Biotechnology Implementation Council in May last year and launched by Prime Minister Datuk Seri Najib Razak during BioMalaysia 2011 in November last year. The impetus for developing a bioeconomy is driven by global sustainability concerns. The world population is expected to hit nine billion by 2050, which will result in a huge increase in demand for food and other resources, including medicines and health-related innovation. Additionally, with the depletion of fossil resources and the need for environmentally sustainable solutions, developing renewable energy sources continues to be a priority for many countries. In terms of business potential, the Organisation for Economic Development and Cooperation estimates that the bioeconomy will contribute a global average of 2.7% to GDP. The bioeconomy will contribute 10 to 14 new drugs per year over the next five years and be responsible for 10% of chemical production by 2030. Recognising the significance of the bioeconomy to a country's future growth and strength, major world economies such as the US and the European Union have begun initiating their own bioeconomy plans and blueprints in recent years. Malaysia, as one of the most competitive biotechnology hubs in Asia-Pacific, has also recognised the importance of the bioeconomy and taken early critical steps in coordinating and intensifying national efforts to harness its potential through the implementation of BIM. Leveraging the successes of NBP Phase 1: Capacity Building (2005-2010) — to create a conducive, sustainable ecosystem for R&D and commercialisation in the areas of agriculture, healthcare and industrial biotechnology — BIM is well positioned to further enhance the role of biotechnology as a key cross-cutting technology driver in transforming Malaysia into a high-income, knowledge-based economy. BIM aims to coordinate and intensify the nation's efforts to capitalise on the potential economic benefits of the entire biotechnology ecosystem and related value chains, in line with the government's Economic Transformation Programme (ETP) through the various relevant national key economic areas (NKEAs). This will be accomplished by maximising the participation of private industry in high-impact opportunities in all industries and economic sectors that produce, manage and utilise biological resources, including agriculture, forestry, fisheries, food, wellness, chemicals and renewable energy. Through BIM, Malaysia expects to unlock even greater opportunities in the local and regional biotechnology industry and enhance the participation of the private sector. In facilitating the participation of private players in the Malaysian biotechnology sector, BiotechCorp awards BioNexus status to qualified international and Malaysian biotechnology companies. This special status gives them access to fiscal incentives, grants and other guarantees, which places them in good stead to drive the industry's evolution. Since 2005, BiotechCorp has facilitated the development of 215 BioNexus-status companies in Malaysia with total approved investment of more than RM2 billion. I strongly believe that by optimising the nation's competitive edge through private and public participation, Malaysia will continue to further strengthen its local biotechnology ecosystem for the growth and development of a sustainable bioeconomy that will drive the country's socio-economic status to greater heights. Datuk Dr Mohd Nazlee Kamal is CEO of Malaysian Biotechnology Corporation. This story appeared in The Edge on Oct 15, 2012.

https://theedgemalaysia.com/node/46780

Cellars market: Return to Chardonnay

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The old favourite could soon be making a comeback as a drink de rigueur. A while back, I met the general manager of a luxury resort who declared, “When it comes to wine, I’m for ABC.” ABC? “Anything but Chardonnay.” Chardonnay was once considered the most voluptuous dry white wine in the world. Aged in old oak barrels — as was the method in Burgundy — it often retained a strong varietal character and sense of terroir. New World winemakers changed the game when they — in trying to meet the demands of the mass market — aged their Chardonnay in new barrels, which began to impart new characteristics such as honeyed vanilla and intense tropical fruit flavours. Chardonnay that goes through a secondary fermentation then often develops notes of butter and cream. The ABC crowd emerged about 10 years ago. Chardonnay had been the choice wine, the popular request at bars and restaurants. After a while, the growing crowd of wine lovers began to cry boredom as they began to tire of Chardonnay’s predictable ways. They cried, “Give me anything but Chardonnay, give me something that tastes like grape, give me Riesling, Gewurtztraminer or Pinot Gris …” They had had enough of the butter, cream and oak. But not everyone has lost hope in Chardonnay. In fact, Lilian Carter of Domaine Chandon in Australia’s Yarra Valley banks on it. “I find it fascinating to see how chardonnay progresses through the winemaking process. It’s one of the most diverse and complex varieties of grape, and it’s heavily influenced by the region and conditions it’s grown under,” she shared during a Chandon tasting session organised by distributor Moët Hennessy Diageo at Starhill’s Shook! restaurant in Kuala Lumpur. Domaine Chandon was originally set up by French champagne house Moët & Chandon in 1986 and dedicated to the production of méthode traditionnelle sparkling wine. It was only in August 2008 that it launched its still wines, to much acclaim from consumers and wine professionals alike. Chandon’s Green Point estate is renowned for its Chardonnay and Pinot Noir, the two important components of its Chandon NV Brut, the introductory bottle to the domaine’s stable of premium sparkling wines. I had a taste of the Chandon Brut NV at the tasting session with Carter. It’s a Chardonnay-led sparkling, with a soft, generous palate and a crisp finish. It makes for the perfect aperitif and even palate cleanser. I loved the creamy mid-palate flavours — a bit buttery and tangy at the same time. I also sampled the Chardonnay 2007. While I’m not sure if it was one of Carter’s blends, it was a pretty interesting wine, with hints of fresh zesty flavours balanced with subtle earthy notes, no doubt a result of the nine months it spent in fine grained French oak. It was highly complex and not at all dull on the palate. The complexity comes from the use of old wine in the blends. I’m not of the ABC crowd, nor am I a huge fan of Chardonnay. I’m more inclined to drinking reds, with Pinot Noir topping my list of favourite varietals. But I must admit, I did enjoy Chandon’s 2007 Chardonnay. However, if you’re looking for the cream of Chandon’s Yarra Valley Chardonnay crop, you should look for Domaine Chandon Barrel Selection, made from the best barrels of Chandon’s best Yarra Valley Chardonnay vineyards. The nose exudes vibrant aromas of white peach and citrus while fresh, zesty grapefruit and custard apple flavours are felt generously on the palate. Wild yeast fermentation and lees stirring has resulted in the wine achieving a soft, creamy texture. The wine is beautifully balanced with subtle mineral notes and oak-derived spice providing excellent length complemented by a fresh, crisp finish. Overall, what’s lovely about Chandon’s Chardonnays is that they are drinkable now, with a lot of expression. Cellar it if you want the added complexity, but do so for up to five years, then you should just drink it. When asked about the 2010 harvest, Carter said the vintage 2010 may be quite exciting as the vineyard enjoyed pretty consistent weather, with the right balance of warm and cool. Look out for it at the end of this year or early 2012. Coupled with Carter’s passion for the grape, it looks like Chandon might just be the ticket to winning back Chardonnay love from the ABC crowd. Chardonnay may soon return to centre stage as drink de rigueur. Domaine Chandon is located at 727 Maroondah Highway, Coldstream, Victoria. For more information, check out the website, www.domainechandon.com.au. This article appeared in Options, the lifestyle pullout of The Edge Malaysia, Issue 846, Feb 21-27, 2011 

https://theedgemalaysia.com/node/70442

FBM KLCI closes in the red

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KUALA LUMPUR (Oct 3): Bargain hunters along with gains from blue chips like Tenaga Nasional Bhd and Maxis Bhd help lift the market during the afternoon trading session, but still wasn't enough to bring the FBM KLCI out of the red. At 5pm closing, the FBM KLCI rebounded and cut losses after declining mid-morning Wednesday to close 1.28 points, or 0.08% lower, at 1,649.75 points. There were 295 gainers and 434 losers, while 317 counters traded unchanged. Volume was 846.83 million shares valued at RM1.74 billion. MIDF Research head of equity Syed Muhammed Kifni said the market was lifted in the afternoon, as bargain hunters took advantage of lower stock prices. "My guess is [that] bargain hunters were taking advantage of lower stock prices. But despite it all, I think the underlying market sentiment is still positive," he said. Meanwhile, senior technical chartist at TA Securities Stephen Soo added that the market was still quiet overall, but investors buying in certain blue chip stocks like Tenaga and Maxis helped pushed the market up. Some other notable gainers today include KrissAssets Holdings Bhd, Aeon Co Malaysia Bhd, Petronas Gas Bhd, Y&G Corp Bhd, and Hong Leong Bank Bhd. The FBM KLCI opened in the morning at 1,653.62 points, but was quickly dragged down by plantation stocks well below Tuesday's closing of 1,651.03 after just an hour of market trading. Kuala Lumpur Kepong Bhd fell by RM1.14 to RM20.9, Genting Plantations Bhd decreased by 34 sen to RM8.85, while Sime Darby Bhd saw a 33 sen decline to RM9.41. European stocks also dipped early on Wednesday, adding to the previous session's losses, as uncertainty surrounding a potential bailout for debt-stricken Spain and further signs of a slowdown in China rattled investors, according to Reuters. Most other major indices across Asia were also in the red after the Asian Development Bank (ADB) cut most of its 2012 and 2013 growth estimates for developing Asia. Hong Kong's Hang Seng Index added 0.23% to 20,888.28; Japan's Nikkei 225 fell 0.45% to 8,746.87.16; South Korea's Kospi declined 0.01% to 1,996.03, Taiwan's Taiex dropped 0.44% to 7,684.63; and Singapore's Straits Times Index dipped 0.15% to 3,074.62.

https://theedgemalaysia.com/node/26243

AmResearch: Cyclical bull rally has not prematurely ended

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KUALA LUMPUR: AmResearch Sdn Bhd believes there is more upside for the local stock market and from a fundamental standpoint; it does not think the cyclical bull rally in the market has prematurely ended. It said on Thursday, Jan 28 that for Malaysia, it expects gross domestic product to rebound by 5.7% in the first quarter 2010 (1Q10) and rise by a further 4.7% in 2Q10 before moderating to below 3% in the last two quarters of this year - as the low base effect tapers off. “Historically, market performance has been strongest when GDP accelerates, underpinning a macro backdrop for corporate earnings - to expand at an even faster pace than our current estimate of 25% for 2010 (2009: -2%),” it said. AmResearch retains its fair value of 1,450 for the FBM KLCI, based on 2010’s PE of 16.5 times or one standard deviation above its mean of 14.5 times. Market should trade above its long-term average because corporate earnings growth of 25% set to rise this year is already more than three times the historical average growth rate of just 7% per annum. “This market correction, therefore, presents an opportunity to accumulate quality stocks,” it said, adding several “high-beta” stocks on its Buy list that have been sold down in recent days are CIMB, IJM Land, Tenaga Nasional, Ann Joo Resources, AirAsia, Unisem, MPI and Genting Group. To recap, it said that in recent days, the market rally has been somewhat destabilised by policy tightening surprises in China where it again moved in to curb banks from lending. The FBM KLCI retraced 43 points (down 3%) on Wednesday from its recent peak of 1,308 on Jan 21 with risk aversion resurfacing. It said the issue was whether this correction signaled the beginning of a valuation de-rating or a transitory mid-cycle pullback due to profit taking after a strong start since early this year. AmResearch said it appears unlikely that China’s policy tightening will undermine its economic growth (4Q GDP: 10.7%) and by extension, de-rail the global economic recovery already gathering pace. Its baseline view is that the macro momentum remains robust. “We continue to believe that the cyclical economic upswing will be most significant in 1H 2010, given a depressed base last year,” it said. For Malaysia, its analysis of previous earnings-driven rally from trough to peak - in 1998/1999 and 2001/2002 - also indicates that an uptrend has never been shorter than 12 months. The rallies in 1998/1999 and 2001/2002 sustained for 16 months and 12 months; respectively. Corporate earnings rebounded by a strong 36% in 1999 after contracting 20% in 1998. In 2002, corporate earnings accelerated by 24%, from just 3% in 2001. “We are only just 10 months from lows seen in March 2009, and corporate earnings are still expanding with upside bias. To be sure, the previous earnings-driven rally from trough to peak - in 1998/1999a and 2001/2002 - was also punctuated by three mid-cycle corrections. Pullback was transitory, stretching no longer than two months. Dips were 15% to 22% off intermittent highs,” it said. AmResearch said a 15% pullback from the market’s recent high of 1,308 means that it might form a base at 1,112 (or a 2010’s price-to-earnings of 12.8 times), implying a potential downside risk of 12% from the current 1,265. However, the flipside is that the market will correct to 1,112, if it materialises. This would imply that an earnings-driven rebound to our fair value of 1,450 would also produce an attractive potential return of 30%, outweighing a downside risk of 12%. “Thus, even though trading conditions might remain volatile at least until concern of policy risk dissipates, the upside potential is greater than downside risk,” it said. It remained committed to its view that profit drivers - particularly for cyclicals - auto, banks, construction, property, transport and technology and media are solidifying as end-demand and margin recovery kick-in to accentuate an earnings rebound.

https://theedgemalaysia.com/node/38003

Prose & pastries

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If you’ve been to Times Bookstore in Bangsar Shopping Centre, you would have noticed a signboard towards the back that says Huckleberry. If you mistook it as referring to Mark Twain’s popular character, you certainly won’t be alone. I would have never realised it was actually a most charming café if not for a phone call from a foodie friend of mine, begging me to come try this delicious new dessert the café sold called whoopie pies. “Forget cupcakes,” he said. “This is the new dessert to have.” He was right. Overtaking cupcakes as the chic, must-have at weddings across the US and the UK, whoopie pies are quickly becoming the dessert du jour. But while this latest buttercream-stuffed, sugar-rich novelty to hit our waistlines may have a giggle-worth name, it is a little misleading. A classic whoopie pie is not a pie at all, but is sort of a cross between a cookie and a cake sandwich, since it has a drier bite than regular sponge. It’s basically two chubby domes of firmer-than-usual chocolate cake stuck together with a thick filling of whipped-up vanilla butter cream. The versions at Huckleberry come with the options of butter cream, peanut butter and salted caramel. Okay, so it’s a little bit hard to take a name like whoopie pie seriously in a culinary context until you understand its origins. A traditional Amish dish, these were what farmers toiling in the fields would receive in packed lunches as dessert. Its name comes from the farmer’s delighted reaction when they uncovered their dessert at the bottom of their lunch pails. Owner of Huckleberry Jenifer Kuah (who started Food Foundry in Section 17, Petaling Jaya) heard about whoopie pies from a friend and picked up the recipe from the Internet. Impressed with the results, she put it up for sale at the café and saw it fly off the shelves. Having tried several pies one Thursday afternoon, an easy favourite of mine was with the salted caramel filling. The caramel flavour was strong, and its slightly salty taste contrasted with the butter cream and the chocolate bun beautifully. This is a great option for dessert lovers who tend to be overwhelmed by too much sugar, as whoopie pies aren’t all that sweet. “I love the simplicity and wholesomeness of whoopie pies, which is I think the same reason other people find it so good as well,” Kuah observes. “Butter cream is also something very familiar and nostalgic to many of us — remember the Angel brand cakes we all used to eat as kids? It was always covered in that slightly salty, sweetish, buttery cream.” Its popularity versus cupcakes can also be attributed to another thing — it’s much easier to eat. Cupcakes can be unbalanced by their topping, whereas with a whoopie pie you bite into the sponge first and then get the satisfaction of the cream filling neatly tucked inside. If it is a full-on sugar rush you want, Huckleberry’s macaroons will do the trick. Except that Jenifer has developed a clever way to present them — in larger sizes, and with unusual flavours. I managed to sink my teeth into pineapple, onde onde and teh tarik macaroons, and truly the flavours are unbelievable. “I didn’t want to make macaroons in the traditional French way — so many other people already do that in KL, and they do it really well. I wasn’t interested in competing with them, so my pastry chef and I developed our own recipes based on flavours we liked that were from our childhood or based on our own memories. The teh tarik and onde onde flavours were actually inspired by Hari Raya,” Kuah says. What fun, I say, and Kuah agrees. “That’s definitely the point. I like the products we well at Huckleberry to be fun and reflect a spirit of adventure. I like to also shift the paradigm a little — why should we do things like everyone else? I love the idea of doing something completely out of the ordinary. Innovation is what keeps the business running. It keeps me going too,” she says in earnest, placing before me a dish that made Food Foundry really famous. Adapted from a French pastry called mille-feuille, Kuah’s creation is called mille crepe — layers and layers of soft crepes interspersed with generous layers of jam, vanilla cream or chocolate cream. Delicious and exquisite are two words that come to mind, but they are still quite inadequate to describe how tasty they are. Huckleberry is a little small, but the next branch of this café, set to open in Times Bookstores in Pavilion KL next month, will be a little larger and perhaps adopt a stronger aesthetic relating to its charming name. But one thing will remain, Kuah promises. “Yes, we’ll definitely still have the whoopie pies.” This article appeared in The Edge Financial Daily, October 4, 2010.

https://theedgemalaysia.com/node/63911

#Urgent* Thai anti-govt protesters cut electricity at police HQ and police hospital, says Reuters witness

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Urgent : Thai anti-govt protesters cut electricity at police HQ and police hospital, says Reuters witness

https://theedgemalaysia.com/node/19815

Sime Darby Property is No 1 for 2009

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The awards rank property developers in the country from the consumer’s perspective and developers were judged on both their quantitative (shareholders’ funds, group pre-tax profit, revenue, gearing and cash plus cash equivalents) and qualitative (product quality, innovation and creativity, value creation for buyers, image and expertise) attributes. SDP, the property division of Sime Darby Bhd, is the developer of townships such as Ara Damansara, Putra Heights and Bukit Jelutong, all in the Klang Valley, while S P Setia is the developer of Setia Alam and the award-winning Setia Eco Park in Shah Alam, Selangor. Sunway City Bhd comes in at third place, retaining its position held last year. In fourth place is IGB Corp Bhd, the developer of Mid Valley City. Non-listed Island & Peninsular Sdn Bhd (I&P), the previously listed IOI Properties Bhd and Bandar Raya Developments Bhd took the fifth, sixth and seventh positions, respectively. I&P was voluntarily delisted in July 2007 and on May 1, 2009, I&P Group Sdn Bhd emerged following a rationalisation and merger exercise of I&P, Petaling Garden Sdn Bhd and Pelangi Sdn Bhd. Eastern & Oriental Bhd is at number eight while in ninth spot is Sunrise Bhd, the name synonymous with the high-end high-rise residential enclave of Mont’Kiara. It also came in as the best developer in qualitative attributes. In 10th place is non-listed Bandar Utama City Corp Sdn Bhd, the developer of Bandar Utama which was in seventh place last year. Companies listed on the property sector of Bursa Malaysia automatically qualify for the ranking. Quantitative attributes of listed companies were sourced from published sources compiled by Interactive Data Systems Sdn Bhd, while non-listed companies were required to submit copies of signed audited accounts. A total of 15 submissions were received from non-listed companies this year. All companies were judged on the FY2008 financial results. A panel of industry experts and veteran property developers judged on the qualitative aspects of the companies. The judges were Datuk Alan Tong, Datuk Richard Fong, Datuk Jeffery Ng, Datuk Teo Chiang Kok, Kumar Tharmalingam and Datuk Eddy Chen. The Edge was represented by its executive editor Au Foong Yee, who is also the editor of City&Country and theedgeproperty.com. The judges abstained from deliberation and judging companies in which they have direct or indirect interest. They are Fong for Glomac Bhd, group executive vice-president; Teo for Bandar Utama City Corp (director), Ng of Sunway City (executive director), Chen for Metro Kajang (MD) and Au for Sunrise (Sunrise and The Edge have in common a major shareholder). The results were audited by Deloitte Malaysia for the third year running. For more details on the ranking read the Oct 12 issue of City & Country in The Edge Malaysia and view a video of the awards presentation night at www.theedgeproperty.com.

https://theedgemalaysia.com/node/14885

#Technicals* Palm oil to rise to 2,556 ringgit

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SINGAPORE (Jan 29): Malaysian palm oil is expected to rise to 2,556 ringgit per tonne, driven by a wave c. This wave will reverse the preceding wave b, which has completed around a support at 2,512 ringgit, the 76.4 percent Fibonacci retracement on the rise from the Jan. 13 low of 2,486 ringgit to the Jan. 23 high of 2,595 ringgit. A Fibonacci projection on the wave c reveals an immediate target at 2,556 ringgit, the 38.2 percent level, a break above which will open the way towards 2,581 ringgit, the 61.8 percent projection level. A break below 2,512 ringgit may cause a further loss to 2,486 ringgit. - Reuters

https://theedgemalaysia.com/node/85770

Wee: Let MCA grass roots, not leaders, decide on EGM

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KUALA LUMPUR: MCA Youth chief Datuk Wee Ka Siong said the decision to hold an EGM to review the party’s resolution to give up its Cabinet posts must be based on the will of the grass roots. Wee said the issue is not whether it is appropriate to call for an EGM but whether the grass roots are opting for it, and a leader should not pre-judge what the party members want. When asked what the will of the grass roots is, Wee merely said: “Ask the president [Datuk Seri Chua Soi Lek].” Since the May 5 general election, more than 10,000 MCA leaders have resigned from their government posts, including local councillors, village headmen and community leaders. Party grassroots leaders have been urging the party leadership to hold an EGM to deliberate and review the “no Cabinet post” decision. According to the Section 30.1 of Party Constitution, the president has the right to call for an EGM. The resolution was mooted by Chua and subsequently backed by the party central committee and central delegates at the 2011 and last year’s AGM. Wee, who is also the Ayer Hitam MP, said even though MCA representatives have not taken up any government posts, they can still play active roles as backbenchers and MPs. However, he admitted that without Cabinet posts, MCA does not have the convenience it enjoyed previously of bringing any issue directly to the Cabinet; therefore, Parliament will be the best platform for MCA now. “However, it doesn’t mean we cannot play our role while Parliament is not in session. Give us some time, when parliament session convenes, we will raise some issues,” Wee told reporters after attending the briefing session for MPs in Parliament yesterday. — By Chen Shaua Fui For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation. This article first appeared in The Edge Financial Daily, on June 12, 2013.

https://theedgemalaysia.com/node/45190

Pos Malaysia net profit down 59pct to RM6.08m from yr ago on Transmile, impairment

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KUALA LUMPUR: Pos Malaysia Bhd’s net profit fell 59% to RM6.08 million in the fourth quarter ended Dec 31, 2010 from RM14.93 million a year ago due provision for its investment in Transmile Group Bhd and one-off impairment provision for the capital expenditure. It said on Monday, Feb 28 that its revenue rose 23.4% to RM277.33 million from RM224.58 million while earnings per share were 1.13 sen compared with 2.78 sen. Pos Malaysia said it recorded 16.9% growth from operations of RM26 million (2009: RM22.2 million) for the quarter ended Dec 31, 2010 due to an increase in revenue by 23.5% on-year. “As a result of provision of the investment in Transmile and one-off impairment provision relating to capital expenditure (capex) incurred for the postal counter system, the profit before taxation for current quarter was RM10.0 million as compared to RM28.4 million in the preceding year corresponding quarter,” it said. For the financial year ended Dec 31, 2010, its earnings declined by 11% to RM67.11 million from RM75.41 million in FY09. Its revenue rose 12.4% to RM1.014 billion from RM902.56 million.  EPS were 12.50 sen compared with 14.04 sen. “The group registered a substantial growth of 28.3% in profit from operations of RM105.7 million (2009: RM82.4 million) for the year ended Dec 31, 2010, as a result of domestic tariff increase in the middle of the year coupled with the benefits realised from transformation initiatives,” it said. Pos Malaysia said FY10 included two major impairment provisions; one relating to provision of the investment in Transmile Group Berhad (TGB) of RM25.1 million and the other is the one-off impairment provision relating to capex incurred for the postal counter system (classified under property, plant and equipment) of RM22.3 million. “As a result of these impairment provisions, the profit before taxation registered RM99.1 million as compared to RM109.3 million in the previous financial year ended,” it said.

https://theedgemalaysia.com/node/85484

F&N to maintain market leadership, increase distribution

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KUALA LUMPUR (May 8): Fraser & Neave Holdings Bhd (F&N) plans to mantain its core market leadership and increase distribution of newly launched products as it eyes expansion across Asia, chief executive officer Datuk Ng Jui Sia said. Ng said with the synergy resulting from the recently-concluded TCC Asset takeover of Singapore-listed Fraser and Neave Ltd, the group's prime emphasis will be enhancing customer service and brand awareness instead of pricing. "For the dairy products segment, the group is looking to mantain its 60% market share. "This is on top of the 30% to 35% for the read-to-drink products and 85% for soft drinks," he told reporters during a briefing on the company's latest financials.

https://theedgemalaysia.com/node/97601

Highlight: Bidders refuse to bid; help owners save houses

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TAIPING (Aug 28): Four houseowners who were supposed to have their homes auctioned yesterday had a last-minute reprieve by none other than the bidders to their houses. The potential buyers at the Taiping High Court auction house refused to bid for the properties of Jonathan Ng and his small group of victims who are victims of a procedural breach in the Banking and Financial Institutions Act (Bafia) and the National Land Code (NLC). Prior to the start of the auction, Ng and the other victims including Wong Chun Mun, Megat Azmi and couple Ng Siew Imm and Lee Chek Chuan pleaded to the other bidders to not purchase their properties. It was a heart-wrenching scene when Ng's mother, Susan Cheong, broke in tears telling everyone that they have lived in their homes for 10 years and have become the victim of an alleged cheating scheme thought up by their property's developer, KS Properties Sdn Bhd. "We were cheated of our homes. We have fully paid. But they're trying to take our homes away! Please! Don't buy our house, we don't have a place to stay!" begged a tearful Cheong. Another victim, Megat Azmi also appealed for compassion, showing a picture of his ill baby, saying that he has not slept for month trying to raise funds for his house. "Please, please… I just want my house back… Please… please don't fight with me when I start bidding," said Megat Azmi, who finally caved in to the demands of debt collection agency Gale Force Sdn Bhd by repurchasing his home. The bidders not only showed solidarity in not bidding for any of the Taman Suria Permai, Taiping houses that came up on the block but even tried to discourage Megat and couple Lee Chek Chuan and Ng Siew Imm from repurchasing their homes. They informed Lee that they are not interested in his home and will not contest but the couple went ahead, saying they just wanted to get on with their lives. "How long can we suffer? This time around we are lucky no one wanted to contest against us when we began our bid. We paid RM108,000 again yes but how many times must we go through this kind of pain? We don't want to go through this again," said Siew Imm. Megat on the other hand said that he would have fought on if only his baby was not ill. "I have a family. I can't do this anymore. I didn't sleep for a month and I am here with my group. I don't want to leave my group but I have to think of my baby! I had to find ways to raise money again to repurchase my home!" said a tearful Megat whose bid for his own home cost him an extra RM162,000. fz.com first reported this incident on Aug 21, where at least six individuals might lose their homes due to procedural breaches in banking and land laws. In Ng's case, he had paid for his house in full to the developer via his lawyer, the late Tan Hooi Meng. Tan, 45, who was found dead in Taiping last year under mysterious circumstances. Now, the title is being held by the court. The other five victims had also fully settled the purchase price for their properties. The developer, Koi Kim Seng, owner of KS Property Sdn Bhd also died under mysterious circumstances in 2008. His death was the catalyst that caused all these problems to the poor victims in Taman Suria Permai. Maybank sold off Koi's non-performing loan to foreign-owned debt collection agency Gale Force Sdn Bhd, which included the six properties to be auctioned. The transaction can be considered illegal as Ng's lawyer, Jennifer Thomas, had previously pointed out that Maybank did not receive the consent of the houseowners (victims), the Perak state authority nor the finance ministry. A bidder who owns a realtor company told fz.com that he "pities" them. "This is not the first time I've seen them here. I know their case and normally, when it's them, the realtors get together and try to inform the other bidders not to purchase their houses. It's wrong. Thank God they managed to retain their homes again," he said.

https://theedgemalaysia.com/node/51324

Japan's Abe says 2014 Q3 GDP key to second sales tax increase

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TOKYO (Dec 20): Japan's economic growth in the July-September quarter next year will be a crucial factor determining whether the government proceeds with a second stage of sales tax increases in 2015, Prime Minister Shinzo Abe said on Friday. The government has already decided to raise the sales tax to 8 percent from 5 percent in April, which is part of a two-stage increase that will bring the tax rate to 10 percent in October 2015. Abe said he wants to see whether the economy rebounds in July-September quarter from an expected downturn after the first sales tax hike in April, before deciding whether to go-ahead with the second increase in the tax. "Household spending will fall in the April-June quarter. What's important is for the economy to avoid a downturn," Abe told a television programme on Friday. "I'd like to make a decision on the next tax hike after confirming figures on the economy for July-September," he said. Abe also repeated his plea to Japanese companies to increase wages, which he described as crucial in making the current economic recovery sustainable. Japan's preliminary third-quarter gross domestic product (GDP) data is usually released around November. - Reuters

https://theedgemalaysia.com/node/90222

Sime Darby not involved in open burning

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KUALA LUMPUR: A day after the Roundtable on Sustainable Palm Oil (RSPO) identified Sime Darby as one of the five members allegedly involved in the current forest fires in Indonesia, the conglomerate has swiftly produced satellite data to deny the accusation. Yesterday, its plantation arm Sime Darby Plantation Sdn Bhd (SDP) provided satellite data of its concession areas in Indonesia, which confirmed that there were no fires on its operating areas in Riau. The concession areas are operated by PT Tunggal Mitra Plantation (PT TMP) and PT Bhumireksa Nusa Sejati (PT BNS)."The matching of the hotspot data and the maps of the concession areas showed that all hotspots were outside of PT TMP's concession. There were three hotspots within PT BNS' concession area. "However, they are located outside of the company's operating area. As explained previously, local communities occupy and plant cash crops such as corn, sugarcane and pineapple as well as perennial crops such as coconut and areca nuts on these lands,” Sime Darby said in a statement yesterday. Besides Sime Darby, the other companies identified by RSPO as allegedly involved in open burning were PT Jatim Jaya Perkasa and Sinar Mas of Indonesia, and TH Plantations Bhd and Kuala Lumpur Kepong Bhd of Malaysia. These companies were ordered by RSPO to submit digital maps of their plantations in Kalimantan and Sumatra within 48 hours for investigation. The maps will be used to assess and analyse against the published mapping of the forest fires by NASA and NOAA (National Oceanic and Atmospheric Administration). Sime Darby said SDP reviewed hotspot data from the NASA satellite for the period from May 25 to June 25, 2013, and overlaid the company 's own global positioning system map of the concession areas under PT TMP and PT BNS."SDP would also like to point out that the NASA satellite had outdated information on our land concession areas. The concession areas had been reduced after the final land licensing process was concluded. "The NASA satellite showed PT BNS' concession area as 180,392ha, when it is in fact only 25,662ha. Of this, 18,688ha are the actual planted area, while 1,530ha are under the company's residential and development areas. The remaining land is now mostly occupied by local communities.” Sime Darby said there were also discrepancies with regard to PT TMP's concession area. "Data from the NASA satellite states the size of the company's concession area as 38,473ha. The actual concession area is only 13,836ha, out of which 2,474ha are occupied by local communities.” Sime Darby said it will publish and submit these findings to the RSPO as requested. “SDP and its companies will continue to cooperate with local authorities to manage any hotspots and fires in the interest of its workers, the general public and the environment,” it added. Industry observers said the swift response by Sime Darby reflected its seriousness in not running afoul of the RSPO's principles and criteria on open burning, which is strictly prohibited. Any infringement on this rule may result in its “green certificate” being revoked, thus making it hard to sell its sustainably produced palm oil in western countries, especially in Europe. According to its website, Sime Darby is one of the world's top producers with about 2.44 million tonnes or 5% of the world's crude palm oil output annually. This article first appeared in The Edge Financial Daily, on June 27, 2013.

https://theedgemalaysia.com/node/60197

Rosmah’s safety more vital than cost of using executive jet: FT Umno delegate

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Last Updated: 5:45pm, Dec 06, 2013 KUALA LUMPUR (Dec 6): Federal Territories Umno delegate Affendi Zahari defended Datin Seri Rosmah Mansor’s controversial use of the government’s private executive jet, saying that if she used it for an official function, then it is acceptable as it will ensure her safety. Affendi admitted that only a fool would say that a private government jet is cheaper when compared to a commercial flight, however Rosmah’s security is paramount and takes top priority when compared to the expenses of using such facilities. “Federal Territories Umno looks at this issue from a security aspect. If something were to happen to Datin Seri Rosmah Mansor, our own Prime Minister and president Datuk Seri Najib Razak will be emotionally unstable and it will be a burden on him and (by virtue of association) the nation. “If she was on an official trip, let it be! She had the Cabinet’s approval. There is no price on safety and security, that is why our Prime Minister goes around with 10 bodyguards. Otherwise the Special Task Force (UTK) might as well just stay at home. “Our president is a loving husband and the same can be said of our Deputy Prime Minister Tan Sri Muhyiddin Yassin. If you observe Tan Sri, whenever he enters the car with his wife, he’ll be holding her hand. He’s not like many other men who will just leave their wives alone,” said Affendi to the applause and laughter of the gathered delegates. Affendi, who kept delegates entertained at this year’s Assembly managed to crack up the floor, including bantering in Tamil with party chairman Tan Sri Badrudin Amilrudin, over an anecdote told to Affendi by Perak MB Datuk Seri Zambry Abdul Kadeer. However, he also reminded the party not to enter the Trans-Pacific Partnership Agreement (TPPA) blindly, but must ensure that the deal will be lopsided towards Malaysia’s advantage. “I read a book titled: ‘How to kill a country’. It’s about the trade agreement between Australia and America and how in the long run, Australia will not gain much benefit as the deal was lopsided towards the US. “I would like to firmly ask Tok Pa (International Trade and Industries Minister Datuk Seri Mustapa Mohamed) and the gang to get the best for the country, especially because there are times when the deal sounds good until you sign it, then you’re trapped,” Affandi said. He also reminded the party that the government must be firm when it comes to all issues brought up by the opposition, especially on its policies, including traffic tickets, subsidy cuts, etc. “We have to be firm in all issues. We cannot dilly dally like when we gave out a warning to all traffic offenders to pay their summons tickets in one month’s time. One month later, the government said it will extend it to another two months. “By the end of the two months, the government said it will offer a 50% discount on the summonses. What is this? We need to be firm! We should be going after the traffic offenders instead. If you’re not willing to bite, don’t show your teeth! “If some fool gangster from Kampung Dusun like Sarip Dol tries to play the government out, we cannot be dilly dallying on the issue but we must give out a firm warning, without compromising anything!” he said, quoting a villainous character from a classic P Ramlee movie. For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation.

https://theedgemalaysia.com/node/1518

Perak’s legal morass

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Update 2: 16 March - The Federal Court will decide on the constitutional issue as to who has the power to declare the vacancy of Perak State Legislative Assembly seats. Update 1: 10 March - Perak Speaker V. Sivakumar filed a suit against the Election Commission (EC) on its earlier decision to not call for by-elections in Changkat Jering, Behrang and Jelapang. Meanwhile, three voters and three former Perak executive councillors also filed similar suits against the EC. What started out as a squabble over who the rightful Menteri Besar of Perak is has now escalated into what many legal experts say is a full-blown constitutional crisis. The debacle has crippled the state’s administration as both Pakatan Rakyat and Barisan Nasional MBs argue their legitimacy. To help you make sense of this messy legal situation in Perak, The Edge Malaysia has identified the key points of contention between the two parties. An unconstitutional sitting? Perak Speaker V. Sivakumar’s lawyer, Tommy Thomas, says that according to the state constitution, the Speaker has the discretion to call for a reconvening of the State Assembly. This is only applicable, however, if the session has not come to a close otherwise only the Sultan of Perak may summon the Assembly. The PR argument is that the current session was never closed. Malaysian Bar Council President Datuk Ambiga Sreenevasan says events in Perak are unprecedented “thus leaving the Speaker with the powers to act according to the circumstances of the case.” Dr Mohammad Agus, a lecturer at UKM’s History, Politics and Strategic Studies Department, says that the three motions passed during the session were also valid and cannot be challenged in court. These included a motion of confidence in Datuk Seri Mohammad Nizar Jamaluddin as the legal Perak Menteri Besar, an agreement to seek Royal consent for the dissolution of the state assembly and the adoption of the suspension of Datuk Dr Zambry Abdul Kadir as MB and the six executive councillors he appointed. Most  legal experts appear to agree that the sitting was valid. However Prof Madya Dr Shamrahayu Abdul Aziz, a constitutional law expert from the International Islamic University Malaysia disagrees with that.  In an interview with Bernama, Shamrahayu says that “the State Assembly term is at a time and place as determined by the Sultan of Perak from time to time through gazetted proclamation.” No more emergency sittings The Ipoh High Court on 3 March issued an injunction preventing Sivakumar from holding any more ‘unlawful meetings’ under Section 44 of Specific Relief Act which grants the court the power to make orders to a public official.DAP chairman and lawyer Karpal Singh said that the Ipoh High Court’s order was “null and void” on the grounds that Judicial Commissioner Ridwan Ibrahim had “acted beyond his powers in that ruling”. "The judge will have to answer for having acted unconstitutionally,” Karpal said in an interview with Malaysiakini. “He can be brought before the Perak assembly because of the decision he made.” It later emerged that Ridwan was appointed on 1 March, 2007 to a term lasting two years ending 28 February. 2009. According to a Malaysian Insider report, it is not clear whether his term was extended. This raises questions as to his eligibility to deliver rulings, unlike judges who have full tenure. Conflict of interest Zambry’s lawyers had asserted that the Speaker ought to be represented by the State Legal Advisor rather than his team of private lawyers that included Tommy Thomas. They argued that as the Speaker is part of government, only the Attorney General’s Chambers and the State Legal Advisor may appoint lawyers for him. Thomas meanwhile, argued that the Speaker is not a “public officer” and the Assembly is not “government”. JC Ridwan Ibrahim ruled that private lawyers have no legal standing to represent the Speaker. The Bar Council’s Ambiga said while there was a legal basis for the Courts to disagree with the view that Sivakumar should be represented by private lawyers, the more substantive matter of general principles with regard to the State Legal Advisor’s position must be addressed.  “Every lawyer must act on the instructions of his client and not otherwise,” she said. “The Speaker has stated that he never gave instructions to the State Legal Advisor to either appear for him or to argue the case on his behalf.” Sivakumar subsequently filed a suit against the State Legal Advisor for falsely representing him in an application to prevent him as Speaker from convening any state assembly sitting. This situation is further muddled by the ongoing court case between Nizar and Zambry in the Kuala Lumpur High Court. The State Legal Advisor Datuk Ahmad Kamal Mohd Shahid is also acting as Zambry’s counsel which puts him “in a position of conflict” with regard to Sivakumar, according to Ambiga, Uphold the separation of power There are three branches of government: the legislature, the executive and the judiciary. As these three branches each possess a great amount of power, there is a commonly-practiced doctrine of the separation of powers. In Perak one incident that illustrates the intermingling of powers was when the Perak State Secretary’s office issued a directive to lock the gates to the State Secretariat. The directive suggests civil service and executive interference in the legislature and is against the doctrine of separation of powers. This was exacerbated by the Perak Police Chief Datuk Zulkifli Abdullah who issued a statement calling the emergency sitting “invalid” and warned against the public gathering “in groups which are deemed to be illegal.” The barricading of the entrance to the State Secretariat building by the police is deemed problematic by legal minds. Ambiga called it a clear indication of a breach of authority. Malaysia is no stranger to instances of the perceived absence of separation of power. The 1988 Judiciary Crisis where the-then Lord President Justice Tun Salleh Abbas and other Supreme Court judges were removed is an oft-cited instance of the blurring of the powers of the three branches. As the next few weeks play out, the public can only guess at what other legal contentions may arise from the Perak situation. But more legal wrangling are definitely in the offing as PR has shown that it will use this avenue as a means to thwart BN’s takeover of the state government.

https://theedgemalaysia.com/node/38359

LPI’s 3Q net profit up 10%

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KUALA LUMPUR: LPI Capital Bhd’s net profit for the third quarter ended Sept 30, 2010 (3QFY10) rose 10% to RM36.2 million from RM32.89 million a year ago mainly due to higher underwriting profit. In a filing to Bursa Malaysia Securities yesterday, the group’s 3Q revenue climbed 5% to RM216.95 million from RM206.62 million previously due to higher gross premium underwritten.LPI posted basic earnings per share of 16.85 sen in the quarter under review versus 15.33 sen a year ago. Its net assets per share stood at RM4.97 as at Sept 30. For its nine months ended Sept 30, 2010, the group’s net profit gained 10.8% to RM100.97 million from RM91.11 million in the same period last year on the back of a revenue that increased 9.7% to RM640.46 million from RM583.87 million. Its share price yesterday added six sen to close at RM11.76 with 17,900 shares traded. This article appeared in The Edge Financial Daily, October 8, 2010.

https://theedgemalaysia.com/node/94127

New theme park for Genting

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Genting Malaysia Bhd(July 29, RM4.01) Maintain buy at RM4 with a target price of RM4.52: Genting Malaysia has announced a RM400 million joint venture with Twentieth Century Fox to refurbish and transform the group's theme park in Genting Highlands. The group announced that the new theme park would be Twentieth Century Fox's first international  theme park in the world. It said its existing theme park would stop operating from Sept 1 for the construction of the new theme park, which would open in 2016. We understand that the RM400 million capital expenditure forms part of the group's plan to spend about RM3 billion in the next five years to give the hilltop casino resort a new facelift.   The group's chairman and CEO Tan Sri Lim Kok Thay has also confirmed that it is interested in raising its stake in Australian casino outfit Echo Entertainment - which holds the sole licence to operate a casino in Sydney until 2019 - if it gets the go-ahead from the Australian regulators. Given that Genting Malaysia's non-gaming activities are estimated to contribute less than 10% of the group's total leisure and hospitality revenue, we believe that the tie up with Twentieth Century Fox to revamp its Malaysian theme park will not have a significant boost to the group's overall earnings in a direct manner. Besides that, we are aware that the closure of the theme park from Sept 1 till 2016 could adversely impact the group's earnings in the near term. Nonetheless, we are optimistic of the group's major move to revamp its theme park together with the renowned global entertainment giant. This is because the refurbished theme park could attract more visitations and indirectly drive its domestic gaming revenue. On the other hand, it will also enhance the profile of its domestic casino resort and support the group's strategy to grow its VIP segment. Pending further clarification from management, we are retaining our earnings forecasts for the group for now, although we acknowledge that the closure of the theme park could pose a downside risk to our earnings estimates, in particular the 2014 financial year (FY14)/FY15 earnings assumptions. On the other hand, we believe that it is too preliminary to access the impact of the Genting group potentially raising its stake in Echo given that the group is awaiting regulatory approval to raise its stake to as high as 25%. At present, Genting Hong Kong, in which Genting Malaysia owns a 18.4% stake, holds a 6.6% stake in Echo. We maintain our ìbuyî recommendation for Genting Malaysia with an unchanged target price of RM4.52 based on our sum-of-parts valuation. Downside risks to our recommendation include: (i) poor luck factor; and (ii) policy risk of the government imposing higher gaming tax. - Alliance Research, July 29 This article first appeared in The Edge Financial Daily, on July 30, 2013.

https://theedgemalaysia.com/node/53225

CIMB Research retains Underperform on Hong Leong Bank

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KUALA LUMPUR: CIMB Equities Research is retaining its Underperform recommendation on Hong Leong Bank Bhd and RM13.80 target price. It said on Monday, Aug 15 that the positives from The Edge’s article on Hong Leong Bank are (1) the successful completion of the first phase of the group’s integration with EON Bank Group, which resulted in minimal disruptions to its day-to-day operations, and (2) the possible sale of MIMB Investment Bank, which would reduce the purchase cost for EON Bank. “But we foresee challenges for the consolidation process including management distraction and attrition of key management/customers, which pose short-term earnings risks,” it said. CIMB Research said it maintained its earnings forecasts, RM13.80 target price and underperform rating. “The potential slowdown of business growth due to merger distractions is a potential de-rating catalyst for Hong Leong Bank, along with its above-sector valuation and 8-13% EPS dilution from the rights issue. We prefer Maybank for exposure to the sector,” it said.

https://theedgemalaysia.com/node/1332

Various sectors face high impact from global crisis

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PETALING JAYA: The banking, private equity, real estate and property, insurance, manufacturing, consumer goods and retail sectors are among those facing a high impact from the economic downturn, said Dr John Lee, head of Asia Pacific financial risk management of KPMG Business Advisory. Sectors such as chemical and plastics, healthcare, oil and gas, and pharmaceuticals, on the other hand, are facing medium impact from the global credit crunch. Liquidity and general risk are the most critical issues facing banks, private equity, real estate and property, insurance and manufacturing. Other high-risk sectors such as consumer goods and retail have liquidity and performance as their main issues. Companies need to consider immediate, near-term and medium-term approaches in managing liquidity risk during this challenging time. “In managing liquidity risk, organisations need to improve cash flow management and seek deferral on cash payment to minimise cash outflow as an immediate measure,” Lee said at a talk titled Succeeding in Turbulent Times, here yesterday. For the near term, companies would need to consider contingency planning and modelling of different scenarios and options. The next step would be to set up a governance and liquidity risk framework for the medium term. On how Malaysia could avoid the risk of a deteriorating economy, Lee said the second stimulus package should focus on consumer spending. “Areas like retail and consumer goods should be made more attractive and although the housing sector doesn’t look that good, the focus should be on low-cost housing,” he said. “What we are facing now is a crisis of confidence. When people aren’t confident, they won’t spend.” To keep the spending momentum going, banks should continue to lend so that companies would be able to retain their employees. Yet, Lee said there was more the private sector could do as well. “Companies should be better prepared to talk to banks. As an organisation, you need to have a dialogue with your bank to show that you are not at risk,” Lee said. This article appeared in The Edge Financial Daily, March 5, 2009.

https://theedgemalaysia.com/node/76196

The weekend in numbers(28-30 Dec)

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1. act of charity Malaysian Dogs Deserve BetterIf you haven’t yet picked out a calendar for 2013, consider lending your support to the Malaysian Dogs Deserve Better. Animal welfare NGO director Ng Swee Ling and photographer Carolyn Choo captured the inspiring tales of some of the abused dogs they had had under their care that have struggled to survive and are now leading happier lives. On the cover is Mimi Chita, a friendly canine whose nose was looped off by a neighbour. The calendar is priced at RM20 with an RM5 fee for postage if you prefer to have it delivered. Find out more at www.facebook.com/MalaysianDogsDeserveBetter. 2. shows to book early The NutcrackerCatch the classic ballet next month when stars of the Moscow Ballet dance to Tchaikovsky’s scores played by the Malaysian Philharmonic Orchestra, helmed by Robert Cole, in the seminal The Nutcracker. The performance takes place at Dewan Filharmonik Petronas from 11 to 13 Jan 2013, and tickets are priced at RM80, RM180, RM260 and RM300. For more information, visit www.dfp.com.my. UpfrontYou want to be up close and personal at Upfront, a series of casual gigs taking place at The Bee, Publika. Scheduled to perform at 8pm on 11 Jan is British indie rock band The Vaccines, an award-winning West London four-piece outfit that have opened for the likes of The Stone Roses, Red Hot Chili Peppers and Arctic Monkeys. Tickets are limited so purchase them early at The Bee (Jaya One and Publika) and Rock Corner outlets to avoid disappointment. Early bird tickets are priced at RM113 while ordinary tickets are RM133. Call (03) 6201 8577 to find out more. 2. different perspectives Hari MampusThe Sutra Foundation pokes fun at the superstitions and fears surrounding the 21.12.2012 Armageddon predicted by the Mayan calendar with Hari Mampus. The 19-artist exhibition sees illustrations of their take on the end of the world with inspirations running from thoughtful insights to teasing ideas. Participating artists include Ramli Ibrahim, Syed Thajudeen, Steven Menon, Philip Wong and Jeganathan Ramachandran. Sutra Gallery is located at 12 Jalan Persiaran Titiwangsa 3, KL, and is open Mondays to Fridays from 9.30am to 6pm. Call (03) 4012 1092 for details. Two Worlds: Different Points of ViewingExpect to spend some time in introspection this weekend when you check out this Malaysian-Austrian group exhibition. The 10 artists capture in their works the pride of both nations in a showcase aimed to foster cultural and creative relations between Malaysia and Austria in conjunction with the 50th anniversary of diplomatic affiliations between the participating countries. The exhibition will run at the Bank Negara Malaysia Museum and Art Gallery, KL, till Jan 31, next year. Find out more at www.museum.bnm.gov.my. 2. hot spots to  rock it old school SkyBarBe sure to drop by SkyBar at Traders Hotel KL tonight where DJ Herb helms the turntable at the Mingle Jingle night. Expect a mix of ‘70s and ‘80s classic pop hits that simply beg dance floor participation. Throw in the marvellous view from the high-in-the-sky bar and you have all the makings of a great night out. To reserve a table, call (03) 2332 9888. SOULed OUTThe party only starts at 10pm tonight when DJs John and Roy bring Retro Rewind to the masses. Joining into the spirit of the music theme are jumbo-sized retro cocktails available at both the Desa Sri Hartamas and Ampang outlets: choose from a menu of Ocha long island tea, Malibu Sunrise, SOS Shooters and  more, priced between RM70 and RM100. Visit www.souledout.com.my for more information. 3. ways to high spirits La Bodega LoungeCelebrate the last Friday of 2012 with a leisurely drink at La Bodega Lounge, where the end of the working week is toasted with happy hour prices. All cocktails on the menu are priced at RM20 per glass all day, so feel free to start early and leave late. La Bodega Lounge is located on Jalan Telawi Dua, Bangsar Baru, and reservations can be made at (03) 2287 3808. FrescaAll weekend long, Fresca entices with a buy two and get one free promotion on Draught Tiger Beer (both mug and jug) and bottled beers such as Heineken, Hoegaarden and Guinness. Cocktail sippers are not excluded: order a grande margarita to enjoy a single margarita free, while connoisseurs can take advantage of the 30% discount on all house pouring spirits. The happy hour promotion is from 4pm to 8pm and runs till Sunday. Fresca is located at The Gardens Mall and you can call (03) 2201 2893 for reservations. Malones Irish Restaurant & BarSwing over to Malones at Suria KLCC where there’s more brewing than just beer. Kick back with a pint and catch great sets by four-piece band Joshing Around, which takes the stage every Friday with acoustic tunes to launch the weekend on a high note. The show starts at 9pm. Find out more at (03) 2166 2257. This article first appeared in The Edge Financial Daily, on Dec 28, 2012.

https://theedgemalaysia.com/node/4421

Internet Time:Five ways to leverage social media

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In the age of Web 2.0, having a website is a given. And it’s not enough. To really make a difference online, you have to leverage the social media. Social media is basically online services that allow people to interact with each other. Its roots are, as its name suggests, social in nature. But it can be used for companies to communicate with its potential customers. There are many types of social media services out there but the ones you really need to concern yourself with are Blogger, Twitter, Facebook, Flickr and YouTube. BloggerThere are many blogging platforms but the easiest one to use is still Blogger.com. Setting up a blog is easy enough. The challenging part is in filling it up with the right type of content and posting them regularly.One approach is to have a dedicated company blogger — quite possibly the CEO. Another approach is to have a small team of bloggers who alternate. Topics should include anything that relates to the industry your company belongs to (so as to establish expertise and build a following), new products or services and events that are relevant to the sector. Encourage consumer feedback and interact with readers. After all, that is what social media is for. TwitterTwitter is micro-blogging service that is super easy to use. But as with blogging, it’s easy to set up but hard to keep up. When you have a Twitter account, people expect you to update your page several times a day.It should be used differently from your blog. Twitter updates are short — about the size of an SMS — so you should use it to update your readers about smaller, perhaps more trivial, or should I say, more fun, topics. For Twitter to work, you need followers. And the best way to get started is to follow some Twitterers. When you follow others, they notice you. More often than not, they will follow you in return. And if they find your postings interesting, they will tell others about you. That’s how you build up a following.FacebookFacebook started out as a social networking tool for college students but it’s now grown to become the biggest force in social media. And the folks behind Facebook have decided to make it more accessible for companies to use it to promote themselves.Create a Facebook fan page, which is different from a typical Facebook homepage. Then load it up with notes, pictures and videos relating to your company. Promote your fan page through your blog and through Twitter. And when fans start adding you, make sure you interact with them. Such interactions will appear on their homepages and their network of friends will notice your fan page. Some of them might even become new fans. FlickrJust as there are many different blogging platforms out there, there are probably just as many online photo album services. Many of them also have social media elements to them but the granddaddy of them all is Flickr, probably the first one to embed the social aspect into its offerings.Through Flickr, you can showcase your products or pictures relating to your industry. People can share the photos with others, who can comment on them. They can even download them if you permit. YouTubeIf your company is big enough to have its own corporate video, upload it on YouTube for others to discover. But if you don’t have a professional corporate video, you can still gain exposure through YouTube by creating informal yet informative video clips with just a simple camcorder. Remember to tag your clips so that it’s easy for others to find. Tagging is a big part of the social media scene. Fans of your clips can comment on them and even post video responses. There is no better form of viral marketing than to get fans actually interacting with you in a multimedia way. They will tell others, who might also participate and tell even more people.Social media is now an important part of a person’s digital lifestyle. Any marketer who neglects to look at social media would be missing out on an important means to reach new customers. Embracing social media is a must in this day and age. Oon Yeoh is editor for New Media at The Edge. Visit www.theedgemalaysia.com to see howsocial media is used to enhance the website’s news offerings. This article appeared in Netvalue2.0, the technology section of The Edge Malaysia, Issue 747, March 23-29, 2009.

https://theedgemalaysia.com/node/81116

BNM: Banks well placed to face challenges in 2013

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KUALA LUMPUR (March 20): Bank Negara Malaysia (BNM) said Malaysia’s financial institutions are well-positioned to face prevailing concerns on the banking sector and fiscal issues in Europe and the United States (US), which are expected to continue in 2013. In its 2012 Financial Stability and Payment System Report, BNM stated that the credit risk exposures of banks are expected to be contained within acceptable levels in 2013. In addition, sound credit risk management practices of the banks, balance sheet strength of businesses, stable income and employment prospects that will preserve household income are expected to continue. BNM said it will continue its surveillance and supervisory priorities in 2013 in monitoring household leverage, residential property price, changes in the risk-taking activities and lending standards. “However, the business expansion and lending activities of the non-bank financial institutions and the high leverage of the lower-income households are key areas that will be closely monitored by the Bank,” BNM said. Household debt levels have risen at a moderate pace following the implementation of targeted macro-prudential measures by the bank since 2010. BNM also stated that the new legislation for the financial sector that has been approved by Parliament in December 2012 will come into effect by mid-2013. The Financial Services Act 2013 and Islamic Financial Services Act 2013 will come under this area. “Looking ahead, the financial sector is well placed to cope with future challenges but continued vigilance is required by the bank as well as the financial institutions,” said BNM governor Tan Sri Dr Zeti Akhtar Aziz in the governor’s statement in the report. “A continued focus on the development of a sound, progressive and inclusive financial sector, guided by the recommendations of the Financial Sector Blueprint 2011-2020, will also further reinforce the resilience of the financial system and its ability to support and drive Malaysia’s transformation to becoming a higher value-added, high-income economy to be achieved in this decade,” she added.

https://theedgemalaysia.com/node/5898

GBH rights issue oversubscribed by 10.4%

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KUALA LUMPUR: Goh Ban Huat Bhd’s (GBH) rights issue, comprising 123.83 million shares and 61.92 million warrants, has been oversubscribed by 10.4%. The company had approved the allocation of the rights issue on the basis of minimising odd lots, and on a pro-rata basis based on the entitled shareholders’ stake in GBH as at the entitlement date on March 16. “The accompanying warrants will be allocated on the basis of one free warrant for every two rights share allotted and rounded down to the nearest whole warrant,” it said on Tuesday, April 6. GBH had announced the rights issue last month. It had consisted of 123.83 million shares at an issue price of RM1 each, with a first call price of 60 sen payable in cash and a second call price of 40 sen to be capitalised from its revaluation reserves account. The rights issue also comprised 61.92 million detachable warrants for free, on the basis of two rights share together with one free warrant for each ordinary share in GBH.

https://theedgemalaysia.com/node/98292

Liverpool sign defender Ilori from Sporting Lisbon

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(Sept 2): Liverpool have signed Portuguese defender Tiago Ilori from Sporting Lisbon, the Premier League club confirmed on Monday. The 20-year-old has represented his country at age-group level and is the third defender signed by manager Brendan Rodgers in the transfer window, although Kolo Toure and Aly Cissokho missed Sunday's 1-0 win over Manchester United through injury. Uruguayan centre-back Sebastian Coates has already been ruled out for most of the season with a knee injury. "I know the history of the club and the Premier League is the best league in the world, in my opinion," Ilori, who was born in London, told the club's official website (www.liverpoolfc.com). "Liverpool, have a great team and I think it's the place for me to be at the moment. "I know there have been some great teams here in the past and the club has won a lot of trophies and I want to be a part of it." No transfer fee was disclosed. Liverpool are poised to make a number of signings before the close of the transfer window later on Monday, with winger Victor Moses expected to arrive on loan from Chelsea and defender Mamadou Sakho from Paris St Germain. - Reuters

https://theedgemalaysia.com/node/45477

More developers keen on green

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PETALING JAYA: The submissions of projects for Green Building Index (GBI) certification have jumped substantially in the last six months, indicating the rising interest among developers to build green. “From August 2010 until February, we received about 60 new registrations, bringing the total to about 150 projects. This is very encouraging as it is the highest number of registrations within a six-month span since GBI was launched in May 2009,” said Paul Lai, chief executive of the Malaysian Institute of Architects (PAM). GBI is a green rating tool jointly developed by PAM and the Association of Consulting Engineers Malaysia (Acem). Lai believed the collective efforts by the government, professional bodies such as PAM and the Real Estate and Housing Developers Association (Rehda), non-profit organisations such as the Malaysia Green Building Confederation, developers and the media are beginning to bear fruit. “I believe people are more aware and conscious of environmental issues and the role they play. As such, more developers are seriously considering getting their projects certified,” said Lai.   The growing level of interest from developers could be seen in response to the Green Tour organised by Rehda Youth (an informal grouping of young Rehda members) on Tuesday.The Green Tour brought participants to visit four green developments in the Klang Valley, namely GTower in Jalan Tun Razak by Goldis Bhd, Challis Damansara in Sunway Damansara by Sunway City Bhd, Ken Bangsar in Bangsar by Ken Holdings Bhd and First Avenue in Bandar Utama by Bandar Utama City Corp Sdn Bhd, to enable them to understand and experience the workings behind the developments. Housing and Local Government Minister Datuk Wira Chor Chee Heung officiated at the event. Calling the response to the tour “tremendous”, Rehda president Datuk Seri Michael Yam said there were more than 170 participants, consisting of developers, consultants and architects. “In fact, we had to turn away quite a number of people because we do not have enough seats. I think this shows the amount of interest in green developments,” said Yam. Sam Tan, a Rehda Youth leader and executive director of Ken Holdings Bhd, was not surprised at the response. “We already knew there are a lot of people interested in green buildings. Contrary to popular belief, building green is not difficult to do. That is the idea behind this tour; to let people know that it is not so difficult to go green,” said Tan. Mindsets among developers are also changing, Tan said. “Traditionally, developers don’t share their knowledge. But the industry is starting to look at the bigger picture. “We need to elevate the standards of our developments if we want to attract foreign investors. And to do that, we need to share our knowledge and learn from one another,” said Tan. Lai noted that most of the projects seeking GBI certification are from the bigger developers such as S P Setia Bhd and Sunway. However, “if the big developers’ green projects prove to be successful, the smaller ones will have to follow or they will lose out”, said Lai. Meanwhile, Tan promised more Green Tours in the future. “We hope this tour will continue to gain momentum. We already have a few developers asking us to consider including their properties in the next tour and a few are even interested in joining Rehda Youth,” he said. This article appeared on the Property page, The Edge Financial Daily, March 4, 2011.

https://theedgemalaysia.com/node/71094

Ringgit down vs SGD on Singapore FX policy surprise

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KUALA LUMPUR (Oct 12): The Malaysian ringgit slid to its weakest in a month against the Singapore dollar after Singapore’s central bank on Friday unexpectedly kept a hawkish monetary stance, resulting in the strengthening of the dollar. The ringgit weakened as much as 0.41% to 2.5087 versus the Singapore dollar, the lowest since hitting intra-day low of 2.5120 on Sept 13. This happened even as the Singapore dollar jumped to $1.2199 against the US dollar, its strongest since Sept 14’s close, Bloomberg data showed. At 3pm Friday, the ringgit was at 2.5038 to the Singapore dollar, 0.22% weaker from Thursday’s close of 2.4984. The Monetary Authority of Singapore (MAS), which uses a strong currency to combat inflation, said on Friday that it will keep the current slope, midpoint and width of its currency trading band, while continuing to allow a modest and gradual appreciation of the Singapore dollar. “With this announcement, we expect the Singapore dollar NEER (nominal effective exchange rate) to trade towards the top of the trade weighted band over the next few months,” Credit Suisse’s analyst Michael Wan wrote in a note after the policy decision. Market experts had earlier expected room for policy easing by the MAS with the decline in core inflation to 2.2% in August. But the MAS on Friday said core inflation rates will face upward pressure from higher costs of food and services.

https://theedgemalaysia.com/node/285

Tech Connect

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The most obvious benefit of this advancement is that you’re now able to get more megapixels (MP) per ringgit for your camera. But hang on… Don’t get carried away by advertisements of 10MP digicams that go for less than RM1,000; remember to check out the other features as well. Here’s a primer: How much is enough? You can find digicams below RM1,000 with MP counts of between seven and 10, but you would need a high MP count only if you want to develop large prints. A 6MP digicam can easily give you good quality prints of up to 8in x 10in. So if you don’t plan to have bigger prints, settle for a smaller MP count and opt for other more useful features such as a powerful optical zoom. Zoom in, anybody? Essentially, with an optical zoom, the lens moves to give you the zoom effect, while with a digital zoom, only a fraction of the image is captured and enlarged to give you the effect of a zoomed-in picture. This tends to result in a blurred image. While you should always look for better optical-zoom specifications of, say, between 3x and 10x, be wary of how vendors or advertisements state their digicam zoom capabilities. Some advertisements tend to add up their optical and digital zoom specs, giving you the impression of a higher zoom capability. Do also look out for the manual focus feature, which allows you to adjust your focus should your auto-focus malfunction. A low-end digicam tends to give you a stepped manual focus, which forces you to choose preset focal points. Another feature to look for is macro mode, which allows you to take pictures at a very close range. Size and weight One of the best things about a point-and-shoot digicam is the fact that it can slip into the smallest of places. However, buttons may be too small. So, it’s best to try out the settings to see if you’re comfortable with them. The size of the LCD viewfinder is also important. Most range from 1.8in to 3.5in wide (diagonally measured); so try to get one that is at least 2.5in for a good picture view. Storage card Storage cards in the form of SD or compact flash cards are affordable (RM50 to RM100), depending on the size. Always opt for as large a card as you can find; you can’t have too much memory to store your picture and/or videos. Batteries Some cheaper digicams do not provide in-built Li-Ion rechargeable batteries and require you to use alkaline or rechargeable batteries. Where possible, always opt for the former, as you can always charge your batteries on the run instead of having to bother with extra batteries. Extra features There are many new useful features that won’t cost you an arm and a leg to obtain. A good feature to have is facial recognition software, which will help you optimise the exposure and focus settings when you take pictures of people. Most digicams today also come with a video-recording feature.   

https://theedgemalaysia.com/node/88332

Further global and regional volatility

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US stocks fell, sending the S&P 500 index tumbling to a one-month low, as jobs and factory data missed estimates and investors speculated whether the Federal Reserve will taper off bond purchases. All 10 S&P 500 industry groups retreated. Alcoa Inc and Bank of America Corp dropped at least 2%, as raw materials and financial companies declined the most. An index of homebuilders slumped 1.6% as mortgage applications dropped for a fourth straight week. The Dow declined by 216.95 points to 14,960.59 points on Wednesday. The FBM KLCI traded in a quiet range of 12.3 points for the week with higher volumes of 1.89 billion to 2.31 billion shares done. The index closed at 1,769.6 yesterday, down 4.82 points from the previous day as blue-chip stocks like AMMB Holdings Bhd, Astro Malaysia Holdings Bhd, CIMB Group Holdings Bhd, PPB Group Bhd and UEM Land Holdings Bhd caused the index to end lower on some profit taking. There was some volatile foreign fund carry-trade selling in the Asia-Pacific region (like Japan, Thailand, Singapore and the Philippines). The KLCI’s recent key swings were 1,590.67 (low), 1,699.68 (high), 1,597 (low), 1,664.39 (high), 1,613.94 (low) and 1,826.22 (high). The recent post-election surge to a fresh all-time high of 1,826.22 happened on May 6. From the closing of 1,694.77 on May 3  (just before the election), there now exist two obvious gap-up areas of 1,712.03 and 1,718.44 on the chart. Despite the higher volumes churned from May 6 onwards, there may be a period of consolidation and correction to the gap-up support areas mentioned above in the next few weeks. As such, the key support levels are seen at the 1,712, 1,718 and 1,764 points, while the resistances of 1,769 and 1,793 as well as the all-time high of 1,826 will offer heavy selling. The current rebound rally from the 801.27 low (October 2008) to the 1,826.22 all-time high represents an extended Elliott Wave “Flat” rebound in a “Pseudo-Bull” rise. Tactically, investors may liquidate on rallies due to the index’s ample long-term bearish divergence signals as well as the gap-up moves mentioned. Continue to take profit on any price rallies, as the divergent longer term technical signals are very obvious and overextended for 56 months now. Overlapping support and resistance levels at 1,664.39 and 1,635.55 also indicate the “bluff” nature of this current index rise. Its daily indicators (like the DMI, Stochastic and Oscillator) remain upbeat and its moving averages depict a double time frame uptrend (weekly and monthly). Despite these positive signs, we believe investors should take a short-term investment philosophy as the index remains shaky at lofty and overbought levels for now. Its CCI and MACD are currently negative. Despite the mixed tone of the KLCI, we are recommending a “buy” on Century Bond Bhd. Its revenue for the fourth quarter of 2013 financial year ended March (4QFY13) of RM45 million was RM800,000 higher than 4QFY12 revenue of RM44.2 million. This increase was mainly due to lower cost of raw materials in the quarter. The paper packaging and contract manufacturing divisions both reported increases in revenue in 4Q compared with the previous corresponding period. Moving forward, Century’s core attention and focus will be in the paper packaging division which will be the group’s key growth driver. Management will be closely monitoring and taking the appropriate measures to insulate and adapt to the ever-changing operating conditions of the market. Century is optimistic that based on management’s measures, the group will remain profitable in the next financial year. Maybank-IB currently does not have fundamental coverage on Century. A check on Bloomberg consensus reveals there are currently no research houses that have coverage on the stock. Century is currently trading at a price-earnings ratio of 10.8 times with an indicative dividend yield of 2.6%. Its share price made an obvious surge since its monthly Wave 2 low of 56 sen in October 2011. Since that significant low, Century surged on a very firm daily Wave-3 move to its recent all-time high of RM1.76, accompanied by heavier volumes traded from mid-May this year. Its chart has moved into daily, weekly and monthly uptrends to its recent all-time high of RM1.76. As it broke above its recent key critical resistances of RM1.42 and RM1.69, look to buy Century on any dips to its support areas as the moving averages depict very firm short- to medium-term uptrends for this stock. The daily, weekly and monthly indicators (like the CCI, DMI, MACD, Oscillator and Stochastic) are firmly positive and now depict the obvious indications of Century’s eventual surge to much higher levels. We expect the stock to remain very firm towards its support levels of RM1.42, RM1.69 and RM1.75. It will attract minor profit taking at the resistance level and all-time high of RM1.76. Its upside targets are now located at RM1.88, RM2.23, RM2.72 and RM3.00. Lee Cheng Hooi is head of retail research at Maybank Investment Bank. The views expressed in the article are the opinions of the writer and should not be construed as investment advice. Please exercise your own judgment or seek professional advice for your investment decisions. Technical report appears every Wednesday and Friday. This article first appeared in The Edge Financial Daily, on June 7, 2013.

https://theedgemalaysia.com/node/79826

#Budget 2014* Implementation of GST is fair, says Supermax MD

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KUALA LUMPUR (Oct 25): The implementation of Goods & Services Tax (GST) is fair because there will be a wider pool of tax contributors to increase government revenue, according to Supermax Corporation Bhd Group Managing Director Datuk Seri Stanley Thai. In a statement on Budget 2014, Thai said the flip side of GST is the additional financial burden to the poor and the lower income group people, as well as those eligible to receive BR1M and other government goodies. “So, we are going back to square one. The poor are not getting financial assistance despite the implementation of BR1M,” said Thai. Further onto GST, he said there is no mention as to whether material supply to manufacturing is subjected to GST. “In many countries, there is GST or Value Added Tax (VAT) rebate for goods and services supplied to firms who operate in the export oriented industry,” Thai said. “We hope the government will exempt GST on export services, to ensure products made in Malaysia remain competitive globally.” Meanwhile, Thai also commented on the budget deficit and government debt saying the budget speech did not address on how the government would tackle the continuous budget deficit or curb expenditure to reduce the huge government debt. “With over RM260 billion annual budget, 0.5% reduction in budget deficit of 4.0% is marginal,” he said. However, he commended the government for addressing the safety and security of the rakyat, saying ‘finally, we are seeing the light at the end of the tunnel’. “The effectiveness in curbing crime would certainly boost the tourism industry and the confidence of ordinary citizens of Malaysia,” said Thai. The budget speech had earlier outlined that the government intends to reduce crime and enhance military preparedness by allocating a sum of RM8.8 billion to the Royal Malaysia Police and RM13.2 billion to the Malaysian Armed Forces. Touching on the reduction of corporate tax by 1% to 24%, Thai said this is good news for the manufacturing sector including glove manufacturers. “However, there are trading nations such as Singapore and Hong Kong which have far lower taxes,” he compared. “We hope the government will continue to reduce corporate taxes yearly to be in line with Singapore.”

https://theedgemalaysia.com/node/74634

Takaso to diversify income stream

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KUALA LUMPUR: Rubber manufacturer Takaso Resources Bhd, whose share price has been on the uptrend for the last two months, plans to diversify its income stream by expanding into the ready-to-eat market segment. Executive chairman Tee Tze Chern said in a statement yesterday that the group believes it can exploit the ready-to-eat market segment given the vibrant food culture in Malaysia and the constant demand for food. Takaso stumbled upon this new business opportunity during its proposed expansion into Thailand for its rubber products business. It found Thailand’s food technology to be more advanced than Malaysia’s. “From this, we conducted some studies as well as market research, and feel that this venture is indeed worth exploring. “We are not changing the core nature of our business in rubber and baby products, but are merely expanding into a new area on a small scale given this opportunity. This is also a manufacturing-based business which we know a thing or two about,” said Tee. Takaso’s rubber business is mainly in the manufacturing and trading of condoms. It also manufactures and trades baby accessories, baby apparels, infant milk formula, and toiletries. Tee said the group has conducted its research on the market and food technology, and plans to start the new business segment on a small scale first before expanding it later. On funding, Takaso plans to undertake a capital raising exercise via a special private placement or any other form of exercise advised by its appointed advisors. It also plans to be more prudent in accumulating its cash reserves by paring down on borrowings to save on interest costs. Takaso’s share price has been seen slowly climbing in the past two months. Yesterday, the counter closed at 27.5 sen after falling to about 18 sen in March. This article first appeared in The Edge Financial Daily, on November 15, 2013.

https://theedgemalaysia.com/node/39047

WCT advances after MIDF Research ups target price

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KUALA LUMPUR: WCT Bhd's shares advanced on Thursday, Oct 21 after MIDF Research maintained its buy recommendation on WCT Bhd at RM3.11 and raised its target price for the stock to RM4.24. At 9.10am, WCT was up 17 sen to RM3.28 with 493,800 shares done. On Wednesday, WCT said it had secured two separate contracts in Qatar and Malaysia for a total of approximately RM1.49 billion. MIDF Research said WCT's order book ballooned to RM4.4 billion and was still growing after the company landed a RM1.36 billion project in Doha and another RM127 million hospital project in Tuaran, Sabah. MIDF Research said it was revising its forecast for WCT to take into account the income from the construction of the new contracts, adding it was looking at a possibly higher replenishment target for 2011, as it expects more new domestic-based jobs to awarded in the near future. "As outlined in the 2011 Budget and the ETP, potential awards include packaged for (i) Klang Valley LRT extension, (ii) Langat 2 water treatment plant, (iii) various highway projects. "We are of the opinion that more news flow on potential awards could intensify in the next 12 months," it said in a note on Thursday, Oct 21.

https://theedgemalaysia.com/node/17678

InsiderAsia's Model Portfolio — Week 341

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THIS portfolio review covers the last two weeks, due to the Merdeka holiday last Monday. Over the last two weeks, the FBM KLCI charted gains, rising a total of 14.9 points or 1.3% to end at 1,178.7 points. In a sign of growing investor caution though, daily trading volume has fallen sharply. Daily trading volume averaged just 554 million shares last week, down from 652 million shares the previous week and 838 million shares the week earlier. Investors around the region are turning cautious due largely to increased volatility on the Chinese stock market, which in turn is influencing the performance of most Asian bourses. The Shanghai Composite Index plunged 6.7% on Monday, but later chalked up four consecutive days of gains from Tuesday to Friday. This gave room for Asian markets to recover some of their earlier losses later in the week. The recent steep fall in the Shanghai Composite Index — by some 20% since early August — is affecting sentiment for Asian bourses. There are concerns that efforts to rein in on excess liquidity and robust bank lending — which fuelled growth in the first half of 2009 (1H09), will affect the rest of the region, even though most economies have bottomed out and are recovering. US economic data continue to show the world's largest economy is well on the path to recovery. The  Institute for Supply Management  (ISM) survey on the US manufacturing showed growth in August after 18 consecutive months of decline. The factory index jumped to 52.9% from 48.9%, above the 50% level that signifies growth.   The services sector also moved closer to growth in August. The ISM index of the non-manufacturing sector rose to 48.4% in August from 46.4% in July. In a separate report, pending home sales in the month of August rose to the highest level since June 2007. The upbeat data, however, failed to spur buying major interest. Investors, having chased share prices sharply higher over the past few months, are growing worried that valuations have been stretched too far. Indeed, the main concern remains the strength of the recovery ahead. On Friday, investors around the region were generally cautious ahead of the key US unemployment report for August, which will set the tone for Wall Street's trading on Friday and regional bourses this week. Ahead of the report, the latest US weekly jobs report was weaker than expected. New claims for jobless benefits fell less than expected (to 570,000 from a revised 574,000) and the number continuing to receive unemployment benefits rose. A weak labour market suggests US consumer spending, which accounts for 70% of the economy and much of Asia's exports, will remain weak. There is no doubt that global economic growth will strengthen in the third quarter of 2009 (3Q09). But some investors are worried that the recovery may not be sustainable going into the last quarter of the year — after the impact of inventory rebuilding and government stimulus plans fade. For instance, August car sales in the US jumped strongly as buyers rushed to take advantage of the government's cash rebate scheme, which has since expired. On the local front, the second-quarter earnings season has ended with the majority of companies, especially the smaller ones, reporting better- than-expected results. This underscores the resilience of corporate Malaysia during the recession. Portfolio reviewOver the last two weeks, our model portfolio underperformed the FBM KLCI slightly. Our basket of 16 stocks rose by 0.7%, compared with the FBM KLCI's 1.3% gain. Including our large cash reserves (for which no interest is imputed), the total portfolio value rose by a smaller margin of 0.4% to RM490,817. Our model portfolio's total value and returns represent a significant achievement compared with our initial capital of just RM160,000. We started the model portfolio on March 3, 2003. Our total profits are very substantial at RM330,817. Of this amount, RM222,366 has already been realised from earlier sales and the rest are unrealised. This represents a hefty return of 206.8% compared with our capital of RM160,000. We continue to outperform the FBM KLCI significantly, which is up by 82.2% in the same period. This was achieved even though the benchmark index is less representative of the broader market, and our portfolio holds a large amount of interest-free cash at all times for prudence reasons. Over the last two weeks, seven of our stocks rose, seven fell and two were unchanged (DiGi and HELP). The major gainers were 3A Resources (up 9.4%), Muhibbah (up 6.7%), Selangor Properties (up 4.8%) and Genting Malaysia (up 4%). The major losers include Ireka Corp (down 9.1%), Tanjung Offshore (down 3.7%) and Bursa (down 2.9%). Over the last two weeks, we have accounted for dividends from the following stocks, which traded ex-dividends: DiGi (49 sen), Pantech (one sen) and Muhibbah (2.5 sen). We are leaving our portfolio unchanged. Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment 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.

https://theedgemalaysia.com/node/38361

JP Morgan initiates coverage on Bursa, HKEx with overweight calls

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KUALA LUMPUR: JP Morgan had earlier in the week initiated coverage on Bursa Malaysia Bhd with an overweight rating and a price target of RM10.70 based on its newly formulated “dynamic PE (price-earnings) valuation”, with mean PEs of 34.1x. The international research house had also at the same time assumed coverage on Hong Kong Stock Exchanges and Clearing Ltd (HKEx) with an overweight rating and a price target of HK$168 (RM67) based on its dynamic PE valuation. From the macro perspective, JP Morgan said Bursa was well poised to benefit from increasing derivative trades and higher securities volumes as free-float for companies “slowly but steadily increases”. The HKEx should benefit in the near term from recovering cash equity volumes and in the medium term from the renmimbi internationalisation”, it added. HwangDBS in a report released the same week also upgraded Bursa to a buy, from a fully valued rating, with a price target of RM9.60. Dynamic PEJP Morgan introduced the dynamic PE valuation because it said the biggest challenge in evaluating and forecasting trading pattern of exchanges, whether it be Bursa or HKEx, was the wide PE range that these stocks traded in. “Hence, even if average daily turnover forecasts are arrived at with a certain degree of confidence, getting a handle on the right (PE) multiples is in doubt,” JP Morgan’s analyst Harsh Wardhan Modi said in her report. She said exchanges’ earnings comprised millions of transactions that took place throughout the year, “which are anything but uniformly distributed”. Thus, stocks such as Bursa does not trade on analyst estimates or reported annual/ quarterly profits but it trades on daily value traded. According to her, the dynamic PE formula enables this uncertainty to be removed, as it has “condensed the turnover metric into dynamic profit numbers”. “From the analysis (on Bursa), we worked out what is the implied 12 months forward earnings per share (EPS), assuming that the current 30-day moving average on turnover would continue for the next 12 months,” Modi said. By using the 30-day moving average turnover rather than trying to predict where turnover will be three, six or 12 months from now, the analyst concluded that Bursa’s PE trading range should be tighter, between 25.4x and 51.5x, and not between 15.4x and 63.4x derived from the conventional 12-month forward PE chart. “Given any volume assumption, it is significantly easier to evaluate the multiple that should be paid for the stock, as fluctuation is in a tighter range. “In the near term though, Bursa Malaysia is trading at the upper end of the band, based on dynamic EPS. This may lead to profit book (profit taking) but we believe such a decline will offer buying opportunities,” Modi added.Exchange operators as proxy to market rallyBoth JP Morgan and HwangDBS said they called buy on Bursa because it offered a proxy for investors to participate in the upcoming market rally in the local bourse. They say catalysts for a potential bull run in the local bourse include greater trading volumes buoyed by a sustained rally on the benchmark index; structural changes in the local stockbroking industry, and the revival of the capital markets that will find favour from more retail participants. According to HwangDBS, further liberalisation of the local stockbroking industry (full liberalisation by 2015) will draw more foreign funds due to plans for strategic alliances with regional exchanges such as Hong Kong and Singapore. “These should improve trading volumes and values, and ultimately velocity, a key re-rating catalyst for Bursa. The (local) capital market would be a major source of funding for the US$444 billion (RM1.4 trillion) worth of investments identified under the Economic Transformation Programme,” HwangDBS said. JP Morgan stated that the recent Bursa-Chicago Mercantile Exchange partnership would globalise the Malaysian Crude Palm Oil Futures market and boost derivatives revenue which would improve velocity at Bursa. It also expects Bursa to benefit from the greater retail participation along with the “sustained rally in the FBM KL Composite Index”. JP Morgan cited statistics which showed that most of the active retail participants on the local bourse were above the age of 40, while only 12% of investors were between the ages of 20-29 because of the magnitude of losses and consequent risk aversion which led to the ‘lost generation’ post-Asian financial crisis. But such historical factors aside, recent government initiatives to allow higher foreign ownership of local stockbroking and fund management companies, along with the steps taken to increase free-float, should lead to higher foreign participation in the local bourse, JP Morgan added. JP Morgan has also maintained its overweight target on Singapore Exchange Ltd (SGX) with a price target of S$9.70 (RM22.96) because of expectations of higher volumes due to a slew of initiatives. “We expect near-term positive impact from American Depositary Receipt (ADR) quotations. We believe (a) continuous stream of well-thought out products and services leads to (a) higher probability of success.” SGX is in the process of quoting shares of Asian companies which have ADRs listed on Nasdaq, which would allow American investors to buy shares in foreign-based companies that are not quoted on an American Stock Exchange. At its close yesterday, Bursa Malaysia gained one sen to RM8.25, SGX lost one cent to S$9.47 and HKEx gained HK$3.40 to HK$163.40. This article appeared in The Edge Financial Daily, October 8, 2010.

https://theedgemalaysia.com/node/98707

KLCI futures close mostly higher

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KUALA LUMPUR (Sept 4): The FTSE Bursa Malaysia KLCI (FBM KLCI) futures contracts on Bursa Malaysia Derivatives closed mostly higher today, despite weaker performance on the cash market, dealers said. Spot month September 2013 and October 2013 rose two points each to 1,670 and 1,699 respectively, and March 2014 added one point to 1,687. December 2013 declined one point to 1,693.5. Turnover rose to 13,414 lots from 12,068 lots, while open interest advanced to 54,577 contracts from 50,343 contracts on Tuesday. The underlying FBM KLCI ended 7.45 points lower at 1,716.76.

https://theedgemalaysia.com/node/8343

StanChart is ‘Here for good’

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THESE are “extraordinary times in the banking industry” and Standard Chartered (StanChart) is “in the right markets at the right time” to capture the opportunities, says Standard Chartered Bank Malaysia Bhd managing director and CEO Osman Morad. “The rise of Asia, Africa and the Middle East on the global stage, burgeoning new economies, new trade corridors and new ways of doing business... Now is the right time to tell our story and broaden our appeal; to build on our strong financial performance and further differentiate the bank from our competitors,” he said. Standard Chartered — which celebrates its 150th anniversary globally and 135th anniversary in Malaysia this year — derives around 90% of its income and profits from Asia, Africa and the Middle East. On March 31, it launched a new global brand campaign with the brand promise “Here for good”. According to Osman, the brand promise was developed based on interviews with StanChart management and staff, discussions with analysts as well as brand and marketing customer research. “It is developed with the understanding of what makes Standard Chartered unique. We analysed our values, behaviour, strategy, history and ambition,” he said in an email interview yesterday. The campaign was launched on March 31 across 70 markets, with print, outdoor, social media and TV advertising in major markets. Advertising (billboards, posters and television ads) and marketing (booklets and brochures) collateral will reflect the new brand promise beginning mid-April, said Osman. The campaign was developed by creative agency TBWA, which holds the bank’s creative account globally. The brand promise was also communicated to staff via internal branding initiatives run by the respective countries’ operations. Standard Chartered Malaysia held its bi-annual “Town Hall” event on March 26 at the bank’s headquarters in Kuala Lumpur where Osman and senior management gave employees a preview of the brand promise prior to the public announcement. “There will also be a ‘Here for good’ award for extraordinary and outstanding staff, as well as competitions and games for staff to discuss how they live out the brand promise every day, either at home or at work,” added Osman. He declined to say how much was invested into the campaign but said it was “a big investment”. “‘Here for good’ will help reinforce stakeholders’ understanding about what Standard Chartered stands for and it will also serve to focus employees on what they should live up to every day,” he said. Other branding initiatives lined up for the year include the bank’s sponsorship of Liverpool Football Club from July onwards and the Standard Chartered KL Marathon 2010 on June 27, he added. Listed on the London and Hong Kong stock exchanges, StanChart recorded its seventh successive year of record income and profit, with net profits increasing 4.7% year-on-year to US$3.28 billion (RM10.63 billion) in 2009, according to its group earnings statement on March 3. This article appeared on the Media & Advertising page, The Edge Financial Daily, April 6, 2010.

https://theedgemalaysia.com/node/12179

AMMB’s valuations remain attractive, says HwangDBS

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“We understand that the pipeline for equity and debt capital market deals has recovered. Given AMMB’s previous track record, it should get a share of the pie. In fact, the upcoming 1QFY10 result could surprise on the upside with positive flows from investment banking fees, brokerage, and investment gains,” said HwangDBS. In the short term, key earnings booster would be non-interest income, it said, adding that over the next two to three years, AMMB is expected to gradually improve return on equity (ROE) with capital management activities. “Further ROE enhancement is likely via capital management, possibly via higher dividend payments among other means.”Currently, HwangDBS is assuming 35% dividend payout ratio with dividend per share (DPS) ranging from 10.5 sen to 14.5 sen for FY10-12F. “With the inclusion of new equity capital from the bumiputera issue and the converted ordinary shares from the exchangeable bonds, AMMB’s capitalisation will increase to 11.5% and 15.8%, respectively, which is more than sufficient to support a higher dividend payout.” “We still see value in AMMB as it transforms its balance sheet and earnings profile. We believe ANZ’s (Australia and New Zealand Banking Group Ltd) presence in AMMB is under-appreciated,” added HwangDBS. The research house maintained its buy call on AMMB at RM4.15 and revised its target price upwards to RM5.20 (from RM3.60 previously) based on the Gordon Growth Model, which carried an implied 1.5 times CY2010 book value, equivalent to mid-cycle price/book value (P/BV). “At 1.3 times P/BV currently, AMMB’s valuation remains attractive,” added HwangDBS. Yesterday, AMMB closed at RM4.18, up three sen. This article appeared in The Edge Financial Daily, August 11, 2009.

https://theedgemalaysia.com/node/81022

‘Oleochemical producers in region on even footing’

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KUALA LUMPUR: Indonesian and Malaysian oleochemical producers might find themselves on an even footing as Indonesian exports will also be taxed upon entering the European Union (EU), according to a report by Hong Leong Investment Bank Research (HLIB) yesterday. It said in a note that the EU has withdrawn its duty preference to Indonesia’s vegetable oil sector on the basis of a “graduation” mechanism. “Under the ‘graduation’ mechanism, imports of a particular group of products and originating in a given beneficiary country (Indonesia, in this case) exceeding 17.5% of the generalised scheme of preferences (GSP) imports of the same products from all GSP beneficiary countries will lose GSP preferences. “Our back of the envelope calculation indicates that Indonesia will not be entitled to the duty preference too,” it said.  HLIB’s report was in response to news that Malaysia will lose its GSP status by January 2014, which eliminates the country’s preferential duty treatment on exports into the EU. Among Malaysian exports to the region, oleochemicals will be taxed 4% to 6% without the GSP from Jan 1, 2014 onwards. This is expected to put Malaysian oleochemical exports in a very uncompetitive position. HLIB said the latest development does not put Malaysian oleochemical producers in a disadvantaged position against Indonesian producers, as their oleochemicals entering the EU will also be taxed. It added that this was based on the assumption that its calculations on Indonesia’s contribution to EU’s vegetable oil imports are correct. HLIB has maintained its “overweight” stance on the sector. This article first appeared in The Edge Financial Daily, on March 20, 2013.

https://theedgemalaysia.com/node/22926

Ting and six Ekran directors fined RM630k

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KUALA LUMPUR: Tan Sri Ting Pek Khiing and six other directors of Ekran Bhd have been handed total fines of RM630,000 for breaching the Listing Requirements (LR) of Bursa Malaysia Securities Bhd pertaining to a related-party transaction. The penalty for Ting, the company’s executive chairman, was RM500,000. Four directors were fined RM25,000 each and the remaining two RM15,000 each. The breaches relate to the company’s failure to disclose the change in the terms of Ting’s settlement of the remaining amount owing to Ekran. In publicly repremanding Ekran and its directors yesterday, Bursa Securities said Ekran had failed to make an immediate announcement on the settlement’s fourth supplemental agreement. It was only disclosed much later in the notes to Ekran’s quarterly report for the period ended June 30, 2008 and announced on Aug 27, 2008. According to Bursa Securities, Ekran also failed to appoint an independent adviser and a main adviser before the terms of the supplemental agreement were agreed upon and it did not issue a circular and obtain shareholders’ prior approval for the agreement. It said Ekran shareholders approved on Sept 28, 2001 the proposed settlement of debt amounting to RM712.94 million owed by Ting by way of cash amounting to RM357.64 million and payment-in-kind amounting to RM355.29 million. The terms included direct cash payment of RM228.82 million in a scheduled 12 instalments. “Tan Sri Ting did not make the direct cash payment and 12 quarterly instalment payments in accordance with the terms set out,” said Bursa Securities. Ekran subsequently entered into a fourth supplemental settlement agreement dated March 27, 2008 with Ting to vary the original approved settlement where it was agreed that the outstanding debt of RM408.17 million was to be settled in full via cash instalment payments. Reprimanded and fined along with Ting were executive directors Ting Sie Chuong and Liew Chie Chung and independent directors Dr Regina Noran Nuruddin, Datuk William Lau Kung Hui, Datuk Muhammad Shafee Md Abdullah and Datuk Stanley Isaacs. “The directors have failed or neglected to ensure compliance of the related-party transaction obligations as the directors were or should be aware that any variation to the original approved settlement which is a related-party transaction requires shareholders’ approval,” Bursa Securities said.     This article appeared in The Edge Financial Daily, November 25, 2009.

https://theedgemalaysia.com/node/76461

Budget 2014 measures for property sector likely to promote long-term investment

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GEORGE TOWN (Nov 12): The Budget 2014 measures for the property market would deter excessive speculation, according to professional firm of international property consultants. Besides deterring speculation, Henry Butcher Malaysia (Penang) Sdn Bhd said the new budget measures would bring positive notes in the long term. Its Director, Dr Jason Teoh Poh Huat, said the property market was likely to experience some immediate knee-jerk reaction from the budget measures and sales were expected to slow down in the short term. "However, the market could self-correct or cushion the impact of the measures in the medium term due to the healthy fundamental demand for real estate in Penang. "The market sentiments for the upper-end properties are expected to consolidate," he told reporters after a post-budget dialogue on 'The impact of the budget measures on Penang's property market' here today. Among the panel members at the dialogue were independent audit firm, KPMG Partner Ooi Kok Seng, Real Estate and Housing Developers' Association of Malaysia (REHDA) Penang Chairman, Datuk Jerry Chan Fook Sing and Spiral Energy Sdn Bhd's Michele Grimsley. Teoh said the upward revision of real property gain tax (RPTG) and the removal of Developer Interest Bearing Scheme were already expected by buyers, investors and developers to cool off the property market. Meanwhile, REHDA's Penang Chairman said the impact of the proposed goods and services tax (GST) on the property sector would directly/indirectly increase costs as the construction materials were not exempted. He expected the cost of living to increase following the implementation of GST on April 1 2015, while on the converse, inflation would be good for property market as it was considered a perfect hedge against inflation.

https://theedgemalaysia.com/node/49675

#Tong Kooi Ong blogs* DBKL Assessment - Facts, Fallacies and The Bottomline

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EVER since Dewan Bandaraya Kuala Lumpur (DBKL) announced the higher assessment value, many commentaries have been made and some appear to be intentionally deceitful. I have also written fairly extensively on why it is not justified. With DBKL having just announced a reduced assessment RATE, and sticking to higher assessment VALUE previously decided, what is the bottomline effect for you? In other words, how much more do you pay in actual assessment TAX? I hope this article will help provide further clarity for you. A. DBKL's total expenditure and revenue 2013 Budget figures*Total Revenue        RM1,690.00 milTotal Expenditure  RM2,190.00 mil- Operational         RM1,406.00 mil- Development      RM  782.55 mil Source : DBKL Budget Speech 2013 B.   Total Assessment Tax Collections (Before and After Revision) The estimated revised assessment tax collections amount to RM1,430 mil compared to RM880mil currently.  This represents an increase of 62.5% or RM550mil more. DBKL should disclose the exact figures, but we believe our estimations are reasonable. C.   The Assessment Rate What is the basis for the different percentage of reduction of the assessment rate for the various property types and locations? If the intention is social inclusion to assist the lower income group, it would have been easier to give a further discount to the assessment rate base on income reported on tax returns. A billionaire who lives in a designated area with low assessment rate pays low assessment tax even if he has a palatial home. D.   How does the new assessment rules affect you? Whether you pay more or less depends on the relative changes to your assessment value and your assessment rate, as per the formula above.  In general, most people will pay a higher assessment tax as the rise in assessment value is greater than the fall in assessment rate.With DBKL getting RM500m to RM600m more, who pays?Is this pain fairly spread out? E.   Illustrations of the above and its effect based on 3 scenarios on a residential property F.    ConclusionTo address the unhappiness of Kuala Lumpur residents, we hope DBKL will provide further clarity and transparency on the following questions :-a)    How much more assessment tax revenue will DBKL get after the revised assessment value and rates?  How will this additional collections, which we estimate at over RM500 million, be spent? Tax payers have the right to demand accountability and responsibility. As I have written in previous articles on this issue, DBKL is already spending more than other municipalities per person.b)    What is the basis of computing assessment value? I know it is rental income (implied or actual) but what are the reliable sources of information or database used? DBKL should make the entire list of assessment values for all properties in KL available on the Internet. This will allow every resident the ability to check their assessment value against all others, in the interest of fairness and transparency. c)    A failure to be transparent would likely give the impression of possible biases in the way assessment values are determined, leading some residents to feel they are being penalized for choices they previously made. Tong Kooi Ong is executive chairman of The Edge Media Group. Feedback is welcomed at www.tongkooiong.com.

https://theedgemalaysia.com/node/52934

The Edge Billion Ringgit Club - LaFarge Malayan Cement Bhd

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Lafarge Malayan Cement Bhd (LMCB), incorporated in 1950 and listed in 1961, is a member of the Lafarge Group, a world leader in building materials. LMCB is today Malaysia’s largest cement player with an annual production capacity of 13 million tonnes of cement. Its ready-mixed concrete division is one of the country’s largest with over 35 batching plants. The company also operates four quarries for aggregates in Malaysia and is involved in ready-mixed concrete and cement trading business in Singapore. Bi Yong Chungunco, LMCB’s president and CEO shares with The Edge Financial Daily her strategies and dreams for the company.   TEFD: What are the company’s competitive strengths and advantages?Chungunco: Being a member of the Lafarge Group gives us access to operational and technical expertise, innovations, best practices and the international trading network of the Lafarge Group.  Combining this with LMCB’s 60 years of history in Malaysia, with its established and trusted product brands and corporate reputation, solid customer base and a management team, we are in a better position than our competitors to meet the needs of our customers and help them to add value to their business. Our strategically located four plants and various depots and terminals are also well placed with logistic advantage to serve our customers in the entire Peninsular Malaysia and the export markets at competitive costs and with excellent delivery services. We are able to improve the utilisation of our plants by exporting our excess capacity leveraging on the international trading network of Lafarge.  When cement demand in the domestic market grows, we could divert our production from the export to the domestic market without having to invest in new capacities.   What have been the major achievements (financial and non-financial) of the company in the past four years?We recorded strong growth in pre-tax profits from RM318 million in 2007 to RM442 million in 2009 before declining to RM345 million in 2010 due to the less favourable export market conditions.  Over the past four years, the strong cash flow from operations and better working capital management resulted in a much stronger balance sheet, turning from a net debt of RM239 million at the beginning of 2007 to net cash of RM157 million as at end of 2010, despite having returned total cash of RM1.49 billion to shareholders from 2007 to 2010 by way of dividends and a capital repayment. In 2008, we sold 358,000 CERs (Certified Emission Reduction) for RM29.4 million arising from the use of biomass fuel as a replacement for coal, as part of our commitment to reduce CO2 emissions. We are proud to say that we are the only cement company in Malaysia that has obtained approval from the UNFCCC (United Nations Framework Convention on Climate Change) with an approved CDM (Clean Mechanism Development) project and issuance of CERs.To nurture our own talents, we have the “Lafarge Young Engineers’ Programme” which is now in its 6th year and is recognised as the most successful one within the Lafarge Group.   In 2010, LMCB received the Singapore Green Label certification by the Singapore Environment Council for Mascrete LH cement and Phoenix cement made with eco-friendly raw materials. In 2011, we received the Singapore Green Building Product certification by the Singapore Green Building Council. We are the first and only cement company in Malaysia to win these double-certifications. What are the major challenges your company faced over the years and how did it overcome them? Is there anything else you would have done differently?Since the Asian financial crisis in 1998, the industry has suffered from excess capacity while domestic demand growth over the years has been slow. Our challenges are to protect our market position by continuing to provide our customers with excellent products and services at competitive prices. On the one hand, we have to be very focused on improving our industrial performance, maximising asset utilisation, tightening cost control and cash management so that we can be competitive in pricing our products. On the other hand, we need to be able to compete beyond pricing alone by being innovative in our product and service offerings and to differentiate ourselves from our competitors as business partners to our customers in providing solutions and adding value to their business. In addition, we continue to broaden our customer base and market reach. Besides these challenges, we want our employees, contractors, transporters and all our business partners to go about their business with a strong safety mindset. There is no doubt that some decisions taken over the years gave less satisfactory outcomes but what is more important to me is the decision making process. But looking back, I would have liked to see more being done in lesser time, not necessarily differently. How is the company positioning itself within your industry? What are your strategies to grow or gain market share?LMCB is recognised as the leader of the cement industry in Malaysia. But this is not good enough if we are only the leader by virtue of our capacity and market share. I want LMCB to be recognised by the market and our customers as a true leader in quality of our products and in how we service our customers, in innovation, in corporate governance, safety and in how we look after the interests of all our stakeholders. When we are recognised by our customers that we are and can be their true business partners, we do not have to worry about market share.  What are your company’s plans for the future, short-term and long-term? What are your plans to compete in the increasingly globalised environment?As we expect stronger cement demand growth in the domestic market and also a better outlook in the international markets for our exports this year and probably in the next couple of years, our focus in the short term is to continuously improve the performance of plants so that we can maximise our production output at the most optimum cost and with excellent quality products.   We have to raise the level of our services to our customers as we lost some grounds in our customer satisfaction survey carried out in 2010.  In this regard, we are working on many fronts to improve on how to serve our customers. The longer-term concerns are more on strategic issues such as new capacities being added to the industry, how businesses respond to the more globalised and hence more competitive environment and the need for more sustainable developments and efficient buildings. While the world is getting smaller, there are still wide gaps in the stage of development in countries around the world. Lafarge, being an international group, has the advantage of having first-hand experience of knowing the different needs of countries in various stages of developments. We will apply that knowledge base to focus on product development that is solution-based. We will together address the concerns of global warming, the demand for green technology, as well as the need for efficient and less labour-dependent construction methods. What is your dream for your company? How would you like to see it in 10 years time?I would like LMCB to be recognised as a true leader of the cement industry in every sense. It has to rank amongst the safest companies to work for in the world and not just in Malaysia. Our employees are customer centric, understand the different needs and challenges of our customers.  With the solid backing of the Lafarge Group, we will have products and services that will address these needs — from basic cement and high strength concrete, to eco-friendly cement and concrete products meeting the sustainable ambitions of developers. We work together with customers to find high value-added solutions to their construction needs, being always in the forefront through innovation. I would like LMCB to be one of the best business units of the Lafarge Group, in terms of financial and industrial performance. Finally, we continue to cultivate an excellence-driven team, raising the bar each year. We have a team that comes to work with a lightness of spirit and yet passionate with what they do, adaptable to changing environment and yet disciplined, taking that extra mile because they are proud of what they do, and proud to be part of the LMCB Group. This article appeared in The Edge Financial Daily, August 9, 2011.

https://theedgemalaysia.com/node/25653

#Update* Public Bank 4Q net profit RM678m, declares dividends

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KUALA LUMPUR: Public Bank Bhd posted 4Q net profit of RM678.23 million versus RM653.97 million a year ago and it also declared cash dividend of 25 sen per share and share dividend to be distributed from the treasury shares, on a one for every 68 shares held. It said on Wednesday, Jan 20 that revenue in 4Q ended Dec 31, 2009 was RM2.495 billion compared with RM2.557 billion a year ago while earnings per share were 19.65 sen compared with 19.49 sen. Public Bank group chairman Tan Sri The Hong Piow said for the financial year ended Dec 31, 2009 (FY09) pre-tax profit was RM3.32 billion and net profit RM2.52 billion, on the back of a strong 10.2% growth in net interest and financing income. Revenue was RM9.715 billion in FY09 compared with RM10.5 billion in FY08. "In the previous year, the group's pre-tax profit of RM3.38 billion included a significant one-off goodwill income of RM200 million in respect of the bancassurance distribution alliance with ING Asia/Pacific Ltd (ING). Excluding this one-off income, the group's underlying operating pre-tax profit improved by 4.5%," he said. Teh said the Public Bank Group's improved profit was mainly due to continued strong growth in net interest and financing income by RM435 million or 10.2% to RM4.71 billion in 2009, despite the negative impact on net interest margins arisingfrom the reduction in the Overnight Policy Rate. "This was mainly driven by loan growth and core customer deposits growth which remained strong at 14.4% and 14.8% respectively, whilst the group's net non-performing loans (NPL) ratio continued to be capped at below 1%," he said. Other operating income amounted to RM1.40 billion in 2009, an increase of 11.4%, excluding the RM200 million one-off goodwill income from ING recorded in the previous year's other operating income. The growth was mainly due to higher due to income from the unit trust management business and investment income from securities held.

https://theedgemalaysia.com/node/19045

Power of Ideas

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The creative department heads are midwives of the advertising industry — they oversee and manage the conception of ideas. Even though it is a bloodless affair, a delicate war of diplomacy, if you like, it is almost always waged between clients and the rest of the creative team to produce the best work, the best ads and the best ideas. Without the power of big ideas, or advertising, rows and rows of perfume bottles, for example, will sit moodily on shelves without having any distinction from one to another. Quite simply, advertising is about messaging and communicating a business or a concept, whether through a well-told story, a subtle suggestion, a colour or mood, or by a choice cursive script. Advertising is what colours the marketplace, it thrives on vibrant competition, it is what makes shopping pleasurable — it gives a brand a personality, it has a story, a history and a promise. Advertising creates an image based on the promise of a brand when you spray on a certain fragrance, strap a watch or carry a certain bag. When it came to discovering perspectives on the business of ideas for our feature, the four men in our autumn/winter fashion spread — Adrian Miller, executive creative director at Saatchi & Saatchi KL; Ng Heok Seong, executive creative director at Lowe & Partners; Lee Szu Hung, executive creative director and deputy chairman at McCann Worldgroup in Malaysia; and David Sin, group creative director at Grey Group in Malaysia — were all highly recommended. Their resumés are impressive as they have won numerous local and international awards, with extensive working experience in the industry. Smiles and grins abound when they first arrived, punctually, at Hakka Republic at Menara Hap Seng in Kuala Lumpur, with a spacious and splendid wine bar that overlooked the city traffic. From the friendly jibes and easy exchanges, we learn that all four have worked together, at some time or the other, for some campaigns and at the same agencies in Malaysia. The advertising fraternity is not very large and the four men featured here are the crème de la crème of the industry. Who better to suit up than the creative heads in the advertising industry, where the affectionately term “suits” are refered to those from the other end of the office space — the account-servicing department? The season’s suits from fashion houses witnessed a return of classic and timeless styles, with minimalist and modern reinterpretations and innovative fabrics and cuts. Colours are soft or blocked, while the fabrics are textured and cut in contemporary styles. Szu Hung’s magnificently moulded shirt and textured jacket from Giorgio Armani is a key look of the season, a colour of optimistic resplendence. The same can be said of Adrian’s Versace suit in a dazzling shade of silver, setting off his bold look with charm. Having never met any of the men before the interview, our selection was based on a pinch of daring and patchy information about their sizes — with a varying inch or so before or after meals. But thanks to valuable advice and recommendations from boutique assistants and a fair bit of guesswork from Google Images results, our selection for Adrian’s suit by Versace was received with ease. He loved the suit, and embraced the Versace vibe with ease. “Everything about me is shiny,” he jokes, in reference to his clean-shaven head. The accessories also stood out with classy conservative designs, such as the woven belt from Hugo Boss that Heok Seong wore, which complemented the crisp trousers and comfortable jacket. While David admits that suits were not a common staple in his wardrobe, the distinguished Ermenegildo Zegna suit certainly did wonders to spruce up his sneakers. But while there may be some truth in the pigeonholing of wardrobe styles in the creative and accounts servicing departments, these stereotypes are a thing of the past. Adrian confessed to never owning a single suit; Szu Hung, on the other hand, only graduated to the staple jeans and shirt after a few years. “Sometimes we put on a shirt… an ironed shirt, if we have to meet clients,” David laughs. It is with this lighthearted demeanour and candidness in which the four gentlemen share their insights on advertising in the changing media landscape, on running the creative departments in their respective agencies, their personal take on what luxury is and about the power of big ideas. Lee Szu HungExecutive creative director & deputy chairman, McCann Worldgroup, Malaysia Tell us about yourself.I go by the name Szu Lee, and I’m the executive creative director and deputy chairman of McCann in Malaysia. I run and manage the agency in the country; we have a few companies under our group. I’ve been here for seven years and we have multinational clients as well as very prominent local brands.What does a day in Szu Lee’s worklife look like?Well, I attend glamorous photo shoots day to day. No, not really. I can never really plan. After scheduling meetings, you could be doing a presentation for a board of directors or overseeing the creation for a new campaign for an interesting brand or a platform for a new brand or planning a shot for a commercial or working on radio commercials.What is the proudest moment in your career?I come from a legal background; I am a lawyer by training. I made a switch after returning to Malaysia. The proudest moment of my career was to convince someone to hire me... and it’s been all downhill since then... I’m joking! I think I got hired because I was cheap, I don’t know! I started with Saatchi & Saatchi in brand management; I made a switch to copywriting after nine months. I don’t really have any intention to retire. I really enjoy this and it is one of the greatest jobs that one can do. I enjoy the craziness, the crazy creativity…young people... the variety of people I meet.Why the switch from legal to creative?I spent a few summer holidays interning at legal firms... it didn’t fascinate me. I was very interested in the commercials I saw in the UK and I was always complaining why our commercials weren’t good. That is how I got interested, a friend suggested it, and so I tried it out. I write, and I enjoy watching movies and critiquing movies and art.And you’ve been here since then... what keeps you going?It’s the craziness, adrenaline, the constant hive of activity with the myriad of people you meet, the multitude of brands you are exposed to... understanding the population, the local people, the very market that you’re working with. And it’s my kind of thing. It’s all about people. It feeds the curiosity I have for people, culture and life. And it all comes together in this business. Was there a particular commercial in the UK that inspired you?There have been many of them! Malaysian commercials here have a long way to catch up. But then again, we are really a different population; we are a very different market. Watching commercials is a very good gauge of what a country is like. For anyone who wants to be familiar with the market, they should just watch TV and the commercials. The zaniness that pervades the Thai advertisements, for example, reflects their culture and how they approach life. Over here, they are a bit more careful because we have many cultures and many things to be careful about, so we are far more sensitive about issues than we might be in a homogeneous, racially homogenous culture.Tell us about the power of advertising, power of big ideas.Advertisements have the ability to inform people. I wouldn’t say that we have the ability to change people’s behaviour. But over time, as people become more involved they may change their behaviour to like your brand or to buy your product. To say that advertising makes you just go out and buy something is giving it too much credit. Advertising is about informing, and informing in the most entertaining way. Are Malaysian commercials informative and entertaining?It varies (in Malaysia), depending also on the type of brands and products. If you’re very mass market you have to connect with the audience. So, if you want to throw a British ad to them — they won’t understand. You have to understand the market and speak to them in the most empathetic way.Your suit looks snazzy, how do you feel in it?I used to dress like this all the time, until I learnt how to be more comfortable and wear just jeans. I like dressing up comfortably... in our business, it allows us to be casual. Sometimes, I do suit up, depending on the situation. My personal style is relaxed, casual and… elegant! Maybe, elegant sounds a bit pretentious. I love brands like G-Star, and agnès b, a French brand, which has a French sort of flair I like. Normally, I’m dressed casually, in cargo shorts and polo T-shirt.What does luxury mean to you?It means having time to do what I want to do. That is a luxury. A holiday, basically, just being able to relax and be yourself, and having the time... advertising is what I want to do, but I also need to know when to turn off. A holiday is the ultimate luxury. Where have you been in the last year?I take a lot of short breaks in between work. Three times to Bali — I go to Bali a lot. I was also in South Korea, Laos, Sri Lanka, Portugal and Spain. Two of them were work related. What is the most luxurious experience for you?I absolutely love shopping. I don’t qualify for a black belt in shopping yet, but I’m pretty sure I’m near a brown belt. I think part of it is because it’s about being an eager consumer. When you walk around, looking at displays, watching people, looking at what people are buying... you may understand why people are buying it. I shop a lot. I shop for clothes and shoes. I like going to junk shops and look at furniture, art... I like going to supermarket, hypermarkets, hardware stores. I enjoy retail... even when I travel, I’ll will always find the shopping areas to go to. What is your take on the luxury market and the advertising market?It’s a tremendous relationship. The luxury brands, whether using in-house advertising or agencies like us, to create their shopfronts in magazines, to create an image based on the promise of that brand when you put on certain fragrance or carry a certain bag. Even if you enter a store and make a purchase just based on experience, it’s very important and I don’t think that the luxury industry would be what it is today if it weren’t for advertising. They are not famous because of our advertising; they are famous because they advertise. The luxury brands are highly experiential?I think the ultimate thing for some brands is to have their customers eat, live and breathe their brand. Personally, I’m a brand slut, I love all types of brands and all brands have their own appeal. I get to know all the different personalities — you’re also curious about all the retail... in hypermarkets, hardware stores. It is about encapsulating the entire experience, not just with TV ads. It could be also how certain stores have their own fragrances. A customer walks in and is enveloped within the store and the experience. When you open the shopping bags — I don’t take shopping bags anymore, I use my own bags, even at the luxury stores — you can still smell it. It’s like going into the supermarket, and seeing how the bakery is up in front of the layout. It is about how certain smells connect with our brains and hearts. Is this fairly new for luxury brands, encapsulating the brand experience with scent?It is one that has evolved with time. What’s so special about certain speciality luggage stores is how you can smell the leather, feel it... and it’s the same in the whole boutique... the smell, the feel.So, they’re connecting intimately with the customer?Yes, some brands, not all brands. The higher luxury brands are becoming so sophisticated in how they connect with their customers. And the best is when what it does to you. But if anyone makes someone happy, go and do it. Is that the best example of advertising — subconscious brand involvement?I think luxury advertising has always been subtle, not so blatant, it has always been the nature of the industry. True, they may have one line that may be completely emblazoned with logos, that is bling-bling market happy, but they are less-is-more logofied. Do you have anything else to share with our readers?I look forward to seeing more Malaysian brands going into the luxury segment, like Jimmy Choo, a brand named after a Malaysian, which is the best example that we have. To a certain degree, I think Royal Selangor is also considered a luxury brand. If you walk down one street in Europe you will see some big brands, but they are not Malaysian brands... that would be something I would love to work on. What is the proudest moment in your career?Seeing a brand come to life. Seeing my first ad come to life was a proud moment, getting an award was a proud moment, even though I cannot remember them now. Many years ago, with a different agency, I worked on Mutiara Telekom — I do not know if you remember it. We worked on a campaign to convert that brand into the DiGi of today. To see that brand come to life, it was one of many proudest moments. For a creative person, validation comes with awards. It starts with a first award as a newbie, you feel validated by your peers. I cannot remember my first award, but there have been so many over the years, starting with the local Kancil Awards, then to more prestigious international ones. You have spent more than 20 years in the advertising industry. What keeps you going?The thing about this business is that we are jack of all trades, master of none. So, I know a bit about banking and a bit about how cars are sold. Through the years, it is just learning about every category of every product, new clients... It is never boring! When I first came out from school, I only knew I was good at drawing. My relatives wanted me to go into banking because it was considered a good job to have then. I did not want to do that. I went to art college instead. My mom asked me if I was just going to be painting posters — that is the impression older ladies had of art. Truthfully, I did not even know what to expect myself. Penang, where I am from, does not have a thriving ad industry — then and now. But I am glad I stuck to it, because it is a new challenge every day. You learn new things, are exposed to new things. We literally live through our clients through their projects. That, to me, was interesting enough to keep me going. Tell us about the power of big ideas.Everything revolves around the big idea. It is actually the power of branding. A big idea is about how we move a brand. When you talk about luxury products, a lot of it is perception, it is about how you make people hunger for it, and how to build status to make people want to aspire and want it. In a way, it is very important. What do you mean when you say, seeing a brand come to life? Is it a life that comes to be when consumers react to it?When I joined Lowe, one of our projects was Brand’s Essence of Chicken. It has been around for 150-odd years. People think it is a local brand, but it is actually from England. When we started the campaign, it was a leader in the market. But it was only drank when there was a perceived need, such as when children have exams. In the campaign, we worked on changing that perception. It was more about mental alertness: in today’s fast-paced lifestyle, you need to be alert, to get ahead of everything. So, by drinking Brand’s, that is how you can get ahead. Today, not just schoolchildren drink it. Younger people also drink it every day when they see the need to be alert. We also got into the Malay market. The brand has grown really well, even though they were market leaders, today, they grew the market. That is satisfying, to me. That is how it comes to life — it is effective.Tell us about the stereotyping of ‘suits’ in the advertising industry.That is an old stereotype. Suits are what we would call the account management people, people who see clients, the go-between, or sometimes the bag-carrier. People think the creative department all have long ponytails and drive fancy cars... That has all changed. Creatives have to spend a lot of hours in the office. That is why we wear jeans, shorts, and certainly, not ties. But when we have to make a presentation — then we do dress up, we do put on a suit for functions.What is your personal style?I sort of wear shirts and jeans. If I have a client meeting, then I dress up. But you are wearing very nice shoes today.These shoes are for today. I am usually more casual; I would wear Timberland shoes on a day-to-day basis. What does luxury mean to you?It’s what makes me feel comfortable. Especially for us who work in advertising, we know the power of branding, so we don’t succumb (to luxury brands). Personally, luxury means having the time and freedom to be ourselves, and also to have freedom in our work. There are many dos and don’ts in the industry. It can be very limiting how you can express yourself. But I always believe in truth in advertising. And that, to me, is sometimes a luxury, to be more truthful. Luxury is about having freedom and creative control. What is the most luxurious thing you own? What would you splurge the most money on?My 14-year-old son! He is gila games... the xBox, PC games, gaming magazines... whatever... I spend my money on him. I do spoil him quite a bit.What do you aspire to own, or experience... be it a holiday or...?A holiday, definitely! I make it a point to go one place new every year. It doesn’t have to be very far. I believe in the balance of living, and in life. It’s what I tell my boys and girls on my team. To be in the ad industry, you cannot do without understanding human insights. We have to sell to many types of people, to many groups. If you want to sell to an old man, you have to put yourself in his shoes and experience and observe. Tampons, for example, what would I know about tampons? I wouldn’t know... I would need better insights. To travel is to have insight into human nature. To have a holiday, to relax, to rest... but not only holidays [for insights], also through visiting hypermarkets, markets... there’s an explosion of new products out there. We need to keep tabs on what is out there, and constantly be on our toes. What’s your take on luxury and branding and its relationship?I think it is a very close link and very important. If it weren’t for advertising, the luxury market wouldn’t be where it is now, to project that kind of image, to have people aspire or to wear that kind of clothes…. the appeal of wearing a particular watch. A lot of it is probably the same, so it is through the power of advertising. Yes, it is a very important part of what they do. Without branding and advertising, you could not push your brand to that level. Have luxury brands evolved like how the advertising industry has changed?It has changed, yes, in the channels of communication that we are used to. Here is an interesting statistic: back in the 1970s in the UK, three commercial TV spots could reach 80% of the population. In 2007, you had to buy 64 spots to reach 80% of the population. It is becoming harder now to reach them, but at the same time it is more exciting. Take TV, you will very soon be able to watch one episode of Lost for just US$1 (RM3.50), whenever you want. Pay-per-view TV is coming very soon. The messaging is still the same, but how you reach the consumers is changing and evolving, because of our media habits. The mobile phone is the convergence device — pretty soon everything will be pushed via the mobile phone to the consumers. I do not see luxury brands to be very different. Maybe it would change in its approach to public relations, not necessarily just in advertising. On-ground activation, celebrity endorsements... What I am saying is that it is not necessarily traditional mediums. How do you think luxury brands are doing in Malaysia?I think as Malaysian society becomes more affluent, consumers will distinguish themselves by the luxury brands they wear. There are still many rich people who can still afford luxury brands in Malaysia. What I mean is that I do not see it not growing... if you look at other countries, like China, for example, it is exploding. Tell us a bit more about yourself, and how you started in advertising.I started in advertising 12 or 13 years ago. I am originally from South Africa. I am not too sure how I got started. I dropped out of university studying philosophy and English literature, and spent a year in Pakistan with my parents when I was 18. I went to Singapore when I was 19. A friend whom I lived with in Singapore was kind of tired of me just lying around his apartment. He was in advertising, and asked me to work in his agency. I started out as a junior copywriter. This is my third year with Saatchi & Saatchi. I was at Lowe & Partners for two years before that.What does your day-to-day job entail?As the executive creative director, my job entails leading the creative department of the agency, making sure that the agency stands for something in the creative industry and adheres to certain standards. Basically, making sure that we are a creatively driven enterprise. That is pretty much my job. What is the proudest moment in your career?Well, we won the Kancil Awards’ Agency of the Year for three consecutive years — that is pretty good. There are many defining moments of a career, but it is probably winning three Lions (from Cannes Lions International Advertising Festival), three years in a row — Gold, Silver and Bronze. There has been a defining series of moments, in the creative sense.  It (awards) is not something that you work towards; it is something that just happens. Honestly, that gives you a lot of confidence, sort of more gumption to do more things. Then you push the envelope further, and you win the second time... But the scariest thing that can happen is being over-confident and blasé… It is one of my fears. Tell you what: advertising awards are actually meaningless except for the people in advertising.But awards give a competitive edge, right?They do. I think in the advertising industry, we actually celebrate ourselves too much, far too much.What is it about advertising that keeps you going?It is the ability to be creative on a daily basis. I think if any job allows you to do that, I would like that job. Being able to express yourself creatively, using your own imagination... it is never a dull moment, really. You are never in one place all the time, you’re constantly doing. Friday is never the same as Thursday... or Tuesday... it keeps you on your toes. Is there a particular element that keeps you going? Selling great work to clients, and getting them to actually buy great thinking and great work that sort of changes the way the product is bought, or changes the mindset of the people and their products. Plus, if it wins an award, and does well with the public — that kind of covers all the bases. Because often in advertising, there is this odious self-congratulatory award shows, it is very insular because it does not mean much to the man on the street. And I think coming back to my last point, if you focus too much on awards, you lose sense of what you are doing. The challenge for me is to produce a piece of work that is commended by the industry as well as on the public side, and obviously does its job for the client, which is a very big challenge.What is your take on the power of big ideas?Everyone likes to use that word... am not sure what exactly it means. People in advertising and creative side like to use that phrase a lot, and it has become a cliché. But basically, a good idea is a good idea. It works across many media channels or it does not, it is that simple.What about the power of advertising?That is a good question. Really, I have no idea. I have often asked myself: am I influenced by advertising? I would like to think that I am not, but I think I am (influenced), on a subconscious level, I think everyone is. But no one walks past a billboard and says, you know what, I will have that. Would you really drive past Joe Tan’s Paint Billboard, and say, hey, you know what — I really need to paint my house! I do not think any human being actually does that. Personally, I think a lot of clients here think that there are only certain sets of channels to get the message across. They are thinking: I’ve got some money to do some TV ads, some print ads, and perhaps a billboard. And you know what: it doesn’t really work like that anymore. Creativity is not about how many media channels you get. Are people really looking at billboards? Are they really watching TV all that much? Or YouTube? Or downloading stuff from... where? We have to look at everything. We cannot look at traditional stuff anymore. Now, (consumers) don’t have to watch TV anymore, or look at print ads. I think print ads are going to be a thing of the past. With (Amazon’s e-reader) Kindle, newspaper subscriptions are going to be downloaded immediately to that. You just hit a download button and it is there... It is about looking at new ways of entertaining the public, using more channels innovatively. Suits is a term often used to refer to the executives in the account-servicing department. What is your take on that?I think that as long as people are adding value and contributing to making a piece of great work, creativity can come in many different ways. The creative department, suit department, accounts department... it doesn’t matter. What does not work for me is when people think in silos: I am a suit, so I will think like a suit; I am a creative, so I will think like a creative. Look instead at the big picture: everyone works for a common cause. It is all about ideas and working as a team. How do you feel about suiting up? You said that you have never owned a suit in your life?It feels shiny and smooth…You have never worn a suit… Not even for a... funeral?No. I usually wear jeans and maybe a nice jacket. Describe your personal style.Casual and comfortable. Usually just shirts, jeans and shoes.What does luxury mean to you?For me luxury just means a nice boutique hotel, a good book, and money to eat in nice restaurants — does not mean I have to buy expensive brands. The only things I spend money on, is probably a watch. I go for quality. I am not going to pay RM12,000 for a suit if I had that to spend. I would rather spend money on travelling, food, books, art, that kind of stuff — that is probably luxury for me.What is the most luxurious thing you have owned?It is what my wife owns, not me! My house is pretty much the most luxurious thing I own. We have got a garden. Luxury is a comfortable house that you go home to. What is your take how big brands use advertising?They do not use the advertising agencies to do brands. They do it all in-house. Louis Vuitton wants to tell the woman out there that they need this handbag. So, of course, they need advertising. Tell us a bit about yourself.I am the head of creative at Grey KL and I have over 20 years of experience in advertising. I began at a local agency, graduated from the American College in London. Started a local design company called CCS. Then I joined the first international agency, Hakudo, followed by YNR, Ogilvy, Lowe & Partners and BBDO. I had a short stint with YNR Shanghai. I have been with Grey for exactly one year and one month now.Why the moving around? Is it normal?On average, advertising people tend to move around every three to four years. Because after working on the same accounts year after year, you understand what these brands are all about, working on them... it becomes boring after a while. How do you find passion in the work and all that.... One of the ways we do is to move on to another agency and all that and we try new things out.What is the proudest moment of your career?It was winning the biggest award, the Golden Kancil, when I was at Ogilvy for an ad for Panadol Menstrual in the 1990s. A very simple poster with a guy in a relaxed pose, smiling. At the bottom of the poster was a line that said, ‘Panadol Menstrual’. It worked on a great insight: if you have a girlfriend, or if a guy has to go through the same what a woman goes through that time of the month... this is the pill that will obviously make guys much more relaxed. Then there was also one ad which we did one for Land Rover. It had a picture of an African tribal woman carrying a blonde kid, and a line that simply said ‘Land Rover’. What it said was that owners of Land Rovers lead adventurous lives. So, they get to go around and meet people. Your work is very much about reading between the lines.If an ad stops you and makes you think, it is a thousand times much more effective (than one that simply states it). Why? Because it creates a lot of debate and conversation. An ad that is talked about is a great ad. That is what advertisements do: they make people sit up and listen. If you’re talking to your friend about it because it’s so good, I think the ad, to me, has done its job. If an ad can create debate and conversation — first and foremost, you will not forget what it is about. Usually, there is a lot to it than just telling a message. Ads with an idea evoke emotions, and it makes you connect to the brand. That is real communication.What is it about the ad industry that keeps you going?The business is ever-changing, it keeps me on my toes, it is always about producing a better ad. I think what works for me is that I like to look at the problems clients throw me and we try and solve them in innovative ways. We are in the ideas business. That, itself, is a nice challenge every day. That is what keeps me in business so long. I think that passion in the business is important. If you don’t have that, you will just wear down and burn out. What is your take on the power of advertising and the power of big ideas?If you have a great ad, the whole world will see it and talk about it. That is the power of great advertising. Take the annual (televised American football championship) Super Bowl in the US, for example. Each year, you only get to buy just one slot, because it is really expensive. That is one chance to reach this humongous audience... how many people get to do that?  It is a huge honour, and the pressure to put out an ad that is talked about is huge, because the ad only runs once. What is the best ad you’ve ever encountered?Way too many! Every year, the ads just keep getting better and better.All these ads must have spoken to you in some way — why and how did they speak to you?They speak to me in unexpected ways. There were elements of surprise, new information, and (they) made an impact. They really touched me or made me think. For example, the election campaign advertisements in the US. One of them featured interviews with people, and talked about their candidate. At the end of the ad, it just says something about exercising your vote. So, a guy is interviewed, and the advertisement is about how racist he is and how he wants to change the world and all that. At the end of the ad, it says, if you do not exercise your vote… it makes you think and makes you want to do something. Those ads are the most powerful. You look at something in a way you would have never thought of before.The term ‘suits’ — tell us what it means to you in the advertising industry?‘Suits’ in the advertising world are the types that wine and dine clients. It is not derogatory, though. I think the term is invented in the US, at Madison Avenue (in New York). Not so much here. In today’s world, the creatives and the suits work quite closely together. How you feel about your outfit?I think it feels a bit uptight. I probably wear something like this once or twice a year. A good friend’s wedding, maybe. Apart from that, we don’t normally wear this. I usually dress up as casual as I can. In advertising, we wear T-shirts and jeans. I wear FCUK, Replay and Levi’s 501 jeans… classics.How would you describe your personal style?Relaxed, not fussy. I am like a Sunday morning person, really.Is it like a Sunday morning every single day then?No, not really... I try to relax everyone, there are always deadlines, always-uptight people running after deadlines, it gets up to your nose every day. Every agency has its culture. Some have a rather strict dress code. I let my own creative team run wild a little bit, because they should not be constrained. My management style is to let people off, give them the benefit of the doubt, confidence, and believe in them... They will come back with some solid ideas. You have been in the industry for two decades, what is the most significant change you have observed?Technology has changed the way we work and communicate, but the discipline is still searching for the big idea — that has not changed. Advertising is grounded on great ideas. When you present and sell the product through an idea, people do not forget them. It is like telling your children a fairy tale — fairy tales are based on ideas.What does the word luxury mean to you?Being able to do what I really want, being able to be at certain places at my own whim and fancy. To me, that is luxury, to travel... if you can do that, that is luxury. How often do you indulge yourself?Maybe once or twice a year. I might buy a car, go on an expensive holiday, or find somebody or something special... like seeing my daughter on her birthday, the smile on her face — that is real. What would you say is the most luxurious thing that you own?This Rolex Submariner Date — I bought it with my hard-earned money about six years ago. This is a classic divers’ watch. It is the first to use the bezel in its design, and it is a classic design icon. The watch was designed for a purpose, not so much for aesthetic reasons. I think that is why I fell in love with it. It is something designed with true function and still looks great. I think that is when design speaks for itself. A lot of thinking has gone into it that makes it a classic today. When I was growing up, I was always impressed with how Rolex advertised its watches. Rolex is not a fashion item. It is a watch that’s so beautiful that I want to put it on my wrist. That is what the power of advertising is. It makes you desire, makes you want to work hard for it. What do you aspire to own or experience?Hitchhike or backpack around the world… that is probably something I want to do sometime in the future. Maybe in South America... I have not been there yet. I want to explore, to see life, experience. People in advertising are curious creatures. They tend to delve into more than what is on the surface. They want to find out what exactly makes people tick. Makes life a bit more interesting. Backpacking is great, I get to meet and talk to people on the street. Once, I rode around Phuket on a motorcycle, with no plans in mind. Being spontaneous, that is great for me. Being able to experience, to have adventures, to try things you are afraid of... you never know what will surprise you.What is your take on the relationship between luxury brands and the advertising industry?Big brands can command such high prices, and people buy them and believe in the brands because of advertising. But, as times change, with the Internet, for example, people tend to go beyond advertising, such as to blogs that write about brands. Let me give you one example. The Leica D-Lux camera uses very little advertising, but it has a cult following. People learn about it through forums, blogs, reviews and through recommendation. People tend to believe someone else’s word rather than the advertiser’s. There’s a slight shift in how brands can talk to people. Facebook’s Fan Pages is growing. Then, there is also celebrity endorsements that work wonders.   Big ideas happen in everything  we do. A new business with a new idea or concept — that too is an idea. So, to me, ideas do not have to happen only in advertising, it is anything that happens anywhere else in the world. Things that make you take notice, talk about and usually has a strong idea behind it. This article appeared in Options, the lifestyle pullout of The Edge Malaysia, Issue 771, Sep 7-13, 2009.

https://theedgemalaysia.com/node/15071

Bina Darulaman up after 1Q net profit jumps two-fold

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KUALA LUMPUR (May 21): Bina Darulaman Bhd shares rose on Monday after afternoon after the company said its net profit for the first quarter ended March 31, 2012 rose two-fold to RM6.88 million from RM3.13 million a year earlier on the back of a 121% jump in revenue to RM73.39 million from RM34.57 million a year earlier. At 3.15pm, Bina Darulaman was up two sen to RM1.25 with 11,000 shares traded. Earnings per share was 9.44 sen compared to 4.30 sen in 2011, while net assets per share was RM3.27. Reviewing its performance on Monday, the company said it registered higher earnings in its road and quarrying, construction property divisions, while its golf and hotel division posted a loss due mainly to the temporary partial closure of the golf course for upgrading and restoration works.

https://theedgemalaysia.com/node/65743

HELP on track for strong recovery

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With most of the issues weighing on its outlook over the past year resolved, HELP International Corp Bhd is on track for a strong recovery this year. HELP’s earnings for the second quarter of financial year ending October 2012 (2QFY12) were within our expectations. The company posted revenue and pre-tax profit of RM34.7 million and RM10.5 million respectively, compared with RM31.4 million and RM10.2 million respectively a year ago. On a year-on-year basis, revenue grew 10.7% due to higher student enrolment, while pre-tax profit rose 2.9% and net profit increased 8.1% to RM7 million from RM6.5 million a year ago. Compared with 1QFY12, which was a seasonally slow period due to the year-end holidays, the results were a significant improvement. In 1QFY12, the company posted pre-tax and net profit of just RM3.2 million and RM1.7 million respectively on a revenue of RM26.9 million. That corresponded to a pre-tax and net profit decline of 22.3% and 38.2% respectively for the quarter. For the first half (1HFY12), revenue grew 10.6% to RM61.6 million, while pre-tax profit was 4.4% lower to RM13.7 million and net profit dipped 5.6% to RM8.7 million, accounting for half of our full-year forecast of RM17 million. The growth in profitability in 2QFY12 is a welcomed positive trend and marks a turnaround from the FY11 decline due to a whole host of unforeseen issues. The Fraser Business Park campus opened in May 2011 after several delays caused by late delivery of the premises. High relocation and operation costs, missed opportunities for student intakes and problems with its venture in Vietnam had depressed HELP’s performance last year. Although a positive move, the upgrading of HELP from university college to full university status last year also resulted in increased manpower costs as the university had to hire more PhD holders and improve staff-student ratios. Another issue for HELP last year was higher costs following the Ministry of Higher Education’s directives for education institutes to streamline their twinning programmes. As a result, HELP’s twinning programmes were transferred from HELP University College to another subsidiary, HELP Academy. Stock appears fairly valued We expect a strong recovery this year as the worst appears over after a series of negative domestic and external events last year. We are maintaining our forecasts and expect net profit to jump 30.5% to RM17 million for FY12, but dip marginally to RM16.6 million for FY13 due to higher costs associated with the start of its new Subang 2 campus. HELP’s shares have recovered some ground in the past month as investors sense a recovery in the offing. With new ventures such as its international school, there will be impetus for growth that will help negate the impact of one- off costs associated with its new campus opening. At RM2.17, its valuations are fair at 18.1 and 18.5 times for FY12 and FY13 respectively. International school to contribute, counter new campus costs We continue to like HELP’s strong business model and brand name, which have helped expand its student population base, extend its presence overseas and increase the appeal of its own degrees. While the company’s earnings were affected in FY11 due to expansion plans, they are central to its growth strategy. The company aims to grow its domestic student base to 16,000 by 2016 from the current 11,500. The domestic expansion will be anchored by two new campuses in Fraser Business Park and Subang 2. HELP will also widen its target market by increasing the levels of education and courses — from mainly tertiary to post-graduate, secondary schooling, certificate and vocational courses. Its management is starting to see the effects of its full university upgraded status as seen in 1H revenue increase of 10.6%. It believes the stronger intake will have a positive domino effect on its prospects going into the subsequent intakes. HELP’s plans to expand into secondary and primary schooling are rolling out well. In January 2012, approval was given by the Ministry of Education to establish an international school, which will be located at HELP’s new campus in Subang 2. HELP will use five acres (2ha) of the 23.3 acres at Subang 2 for the international school. Work on the school has started and HELP management expects it to open in time for the September 2013 intake. Construction cost is estimated at RM30 million, and the school will have a capacity for 2,500 students. The new school will have a positive impact from 2013 onwards as margins are substantially higher than the tertiary courses with a large target market base. We understand the management is looking at indicative annual fees of RM24,000 for primary education and RM36,000 a year for secondary schooling. Most of last year’s issues involving Fraser Business Park, Vietnam (due to a change in government regulations) and local regulatory changes (the segregation between twinning and local courses) have been largely resolved. A growing student and revenue base will help the company cover the higher structural costs. One-off costs related to the move to the new Fraser Business Park campus have been fully covered but personnel expenses will remain high due to HELP’s new full university status, while overall costs will increase due to the multiple campuses. Expenses will also rise towards the end of 2013 and into 2014 when HELP completes and shifts to the new full-fledged campus in Subang 2 by the end of 2013. This could dampen earnings for FY14 again, although this will be tempered to some extent by the international school. We understand piling works for the Subang 2 campus will start in two months and the project is likely to be completed in the second half of 2014. It will open in time for the 2015 intake. Construction cost for the first phase of the campus, which will comfortably accommodate 10,000 to 11,000 students, will be RM180 million. In Vietnam, student enrolment has resumed after missing out on half a year’s enrolment in the first six months of calendar year 2011. This followed the Vietnamese government’s more stringent checks on education players aimed at weeding out degree mill players. In early 2011, the government stopped foreign players from enrolling students until they were audited and verified. Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment 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.

https://theedgemalaysia.com/node/55903

Ringgit closes lower against US dollar, ahead of weekend

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KUALA LUMPUR (Dec 13): The ringgit finished the week lower against the US dollar today, on selling pressure ahead of the weekend, dealers said. At 5 pm, the ringgit was quoted at 3.2340/2370 to the US dollar, compared to 3.2280/2310 at yesterday's close. They said the decline in risk-taking, on renewed concerns that the US Federal Reserve may start tapering its stimulus plan soon, caused the local unit to remain under pressure. In contrast, the greenback firmed on the global market, on the back of an upbeat US retail sales report. Meanwhile, the ringgit was little changed against the Singapore dollar at 2.5753/5797, from 2.5758/5784 yesterday, but emerged firmer against the yen at 3.1222/1263, from 3.1355/1399 on Thursday. The domestic currency was traded slightly higher against the British pound at 5.2863/2918, from 5.2939/2001 on Thursday, while changing little against the euro at 4.4497/4544, from 4.4488/4536 yesterday.

https://theedgemalaysia.com/node/19509

Kuok Khoon Ho quits Transmile board

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The air transportation company said Kuok’s resignation took effect yesterday. He had been with the board since April 2004. Kuok, 59, is the chairman of Kuok Brothers Sdn Bhd, which holds a 17.99% stake in Transmile or 48.6 million shares. Kuok himself holds 50,000 shares. Transmile has borrowings of up to RM575.29 million as of June 30, 2009. It posted net loss of RM449,000 on the back of RM38.53 million in revenue in the second quarter ended June 30. The company, which was a darling of foreign investors, was once trading at a high of RM13 in May 2007. But since then, its share price has plunged after the uncovering of massive financial irregularities. The stock closed unchanged at RM1.16 yesterday. The Securities Commission had in July preferred criminal charges against Transmile’s former chief executive officer Gan Boon Aun, former chief financial officer Lo Chok Ping and executive director Khiudin Mohd under the Securities Industry Act 1983. The charges were for abetting Transmile in making a statement that was misleading, in particular relating to revenue in the unaudited consolidated results for the financial year ended Dec 31, 2006. The misleading statement was in relation to its reported revenue of RM338.47 million. However, in May last year, the SC withdrew the charge against Lo after he paid a compound of RM700,000. This article appeared in The Edge Financial Daily, October 7, 2009.

https://theedgemalaysia.com/node/9845

M’sian Islamic finance still at nascent stage

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KUALA LUMPUR: Malaysia’s Islamic finance sector is still at a nascent stage, despite the country having developed as an Islamic finance hub, industry players said. “The industry is still at a pretty nascent stage, for example as far as getting infrastructure for human capital training, and commonality in rules, and these will take some time,” Aberdeen Asset Management Malaysia Sdn Bhd managing director Gerald Ambrose said. He was speaking among a panel at Invest Malaysia 2009 here on June 30, in a session entitled Islamic Finance: Driver of Growth. Nomura Asset Management Malaysia managing director Nor Rejina Abd Rahim said the sector’s mutual funds still trailed the conventional market. However, with Malaysia’s opening up of the Islamic asset management space to foreign companies, more innovative products could be made available, she added. Goldman Sachs and Co Singapore managing director Tim Leissner said enhanced liquidity was needed to spur product innovation. “We need more liquidity for more players to come in. Eventually, there will be a tipping point and the market will take off.” Leissner also said Malaysia would be a winner if it could “marry” the liquidity available from the Gulf Cooperation Council countries with the capital need of growth nations, such as China and India. CIMB Islamic Bank Bhd chief executive officer Badlisyah Abdul Ghani said “the party had not even started yet” for Islamic finance, as many Malaysian Muslims still had not fully taken up Islamic finance products. “Malaysia has done a good job in the past, but it must move forward now, and a key concern is to be cost competitive,” he said. Commenting on how Islamic finance could play a role in the aftermath of the global financial meltdown, Leissner said while the industry would not be a saviour of capital markets, it could “add a lot”. CIMB Islamic Bank Bhd chief executive officer Badlisyah Abdul Ghani said “the party had not even started yet” for Islamic finance, as many Malaysian Muslims still had not fully taken up Islamic finance products.

https://theedgemalaysia.com/node/63532

EPF declares 6% dividend for 2011, highest in 10 years

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KUALA LUMPUR (Feb 19): The Employees Provident Fund (EPF) Board declared a dividend of 6%, the highest in 10 years, for its financial year ended Dec 31, 2011. “The dividend rate, an increase of 20 basis points over the 5.80% rate paid out in 2010, translates to a total of RM24.47 billion being distributed to its members,” it said in a statement on Sunday. The EPF’s gross investment income of RM27.24 billion in 20111, up 13.18% from 2010, was derived after deducting net impairment allowance on financial assets, investment expenses, operating expenditures, statutory charges and dividend on withdrawals, representing an increase of 13.23% compared to RM21.61 billion in 2010. EPF chairman Tan Sri Samsudin Osman said: “The year 2011 marks another commendable achievement for the EPF. Despite the challenging investment landscape, it was the strongest performance since the year 2001 that affirms our long term and prudent investment strategy combined with continuous efforts by our investment team.” He pointed out that while its  fixed income investments provide stable returns, the fund’s overall performance was mainly due to the gains realised in both domestic and global public listed equities as well as its active management programmes. As at Dec 31, 2011, EPF total investment assets had grown 6.52% to RM469.22 billion from RM440.52 billion recorded in 2010. Samsudin said the increase was mainly due to the positive net annual contributions from members and employers, consistent and encouraging investment performance. The EPF said 60.79% of its investment assets were in stable and conventional low risk fixed income instruments. Equities accounted for 35.64% of total assets while the remaining 3.18% and 0.39% were allocated for money market instruments and properties asset classes, respectively “Equities were the largest income contributor at RM13.29 billion representing 48.81 per cent of total investment income. “This was followed by loans and bonds, Malaysian Government Securities and money market instruments which contributed RM7.54 billion, RM5.63 billion RM656.36 million respectively. The balance RM115.41 million or 0.43 per cent was contributed by property and miscellaneous investment income,” he said.

https://theedgemalaysia.com/node/81501

PSM slams govt over U-turn on minimum wage for foreign workers

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PUTRAJAYA (March 25): Parti Sosialis Malaysia (PSM) has slammed the government for postponing the implementation of minimum wage on foreign workers in small and medium enterprises, saying it negated the efforts of a government-backed council. "This is against the decision of the National Wages Consultative Council. Why was their decision overridden when they are the experts?" asked PSM secretary-general S Arutchelvan. Artutchelvam was speaking to reporters after leading a team of representatives from PSM and workers' rights group Jerit in a meeting with Human Resources Ministry officials here this morning. The minimum wage policy, which came into effect on Jan 1, requires employers to pay a minimum monthly wage of RM900 in the peninsula and RM800 in Sabah, Sarawak and Labuan. However, the cabinet earlier this month agreed to allow employers in SMEs to defer implementation until Dec. 31 for foreign workers. The decision comes after groups representing SMEs pressured the government to defer  the implementation for foreign workers, claiming that the SMEs would go out of business if forced to pay such salaries. Arutchelvam said PSM and Jerit are unhappy that the government had not kept to its promise of not making a U-turn on the implementation of the policy. He also expressed concern that the deferment would affect the employment opportunities of Malaysian workers as most SMEs - which comprise 97% of the companies in the country - would now opt for foreign labour as it was cheaper. "Now most SMEs will employ foreign workers which defeats the aim of the minimum wage," he said. He cited the case of a company in Klang which increased the salary of foreign workers to RM650 from the previous RM450, after the minimum wage policy was announced last year before reverting to the original sum. As such, said Arutchelvan, the government's decision will also impact foreign workers.

https://theedgemalaysia.com/node/56521

Benalec calls off sale of Melaka land

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KUALA LUMPUR: Benalec Holdings Bhd has cancelled its sale of eight tracts of leasehold vacant land totalling 16.82ha in Melaka Tengah for RM54.31 million. In a filing with Bursa yesterday, it announced that its subsidiary Heritage Land Sdn Bhd had terminated the sale and purchase agreements (SPAs) it had entered into with Highbond Capital Sdn Bhd and Gigayear Revenue Sdn Bhd in July. Benalec said Highbond and Gigayear had failed to pay the balance amounting to RM48.89 million by the extended completion date of Dec 10. The group added that it was entitled to impose a forfeit of the 10% deposit, amounting to RM5.43 million, it received from the two companies. The termination would not have any material effect on Benalec’s consolidated earnings per share and net assets per share for the financial year ending June 30, 2014, according to the company. Benalec had said earlier that it planned to use the proceeds from the sale to finance its ongoing projects and to meet its working capital requirements. — by Charles Yong This article first appeared in The Edge Financial Daily, on December 13, 2013.

https://theedgemalaysia.com/node/2993

#Today's Diary* What to expect on Apr 30, 2010

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1. Listing ceremony of Turbo-Mech Bhd at Bursa Malaysia Gallery, KL at 8.45am 2. Official launch of KFH Gold Account-i for Kuwait Finance House (Malaysia) Bhd at Sentral Ballroom B, Level 6, KL Hilton at 9am 3. ISIS International Affairs Forum on Asean Economic Integration: Driven by Markets or Mandarins? at ISIS Conference Room, 2nd Flr at 10am 4. Launch of Enterprise 50 Award Programme 2010 at Ruby Ballroom, One World Hotel, PJ at 3pm

https://theedgemalaysia.com/node/38468

City&Country: Briefs

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S P Setia hits RM2 bil sales target S P Setia Bhd had recorded sales of RM1.95 billion as at Aug 31, achieving its FY2010 sales target of RM2 billion with two months to spare. The 10-month sales value exceeded the group’s highest sales value of RM1.65 billion recorded in FY2009 by 18%. Some RM590 million was achieved in 3QFY2010, bringing cumulative nine-month sales to RM1.8 billion. Projects that contributed to these numbers include Setia Alam and Setia Eco-Park in Shah Alam; SetiaWalk in Puchong; Setia Sky Residences in Jalan Tun Razak, Kuala Lumpur; and those in Johor Baru and Penang. Plenitude to buy 20 land parcels in PenangPlenitude Bhd is acquiring 20 parcels of freehold land in Balik Pulau, Penang, measuring about 56.63 acres for RM40.12 million (RM17.50 psf) to be developed into a mixed development. Plenitude, via its wholly-owned subsidiary Plenitude Estates Sdn Bhd, entered into two separate sales and purchase agreements with United Formula Sdn Bhd and Affluent Base Sdn Bhd on Sept 27. The company says the proposed development will comprise 2-storey and super-link houses and a neighbourhood commercial centre consisting of 2 to 3-storey shops. The project has an estimated GDV of RM230 million. This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 826, Oct 4-10, 2010

https://theedgemalaysia.com/node/57947

National Biomass Strategy to generate RM30b by 2020

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KUALA LUMPUR: The new National Biomass Strategy (NBS), launched by Prime Minister Datuk Seri Najib Razak yesterday, is expected to generate RM30 billion in new income by 2020 and create 70,000 new jobs, of which 40,000 will be high-skilled. Najib said the NBS, aimed at enhancing the country’s competitiveness as a biotechnology hub, has a clear action plan with immediate initiatives and new Entry Point Projects (EPP) to drive opportunities. “Biomass has the potential to deliver up to RM30 billion in new income for Malaysia and Malaysians by 2020. We are excited about the prospects and we are optimistic of performing well in this sector,” he said at the launch of BioMalaysia 2011 and the 6th Pacific Rim Summit on Industrial Biotechnology and Bioenergy yesterday. Najib said the Ministry of Science, Technology and Innovation (Mosti) and Biotech Corp and other agencies will roll out a bio-economy road map by early next year. The road map will complement the current National Biotechnology Policy (NBP) and will set a target for high growth in the coming years, he said. “We will be looking at some key focus areas in the industrial, health and agriculture sectors which will leverage the latest approaches in bio-mining, bio-conversions, bio-extractions and key knowledge technologies such as genomics, proteomics, and metabolomics,” he said. He added that under the NBP framework, Mosti and BiotechCorp have nurtured and built 204 biotech companies since 2005. “In the next five years, we expect to see significant value creation,” he said. The event yesterday also saw strategic collaborations between BiotechCorp, the Malaysian Agricultural Research and Development Institute (Mardi) and four other parties to utilise marker assisted selection (MAS) technology. MAS uses DNA markers in the process of selecting plant varieties in order to accelerate the plant and animal breeding process. The technology will be used to genotype palm oil crop, in the breeding of shrimps and other aquaculture products and the development of hybrid seeds of various crops. This article appeared in The Edge Financial Daily, November 22, 2011.

https://theedgemalaysia.com/node/21004

Company Spotlight: Unisem riding Chinese dragon

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Unisem Group is a provider of semiconductor assembly and test services for many global electronics companies, especially those located in the US. It offers an integrated suite of IC packaging and test services such as wafer bumping, probing and grinding, and a wide range of lead frames and substrates. The company’s turnkey services include design, assembly, test, failure analysis and electrical and thermal characterisation.Unisem, which has about 9,000 employees worldwide, started its manufacturing operations in Ipoh and has since expanded to Wales, Chengdu in China, Batam in Indonesia and Sunnyvale in California. Like most electronics companies, Unisem saw a sharp contraction in orders in 4Q2008 and 1Q2009 as electronics companies cut down orders due to uncertainties created by the global financial crisis. As revenue in 1Q2009 plunged to RM180.7 million from RM310.7 million a year ago, Unisem reported a net loss of RM23.4 million. A recovery in demand was seen in 2Q2009, with revenue rising to RM255.3 million. The company returned to profitability in 2Q2009 with RM23.7 million. As the global economy stabilises, revenue could grow a further 10% to 15% in 3Q2009 and another 5% in 4Q2009. The visibility of orders is poor in the assembly and test services industry as orders are only given three months ahead. Revenue in 2009 will depend on demand for electronic goods in 2010, which will depend on consumer confidence next year. Unisem is cautiously optimistic about its prospects in 2010. There is little likelihood of a severe financial crisis, as seen in 4Q2008 and 1Q2009, but the recovery in the real economy may be slow due to deleveraging by highly geared consumers. Unisem is seeing growth mainly in China where it is operating at close to full capacity. To date, it has spent US$100 million on its Chengdu facility and plans to spend another US$50 million to expand capacity. Its production of 3.8 million pieces in 2Q2009 is expected to rise to above five million pieces in 4Q2009. The company has a 45-acre tract in Chengdu, where there is scope for expansion as only half the area has been used. Its Chinese operations account for 20% of Unisem’s revenue but the profit contribution is significantly higher. The company declined to provide a profit breakdown by location. Growth in China is coming from the handset market. With the introduction of 3G services in the republic, demand for 3G handsets has increased. The operating cost in Chengdu is 20% lower than in Unisem’s Ipoh plant while the salaries of qualified engineers there is only 50% of what their Malaysian counterparts earn. Many of Unisem’s Chinese employees are graduate of universities that specialise in teaching electronics. As its operations are located in Chengdu, the capital of the western Chinese province of Sichuan, costs are lower than in the coastal regions of China. The republic’s cost advantage and ample supply of skilled labour do not augur well for the Malaysian electronics industry, especially since the local education system is not producing enough highly skilled talent. The Chinese government also gives Unisem a subsidy — its FY2008 subsidy of RM6.5 million was paid in 2Q2009. Unisem’s plant in Ipoh is operating at around 70% capacity while its plant in Batam is operating at slightly above 60% capacity. The company will spend some money to upgrade its Ipoh and Batam plants but the bulk of its capital expenditure (RM43.2 million in 1H2009) was used in China where the growth is. Its Welsh operations continue to bleed and will be used by the company as a business enabler. Its subsidiary, Advanced Technologies (UAT), offers wafer bumping services used in flip chips which remove the need for bond wiring, thereby enabling the chip to be smaller. UAT started small volume production in 3Q2009 and is expected to be profitable in 4Q2009 as production increases. In terms of costs, gold wire accounts for 50% of costs. Other costs include epoxy, lead frames, moulding compound and packaging materials. Unisem was not adversely affected by the recent rise in gold price as it has a cost pass-through formula. Taiwanese assembly and test company ASC has operations in China but it is assembling higher-end BGA packages, an area where Unisem is not supplying. In the longer term, Unisem will face competition from Chinese assembly and test companies which are increasing their capacity and improving their quality but currently, most of Unisem’s US customers still value its reliability. Jiangsu Changjiang has around the same turnover as Unisem while Nantong Fujitsu’s turnover is half Unisem’s. However, with a larger market capitalisation (RM1.9 billion for Jiangsu Changjiang and RM1.3 billion for Nantong Fujitsu, compared with Unisem’s RM754 million) due to their higher PER valuations, these Chinese companies will be able to raise capital to improve their technology and quality. As at June 2009, Unisem had loans of RM528 million which included a US$30 million loan to build the China plant and a US$25 million loan to buy over its Batam operations. This represents a debt-to-equity ratio of 0.61. Though Unisem is likely to generate a good cash flow in 2H2009 and 2010, it may need to raise some capital to boost production at its Chinese plant, which is operating at close to full capacity. Unisem is trading at a prospective FY2010 PER of 10.8 times compared with a prospective FY2009 ended June PER of 11.8 times for its larger rival MPI. Like MPI, Unisem has a niche in the fast-growing Chinese market and is reaping the benefits of growth in the Chinese economy. Nevertheless, like most electronics companies, it is subject to the volatility of the electronics market which is likely to see some stability after a traumatic 4Q2008 and 1Q2009. Choong Khuat Hock is head of stock research and a partner at Kumpulan Sentiasa Cemerlang Sdn Bhd, a fund management company. KSC may own shares in some of the companies covered by the writer. This article appeared in Capital page of The Edge Malaysia, Issue 775, Oct 5-11, 2009.

https://theedgemalaysia.com/node/24615

MOL’s possible game plan for Friendster

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MOL AccessPortal Bhd made global headlines last week when it announced that it was acquiring social networking site Friendster lock, stock and barrel for an undisclosed sum. And while the deal itself did not ripple Corporate Malaysia given that MOL was taken private by businessman Tan Sri Vincent Tan in 2008, it undoubtly helped to raise the company’s profile. With the acquisition, MOL — which specialises in online payment and micro credit — automatically has an audience of 115 million for its products and services, quite a leap from its existing user base of 400,000. It also gives MOL the platform to stand alongside other online payment players, the largest of which is China’s Alipay. Other contenders include online payment pioneer PayPal, which was acquired by online auction site eBay in 2002; QQ, which is under Hong Kong-listed Tencent Holdings Ltd; and Japan’s Mixi. However, MOL’s CEO Ganesh Kumar Bangah is quick to point out that this alliance between the company and Friendster will be different. “The difference between us and others, like Alipay and PayPal, is that we have more of a physical presence. It is very convenient for a consumer to simply go to a 7-Eleven and pay in cash for our online currency MOLePoints,” he explains in a phone interview. And while China’s third-party online payment trading volume is worth some RMB125 billion (RM62.2 billion), Ganesh says the focus of MOL-Friendster will be on Southeast Asia in the near term. “Our focus will be on social games and social shopping,” he says. The ultimate aim, according to Ganesh, is to create Asia’s largest end-to-end content, distribution and content network. In Malaysia for example, there are very few large examples of listed companies that deal in this kind of microcredit. There was Mobile Money International Sdn Bhd that was acquired by REDtone. As for online payment, MyEG Services Bhd is considered a success thanks to its backbone of government contracts. Given that the bulk of Friendster users are chiefly in this part of the world, MOL’s acquisition of the social networking site seems a good fit. In addition to Malaysia, MOL also has retail channels in the Philippines and India, among others. According to reports, analysts are positive on the acquisition, stating that Friendster’s transformation into a virtual payment provider would be the next step forward for the company. It is no secret that Friendster has been floundering in the shadow of competitors such as MySpace and Facebook, which came about much later. Thus, Friendster has been openly seeking a company to acquire it, with a slant towards Asia where it still has a presence. But both Friendster and MOL are keeping mum as to the price tag for the acquisition as well as how the latter is planning to finance it. The figure that is being bandied about in the news is US$100 million (RM340 million). To keep things in perspective, Facebook is valued at US$15 billion, according to published analyst reports, while News Corp paid US$580 million for the company that owns MySpace. However, at the moment, there is still no black-and-white way to value a social networking site. It is truly a question unique to the Internet age as to how much a network of friends is worth. While advertising is a normal barometer, according to an online technology website, certain regions spend more on online advertising than others, which would place an increased importance on the geographical demographic. However, most agree that more data is needed before a more definitive model can be worked out. “It is difficult to monetise this sort of organisation. Facebook for example, recently stated that it is cash flow positive but it does not reveal by how much,” says an analyst. Regardless, another question that still needs an answer is how MOL will raise the money for the acquisition. Ganesh has been quoted as saying that the combined revenue of Friendster and MOL’s affiliate MOL Global Pte Ltd is more than US$110 million. But MOL itself is loss making, according to data from the Companies Commission of Malaysia. For FY2008, MOL registered a net loss of RM4 million, while its revenue was RM247.5 million. “Even so, the company would not have undertaken the initiative to purchase Friendster had it not arranged for the finances before hand,” says a technology analyst. But for all the positive vibes surrounding the deal, it would not be prudent to ignore Friendster’s past. Friendster, whose website and image recently underwent a revamp, was among the first social networking sites to emerge out of Silicon Valley during the technology boom. The company became a buzzword overnight and sported venture capitalist backing in the form of Kleiner Perkins Caufield & Byers and Benchmark Capital Partners. While there has been no official version for Friendster’s fall from grace, most peg it to bad management as well as the fact that the website was not technically able to handle the volume of traffic. In addition, Friendster will always be known as the website that turned down web giant Google’s offer of US$30 million. In the meantime, MySpace and eventually Facebook eclipsed Friendster to be the top two ranked social networking websites in the world. However, Friendster’s hidden weapon is in its patents. “Friendster is in possession of a handful of patents related to online social networking, which has to do with interconnection of people in the context of a social network, among others. Eventually, Friendster could see revenue coming from filing suits against other websites that infringe on these patents,” says an analyst. There is no question that with this move, MOL has secured itself a place in the technology stratosphere. However, will Friendster build on innovation like it did in its heyday or will its income largely come from monetising the patents? The latter would definitely make Friendster more popular, while the other is sure to be met with contempt. It is now up to MOL as to which path it will take. This article appeared in Corporate page of The Edge Malaysia, Issue 785, Dec 14 – 20, 2009.