FBM KLCI 1782.18
13.70
KLCI FUTURES 1772.50
20.50
STI 3419.05
0.10
RM/USD 3.6280
CPO RM2134.00
76.00
OIL US$48.86
0.39
GOLD US$1268.50
18.10
PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.50
FRIDAY JANUARY 30, 2015 ISSUE 1891/2015
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
www.theedgemarkets.com
M’sia short sellers target world’s
longest equity rally
10 H O M E B U S I N E S S
4 HOME BUSINESS
No revision to
TNB’s offer
for Integrax
4 HOME BUSINESS
AMMB confirms
Ashok’s resignation
8 HOME BUSINESS
UMW Toyota to
pass GST savings
to consumers
10 H O M E B U S I N E S S
Foreign selling of
local equities
d
done
with
h
24 W O R L D B U S I N E S S
Shell profi
fit misses
estimates
by
u
o
y
o
t
t
h
g
u
o
r
b
s
i
y
p
o
c
l
a
t
This digi
FBM KLCI 1782.18
13.70
KLCI FUTURES 1772.50
20.50
STI 3419.05
0.10
RM/USD 3.6280
CPO RM2134.00
76.00
OIL US$48.86
0.39
GOLD US$1268.50
18.10
PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.50
FRIDAY JANUARY 30, 2015 ISSUE 1891/2015
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
www.theedgemarkets.com
4 HOME BUSINESS
No revision to
TNB’s offer
for Integrax
4 HOME BUSINESS
AMMB confirms
Ashok’s resignation
8 HOME BUSINESS
UMW Toyota to
pass GST savings
to consumers
10 H O M E B U S I N E S S
Foreign selling of
local equities
done with
24 W O R L D B U S I N E S S
Shell profit misses
estimates
M’sia short sellers target world’s
longest equity rally
10 H O M E B U S I N E S S
2
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
For breaking news updates go to
www.theedgemarkets.com
ON EDGE T V
www.theedgemarkets.com
Prasarana
expects 40%
hike in ridership
with introduction
of 6-car light
rail vehicles
PR1MA hopes to
see more private
developer interest
as economy
turns sluggish
The Edge Communications Sdn Bhd
(266980-X)
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AK to the rescue
of 1MDB
IN BRIEF
New disclosure guide
by SGX for companies
and investors
Billionaire to lend the fund up to RM2b to help settle its debts
BY HO KAY TAT & J O S E BARRO C K
KUALA LUMPUR: Businessman T
Ananda Krishnan (AK) is understood to have firmed up an agreement to loan beleaguered 1Malaysia
Development Bhd (1MDB) as much
as RM2 billion to help the strategic
investment fund settle a debt obligation to Malayan Banking Bhd
(Maybank) and RHB Bank Bhd due
at the end of this month, sources say.
It is understood that the loan, however, is merely an interim measure.
“It [the loan] is more for 1MDB to
clear this obstacle — the two banks
— than anything else. The two [AK
and 1MDB] are still looking at how
to resolve the issue,” the source said.
1MDB and AK have been in a
quandary over how to settle a RM2
billion debt, slated for repayment in
November last year, which was guaranteed by the billionaire, when the
strategic investment fund acquired
his power assets in March 2012.
1MDB has already been given
two one-month extensions on the
RM2 billion facility. The facility,
meanwhile, is part of a larger debt
restructuring exercise undertaken by 1MDB on a RM6.17 billion
bridging loan that was due to be
settled last year.
The debts were refinanced into
a RM3.5 billion 10-year term loan
secured against Powertek Investment Holdings Sdn Bhd (PIH), and
a RM2 billion facility due in Nov 30
last year. The remainder owed has
been repaid with interest.
The RM2 billion loan was secured
after a commitment by billionaire AK
to inject the same sum into PIH, which
would enable PIH to pay the lenders.
But this route ran into a snag because a RM2 billion injection would
have given AK a majority stake in
PIH, based on today’s valuation.
In other words, 1MDB would lose
control of PIH, a prospect that was
not politically tenable.
Sources said as the Maybank/RHB
Bank consortium waited to be paid,
both 1MDB and advisers to AK have
been looking at various options to
break the deadlock and finally opted
for a plain loan from AK to 1MDB.
“It’s not yet a done deal as the
terms of the loan have to be agreed
on but it looks like the only option
now,” said a source. “And even then,
this is an interim solution so that
the banks get paid.”
1MDB, which is wholly owned
by the Ministry of Finance, racked
up after-tax losses of RM665.4 million from RM4.26 billion in revenue
for its financial year ended March
2014 (FY14).
The bleeding would have been
more severe had it not been for a
re-valuation gain of RM896.8 million on its property assets.
According to the company’s annual report for FY14, the sovereign
wealth fund’s long-term borrowings
had ballooned to RM33.5 billion,
up about RM7.2 billion or some
27% from RM26.3 billion in FY13.
1MDB had short-term borrowings
of RM8.3 billion.
As at end-March last year, 1MDB
had cash and bank balances of RM3.8
billion, down 42% from RM6.7 billion in FY13. This dip in its cash pile
had been used to pay high interest
charges and existing borrowings. For
the year ended March 2014, 1MDB
paid RM2.4 billion in finance costs.
Alibaba posts disappointing sales
REUTERS
NEW YORK: Alibaba Group Holding
Ltd posted disappointing quarterly
sales yesterday as the e-commerce giant hit back against “unfair” Chinese
government allegations that it failed
to crackdown on illegal transactions.
The online shopping platform
posted a 40% jump in sales to
US$4.219 billion (RM15.314 billion),
but that missed the US$4.45 billion in
revenues that analysts were expecting.
China makes up by far its biggest
market with sales of US$3.429 billion, as Alibaba operates the country’s most popular online shopping
platform Taobao.
But the company this week came
under unprecedented attack from
a powerful regulator in China. The
State Administration for Industry
and Commerce (SAIC), charged
with maintaining market order in
China, on Wednesday accused Alibaba of allowing “illegal operations”
to flourish on its online shopping
websites and ordered the company’s
executives to “overcome arrogance”.
The sharp criticism came after
a SAIC survey published last week
on Taobao found only about a third
of products sampled to be genuine.
“We believe the flawed approach
taken in the report and the tactic
of releasing a so-called white paper specifically targeting us was
so unfair that we felt compelled
to take the extraordinary step of
preparing a formal complaint to
the SAIC,” Alibaba vice-chairman
Joe Tsai said yesterday.
Headquartered in the eastern city
of Hangzhou, Alibaba completed the
world’s biggest initial public offering
with its US$25 billion listing on the
New York Stock Exchange in September, making its founder Jack Ma (pic)
China’s richest man overnight. — AFP
BoC Hong Kong mulling sale of US$6b bank unit
BY DENNY THO M AS & E NG E N THAM
HONG KONG/SHANGHAI: Lender BoC Hong Kong Holdings Ltd is
considering a sale of subsidiary Nanyang Commercial Bank Ltd (NCB)
that could fetch about US$6 billion
(RM21.78 billion), in a bid to stop
cannibalising the China business of
its parent, people familiar with the
matter said.
BoC Hong Kong is a unit of Bank
of China Ltd, the fourth-biggest
lender by assets in the mainland,
and a sale of NCB will help stream-
line the group’s operations in the
country, the people said. As of June
last year, half of NCB’s total loans
were to customers in China, according to ratings agency Moody’s.
An elimination of overlapping
businesses could come as a boost
for state-controlled BoC which has
seen a slowdown in profit growth,
and an increase in bad loans as
China’s economic growth weakens.
At US$6 billion, any sale would
be Asia-Pacific’s No 3 bank deal of
all time, according to Thomson Reuters data, behind Australia’s Westpac
Banking Corp’s US$17.9 billion purchase of St George Bank and Bank of
America Corp’s US$7 billion buying
of a stake in China Construction
Bank Corp, both in 2008.
One potential buyer interested in NCB is China Cinda Asset
Management Co Ltd, the nation’s
No 2 bad debt manager that listed
in Hong Kong in December 2013,
the people said.
China Cinda has been keen to buy
a bank, as having a bank will help
China Cinda to tap cheap sources of
funds to buy soured loans. — Reuters
SINGAPORE: The Singapore
Exchange (SGX) is providing
more information to companies and investors in a new
comprehensive disclosure
guide, it announced yesterday. The Straits Times quoted
the exchange as saying that
companies wanting clarity on
specific principles and guidelines on corporate governance
can look to the guide, which
has been laid out in a question-and-answer format. SGX
said listed companies are encouraged to include the new
disclosure guide in their annual reports. This is in line with
listed companies being expected to comply with the Code of
Corporate Governance 2012.
US jobless claims
drop sharply to near
15-year low
WASHINGTON: The number
of Americans filing new claims
for unemployment benefits
tumbled last week to its lowest
level in nearly 15 years. Initial
claims for state unemployment
benefits dropped 43,000 to a
seasonally adjusted 265,000
for the week ended Jan 24,
the lowest since April 2000,
the Labor Department said
yesterday. The drop probably
exaggerates the strength of
the jobs market as the data
included the Martin Luther
King holiday, which means
fewer claims were likely processed. — Reuters
Microsoft launches
Outlook for rival
iOS, Android
WASHINGTON: Microsoft yesterday launched an Outlook
app for rival handsets running
on Apple’s iOS and Google’s
Android, ramping up its software services efforts. The move
will allow users of iPhones,
iPads and Android-powered
smartphones and tablets to
more easily access the email
service popular with many
businesses. “The new Outlook
app brings together the core
tools you need to get things
done — your email, calendar,
contacts and files — helping
you get more done even on
the smallest screen,” Microsoft said on its Outlook blog.
— AFP
German inﬂation tips
into negative territory
BERLIN: Inflation in Germany, Europe’s biggest economy,
dipped into negative territory
in January for the first time in
five years, largely due to lower
energy prices, data showed
yesterday. German inflation
was -0.3% this month compared with January 2014, the
federal statistics office, Destatis, said in releasing its provisional figure, which sank
slightly more than analysts
polled by Factset had forecast.
In December, it had slowed to
0.2%, its lowest level in more
than five years. — AFP
4 HOME BUSINESS
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
No change to TNB’s offer for Integrax
Offer letter to be out today — price stays at RM2.75 per share
BY C Y NTHI A B L E M IN
KUALA LUMPUR: Tenaga Nasional
Bhd (TNB) will not revise its offer
price of RM2.75 per share for the
remaining stake it does not own in
port operator Integrax Bhd, said
sources with direct knowledge of
the matter.
It is understood that the offer
letter will be dispatched to Integrax
(fundamental: 1.65; valuation: 0.6)
and announced to Bursa Malaysia
today.
Integrax shareholders and minority shareholders have been
waiting for the offer letter to see
whether TNB’s RM2.75 per share
offer price still remains, after
several attempts by the former’s
co-founder and deputy chairman
Amin Halim Rasip to rally support
from the minorities to press TNB
for a higher price.
“Tenaga will not increase the
offer price, the offer letter is due
to be out on Friday [today],” said
a source.
On Jan 9, TNB (fundamental:
1.3; valuation: 1) made a general
offer of RM2.75 per share for the
remaining 77.88% stake it does not
own in Integrax. The offer price was
already a premium of 21.7% to the
closing price of Integrax prior to the
takeover announcement.
However, Amin, who is Integrax’s single largest shareholder
with a 22.81% stake, then came out
to declare his rejection of TNB’s
offer, stating that the takeover was
“unfair and unreasonable”.
In a recent interview with The
Edge Financial Daily, Amin said he
won’t part with the shares unless
TNB offers RM5 per share, which
he thinks is what Integrax is worth,
citing the company’s strong cash
position and its fundamentals.
Since then, Amin has increased
his stake to nearly 24%.
It is worth noting that Perak Corp
Bhd (fundamental: 1.90; valuation:
1.2) holds another 15.74% stake
in Integrax, while TNB itself owns
22.12% of the port operator.
Apart from Amin, Perak Corp has
not publicly stated its position on
TNB’s offer. Meanwhile, Integrax’s
board has also refrained from commenting on the offer.
The board of Integrax has nominees from TNB and Perak Corp.
Notably, Tan Sri Mohammad Tajol Rosli Ghazali, former Perak
menteri besar, is the chairman of
Integrax.
Integrax’s revenue comes mainly from port operations at the Lumut Maritime Terminal (LMT)
and contractual revenue under
the operation and maintenance
of the Lekir Bulk Terminal (LBT).
By owning 80% of LBT and 50%
less one share in LMT, Integrax’s
principal business is actually providing coal-handling services and
port facilities for TNB’s 3,100mw
Janamanjung coal-fired power
plant. In essence, TNB is the biggest client of Integrax.
While Amin remains defiant,
there is talk that Perak Corp could
sell half of its stake in Integrax,
while keeping the remaining shares
just to remain relevant in the Lumut
Port operations.
When contacted, several research houses said they deemed
TNB’s offer as fair and advised minorities to take up the offer, which
would cost TNB some RM644.23
million in total.
Meanwhile, news that Integrax’s
board may approve a special dividend would be a sweetener for the
AMMB confirms Ashok’s resignation
BY SURIN MURUGIAH
KUALA LUMPUR: AMMB Holdings Bhd (AmBank Group) has
confirmed that its group managing director Ashok Ramamurthy
will be stepping down as part of
a planned transition, reaffirming
a report by The Edge Financial
Daily yesterday.
In a statement to Bursa Malaysia, the banking group said it has
also commenced the process of
identifying a replacement for the
position.
AmBank Group said Ashok will
rejoin his family in Melbourne in
due course and as part of a planned
transition will resume his career
in a senior executive role at Australia and New Zealand Banking
Group Ltd (ANZ).
Meanwhile, AmBank Group
stated that its managing director of
wholesale banking, coverage, Pushpa Rajadurai, managing director of
wholesale banking, products, Kok
Tuck Cheong and group chief financial officer Mandy Simpson have existing contracts and will continue to
serve the group in accordance with
these contracts as normal.
However, the banking group
didn’t elaborate on when their
contracts will expire and whether
they will be renewed.
Ashok joined AmBank Group
from ANZ in 2007 as chief financial
officer and has been group managing director since 2012.
AmBank Group chairman Tan
Sri Azman Hashim said the group
had made significant progress under Ashok’s leadership.
“This includes repositioning the
AmBank brand internally and ex-
5
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ternally, upgrading our technology
infrastructure and strengthening
our strategic position.
“Importantly, Ashok’s presence
has also deepened the ties between AmBank Group and ANZ,
which continues to be a commit-
ted, long-term strategic partner
for our bank.
“After eight years with AmBank
Group, we are now at a natural
point for a transition to a new
group managing director and the
board has kicked off a process of
identifying a replacement,” he said.
The Edge Financial Daily wrote
yesterday that a major shake-up at
the top level of AmBank Group was
on the cards as the banking industry braces itself for a tough 2015.
According to sources, the group
will soon see the departure of
Ashok, while Pushpa and Kok will
also be leaving the group when
their contracts expire.
AMMB (fundamental: 1.7; valuation: 3.0) closed 27 sen or 4.11%
lower at RM6.30 yesterday, giving it a market capitalisation of
RM19.8 billion.
House prices seen 3% higher after GST — property consultant
BY C HE N S HAUA FU I
The property market is expected to be stable, with signs of a slowdown. The Edge
ﬁle photo
KUALA LUMPUR: House prices
in Malaysia are expected to rise
about 3% after the goods and services tax (GST) is implemented
starting in April.
Property consulting firm Rahim
& Co executive chairman Tan Sri
Abdul Rahim Abdul Rahman said
although transactions on residential properties were GST exempted,
building materials would be taxed
under the GST.
“In my opinion, there will be a
slight increase in residential housing prices, but not higher than 3%.
“There will be a wait-and-see
attitude by house buyers, but I
think eventually, the market will
absorb it,” Abdul Rahim told a
briefing on the Malaysian prop-
erty market outlook yesterday.
He said the property market is
expected to be stable, with signs
of a slowdown.
But steady growth is still seen
this year, Abdul Rahim said.
He was, however, mindful of a
larger supply of office space. According to his estimates, there will
be an additional 10 million sq ft
of office space in the Klang Valley
within the next three to five years.
An excess supply of office space
is expected to fuel greater competition and rental pressure, according to Abdul Rahim.
As of the first half of 2014, Rahim & Co’s estimates showed there
were 84 million sq ft of office space
in Kuala Lumpur.
The occupancy rate stood at
80.1%, according to the firm.
deal. Integrax was in a net cash position of RM150 million as at Sept
30, 2014, translating into some 50
sen per share.
Both Integrax and Perak Corp
shares were among the top gainers
yesterday. Shares in Integrax closed
14 sen or 5.07 % higher at RM2.90,
while Perak Corp shares settled up
six sen or 2.05% at RM2.99.
The Edge Research’s fundamental
score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers.
The valuation score determines if a
stock is attractively valued or not,
also based on historical numbers.
A score of 3 suggests strong fundamentals and attractive valuations.
Go to www.theedgemarkets.com for
details on a company’s financial
dashboard.
AirAsia X to
suspend trading
of its shares
today
BY ME E N A L A K S H A N A
KUALA LUMPUR: AirAsia X Bhd
(AAX) (fundamental: 0; valuation: 0.3) is suspending the
trading of its shares today from
9am to 5pm, pending a “material announcement”, it told Bursa
Malaysia in a filing yesterday.
No other reasons were given
for the suspension. The Edge Financial Daily, quoting sources,
reported yesterday that the longhaul affiliate of low-cost carrier
AirAsia Bhd plans to raise RM500
million via a rights issue and a
private placement to shore up
its balance sheet.
The daily said the proposed
rights issue was expected to be
discussed by the board and
passed today, and that it would
be carried out on the basis of
one new share for every two
existing shares to raise around
RM400 million.
The proposed private placement, on the other hand, would
involve some 10% of the issued
and paid-up share capital of AAX
to raise another RM100 million.
In its fourth consecutive quarterly loss since the fourth quarter of
financial year 2013 (4QFY13),
AAX’s net loss for the third quarter ended Sept 30, 2014 (3QFY14),
ballooned 84.8% to RM210.85
million from RM128.79 million in
2QFY14 due to higher operating
expenditure, foreign exchange
losses and finance costs.
The airline is due to announce its 4QFY14 financials
next month. Its counter closed
down 1.5 sen at RM6.55 yesterday, giving it a market capitalisation of RM1.55 billion.
6 HOME BUSINESS
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Bursa sees IPO activities to be slow
The market will continue to be subject to volatilities, says CEO
BY Y I MI E YONG
KUALA LUMPUR: Bursa Malaysia
Bhd (fundamental score: 2.70; valuation score: 0.9) foresees that initial
public offering (IPO) activities this
year will be as slow as last year’s, if not
worse, as the local market continues
to be subject to global volatilities.
“We believe the market is still trying to figure out how things are positioned [as things] will continue to be
subject to volatilities. From the IPO
perspective, I think the trend will be
close to 2014 or maybe a little lower than that,” Bursa chief executive
officer Datuk Tajuddin Atan told reporters during the bourse’s financial
results briefing yesterday.
He said the IPO market has already
slowed down last year, with RM5.9
billion raised, compared with the
RM8.2 billion raised in 2013. He acknowledged that there are concerns
that there might be some delays in
IPOs this year due to the weaker mar-
Bursa expects
2015 to be a
challenging
year, but is
still ‘cautiously
optimistic’
as Malaysia
has a proven
track record
of resilience.
Photo by
Kenny Yap
ket sentiments, but stressed that the
number of IPOs should still be “about
the same” as last year’s.
Tajuddin said the bourse expects
2015 to continue to be a challenging
year where global markets remain
volatile, but that it “remains cautiously
optimistic as Malaysia has a proven
track record being a tenacious and
resilient market”. Tajuddin also denied that there would be a rise in
listing fees, adding that Bursa needs
to provide more value if it were to
raise the fees.
On the Singapore Exchange’s move
to introduce a minimum trading price
of 20 Singapore cents (54 sen) for
its mainboard stocks to curb exces-
MOST VIEWED STORIES ON
theedgemarkets.com
TH Group founder and MD Lei charged
with insider trading
BY Y EN N E FOO
KUALA LUMPUR: Founder and
group managing director of TH
Group Bhd, Lei Lin Thai (pic), has
been charged with insider trading
of the company’s shares, which
allegedly took place in 2008, at
the Kuala Lumpur Sessions Court
yesterday.
Lei, claimed trial to all 53 counts
of insider trading brought against
him by the Securities Commission
(SC). The alleged offence is under
Section 188 (2) of the Capital Markets and Services Act 2007 (CMSA),
which is punishable by a maximum
10 years’ prison and a fine of not
less than RM1 million.
According to the charge sheet,
Lei traded some 2.77 million TH
Group shares between June 5, 2008
and Sept 22, 2008 while he was in
possession of information that was
not generally available.
It was alleged that Lei knew of
the proposed privatisation of TH
Group via a selective capital repayment exercise which was announced
on Sept 29, 2008.
These transactions were said to
have been carried out by Lei using
central depository system accounts
belonging to Wong Joon Mui, Lau
Sin Ling, Chung Yin Mui and Ng
Lai Sim. The four have also been
charged as accomplices to Lei’s actions under sections 188 (2) and
370(1) of the same Act.
The charges against Lei, Chung,
Wong and Lau were read before
Sessions Court judge Mat Ghani
Abdullah while the charges against
Ng were before Sessions Court
judge Abdul Rashid Daud.
Together with Lei, all four have
claimed trial and the cases will
be called before the Kuala Lumpur Sessions Court 1 on March 3.
The court has allowed bail for Lei
at RM300,000 and RM100,000 for
each of his alleged accomplices.
In a press statement, the SC said
it will not hesitate to take action
against insider trading to safeguard
the integrity of the market.
“Those who are privy to inside
information should not take advantage of it and those who aid
or facilitate any abuse of such information must realise that they
do so at the risk of inviting SC’s
scrutiny,” said the regulator’s director of enforcement Ahmad Fairuz
Zainol Abidin.
sive penny-stock speculation after a
penny- stock rout involving Blumont
Group Ltd, Asiasons Capital Ltd and
LionGold Corp Ltd, Tajuddin replied
that Bursa is not “thinking along that
line”.
“We have a lot of safeguards and
frameworks to govern the shares, prices and the like,” he said. He said that
the framework now is sufficient to
promote efficient market activities
and the performance of shares.
On capital expenditure this year,
Tajuddin said he has budgeted close
to RM20 million, which is much lower
than previous years, as he does not
see major expenses with regards to
technology.
Meanwhile, Bursa reported a
57% rise in its fourth quarter ended
Dec 31, 2014 (4QFY14), net profit
to RM53.14 million from RM33.84
million a year earlier, as the bourse
operator and regulator saw higher equities and derivatives trading
income. Lower staff cost besides
depreciation and amortisation
also supported the bottom line.
The bourse also delivered its highest full-year net profit since 2008 at
RM198.22 million for FY14, up by
15% from FY13’s RM173.08 million,
while revenue was 6.06% higher at
RM503.76 million versus RM474.99
million a year ago.The group plans
to pay a dividend of 18 sen a share
in 4QFY14, bringing its full-year
dividends to 54 sen.
The Edge Research’s fundamental
score reflects a company’’s profitability and balance sheet strength, calculated based on historical numbers.
The valuation score determines if a
stock is attractively valued or not,
also based on historical numbers.
A score of 3 suggests strong fundamentals and attractive valuations.
Go to www.theedgemarkets.com for
more details on a company’s financial dashboard.
Pasdec’s unit signs
development deal
for Kuantan land
BY J E F F R E Y TA N
KUALA LUMPUR: Pasdec Holdings
Bhd’s wholly-owned unit Pasdec
Putra Sdn Bhd has signed a development agreement with Sejati
Bumijaya Sdn Bhd, for the latter
to develop Pasdec Putra’s freehold
land at Bandar Putra in Kuantan,
Pahang, into residential and commercial properties.
The freehold land measures a
total of 154.12 acres (62.37ha) ; and
as audited at Dec 31, 2013, the net
book value of the land acquired in
2003 is RM16.98 million, Pasdec
told Bursa Malaysia yesterday.
Sejati Bumijaya will pay Pasdec
Putra 20% of the gross development
value (GDV) of the residential development and 25% of the GDV
of the commercial development,
which is to be satisfied half in cash
and half in developed units, which
will be payable upon completion of
each phase of the developments.
Pasdec Putra is a wholly-owned
unit of Pasdec Corp Sdn Bhd, which
in turn is a wholly-owned unit of
Pasdec (fundamental: 0.65; valuation: 1.8).
Pasdec said the proposed development of the land — which
is part of its 448 acres of freehold
land in the area belonging to Pasdec Putra — would “speed up” the
development of Pasdec Putra’s land
bank there.
It added the proposed development would free Pasdec Putra and
Pasdec from “additional financial
and cash flow burden”.
Shares of Pasdec closed down
half a sen or 1.1% to 46 sen, giving
the firm a market capitalisation of
RM94.75 million.
Khazanah raises RM1.62b from placement
of 2% stake in Tenaga
KUALA LUMPUR: CIMB Investment Bank Bhd and Credit Suisse
(Singapore) Ltd, as joint bookrunners, have yesterday successfully
completed a placement of 112 million existing shares representing a
2% stake in Tenaga Nasional Bhd
(fundamental: 1.3; valuation 1.8).
The shares were placed out at
RM14.50 each, and raised gross
proceeds of RM1.62 billion for
Khazanah Nasional Bhd.
The placement price represents
a 2% discount to the closing market
price on Jan 28, 2015 of RM14.80
per share.
The shares were placed to domestic and foreign institutional
investors. With the placement,
Khazanah’s stake in Tenaga is reduced to 30.4% from 32.4%.
VILLA 10 @ PELINDUNG is one of Pasdec’s developments in Kuantan.
8 HOME BUSINESS
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
‘Extensions for
1MDB loans show
confidence in fund’
BY ME E N A L A K S H A N A
(From left) Toyota Motor Asia Paciﬁc Pte Ltd senior vice-president (VP) Hao Tien, Ismet, UMW Holdings Bhd group chairman Tan Sri
Asmat Kamaludin, Lexus International chief engineer Takeaki Kato, UMW Toyota Motor deputy chairman Akio Takeyama and Lexus
Asia Paciﬁc VP Paul Carroll at the media launch of the new Lexus NX. Photo by Suhaimi Yusuf
UMW Toyota to
pass GST savings
to consumers
But they are still uncertain given the stronger US dollar
BY JEFFREY TA N
KUALA LUMPUR: UMW Toyota Motor Sdn Bhd will pass on whatever savings it gains from the government’s implementation of the goods
and services tax (GST) to consumers,
pledged the company’s president
Datuk Ismet Suki.
For now, however, it is uncertain
how the GST will impact prices of its
vehicles, given the weakened ringgit
against the US dollar. Hence, it remains to be seen if any savings will
be realised from the imposition of
the consumption tax.
“At this point in time, we are not
quite sure as to the savings of GST.
We have to take into consideration
a lot of other factors like the strong
US dollar,” said Ismet at the launch of
the Lexus NX models here yesterday.
Nevertheless, he assured that
“whatever savings we get from GST,
we will pass on to the consumers.”
Ismet also admitted that the
stronger US dollar may “slightly”
dampen UWM Toyota’s financial
performance this year, but stressed
that its sales performance would remain intact.
“There is still economic growth, so
it won’t be detrimental to our sales
performance,” he said.
Yesterday, Lexus Malaysia — a
division under UMW Toyota — unveiled the “All New Lexus NX” luxury
compact for the Malaysian market.
The Lexus NX is offered in five
variants that are priced between
RM292,000 and RM375,000 per unit
without insurance. This includes the
top-of-the-range Lexus NX 300h at
RM375,000.The other variants are the
NX 200t, NX 200t Premium, NX 200t
Luxury and NX 200t F Sport.
Ismet hopes the company can sell
approximately 2,000 units of Lexus
vehicles by the end of this year. He
also aims to capture 50% of the market
share for the small luxury SUV segment in the country. He said the new
Lexus NX and the existing Lexus ES
and Lexus RX vehicles will drive sales
for the company this year through its
strong network of eight outlets across
the country.
“We are confident these three
models will push us to achieve our
target,” Ismet said.
Lexus Malaysia has received 600
orders since the order taking for the
Lexus NX began in October last year.
On hybrid vehicles, Ismet told The
Edge Financial Daily that automotive
players are expected to request the
government to extend the incentive
period for the vehicles.
He said an extension would attract
more players into the hybrid vehicle
segment as it would help them recoup
their investments. A hybrid car can
run using either a petrol engine or
an electronic one, both of which are
built into the vehicle.
“I think what they [automotive
players] want is for the government to
deliver what is in the National Automotive Policy [NAP] 2014. Of course,
for the hybrids, they expect the government to extend the incentive period. If you come in now, the duty
exemption will expire in [end] 2015.
So you need this gestation period to
recoup the investments. Extension of
the duty exemption will be welcomed
by all industry players,” he said.
Ismet’s comments came ahead of
the NAP 2014 status update today.
International Trade and Industry
Minister Datuk Seri Mustapa Mohamed is expected to be present at
the meeting.
Under the NAP 2014, the government aims to transform Malaysia into
a regional hub for energy-efficient
vehicles to penetrate the regional
and global markets by 2020.
The policy will be accomplished
via strategic investments and adaptation of high technology in the domestic market.
UWM Toyota is a joint venture between UMW Corporation Sdn Bhd,
Toyota Motor Corp Japan and Toyota
Tsusho Corp Japan. UMW Corp is a
subsidiary of listed diversified entity
UMW Holdings Bhd (fundamental:
2.2; valuation score: 1.2).
Shares in UMW Holdings ended
down four sen or 0.4% to RM10.80,
giving the firm a market capitalisation of RM12.62 billion.
The Edge Research’s fundamental score
reflects a company’s profitability and
balance sheet strength, calculated
based on historical numbers. The valuation score determines if a stock is
attractively valued or not, also based
on historical numbers. A score of 3
suggests strong fundamentals and
attractive valuations. Go to www.
theedgemarkets.com for more details
on a company’s financial dashboard.
KUALA LUMPUR: Deputy Finance
Minister Datuk Chua Tee Yong appeared to defend 1Malaysia Development Bhd yesterday, saying that
“some” companies also require an
extension for their loan repayments.
Asked to comment on reports that
the 100%-owned sovereign wealth
fund of the Finance Ministry was seeking a third extension to repay its RM2
billion loan, he said if banks were to
grant the extension, it would reflect
the banks’ confidence in 1MDB.
“For banks to allow [an] extension, this also shows that they have a
certain confidence in the company,”
he told reporters after opening the
Malaysian Business Student Summit
2015 at Universiti Malaya’s Faculty of
Business and Accountancy.
“Every company has its proper way
of financing structure. Some companies also require an extension [to
repay loans],” he said.
News report said that 1MDB is
seeking a third extension to repay
its RM2 billion loan that was originally due on Nov 30, 2014. The third
extension is being sought to allow
time for the investment company to
sell a stake in its energy unit, the news
report stated.
The lead lenders of the RM2 billion
loan are Malayan Banking Bhd and
RHB Bank Bhd.
Bank Negara Malaysia governor
Tan Sri Dr Zeti Akhtar Aziz said on
Tuesday the central bank will ensure that any potential loan default
by any institution will not have systemic implications on the country’s
financial system.
However, she noted that the prerogative to give an extension to 1MDB
for the repayment of its loans lies with
the lenders, not the central bank.
Asked to comment on economic
matters, Chua said the main issue
concerning the country is “the [low]
oil price and whether Malaysia will
hit a twin deficit”.
“As analysts are unable to accurately predict the rate of rebound for
oil prices, there is a lot of uncertainty
in the market,” he said.
Chua advised people to remain
positive as well as consume more
local products to aid small and medium enterprises (SMEs).
“Consumers can also play a role by
assisting and consuming local products which will help SMEs. The export
council that we have set up is also trying to increase trade surplus,” he said.
While acknowledging analysts’
concerns about the initial implementation of the 6% goods and services
tax (GST) in April, Chua said that the
government is confident of gaining
additional revenue from the policy as
more than 300,000 companies have
registered for the new tax system.
On critique from Fitch Ratings
about the structural weakness of Malaysia’s economy following the revised
Budget 2015, Chua said measures
announced by Prime Minister Datuk
Seri Najib Razak will require time to
manifest their desired effects.
He also said one of the objectives
under the Economic Transformation
Programme is to reduce the government’s dependence on oil revenue
which has been fruitful.
“Between 2008 and 2009, oil revenue’s contribution to the government
was 40% but it has been dropping
on a yearly basis and in 2014, it was
estimated to be about 20% to 22%,”
he said.
He added that with the GST in
place, it will contribute to the government’s coffers and reduce the government’s tax gap — the amount of
taxes owed compared to the amount
collected — of approximately 20%.
Prasarana invests RM1b in new
trains for Ampang Line
BY J O N AT H A N G A N
KUALA LUMPUR: Prasarana Malaysia Bhd has invested RM1 billion in
50 new light rail vehicles (LRV) for
the LRT Ampang Line as well as for
the extension project, according to
its group managing director Azmi
Abdul Aziz.
“Prasarana had invested in 20
trains under the extension project
and 30 to replace the existing trains
for the Ampang Line. The first eight
trains will be operational by late this
year,” said Azmi yesterday, at the media briefing on the delivery of the
first LRV.
Azmi said the investment was part
of the initiative to encourage the use
of public transport.
“We expect the extended LRT lines
and new trains to double the current
passenger [load] from 180,000 as the
new lines will extend into areas that
are not covered,” he said.
The LRV supply contractor for the
project is CSR Zhuzhou Electric Locomotive Co, which will deliver the
first 35 trains from China while the
remaining 15 will be locally assembled at the Zhuzhou Electric Locomotive Co Ltd plant in Batu Gajah,
Perak. The system works contractor
for the project is a joint venture (JV)
comprising George Kent–Lion Pacific.
To recap, in 2012 the JV was awarded the contract worth RM955.84 million, in addition to RM128.62 million
more for the supply of train-borne
equipment.
The first phase of the Ampang
line extension project will feature
the opening of four new stations in
Awan Besar, Muhibbah, Alam Sutera
and Kinrara BK5.
The total length of the Ampang
Line is 18.1km beginning from Sri
Petaling Station and will end at Putra Heights.
Bukit Jalil, Kinrara, and Puchong
are some of the places the extended
line will be passing through.
10 H O M E B U S I N E S S
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Foreign selling of
equities done with
Country remains on the radar of investors, says Maybank IB
BY SURIN MURUGIAH
KUALA LUMPUR: Selling on Malaysian equities by foreign investors is
mainly done with, with the country
remaining very much on the radar
of investors, according to Maybank
IB Research.
In a strategy note yesterday, the
researh house said its take was that
most of the funds it met had reasonably reduced their exposure to
Malaysian equities since the roil on
crude oil price began.
“They are presently either ‘underweight’ or ‘neutral’ on Malaysia,” it said.
This is to be expected since investors generally do not like uncertainties, it said, adding that Malaysia’s
net oil-exporting status weakened
the investment case.
It said investors’ reduced exposure
was evident from the weak ringgit,
down 13% versus the US dollar from
a high of 3.146 on Aug 27, 2014.
The research house said Bursa
Malaysia’s fund flow data showed that
foreign investors had net sold RM2.4
billion of Malaysian equities since
early this year until Jan 22, adding on
to a net sale of RM6.9 billion in 2014.
“In the last few trading days, foreign investors have, however, turned
net buyers.
“Foreigners’ position is still of a net
buy of RM7.1 billion since 2012, and
RM24.9 billion since 2010,” it said.
Maybank IB said Prime Minister
Datuk Seri Najib Razak’s announcement on Jan 20 on the government’s
revenue enhancement and measures to cut operating expenditure to
support a revised 3.2% fiscal deficit target for 2015 (versus 3% previously), and a lower 4.5% to 5.5%
real gross domestic product growth
forecast for 2015 (5% to 6% previously), was positive on sentiment
as it shows attentiveness in dealing
with the issues at hand.
“The prevailing concern, however,
is of low crude oil price sustaining over
an extended period, and thus, the impact on the fiscal deficit beyond 2015.
“In addition, near-term headwinds include the 6% GST (goods
and services tax) implementation
come April 1, 2015 and rating agencies’ review of Malaysia’s sovereign
debt rating by mid-2015,” it said.
Maybank IB said it continues to
expect the volatility in FX (foreign
exchange), bonds and equities to stay
high in first quarter of 2015 (1Q15),
and cautiousness to prevail in 2Q15
due to the GST implementation.
It said the 11th Malaysia Plan
(2016-2020), to be unveiled in May, is
critical in addressing rating agencies’
concerns over Malaysia’s “dependence on commodities” and it should
offer insight into fiscal consolidation
efforts in balancing a high-income
economy target.
The research house also continued
to advocate a defensive strategy for
equities. It said telco and power stocks
like Tenaga Nasional Bhd (TNB) (fundamental: 1.3; valuation: 1.8) offer
less earnings downside risks.
“With all telco stocks being syariah-compliant, sector valuations
should at least sustain. TNB is also
syariah-compliant, trading at a lower
PER [price-earnings ratio].
“The glove and port sectors also
offer earnings defensiveness,” it said.
Maybank IB said that as for dividends, Axiata Group Bhd (fundamental: 0.85; valuation: 0.9), Telekom Malaysia Bhd (fundamental:
1.1; valuation: 0.9) and TNB had the
capabilities to pay more, for Khazanah Nasional Bhd to distribute up
to the government, as the government expects to realise additional
dividends of RM400 million from
government-linked companies and
government-linked funds , as well
as other government entities.
The research house said thematics in 2015 include: (i) 11th Malaysia
Plan (Gamuda Bhd [fundamental: 2.2,
valuation: 1.5]); (ii) further strengthening of the US dollar and weakening of the yen (Inari Amertron Bhd
[fundamental: 2.3; valuation: 1.5]
and Vitrox Corp Bhd [fundamental:
3; valuation: 1.5)], glove producers,
Berjaya Auto Bhd [fundamental: 2.35;
valuation: 0.9]); (iii) continued weakness in commodity prices (TNB); (iv)
positioning for Sarawak elections
(Cahya Mata Sarawak Bhd [fundamental: 3; valuation: 1.5] and Hock
Seng Lee Bhd [fundamental: 3; valuation 0.6]); and (v) mergers and
acquisitions which unlock values (S
P Setia Bhd [fundamental: 1.4; valuation: 1.2], WCT Bhd [fundamental:
0.8; valuation: 1.8], NCB Holdings
Bhd [fundamental: 1; valuation: 1.8]
and Sime Darby Bhd [fundamental:
1.3, valuation: 1.3]).
The Edge Research’s fundamental
score reflects a company’s profitability
and balance sheet strength, calculated based on historical numbers. The
valuation score determines if a stock is
attractively valued or not, also based
on historical numbers. A score of 3
suggests strong fundamentals and
attractive valuations. Go to www.
theedgemarkets.com for more details
on a company’s financial dashboard.
Reach Energy optimistic
completing QA this year
BY C H A R LOT T E C H O N G
SUHAIMI YUSUF
KUALA LUMPUR: Special purpose acquisition company (Spac)
Reach Energy Bhd is optimistic it
will complete its qualifying acquisition (QA) this year and has
shortlisted 10 potential assets to
pave its way into the oil and gas
(O&G) exploration and production (E&P) sector.
Its chief executive officer and
managing director Shahul Hamid
Mohd Ismail (pic) said Reach Energy is concentrating its QA search
within the Asia-Pacific region.
“We are looking at mature oilfields in known regions or basins,”
he told reporters after the company’s annual general meeting
yesterday.
However, Shahul Hamid said Reach Energy is still open to other
opportunities outside the region if the offer was attractive.
He agreed with the consensus that lower crude oil prices would
present more opportunities for Spacs to acquire assets.
“Asset owners with smaller assets may find it difficult to finance
their activities or service their loans (at this point of time),” he said,
adding that these owners are looking to divest their assets partially, if not completely.
Reach Energy’s target QA will be among such smaller assets,
he said, adding that oil prices should gradually stabilise at US$70
(RM254.10) to US$90 per barrel, which is the benchmark against
which Reach Energy’s acquistions will be assessed.
“That is the kind of price scenario we intend to use in our evaluation of the potential acquisitions. It will take a bit of time to go back to
US$100 per barrel, but it won’t plummet to US$10 a barrel,” he said.
Brent was trading at below US$49 a barrel while US crude was
trading below US$45 a barrel yesterday.
Shahul Hamid said low oil prices have put pressure on E&P outfits
and caused them to lower their operating costs, adding that “it’s not
unusual for some to shut production because the cost is too high”.
But he assured that maintenance activities in the O&G sector
will continue, although O&G companies will have to negotiate with
service companies for better pricing.
Reach Energy is the fourth and largest Spac listed on the local
exchange, with RM750 million raised through the issuance of one
billion new ordinary shares at 75 sen apiece.
A Spac is a vehicle that has no operations or income-generating
business at the point of its initial public offering (IPO). Following
that, the Spac has a three-year period to use its IPO proceeds to
secure a QA.
Cliq Energy Bhd (fundamental: 0.6; valuation: 0) and Sona Petroleum Bhd (fundamental: 0.6; valuation: 0) are two other Spacs listed
on Bursa Malaysia that are looking for QA. Reach Energy, listed last
August, has 31 months left to fish for a QA, while Cliq Energy has
14 months and Sona 18 months.
M’sia short sellers target world’s longest equity rally
KUALA LUMPUR: Short sellers are
taking aim at the world’s longest-running equity rally.
Short interest in the iShares MSCI
Malaysia exchange-traded fund more
than doubled in the past month to
20% of outstanding shares as of Monday, and reached an eight-year peak
of 23% on Jan 9. That’s the highest
level among 89 US-listed ETFs (exchange traded funds) focused on
emerging-market countries, according to data compiled by Markit Group
Ltd and Bloomberg.
Bears are stepping up wagers
against Malaysia after the benchmark equity index advanced 116%
from its October 2008 low in the longest bull market worldwide. Oil’s 58%
tumble since June has weighed on
the crude-producing nation, with
analysts predicting the weakest profit
growth since at least 2009 and overseas investors pulling money from
the US$449 billion (RM1.62 trillion)
market at the fastest pace in six years.
“Investors are worried Malaysia’s
economy will be affected by lower oil
prices,” said Alan Richardson, whose
Samsung Asean Equity Fund outperformed 96% of peers tracked by
Bloomberg during the past five years
and has an “underweight” position
in Malaysian shares. “These participants are shorting in anticipation of
deteriorating fundamentals, which
have not yet been fully discounted
in market valuations.”
The fortunes of Asia’s only major
oil exporter have worsened as oil’s retreat to a five-year low near US$45 a
barrel dragged down the ringgit to its
weakest level since 2009. That’s adding pressure on an economy already
grappling with rising interbank rates,
elevated household debt and the
country’s worst floods in a decade.
The FTSE Bursa Malaysia KLCI
Index sank 0.8% at the close, its biggest loss in three weeks. The govern-
ment cut its 2015 economic growth
forecast to as little as 4.5% on Jan 20
and predicted a bigger budget deficit than initially targeted. Oil and gas
products account for about 20% of
the nation’s exports.
“With less revenue, the government will have fewer options to stimulate the economy,” Daphne Roth,
the head of Asian equity research at
ABN Amro Private Banking, which
manages about US$218 billion, said
by phone from Singapore. She has
had an “underweight” position in
Malaysian shares since May and now
has zero holdings in the country.
The last time short interest in the
Malaysian ETF was this high, in October 2006, the bears got burnt. The
KLCI index rose about 38% in the
following 12 months, versus a 55%
gain for the MSCI Emerging Markets
Index. In a short sale, traders borrow
shares and sell them, hoping to repurchase the securities later at a lower
price and return them to the original holder, pocketing the difference.
“Those who shorted in 2006 all got
killed,” said Raymond Tang, chief investment officer for the Asean region
at Kuala Lumpur-based CIMB-Principal Asset Management Bhd, which
manages about US$17 billion. “We
are still fairly comfortable with our
holdings in Malaysia.”
Analysts are cutting earnings estimates as the nation’s economic
outlook worsens. Profits in the KLCI
Index are projected to increase 2.1%
in the next 12 months, according to
data compiled by Bloomberg. That
compares with a projected gain of
16% for both Thailand and the Philippines, and 54% for Indonesia.
Morgan Stanley reduced its recommendation on Malaysian shares
to “equalweight” from “overweight”
on Jan 26, citing continued weakness
in earnings forecasts and the country’s exposure to falling fuel prices.
Sime Darby Bhd, which owns
palm oil plantations, and SapuraKencana Petroleum Bhd, Malaysia’s
biggest oil and gas services company,
have suffered the biggest earnings-estimate downgrades in the KLCI index during the past three months,
underscoring the impact of the rout
on commodity prices.
While the valuation of Malaysia’s
benchmark index has fallen to the
lowest level since March 2013 versus
the MSCI Emerging Markets Index,
the nation’s shares still trade at a
33% premium, according to data
compiled by Bloomberg.
Foreign investors sold a net RM6.9
billion of Malaysian stocks in 2014,
the biggest outflow since 2008, according to stock exchange data compiled by MIDF Amanah Investment
Bank Bhd.
“Earnings expectations are still too
high,” Roth said. “The market might
continue to derate.” — Bloomberg
14 B R O K E R S’ C A L L / T E C H N I C A L S
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Index rebound stalled at 1,810.21
BY LEE CHENG HOOI
A
merican stock markets tumbled on
Wednesday as a
poorer earnings
season (from UPS,
Caterpillar, P&G,
Dupont Co and Pfizer Inc) and
a strong US dollar caused investors to take profits there. The S&P
500 Index fell 27.39 points to close
at 2,002.16 points while the Dow
plunged 195.84 points to end at
17,191.37.
The FBM KLCI index moved in
a weaker range of 31.04 points for
the week with lower volumes of 1.88
billion to 2.05 billion shares traded.
The index closed at 1,782.18 yesterday, down 13.7 points from the
previous day as blue-chip stocks
like AMMB Holdings Bhd, Hong
Leong Bank Bhd, Hong Leong Financial Group Bhd, Petronas Chemicals Bhd, and Tenaga Nasional Bhd
caused the index to fall on foreign
selling and liquidation activities.
The ringgit remained much weaker
against the US dollar at 3.6285 as
Brent crude oil remained stable at
US$46.40 (RM168.43) per barrel.
The index rose on a rally from
the 801.27 low (October 2008) to
the previous 1,826.22 all-time high
(May 2013) and it represents an
extended Elliott Wave “Flat” rebound in a “Pseudo-Bull” rise completed. The next few months’ index
price movements since May 2013
have key swings of 1,723.74 (low),
1,811.65 (high), 1,660.39 (low),
1,805.15 (high), 1,759.66 (low),
1,882.20 (high), 1,769.80 (low),
1,838.69 (high), 1,802.88 (low),
1,896.23 (high), 1,837.28 (low),
1,879.62 (high), 1,766.22 (low),
1,858.09 (high), 1,671.82 (low), and
1,810.21 (high).
Most of the index’s daily signals
are positive (except Stochastic).
As such, the index’s clear support
levels are seen at 1,671, 1,738 and
1,770, while the resistance areas of
1,782, 1,810 and 1,858 will cap any
index rebound.
The KLCI’s 18 and 40 simple
moving average (SMA) depict an
emerging uptrend for its daily chart.
However, the price bars of the index are now between the 50 and
200 SMA and remain in a neutral
position on that front.
The recent fall from its alltime high of 1,896.23 saw a low of
1,671.82. The rebound from 1,671.82
stalled at 1,810.21 (on Jan 27, 2015),
which is where the key 62% Fibonacci retracement level lies.
Due to the deteriorating tone for
the KLCI, we are recommending a
chart “sell” on Petra Energy Bhd.
Petra Energy released its third quarter of financial year 2014 (3QFY14)
results at the end of November 2014,
and is expected to announce its
4QFY14 results sometime at the end
of February 2015. For its 3QFY14
results announcement, the group
saw its nine-month (9MFY14) accumulated profit improve.
Petra Energy’s revenue rose 25%
to RM417 million in 9MFY14 from
RM333.4 million in 9MFY13, while
profit before tax expanded correspondingly by 15.8% to RM19.8
million in 9MFY14 from RM17.1
million in 9MFY13. According to
Petra Energy’s announcement, the
strong improvement in profitability
was attributed to positive contribution from the integrated brownfield
maintenance and engineering services segment.
Overall, Petra Energy may have
improved its profitability in FY14
but investors seem to have taken
a more macro approach and discounted the improved profitability
as falling crude oil prices and the
weak outlook for the oil and gas
industry continue to cast a bearish
outlook for the sector.
A check of the Bloomberg consensus reveals that three research
houses cover Petra Energy, with
a “hold” call, a “buy” and a “sell”
call. This stock currently trades at
a price-earnings ratio of 15.8 times
while its price-to-book value ratio
of 0.84 times indicates that its share
price is trading at a slight discount
to its book value.
Petra Energy’s chart trend, on
daily, weekly and monthly time
frames, is very firmly down. Its share
price has made a large decline since
its major daily Wave-5 and recent
high of RM3.16 in June 2014. Since
that RM3.16 high, Petra Energy fell
to its January 2015 recent low of
RM1.32.
As prices broke below their recent key critical support levels of
RM2.38 and RM1.98, look to sell
Petra Energy on any rebounds to
its resistance areas as the MAs de-
pict very firm short- to long-term
downtrends for this stock.
The daily, weekly and monthly indicators (like the CCI, DMI,
MACD and Stochastic) have issued
sell signals and now depict very
firm indications of Petra Energy’s
eventual move towards much lower
levels. It would attract firm selling
activities at the resistance levels of
RM1.33, RM1.98 and RM2.38. We
expect Petra Energy to witness weak
buying interest at its support levels
of RM1.19, RM1.25 and RM1.30. Its
downside targets are at RM1.31,
RM0.80 and RM0.21.
Lee Cheng Hooi is the regional
chartist at Maybank Kim Eng. 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.
Mitrajaya is targeting RM1b new job wins this year
Mitrajaya Holdings Bhd
(Jan 29, RM1.16)
Maintain overweight with a target
price (TP) of RM1.97: Mitrajaya
Holdings was awarded a RM229.9
million affordable housing contract by Putrajaya Holdings Sdn
Bhd. The contract involves the
construction of three blocks of
20-storey (1,062 units) apartments
in Precinct 5, Putrajaya. The contract duration is for three years and
is expected to be completed by
February 2018. This contract win
is within our expectations (that
is within the RM200 million to
RM250 million range).
Including this recent contract,
we estimate Mitrajaya’s order book
to currently stand at RM1.8 billion
(assuming a RM150 million burn
rate in the fourth quarter of its financial year ended Dec 31, 2014
[4QFY14]). This marks another record high for its order book level
and translates into a cover of 8.4
times FY13 (trailing) and 4.7 times
FY14 (prospective) construction
revenue.
With this job in the bag, 46%
of our FY15 order book replenishment target has been met. We
see potential upside to job wins
this year as it is only the month of
January. To recap, job wins almost
doubled our assumption in FY14,
coming in at RM1.1 billion. Mitrajaya is targeting for RM1 billion in
new job wins this year. However,
we choose to take a conservative
stand and maintain our FY15 assumption at RM500 million.
This recent job win reinforces our view that Mitrajaya has a
strong working relationship with
Putrajaya Holdings. Over the years,
it has managed to secure various
contracts from the latter.
Risks to our call include execution risks on the group’s construction jobs and slow sales for
its property developments.
Mitrajaya Holdings Bhd
FYE DEC (RM MIL)
2013
2014F
2015F
2016F
Revenue
338
531
862
1,022
49
85
123
144
Ebitda
Ebit
39
75
112
133
Profit before tax
36
71
108
128
Core Patami
25
51
78
93
Core EPS (sen)
PER (x)
Net DPS (sen)
Net div yield (%)
BV per share
P/BV (x)
ROE (%)
Net gearing (%)
6.4
13.0
19.7
23.7
18.5
9.1
6.0
5.0
2.0
3.9
5.9
7.1
1.7
3.3
5.0
6.0
0.89
0.98
1.12
1.28
1.3
1.2
1.1
0.9
7.4
14.0
18.8
19.8
17.9
21.0
16.8
20.2
Source: HLIB
We maintain projections as upside to our target as 46% of it
year-to-date job wins are still with- has already been met this month.
in our RM500 million new job wins
We forecast earnings to double
target. However, we see potential in FY14 and growing another 51%
and 20% in FY15 to FY16 respectively amid the higher base. All in
all, we project a three-year earnings compound annual growth
rate of 55%.
Mitrajaya is an under-researched hidden gem which offers superior earnings growth at
cheap valuations of six times and
five times FY15 to FY16 price-earnings ratio and decent yields of 3%
to 6%. It is our top small-cap construction pick.
Our TP is based on 10 times
FY15 earnings, in line with our
target valuation parameter used
for small-cap contractors. For an
alternate valuation perspective, the
net value of its land bank alone is
already worth RM1.88 per share.
Investors with a higher risk appetite can consider its warrants
(exercise price: 90 sen, expiry: July
2016) which has seen its premium compress to an all-time low
(19.5%). — HLIB Research, Jan 29
B R O K E R S’ C A L L 15
F R I DAY JA N UA RY 3 0 , 2015 • T HEED G E FINA NCIA L DA ILY
Sunway REIT
affected by drop
in office rental
Sunway Real Estate Investment
Trust
(Jan 29, RM1.56)
Maintain neutral with unchanged
target price (TP) of RM1.70: Sunway Real Estate Investment Trust
(SunREIT)’s first half ended Dec 31,
2014 (1HFY15), core net income
(CNI) of RM126.7million was within
expectations, accounting for 50% of
consensus estimate (RM251.6 million) and 52% of ours (RM244.3million). SunREIT proposed an interim
distribution per unit (DPU) of 2.27
sen which covers the distribution
for its second quarter ended Dec
31, 2014 (2QFY15) (SunREIT historically pays its DPU on a quarterly basis).
SunREIT’s six months ended Dec
31, 2014 (6MFY15) revenue grew by
8% year-on-year (y-o-y) to RM227.8
million. This was mainly due to
higher rental income from Sunway
Pyramid Shopping Mall (SPSM)
and Sunway Carnival Shopping
Mall (SCSM). SPSM benefited from
additional net lettable area (NLA)
of 20,362 sq ft after the completion
of Oasis Boulevard 5 in 2QFY14.
Meanwhile, the rise in rental revenue of SCSM was due to a higher
occupancy rate of 98.4% versus
92.8% in 2QFY14 as the group secured a tenant for 44,000 sq ft of
space which was vacant previously.
Despite this, overall revenue growth
was only 8% as the aforementioned
Jaya Tiasa’s earnings growth
already priced in
Sunway Real Estate Investment Trust
FYE JUNE (RM MIL)
Gross revenue
Net rental income (NRI)
Net investment income
Net income
Core net income (CNI)
Basic EPU (sen)
Core EPU (sen)
Net DPU (sen)
Net distribution yield
Core PER
P/NAV
Core ROE (%)
Core ROA (%)
2013
2014
2015F
2016F
415.9
309.2
484.1
392.3
218.8
14.11
7.87
7.47
4.7
20.1
1.34
6.7
4.4
427.8
321.0
502.4
411.1
232.0
14.06
7.94
7.52
4.8
19.9
1.28
6.4
4.3
468.9
350.7
352.0
244.3
244.3
8.33
8.33
7.87
5.0
19.0
1.28
6.6
4.4
517.3
381.0
382.3
273.3
273.3
9.32
9.32
8.81
5.6
17.0
1.28
7.4
4.9
Source: SunREIT, Forecast by MIDF Research
rental increases were partially offset
by a 4% y-o-y decline in its office
segment’s rental revenue. Lower
occupancy rate at Sunway Tower
of 69.8% in 2QFY15 contributed
to the drop in rental revenue from
office space.
With revenue growth of 8% y-o-y
and operating expenses managed
prudently, CNI grew 8% y-o-y.
The reopening of Sunway Putra
Mall (SPM) is on track for 4QFY15.
We gather that the SPM refurbishment has achieved 95% completion status as of end December
2014. Thus far, SunREIT has secured
more than 70% of NLA for SPM. We
are positive on this development
Jaya Tiasa Holdings Bhd
(Jan 29, RM1.85)
Maintain sell with a target price
of RM1.55: Jaya Tiasa Holdings
Bhd’s second quarter ended Dec
31, 2014 (2QFY15) log and fresh
fruit bunch (FFB) production declined partly due to bad weather
that affected the harvesting process. Strong demand and tight
log supply helped keep timber
product average selling prices
(ASPs) high.
In 2QFY15, Jaya Tiasa’s total log
production declined by 4.6% yearon-year (y-o-y) to 272,537 cu m.
Meanwhile, its FFB production was also down in 2QFY15
by 14.4% y-o-y to 182,672 tonnes.
These declines were unexpected
although we are aware that the
unfavourable weather condition
during the monsoon season potentially slowed down the harvesting process.
We expect Jaya Tiasa’s palm oil
division revenue to grow by about
48% to RM477 million in FY15. This
is underpinned by increasing production of FFB and crude palm oil
(CPO), as well as yield; and rising
maturity of its plantation estates.
Despite the healthy earnings
outlook, we maintain our sell
rating on Jaya Tiasa as we think
the stock is overvalued and has
already priced in the expected
earnings growth from its timber
and palm oil divisions. Our sumof-total-parts-derived 12-month
target price is unchanged (implied
13 times calendar year [CY15]
price-earnings ratio [PER], based
on 11 times CY15E PER for its
timber division, 14 times PER for
its plantation division, and one
times book value [BV] for its forest plantation).
At its current price, the implied
PER for Jaya Tiasa’s timber business is at a high 15.3 times
CY15E earnings, assuming its
oil palm plantation and forest
plantation divisions are valued
at 14 times PER and one times
BV respectively.
Upside risks would be much
higher-than-expected log and plywood production; much higher-than-expected FFB and CPO
production; and a sharp increase
in ASPs for timber, FFB and CPO
products. — AffinHwang Capital, Jan29
Jaya Tiasa Holdings Bhd
and have incorporated the potential increase in rental contributions
from SPM into our earnings forecast
for FY16. FY16 CNI growth will be
stronger at 12% against FY15’s 5%.
In view of its 1HFY15 numbers
which came in within expectation,
we leave our forecasts for both FY15
and FY16 unchanged. Our TP is
based on the dividend discount
model (required rate of return: 7.2%;
perpetual growth: 1%). We remain
“neutral” on the stock as we expect
challenges to its rental reversion
rate due to the implementation of
the goods and services tax as well
as the occupancy rate of its office
spaces. — MIDF Research, Jan 29
FYE JUNE 30 (RM MIL)
Revenue
Ebitda
Pre-tax profit
Net profit
EPS (sen)
PER (x)
Core net profit
Core EPS (sen)
Core EPS growth (%)
Core PER (x)
Net DPS (sen)
Dividend yield (%)
EV/Ebitda (x)
Affin/Consensus (x)
2013
2014
2015E
1,054.1
141.9
32.0
23.2
2.4
78.0
20.5
2.4
(88.1)
78.0
1.0
0.5
18.3
1,034.6
216.2
87.1
57.1
5.9
31.7
76.2
5.9
146.0
31.7
1.5
0.8
12.1
1,268.8
273.9
139.8
98.1
10.1
18.5
98.1
10.1
71.7
18.5
2.0
1.1
9.9
1.0
2016E
2017E
1,455.7 1,523.1
322.2
338.7
194.0
215.9
136.1
151.4
14.1
15.6
13.3
12.0
136.1
151.4
14.1
15.6
38.8
11.2
13.3
12.0
2.8
3.1
1.5
1.7
8.3
7.7
0.9
0.8
Source: Company, Affin Hwang estimates
Yinson’s Ghana FPSO to
contribute greatly to revenue
Yinson Holdings Bhd
(Jan 29, RM2.84)
Maintain hold with target price
of RM2.85: Yinson Holdings Bhd
was finally awarded the contract
for the chartering, operation and
maintenance of a floating production, storage and offloading (FPSO)
facility at the Offshore Cape Three
Points Block located in the Tano
Basin, approximately 60km off the
coast of Ghana, by Italian oil major
Eni SpA.
The Sankofa and Gye Nyame
discoveries hold in place resources
of about 1.2 trillion cu ft of non-associated gas and about 150 million
barrels of recoverable oil. We understand that the contract award
is only for the crude oil recovery.
The charter will have a value of
US$2.5 billion (RM9.07 billion) over
a period of 15 years and options
worth US$717 million for another
five years. It is expected to hit first
oil in the third quarter ended Oct
31, 2018, forecast.
LPI Capital has lacklustre
earnings growth prospects
Yinson Holdings Bhd
FYE JAN (RM MIL)
Revenue
Core net profit
FD core EPS (sen)
FD core EPS growth (%)
Consensus net profit
DPS (sen)
PER (x)
EV/Ebitda (x)
Div yield (%)
ROE (%)
Net gearing (%)
2014
2015F
2016F
2017F
945.9
65.1
12.6
46.0
2.5
23.0
26.6
0.9
16.9
195.2
1,219.6
142.0
13.7
9.0
119.2
2.5
21.1
8.4
0.9
19.6
39.4
1,222.5
147.8
14.3
4.1
137.2
2.5
20.3
12.9
0.9
11.4
110.0
1,242.9
151.7
14.7
2.6
137.0
2.5
19.7
17.6
0.9
10.7
168.2
Source: AmResearch, Company report
This is the first FPSO award since
its acquisition of Fred Olsen Production in 2013, and costs circa
US$1 billion. Due to its prudent
accounting policy, Yinson will not
recognise any contributions during the conversion period of about
2.5 years. However, management
guides that the FPSO is expected to
contribute to the bottom line significantly upon the commencement
of production (first full year contribution of about RM150 million
accretion to bottom line).
The recovery of non-associated
gas, which is yet to be awarded, is a
further upside for Yinson. — AmResearch, Jan 29
LPI Capital Bhd
(Jan 29, RM20.66)
Downgrade to neutral from
buy with target price (TP) of
RM19.90: LPI Capital Bhd’s (LPI)
RM223 million financial year
ended Dec 31, 2014 (FY14) core
net profit (+11% year-on-year)
met 100% of our and consensus
estimates. This excluded a lumpy
RM60 million realised gain from
a long-term equity investment
made in the fourth quarter (4Q).
Underwriting (UW) margins in
general insurance subsidiary
Lonpac Insurance surged 120
basis points to 31.2% (from 30%).
More fire insurance (38% of its
portfolio) and sustained overall
loss ratios offset a lacklustre 4%
premium growth, an industry
trend on competition and a tightening credit cycle. Claims ratio
at 44% (FY13: 45.5%) implied a
more diversified risk portfolio
and expense ratio at 19% (FY13:
18.2%) reflected cost controls.
UW margins for fire improved to
80% (FY13: 73%) as fire net claims
ratio improved significantly to
14% (FY13: 21%). The business
intelligence system will benefit
shareholders as the insurance
stock was highly illiquid.
Lonpac has a combined 62%
exposure to fire and motor premiums. Given LPI’s above industry
exposure to fire insurance, we estimate gross claims exposure to
the East Coast floods at approximately RM20 million. Yet, we expect the net impact on earnings
to be minor (2% to 3% of FY15
earnings) as it is well covered
by reinsurance and claims provisioning.
We lower our FY15 to FY16
forecast (FY15F/FY16F) earnings per share by 8% and 18%
respectively as we cut revenue
growth to 6% and expect higher
loss ratios for FY16 on a tougher
operating environment and more
challenges post fire and motor
detariffication in 2016. While
we like LPI’s profitable product
mix, we see limited upside on
its lacklustre earnings growth
prospects and dividend payouts.
— RHB Research, Jan 29
16 H O M E
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
MH370 declared an accident
DCA director-general makes the announcement over TV
KUALA LUMPUR: The missing Malaysia Airlines (MAS) flight MH370
was officially declared an accident
yesterday under international aviation rules, and that all 239 passengers and crew on board are presumed to have lost their lives.
In making the announcement,
the Malaysian government stressed
that the search for the Boeing 777
remains a priority.
The government is committed
to continuing all reasonable efforts
to bring closure to this unfortunate
tragedy, with the continuing cooper-
ation and assistance of the governments of China and Australia, said
Department of Civil Aviation (DCA)
director-general Datuk Azharuddin
Abdul Rahman.
Appearing in a televised broadcast over the RTM1 television channel, he said: “It’s with the heaviest
heart and deepest sorrow that, on
behalf of the Government of Malaysia, we officially declare Malaysia
Airlines flight MH370 an accident
... and that all 239 of the passengers
and crew onboard MH370 are presumed to have lost their lives.
“We have endeavoured and pursued every credible lead and reviewed all available data. Despite all
these efforts over the last 327 days
[as of yesterday], the search unfortunately has yet to yield the location
of the missing aircraft,” he said.
Azharuddin said the government
acknowledged that the declaration
of the loss of flight MH370 as an accident would be very difficult for the
families and loved ones of the 227
passengers and 12 crew to consider,
much less accept.
Thirteen nations, he noted, had
French co-pilot was flying
AirAsia jet before crash
SURABAYA: The French first officer of
an AirAsia passenger jet that crashed
into the sea last month was at the
controls just prior to the accident,
Indonesia’s lead investigator said
yesterday.
Data from the black box flight data
recorder have provided the accident
probe with a “pretty clear picture” of
what happened in the last moments
of AirAsia flight QZ8501, but officials
offered few details.
The Airbus A320 vanished from
radar screens in bad weather on Dec
28, less than halfway into a two-hour
flight from Indonesia’s second-biggest
city of Surabaya to Singapore. All 162
people on board were killed.
“The second-in-command, popularly known as the co-pilot ... was
flying the plane,” said head National
Transport Safety Committee (NTSC)
investigator Mardjono Siswosuwarno,
referring to first officer Remi Plesel.
“The captain ... was the pilot monitoring.”
Captain Iriyanto, 53, was believed
to have taken over control of the aircraft from Plesel when it started to
ascend and then descend sharply, officials said. The cause of AirAsia’s first
fatal crash, which occurred around
40 minutes into the flight, is still unknown.
Investigators said the cockpit voice
and flight data recorders showed that
the plane had been cruising at a stable
Tatang using a model plane to explain the last moments of ﬂight QZ8501 before it
crashed into the Java Sea. Photo by Reuters
altitude before the accident. The aircraft was in sound condition when it
took off, and all crew members were
properly certified, they said.
“The plane was flying before the
incident within the limits of its weight
and balance envelope,” Mardjono
said. “The flight crew had valid licences and medical certificates.”
Indonesia had previously said the
aircraft climbed abruptly from its
cruising height and then stalled, or
lost lift, before plunging out of control into the sea.
NTSC chief Tatang Kurniadi told
the same Jakarta news conference
that Indonesia had submitted its preliminary report on the crash to the
International Civil Aviation Organ-
isation on Wednesday, as required
under global aviation rules.
The report, which has not been
made public, was purely factual and
contained no analysis, he said, adding that the full, final report would
take at least six to seven months to
complete.
On Wednesday, Indonesia said
the search for dozens of victims still
unaccounted for could end within
days if no more bodies are found.
A multinational search and recovery operation has found 70 bodies in
the Java Sea and had hoped to find
more after finding the fuselage of the
plane. But days of rough weather and
poor underwater visibility hampered
navy divers’ efforts. — Reuters
Govt starts building houses for flood victims
KUALA KRAI: Prime Minister Datuk
Seri Najib Razak launched yesterday the construction of 138 houses on stilts as high as 2.4m for the
people of Manek Urai Lama here
who lost their homes in the recent
floods.
He said each house could be
built within 75 days, and that the
project, which is being implemented in stages, is expected to be completed within a year.
He said each house has a built-up
of 1,300 sq ft and valued at RM48,000.
“These houses will not be affected by floods in the future,” he told
a news conference after handing
over aid to flood victims at Sekolah
Kebangsaan Manek Urai Baru.
More than 2,000 flood victims
from the Kuala Krai district were
present at the event. Also present were Kelantan Umno liaison
committee chairman, International
Trade and Industry Minister Datuk
Seri Mustapa Mohamed and Works
Minister Datuk Fadillah Yusof.
Najib had earlier gone on a walk-
about at the site of the construction to have a first-hand look at
the building of the houses, and to
present aid to several families there.
The first phase of the construction of houses would be for those
who had lost their land, he said.
For those who live in squatter
areas or on river reserve land, the
federal government would seek
state government assistance to approve sites on higher ground that
are safe from flooding, he said. —
Bernama
also lost sons and daughters to this
tragedy but it was nonetheless important that families tried to resume
normal lives.
“Without in any way intending to
diminish the feelings of the families,
it is hoped that this declaration will
enable the families to obtain the
assistance they need, in particular
through the compensation process,”
Azharuddin said.
The plane vanished on March 8,
2014, en route to Beijing from the
Kuala Lumpur International Airport in Sepang.
Azharuddin said the declaration that MH370 was an accident
was made in accordance with the
Standards of Annexes 12 and 13 to
the Convention on International
Civil Aviation.
He said the search and rescue
phase was carried out from the day
the aircraft disappeared up to April
28, 2014, with the search area covering the South China Sea, the Strait
of Malacca, the Andaman Sea and
the southern Indian Ocean.
He said the underwater search
is still ongoing.
NST report was not without malice,
Guan Eng tells court
GEORGE TOWN: Chief Minister Lim Guan Eng disagreed that there
was no malice in an English daily’s online article which quoted
an individual alleging that Guan Eng had sent thugs to intimidate
a group of people over a year ago, the Penang High Court heard
yesterday. When cross-examined by lawyer Leong Wai Hong, lead
counsel for The New Straits Times Press (Malaysia) Bhd (NST) and
its journalist Predeep Nambiar, Guan Eng disagreed that the defendants only reported what was said by the individual, N Ganeson, in a press conference.
Guan Eng was testifying in the defamation suit brought by him
and Deputy Chief Minister II Dr P Ramasamy against NST and
Predeep over a report titled “Indian interest group claims thugs
interrupted meeting”.
The article, which appeared on NST’s web portal on Dec 4, 2013,
was based on a press conference held earlier that day by Concerned
Citizens of the Indian Community spokesman Ganesan to highlight
a police report he lodged on Dec 3.
The article quoted Ganesan as saying that a few “thugs” had interrupted the group’s meeting on Nov 30, 2013, to stop them from
sending a petition on Indian crematoriums.
In the article, Ganesan was quoted as saying: “Based on what was
said by these thugs, we believe these thugs were sent in by Chief
Minister Lim and his deputy P Ramasamy.” Ganesan had lodged
a police report on the incident, followed by the press conference.
Guan Eng earlier told the court that the report by NST was not
accurate as it used the word “concluded” in the allegation that he
sent thugs.
“The words ‘concluded’ and ‘believed’ have different meanings.
A ‘conclusion’ is definite,” he said when going through the transcripts of Ganeson’s press conference and the NST report.
When asked whether the NST article had used the words “claims”,
“claimed” and “claiming”, Guan Eng answered yes.
But he disagreed that the report was not defamatory.
Guan Eng was also asked about a press conference he gave on
the same day, when reporters, including NST reporter Balvin Kaur,
asked him to comment on Ganeson’s claim.
Guan Eng said he had told the reporters to ask Ramasamy, who
knew the issue better.
Leong then asked Guan Eng: “Looking at your answer and the
manner you answered, you said ‘They always mention my name.
Everything in Penang, they will mention my name. Is that anything new?’
“You already dismissed the allegation... do you agree?”
Guan Eng said he disagreed.
When questioned by his lawyer Datuk N Murali, Guan Eng said
that he was not aware of the NST’s online story before he gave a
press conference that day. Murali also asked Guan Eng why he kept
silent when Balvin said to him at the press conference that both he
and Ramasamy were mentioned by Ganeson.
“I had said repeatedly that the reporters should refer the matter
to Ramasamy. I said that twice. I wanted to proceed with the press
conference. I would have been repeating the same answer again.
“The issue was also related to Hindus and I am not a Hindu,”
he said.
Murali also asked Guan Eng to compare the NST report with
the Malaysiakini story.
He said Malaysiakini used the word “allegedly”, which was not present in the NST report, and published the comments by Ramasamy.
Judicial commissioner Datuk Azmi Ariffin fixed May 5 and 6 to
continue the hearing. — The Malaysian Insider
H O M E 17
F R I DAY JA N UA RY 3 0 , 2015 • T HEED G E FINA NCIA L DA ILY
High time for external
audit on state spending
Dr Mahathir said the auditors should be paid by an independent body
KUALA LUMPUR: Putrajaya should
appoint external auditors for all its
agencies to allay public concerns
about the billions being spent on
investments across the world, Tun
Dr Mahathir Mohamad wrote in his
blog yesterday.
The former prime minister suggested that the external auditors
be kept separate and free from the
government’s general orders or
salary scheme and be paid by an
independent body.
“The audit firms should be beholden only to the independent
body as well as be paid by them.
Government and its agencies
should have no say at all,” he wrote.
These moves are necessary, he
said, for Putrajaya to gain credibility in the public’s eyes, given that
entities such as state-controlled
planter Federal Land Development
Authority (Felda) and pension fund
Employees Provident Fund (EPF)
were on a buying spree abroad.
“This need is urgent now because with Malaysia’s greater
wealth, large sums of money are
being expended and managed by
both the government and its agencies.
“We see entities such as Felda, EPF, Tabung Haji spending billions in acquiring foreign properties
while others such as MAHB [Malaysia Airports Holdings Bhd] and
Petronas [Petroliam Nasional Bhd]
have bought shares in airports and
Canadian ventures also involving
huge sums of money,” he wrote in
his blog.
It was reported last month that
Felda Investment Corp (FIC), a sub-
sidiary of Felda, had acquired the
Grand Plaza Kensington Hotel in
London to “diversify its investment
assets”. The acquisition makes it the
first London property for FIC and
the second for Felda.
Dr Mahathir said while the accounts of these entities have been
made public, there are still many
things the public want to know.
A proper and independent audit would establish the clean management of public funds and clear
the government’s name, he added.
The public should be allowed
to give information on anything
they may know about the accounts
being audited, noting that while
there should be transparency, the
identities of informants should also
be protected.
The drop in the price of crude oil
has shone the spotlight on net oil
exporter Malaysia as the weakest of
Southeast Asia’s major economies
and has also set off alarms among
foreign investors who own more
than 40% of domestic bonds.
The DAP on Wednesday had also
urged Putrajaya to conduct a special
audit of the government-backed
strategic development fund, 1Malaysia Development Bhd’s finances
after the strategic investor reportedly requested a third extension
to repay a local RM2 billion loan.
Earlier this week, The Malaysian
Insider had also reported a plan
by the Auditor-General to turn the
National Audit Department into a
commission that would free it from
the conditions and salary structure
of the civil service.
Public Accounts Committee
Review of laws is MCMC’s top priority
KUALA LUMPUR: The review of
the Malaysian Communications
and Multimedia Commissions Act
1998 (MCMCA 1998) and the Communications and Multimedia Act
1998 (CMA 1998) is top priority for
this year, said the chairman of the
Malaysian Communications and
Multimedia Commission (MCMC),
Datuk Seri Dr Halim Shafie (pic).
Expected to be completed by
mid-year, the review is targeted
to be tabled in Parliament before
the end of the year, said Halim.
The review is intended to enhance
governance in MCMC including
through the decoupling of the role
of the chief executive from the role
of the chairman. Datuk Seri Ahmad
Shabery, Minister of Communications and Multimedia, had previously said that this will ensure
continuity and the balance of responsibility within the organisation.
Halim is on a countdown to
achieve specific tasks given to him
by Ahmad Shabery when he agreed
to come out of semi-retirement to
helm the MCMC again. His twoyear term started in mid-January
this year.
“Two years is not a very long
time,” said Halim during a high
tea session he hosted for the editors of the local media in MCMC
yesterday.
“Also on the Minister’s list of
priorities is to see that there is a
healthy cyberspace for Malaysians
to interact in and engage with each
other for positive uses. In the last
15 years, since the CMA 1998 came
into force and Malaysia embraced
convergence, things have changed
so much. We have reached the point
where we have relative ubiquity in
our networks. Now, the emphasis
has to be on content,” Halim said.
“We would like to see this network ubiquity being used positively in social terms so that the
pervasiveness of the Internet has a
constructive impact on the country
through a rich content and applications environment.
“In fact, with the infrastructure
more or less in place, utility content becomes more critical and we
need to fill the space in sectors such
as finance, health and education.
This will require a high degree of
integrity and security in our networks which we will need to continuously improve.”
Malaysia is one of the first countries in the world to have embraced
MOHD IZWAN MOHD NAZAM
convergence when the CMA 1998
was passed by Parliament. Halim
agrees with Ahmad Shabery that the
review to the CMA 1998 is not just
about creating a healthy cyberspace
but a holistic and healthy cyber environment as communications and
multimedia services can affect not
just the economy but also culture
and tradition.
“If changes need to be made to
the legislation, the focus will be
about stimulating further growth in
creativity, innovation and content,
and creating a healthy cyberspace
for governmental and industry de-
velopment,” stressed Halim.
Ahmad Shabery had announced
previously that greater emphasis
will be put towards all aspects of
digitisation for the country and he
is keen to pursue a digital initiative
which will cover both hard and soft
infrastructure.
Said Halim, “The minister is right
in saying that we need this if Malaysia is to remain competitive as
a nation, which is why the MCMC
will be focusing on content development, and utility content, in
particular. Of course, we have to
constantly look at issues like quality, speed and affordability, also.”
Before his reappointment as
chairman of MCMC, Dr Halim,
65, was the chairman ofTelekom
Malaysia, a non-executive position
he held for close to six years after
his stint with MCMC ended. Halim
served as Chairman of the MCMC
from April2006 till May 2009. Prior
to that, he was the secretary-general
of theMinistry of Energy, Water and
Communications where he served
for six years.
Halim’s new tenure as chairman of the MCMC will be from
January 2015 until January 2017.
— Bernama
RM1.8m allocated to repair railings at low-cost flats
BY LOW HA N SHUA N
PETALING JAYA: Putrajaya has allocated RM1.8 million to repair the
railings and wiring at the People’s
Housing Projects (PPR) blocks in
Kota Damansara, following the
death of a five-year-old boy who fell
from the sixth floor on Wednesday.
Selangor Umno chief Datuk
Seri Noh Omar, who made the
announcement during a visit to
the flats yesterday, said the repairs were necessary to ensure
the safety of residents.
“The money is here, we will
see how many blocks can be repaired,” he said, adding that he
would ensure that the repairs are
handled by the management or
authorities as soon as possible.
In Wednesday’s incident, Mohammad Zulhazriq Danish Alden
was reportedly playing in the corridor outside his flat when he fell
through a gap between the railings at 3.18pm.
He was rushed to Hospital
Sungai Buloh where he was pronounced dead on arrival.
The Selangor Housing and
Property Board is responsible
for maintaining the flats and
undertaking repairs, such as broken railings. — The Malaysian
Insider
Dr Mahathir said these moves are
necessary for Putrajaya to gain
credibility in the public’s eyes. The Edge
ﬁle photo
(PAC) chairman Datuk Nur Jazlan
Mohamed had said that this would
allow the department to hire and
pay professional accounting staff
rates to enhance the department’s
competency.
The department, which produces the Auditor-General’s report,
has only four or five professional
accountants, Nur Jazlan had said,
and needs to improve its capabilities as well as the way it produceds
and writes the report. — The Malaysian Insider
Sedition Act
drives down
Malaysia’s
freedom ranking
KUALA LUMPUR: Freedom in
Malaysia took a dip in 2014 due
to Putrajaya’s use of the Sedition Act to silence dissent, a report by the US-based Freedom
House said.
Malaysia was also ranked as
“partly free” in the annual Freedom in the World global report,
the 2015 edition of which is titled “Discarding Democracy:
Return to the Iron Fist”
The report also noted the
government’s persecution of
minority groups such as Shi’ite
Muslims and transgenders.
“Malaysia received a downward trend arrow due to the
government’s use of the Sedition Act to intimidate political
opponents, an increase in arrests and harassment of Shi’ite
Muslims and transgender Malaysians, and more extensive use
of defamation laws to silence
independent or critical voices,” said the report, which was
posted online.
On a ranking of one to seven, with the smaller numbers
representing greater degrees
of freedom, Malaysia was given four points and in comparison, Indonesia got three and
was also ranked “partly free”.
Vietnam, Thailand, Cambodia
and Laos were ranked “not free”.
The annual report focuses on
political and civil liberties and
its scores are based on answers
to questions derived largely
from the United Nations’ Universal Declaration of Human
Rights. — The Malaysian Insider
18 H O M E
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
BN to help MIC resolve
crisis — Muhyiddin
Hopes all quarters remain calm in spirit of camaraderie
KUALA LUMPUR: The Barisan Nasional (BN) top leadership will help
component party MIC to resolve its
domestic crisis and regain strength,
Deputy Prime Minister and BN
deputy chairman Tan Sri Muhyiddin Yassin said.
He said he discussed the matter
on Wednesday with Prime Minister and BN chairman Datuk Seri
Najib Razak.
The crisis, if left unattended,
would affect not only the MIC but
also the BN, he told reporters yesterday after opening the Malay
Language Campus building of the
Teacher Training Institute, Bernama reported.
“Now that the situation has
reached this stage, we have to intervene. I believe that if left unattended, there will be no solution
to the crisis.
“As such, the BN leadership,
the prime minister and myself,
will intervene for the good of the
party and the BN,” he said.
Differences of opinion had
emerged in the MIC following an
order on Dec 5 last year from the
Registrar of Societies for the party to hold fresh elections for the
three posts of vice-president and
23 posts in the Central Working
Committee within 90 days due to
irregularities in the elections held
at the party general assembly in
Melaka on Nov 30, 2013.
Muhyiddin said the MIC top
leaders will be asked to attend a
meeting soon to discuss the crisis
and adopt an appropriate decision
based on the party constitution
and rules.
“If there are calls for a re-election, we will want to look at the
provisions in the party constitution and rules because we cannot
act contrary to the constitution,”
he said.
Muhyiddin said he hopes all
quarters will remain calm in the
spirit of camaraderie and do not
resort to threats which he said does
not portray a good image of the
party.
The deputy prime minister said
it was important to retain the people’s support for the BN, particularly the Indian community’s support
for the MIC.
The Malaysian Insider reported
that MIC president Datuk Seri G
Palanivel and his deputy Datuk Seri
Dr S Subramaniam have agreed on
a moratorium to discuss the current
party crisis with Najib to prevent the
situation from escalating.
Palanivel said the moratorium
would give the warring factions a
period of “non-crisis” to work on
the next course of action.
“We will meet and decide on the
next course of action that will satisfy all quarters as soon as possible.
“I agreed to a moratorium to
allow both sides to discuss with
Prime Minister Datuk Seri Najib
Razak as chairman of BN to find
the best way forward to resolve the
crisis,” he said in a brief statement.
The moratorium followed rowdy
scenes outside the party’s headquarters on Wednesday when Subramaniam and another vice-president, Datuk M Saravanan, were
stopped by party security officials
from entering its office.
In the changes to state party
chiefs, Saravanan was replaced
as federal territory state liaison
committee chairman by Datuk
Rajoo Vyraperumal, while Tan Sri
Ramasamy Muthusamy took over
from Palanivel as Perak chief.
Datuk Ganesan Arumugam was
named as new Negri Sembilan state
liaison committee chief, taking over
from Datuk S Sothinathan.
Earlier yesterday morning,
Home Minister Datuk Seri Dr Ahmad Zahid Hamidi said he would
meet with Palanivel and Subramaniam.
Razak Baginda: Altantuya’s death
‘just a straightforward murder case’
BY L I ONEL MORIAS
& A MI N I SK A N DAR
KUALA LUMPUR: Nine years on,
political analyst Abdul Razak Baginda still does not know the motive
for his lover Altantuya Shaariibuu’s
murder but noted that many people have inexplicably died in police custody.
Abdul Razak was acquitted of
abetting in her 2006 murder, but
two police commandos have been
found guilty by the Federal Court
after a final round of appeal this
month.
“Only the two policemen know.
Rogue police do kill people, like in
so many remand cases,” the political
analyst told The Malaysian Insider
when asked what, in his opinion,
was the motive for the murder.
The two are former special
action unit personnel Chief Inspector Azilah Hadri and Corporal Sirul Azhar Umar but the
motive for the murder was never
established. The Federal Court,
however, ruled that circumstantial evidence sufficed for it to send
the two to the gallows.
Azilah is on Death Row while
Sirul is in Australia. Malaysian authorities have applied to have him
extradited.
Speaking to The Malaysian Insider recently, Abdul Razak said
speculation on the case had gone
to the point of being extremely ridiculous.
“The situation has become quite
Nine years on, Abdul
Razak still does not know
the motive for Altantuya’s
murder. Photo from Twitter
ridiculous in terms of the speculations. It is much of the same
speculation but now, more twisted
because we have reached the end
of a long legal process.
“There is a twist to all this because Sirul escaped and went to
Australia,” said Abdul Razak, adding that he is willing to speak now
as from a legal point, the criminal
case is over.
He also commented on reports
of Sirul’s mother lamenting that her
son had been framed.
“What do you expect the mother
to say?” he asked.
“If you just treat this as a murder and do not politicise it, then
it is just a straightforward murder
case,” he said.
Abdul Razak insisted that the
two policemen had acted on their
own accord when committing the
murder, adding that, “this was determined by the court”.
“At the end of the day, the court
proceedings were so transparent,
some of the best defence lawyers
were there, including the late Karpal Singh. The judge was so liberal,
giving opportunities for everyone
to ask questions.”
He questioned why there was
an allegation of conspiracy hanging over the case when there was
On Aug 23, 2013, a three-man
Court of Appeal bench acquitted
the two policemen due to lack of
evidence. In fact, judge Datuk Tengku Maimun Tuan Mat, who delivered the written grounds, said
the two should have been freed
without their defence called. The
bench ruled that the failure to call
Musa proved fatal to the prosecution’s case.
Tengku Maimun said it should
not be overlooked that the ugly and
horrendous episode had started
with the request by Abdul Razak
to Musa before Azilah and Sirul
came into the picture.
The prosecution said there was
no need to put Musa on the stand as
he was only a peripheral figure in the
case and that an affidavit by Abdul
Razak in support of his bail application had revealed that the senior
police officer’s role was limited to
introducing him (Abdul Razak) to
the Brickfields police chief.
Even Sirul, who gave an unsworn
statement from the dock, had said
that Musa was not involved and
neither did he (Musa) give any directive.
Sirul had also pleaded with the
judge not to impose the death sentence on him, saying: “I am the
black sheep who has to be sacrificed to protect unnamed people.”
no evidence to prove it.
“There are still people out there
who are convinced that police cannot do this without instructions.
“How many people die in remand? The last count was 156 from
2008 and the figure is going up. So
who instructed this?”
Evidence in court revealed that
the Mongolian woman was either
murdered by C4 explosives or was
killed first and her remains destroyed on Oct 18, 2006, in the outskirts of Shah Alam.
It emerged during the trial that Abdul Razak, a confidante of Prime Minister Datuk Seri Najib Razak, had enlisted Deputy Superintendent Musa
Safri’s help as he could not tolerate
the harassment from Altantuya.
Musa was at the time the aidede-camp for Najib, who was then
the deputy prime minister.
On April 9, 2009, the High
Court meted out the death sen- For a fuller version of the interview,
tence on Azilah and Sirul Azhar please visit www.themalaysianinafter a marathon 159-day trial. sider.com
Malaysia the
fastest growing
destination for
students,
says Idris
PUTRAJAYA: Malaysia has one
of the highest proportions of
international versus domestic students in the academic
world with the average ratio
being almost 1:10.
Second Education Minister
Datuk Seri Idris Jusoh said over
the past decade, the country
had become the fastest growing
destination for international
students, attracting an annual
increase of over 16%.
“This shows that education
in Malaysia is not just affordable, but also accessible and welcoming,” he said in his speech
when opening the Education
Malaysia International Development and Marketing Convention 2015 here yesterday.
Idris believes the country is
on track to achieve the target of
attracting 200,000 international
students by 2020 in line with
Malaysia’s aim of becoming
an international and regional
education hub.
As at Dec 31 last year, Malaysia had 135,502 international
students from about 160 nations, studying in public and
private higher education institutions as well as international
schools, he said.
“This is an increase of 16.5%
from 2013,” he added.
Out of this number, Idris
said there were 74,996 international students studying in
private tertiary institutions, an
increase of 29.9% from 2013
while in the public institutions,
the number was 32,842.
“As testament to the quality of post-graduate education
and opportunities in Malaysia,
27,812 international students are
currently enrolled in post-graduate programmes,” he said.
The top 10 countries that
contributed to the new applications last year were Bangladesh, Nigeria, China, Indonesia, Pakistan, Yemen, Libya,
Sudan, Kazakhstan, and India.
Increasing interest had been recorded from countries like Australia, the United States, United
Kingdom, and Japan, Idris said.
Later, speaking to reporters, Idris said all the 330 language centres and public higher education institutions were
required to register their students’ enrolment with Education Malaysia Global Services
beginning March 1 and April 1
respectively to enable them to
study in this country.
He said the decision was
made due to problems that
have arisen, where there were
foreign students studying at
language centres which provided only nine hours of lessons per week, with some
students taking advantage by
doing other work.
He added that the new move
would ease the monitoring and
detection of foreign students
studying in Malaysia.— Bernama
2 0 P R O P E RT Y
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Housing affordability
worsened in 2014
Properties in the primary market will still be in demand
BY ZAT I L H U SNA WAN FAUZI
KUALA LUMPUR: The Malaysian housing
affordability has worsened to 3.6 times in
2014, according to Rahim & Co Chartered
Surveyors executive chairman Tan Sri Abdul Rahim Abdul Rahman, in presenting the
Rahim & Co Research — Property Market
Review 2014/2015 yesterday.
“Housing affordability worsened to 3.6
times in 2014 compared with 3.4 times in
2009. This is based on average terraced house
price to average annual household income,”
he said. “This essentially means that an average terraced house would cost an average
household or family in Malaysia, 3.6 times
its annual gross income.
“However, I believe 3.6 times is reasonable and the government should maintain
it at this figure. Moreover, the government
has a vision to make Malaysia a high-income
nation by 2020, and I’m confident we will be
able to reach it despite the current economic
condition vis-a-vis the lowering of oil prices
and lowering of the [value of the] ringgit.”
The data showed that the least affordable terraced house in Malaysia for 2014 was
recorded for Sabah at 6.2 times, followed by
Pulau Pinang (5.9 times), Kuala Lumpur (5.6
times) and Sarawak (4.4 times).
“I believe that the government is keen on
building one million units of affordable homes
by 2016 through various agencies such as Perbadanan PR1MA Malaysia (PR1MA), Syarikat
Perumahan Negara Berhad (SPNB) and Kuala
Lumpur City Hall (DBKL),” said Rahim. “With
the government’s efforts to build more affordable homes, we believe the ratio between housing cost and income will decrease.”
Rahim & Co director of research Sulaiman
Akhmady Mohd Saheh added: “We expect
affordability to improve by either this or next
year because we believe when the goods and
services tax is implemented in April, people
will become more thrifty and discerning in
their spending. This will see a bit of a boost
in the secondary property market as it is
hoped that this section will offer prices that
are much lower than the primary market.
“Overall, this will contribute to the lowering of the ratio but properties in the primary
market, which are being sought after by many,
is one area that will still be in demand. For
example, the ratio for Kuala Lumpur was 5.9
times in 2009, which improved to 5.3 times in
2012 but worsened again to 5.6 in 2014,” said
Sulaiman Akhmady.
He believes that new talents returning
to the country and tightening measures by
the government will spur more interest and
purchases in the secondary market.
Meanwhile, the report highlighted that
property market activities in 2014 rebounded
after a slowdown in 2013 with higher transaction numbers in the first half of 2014 (1H14)
compared with 1H13.
The total number of transactions in 1H14
was 193,405 and the figure is expected to
reach around 390,000 to 400,000 for the
whole year. This indicates a 3.3% increase
in 1H14 compared with 1H13, showing a
flattening of the declining trend observed
since early 2013.
Furthermore, total transaction value also
showed an increase of 19.3% in 1H14 compared with the same period in 2013 to RM82.03
billion, which indicates rising average prices.
The residential sector recorded that 27.2%
of the transactions in 1H14 were for units
priced above RM400,000 against 16.8% in
the same period a year ago.
The Kuala Lumpur office market supply
stood at 84.2 million sq ft in 1H14 with supply
growth of 1.7% from 2H13 with 1.37 million
sq ft. The market had an overall occupancy
rate of 80.1%.
Net absorption of office lettable floor space
was 2.02 million sq ft in 1H14, equivalent to a
change of 14.7% compared with 2H13, translating to 1.9 million sq ft of average absorption
per annum over the past five years.
Office market rental levels have had marginal movement in the past two years with
prime Grade A office buildings commanding gross rental rates of RM7.50 to RM8.50
per sq ft (psf) monthly, with some asking for
rentals of up to RM11psf per month.
New office developments are expected
to add nine million sq ft of office space to
the market in the next three to five years,
which will fuel greater competition and
rental pressure.
Meanwhile, the retail sector has seen
considerable activity with the opening of
new malls such as Quill City Mall and Putrajaya IOI City Mall in the Klang Valley and
the East Coast Mall re-opening in Kuantan.
According to the report, “inflationary
pressure is expected to intensify in the second quarter of this year, consumer-spending
pattern will likely be restored in the latter
half of this year. Private consumption is to be
supported by the extended Malaysian Mega
Sales frequency and periods as announced
under the economic reboot agenda whilst
the weaker ringgit could further boost tourist
expenditure in the country.”
(From left) Rahim & Co managing director Robert Ang, Abdul Rahim, director of valuation Chee Kok Thim and Sulaiman Akhmady at the presentation of the Rahim & Co
Research — Property Market Review 2014/2015 yesterday. Photo by Zatil Husna Wan Fauzi
FR I
Glomac Bhd launches
Phase 1 of RM1.2b
Saujana KLIA
BY Z AT IL H US N A WA N FAUZ I
SEPANG: Glomac Bhd has launched
the RM130 million first phase of its
fifth township in Sepang, called Saujana KLIA, which will mainly consist
of affordable homes.
“There is a strong demand for affordable properties and at Saujana KLIA
we would like to continue to provide
comfortable and affordable homes for
families,” said group managing director
and chief executive officer Datuk Seri F
D Iskandar at the launch last weekend.
“This is our part to help the government
in providing affordable homes.”
The first phase is on 30 acres
(12.14ha) of land. There will be two
types of 2-storey homes for sale, Marylis
and Celosia. There will be 128 units of
the former and 156 units of the latter.
Completion of these units is targeted
for 2017.
To-date, Marylis has been 100% taken-up while Celosia has seen 50% of
its units sold.
Saujana KLIA has a gross development value of RM1.2 billion. The township is on 239 acres of leasehold land
next to Kota Warisan and will consist
of terraced, semi-detached and bungalow units.
Qatari-led group set
to win US$4b battle
for Canary Wharf
BY PAUL S A N D L E
LONDON: A Qatari-led consortium
looked set to win its long-running battle
to buy Songbird Estates plc on Wednesday after the owner of London’s Canary
Wharf business district dropped its opposition to the US$4 billion (RM14.5
billion) offer.
Songbird said it still thought the price
undervalued its properties but with no
rival bid forthcoming and holders of
86% of the shares backing the deal, it
said minority investors should accept.
The Qatar Investment Authority (QIA)
and its bid partner launched a 350 pence
(RM19.27)-per-share offer direct to Songbird shareholders in December, hoping
to add a financial district rivalling the
City of London to landmarks already in
its portfolio such as the Shard skyscraper
and Harrods department store.
Canary Wharf’s steel and glass towers, home to banks such as HSBC, Citi
and JP Morgan, embody the change in
London’s economy in the second half of
the 20th century as industry dwindled
and financial services grew.
The redevelopment of the former
West India Docks, which traded in
everything from tobacco to bananas,
was championed in the 1980s by then
prime minister Margaret Thatcher, who
saw the need for more space for a financial sector booming after her “big
bang” reforms.
The QIA already owns 29% of Songbird, which in turn owns 70% of Canary
Wharf Group.
Its partner in the deal, US investor
Brookfield Property Partners, has 22%
of Canary Wharf Group. QIA and Brookfield welcomed Songbird’s announcement and urged other shareholders to
accept the offer. — Reuters
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P R O P E RT Y 2 1
F R I DAY JA N UA RY 3 0 , 2015 • T HEED G E FINA NCIA L DA ILY
HOT DEALS
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How much is your property worth?
Which and what property has just been
sold, and for how much? What interesting
buys are now on the market? Check out
the following Hot Deals of the week.
Go to www.theedgemarkets.com for more.
Sold
Aminuddin
speaking at
the PR1MA
BIM Townhall
meeting. Photo
by PR1MA
Anjung Tiara 2-storey semi-detached
house in Mont’Kiara, Kuala Lumpur
Built-up 4,250 sq ft; 3,712 sq ft; 4+1
bedrooms; 4 bathrooms; Freehold;
RM2.5 million
This semidee in Mont’Kiara features builtin wardrobes, covered parking and 24-hour
security.
Sale concluded by Peggy Lim of Prime Cities
Realty (019) 551 1220/(019) 622 1820
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On the market
BIM Guide to ensure standardisation
across PR1MA housing projects
BY C H A I Y EE HOON G
SHAH ALAM: To promote consistent development and ensure uniformity across
all Perumahan Rakyat 1Malaysia (PR1MA)
housing projects, PR1MA officially launched
the PR1MA Building Information Modelling
(BIM) Guide at its PR1MA BIM Townhall
meeting on Tuesday.
Utilising the BIM technology is one of
PR1MA’s initiatives to ensure that the market prices of PR1MA houses are lower than
the market price of houses in the vicinity,
according to PR1MA chief executive officer
Datuk Abdul Mutalib Alias.
According to PR1MA chief operating officer Aminuddin Abdul Manaf, “PR1MA is a
government agency that not only focuses on
providing homes to those who need them,
but also has a long-term vision of improving the country’s construction industry.”
Aminuddin said that BIM is a solution
to a lot of problems that are normally encountered not only during construction but
also during the design development, and
that many problems on-site are due to the
inefficiencies and coordination of drawings.
“I believe BIM will take a bit of work and
a lot of commitment in the beginning, but
I foresee down the road, in about a year
or two, once we have achieved our standardisation in terms of design and specification, [BIM] will be a great help to a lot of
people, including all the consultants and
all the developers that are working with
us,” he added.
BIM enables building professionals to
analyse the physical characteristics of a
project and its function throughout the
construction process.
The BIM technology has been utilised in
many countries such as Singapore, Hong
Kong and Australia to improve the efficiency and accuracy of projects, along with enhancing collaboration among the developer,
project manager, quantity surveyor, engineer and architect for costs and resources
management.
At the launch, PR1MA BIM assistant
vice-president KC Ho, who is also the PR1MA BIM Guide adviser said, “The BIM
technology will ensure that construction
costs are accurate prior to construction,
with almost no run-offs. This will ensure
that there is no wastage of materials and
that the development projects adhere to
the stipulated construction schedule.”
Tan & Tan unveils RM62m Damai Residence
BY L I M KI A N WEI
KUALA LUMPUR: Tan & Tan Developments
Bhd, a subsidiary of IGB Corp Bhd, launched
the RM62 million Damai Residence on Tuesday.
“With its quiet, residential location just
minutes away from Kuala Lumpur City Centre (KLCC), and a focus on privacy and excellent security and management, we are
confident that Damai Residence will appeal
to a wide demographic, including young professionals working in the city, empty nesters
looking for a comfortable and convenient
place to call home, and people who love
the charm of the Ampang area,” said head
of marketing Fern Chong.
The 20-storey freehold condominium
comprises 30 standard units (built-up of
1,938 sq ft each) and a penthouse (3,961 sq
ft). Each standard unit will have 3+1 bedrooms with 3 bathrooms.
They are priced from RM1.9 million to
RM2.2 million. The penthouse will have
6+1 bedrooms and 6 bathrooms, and costs
RM4.35 million.
Damai Residence is in the Jalan Ampang
Embassy Row and accessible via Jalan Ampang and Jalan Tun Razak.
There will be two standard units on each
floor from Level 3A to 18, while the penthouse
Damai Residence
is in the Jalan
Ampang
Embassy
Row. Photo
by Tan & Tan
Developments
Bhd
will cover the entire 19th storey at the top
of the building. Each unit comes with two
parking bays and the penthouse with three.
The gated development will have exercise
facilities on the mezzanine floor. Each resident is provided with a security card to allow
access to the level where his or her unit is.
Nearby are Hock Choon Supermarket,
Ampwalk, The Intermark, The Raintree Club,
the Royal Selangor Golf Club, Prince Court
Hospital, and Gleneagles Hospital and Medical Centre.
“The government has said that the sale of
apartments will be exempted from the goods
and services tax [GST]. At this time, there are
no plans to charge buyers GST. However, once
it is implemented, we will work within the
guidelines accordingly,” said executive director Teh Boon Ghee at the launch.
All units will be semi-furnished with builtin cabinets, wardrobes and kitchen equipment such as hobs and ovens, air conditioning, fitted bathrooms and flooring. The
units will have ceiling heights of up to 3m.
The project is slated for completion in December 2017.
2½-storey terraced house in Taman
Sutera Utama, Skudai, Johor
Built-up 2,160 sq ft; 24ft by 90ft; 4+1
bedrooms; 4 bathrooms; Freehold;
RM890,000
This intermediate, well-maintained unit is
fully renovated with features such as plaster
ceilings and built-in furniture. It is fully furnished and has a koi pond. While the bank
has valued this property at RM1.05 million,
the owner wishes to sell his house as soon
as possible to finance his new house and is
willing to sell below market price.
Contact: Sim Ling Tze of Reapfield Properties
(Johor Baru) Sdn Bhd (012) 755 2565
WHAT’S
HAPPENING &
WHERE
Oﬃcial launch of Hilir 37 bungalows in
Balik Pulau, Penang
Date: Tomorrow and Sunday
Venue: Lintang Sungai Burung,
11000, Balik Pulau, Penang
Time: 10am to 6pm
Contact: (04) 380 6000
Airmas Group will be launching 2-storey freehold bungalows with a built-up of 2,775 sq ft.
Prices and number of units were unavailable
at time of print.
Oﬃcial launch of Sunway Velocity
third-phase serviced apartments
Date: Tomorrow and Sunday
Venue: Sunway Velocity Sales Gallery,
V02-G-02 & 03, Lingkaran SV, Sunway
Velocity, Jalan Peel, 55100,
Kuala Lumpur
Time: 10am to 5pm
Contact: Khoo, sales manager
(012) 318 9656
The official launch features 411 units of freehold 1- and 2-bedroom serviced apartments
priced from RM800,000. There will also be
talks by Chinese astrology expert Joey Yap
tomorrow and lawyer Chris Tan of Chur Associates on Sunday.
Cityscape Malaysia 2015
Date: Feb 4 to Feb 6
Venue: Kuala Lumpur Convention Centre,
Jalan Pinang, 50450, Kuala Lumpur
Time: 10am to 7pm
Contact: +971 4 336 5161
The exhibition is organised by Informa Exhibitions Pte Ltd. On the last day, there will be
an Islamic property finance forum to discuss
Islamic funding tools for property development, and a session for investors to meet senior
decision-makers in real estate to discuss key
issues affecting real estate investment and
development in emerging markets.
22 C O M M E N T
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Japan’s hope may be its hinterland
PM Shinzo Abe aims to spur competition between traditionally sleepy localities
BY WILLIAM PESEK
A
S the European Central Bank prepares to
inject up to a trillion
euros into Europe’s
faltering economy,
Mario Draghi would
be wise to study Japan’s experience
with massive quantitative easing.
In recent interviews, Bank of Japan (BoJ) governor Haruhiko Kuroda has come close to admitting that
his own monetary “bazooka” hasn’t
succeeded in jolting the economy
out of its deflationary funk. Simply
providing liquidity isn’t enough;
banks and corporations need incentive to tap that money.
That means central bankers
such as Kuroda and Draghi need
to get more innovative with their
policies. For the BoJ, the ripest
targets of opportunity could well
lie outside Tokyo and the corpo-
rate headquarters of Japan’s once
world-beating companies.
Kuroda and Prime Minister
Shinzo Abe have learnt the hard
way that Japan Inc has changed
too much for traditional monetary and fiscal incentives to work
on their own.
Having moved many of their operations overseas, Japanese manufacturers are benefiting less than
expected from the yen’s 30% drop,
while even big exporters such as
Toyota and Sony aren’t sharing their
recent spoils with workers as they
might have 20 years ago. Banks are
still too traumatised by the spectre
of deflation to lend.
The logjam is driving Abe to look
for new areas in which to boost
growth — in particular, the Japanese hinterland. Tokyo has traditionally favoured so-called regional
economies with boondoggle public-works projects.
These bring short-term gain to
places such as Okinawa or Hokkaido, but only add to public debt.
With the latter bill now topping
US$8.5 trillion (RM30.85 trillion),
such largesse is no longer feasible.
Instead, Abe hopes to spur
competition between traditionally sleepy localities. Enterprising
communities that create jobs will
get state funding, while laggards
are cut loose.
Kuroda could greatly aid this
survival-of-the-fittest experiment.
As analysts have urged, the BoJ
should consider massive purchases of regional-government debt.
The total amount of regional
bonds outstanding may be roughly
US$1.7 trillion at the end of March;
the BoJ should buy up as many of
them as possible, while also forgiving the debt of the most financially
troubled municipalities.
That way, governments will
squander less tax revenue on servicing debt and can issue more to
invest and qualify for Abe’s support
programme.
The BoJ also should consider
buying up the nation’s most dis-
tressed properties and egregious
white-elephant projects. The area
surrounding the idled Fukushima
nuclear plant springs immediately to mind.
So do dozens of barely utilised
sports arenas built for the 2002
World Cup, the quiet “international” airports around the nation
with only a handful of overseas
flights, and any number of cavernous museums and concert
halls built to gin up growth in
recent decades.
There’s lots more the BoJ could
do, including buying the “zaito
bonds” state-run companies issue to fund projects, a range of asset-backed and mortgage-backed
securities or even derivatives contracts (a possibility Kuroda has
raised before).
The central bank could buy
stocks directly from banks and
real estate and commodity funds.
Loading up on foreign bonds will
help extend the yen’s declines and
support exports. Also, as I’ve written
before, the BoJ could offer cash —
or debit cards — directly to households to make sure its liquidity gets
traction.
The risks — increasing moral
hazard, inflating new bubbles, sowing the seeds of a financial crisis
— are obvious and plentiful. Yet
the more the BoJ pledges to “do
whatever it can” to end deflation
without succeeding, the more likely
it is that traders will pull the plug on
bonds and stocks anyway, causing
a run on the yen.
Bottom line, whatever the BoJ
is doing now isn’t working, as
banks like Nomura are starting to
acknowledge. Kuroda needs a better way to translate his US$700 billion-plus of annual bond purchases
into economic growth.
Given how globalised Japan Inc
has become, maybe acting locally is
the way to do it. — Bloomberg View
William Pesek is a Bloomberg View
columnist.
Connectivity for all
BY JAMES MANYIKA
& HEL EN MA RGETTS
OVER the last decade, the number of new Internet users tripled.
But, though a large majority of the
world’s population remains offline,
the pace of expansion has slowed
sharply in recent years. Is the Internet revolution losing steam?
From 2005 to 2008, the number of Internet users increased at
a compound annual rate of 15.1%,
bringing the number of people online to some 2.7 billion. But, according to a new report by the McKinsey
Global Institute, the growth rate fell
to 10.4% in the 2010 to 2013 period. Given the enormous economic
benefits of connectivity, finding
ways to provide Internet access to
the world’s remaining four billion
people should be a high priority.
Of course, that is easier said than
done. Around three-quarters of the
unconnected — 3.4 billion people
— live in just 20 countries. In 2012,
about 64% lived in rural areas, compared with only 24% of Internet users, while about half live below their
country’s poverty line and median
income. Some 18% are older than
54, compared with about 7% of the
online population, and roughly 28%
are illiterate, whereas the literacy
rate for Internet users is close to
100%. Finally, women comprise
52% of the offline population and
42% of the online population.
These groups face particularly
high barriers to Internet connectivity, beginning with inadequate
infrastructure, including poor mobile Internet coverage or network
access, and unreliable electricity
supply. Indeed, 1.1 billion to 2.8
billion people cannot get online
via a mobile network, because their
area lacks sufficient coverage.
Another barrier is affordability:
Internet access is simply too costly
for many low-income people. Beyond the need to address insufficient
competition, inadequate regulation,
and high taxes on Internet-enabled
devices and service plans, there is the
fundamental challenge of supplying
cost-effective access to the most remote regions. In 10 countries, largely
in Africa and the Asia-Pacific region,
fixed broadband prices exceed per
capita gross domestic product.
The third major barrier to Internet adoption is user capability. The
high level of illiteracy among those
who remain offline often implies
an inability not only to read and
write, but also to use digital technology. An estimated 43% of India’s
unconnected citizens are illiterate.
Without technological solutions,
such as user interfaces that feature
text-to-speech and voice-recognition capabilities, people who have
not attained basic language proficiency will struggle to engage with
Internet content. The lack of relevant local-language content may
also limit use.
Making matters worse, misperceptions of the Internet — for example,
that it is a security risk or solely for the
wealthy — mean that many people
will remain reluctant to use it, even
if affordable access becomes available. In many emerging economies, a
lack of trust in the system has fuelled
resistance to doing business online.
The final barrier to Internet
adoption is a lack of incentives.
As research by the Oxford Internet Institute on broadband in East
Africa has shown, many poor people in rural areas may know little,
Over the last decade, the
number of new Internet
users tripled. But the pace
of expansion has slowed
sharply in recent years.
if anything, about the Internet, or
may not be offered it. Given that
tailoring content to such potential
customers is expensive, Internet
service providers are unlikely to
do so without clear incentives like
government support or high profit
margins. Advertisers are not interested in reaching such markets.
McKinsey has developed a new
Internet Barriers Index that ranks 25
developed and developing countries
on their performance in the face of
these challenges. The top five countries are the United States, Germany,
South Korea, Japan and Spain. The
bottom five are Nigeria, Pakistan,
Bangladesh, Tanzania and Ethiopia.
Nearly half of the world’s offline
population lives in 10 countries that
face a significant struggle to overcome all four barriers. In the bottom
five countries in the McKinsey index,
the average Internet penetration rate
was only 15% in 2013. The offline
population was largely young and
rural, with low literacy rates.
Five other countries — Egypt,
India, Indonesia, the Philippines
and Thailand — face medium to
high barriers across the board, especially when it comes to infrastructure and incentives. With an
offline population of more than 1.4
billion people, these countries had
an average Internet penetration rate
of 19% in 2013. Another 1.1 billion
people live in countries where a
single barrier — especially a lack
of awareness of the Internet, weak
purchasing power, or low levels of
digital literacy — dominates.
Identifying the particular barriers affecting a country or region enables the development of effective
solutions — not least because some
barriers, such as awareness, are far
cheaper to tackle than others, like
infrastructure. That is the purpose
of the Internet Barriers Index. By
mapping the major social, political
and economic obstacles to Internet adoption, the index can help
make efforts by governments and
network and service providers as
targeted and efficient as possible.
The imperative to address the formidable challenges to further the
expansion of Internet use is clear.
Doing so would create considerable potential for economic growth.
Many governments have recognised
this to some extent, setting ambitious
goals for mobile Internet coverage,
broadband infrastructure, and public
WiFi access. But investment in infrastructure is not enough. Only comprehensive, targeted and nationally
tailored strategies, backed by a strong
commitment from policymakers,
can bring the next one billion people
online. — Project Syndicate
James Manyika is a director of
McKinsey and the McKinsey Global
Institute. Helen Margetts is director
of the Oxford Internet Institute.
24 W O R L D B U S I N E S S
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Shell profit misses estimates
Oil firm sees US$15b of potential capital spending being cut over three years
An employee in Shell’s
lubricants blending plant in
Torzhok, Russia. Of the 36
analysts that cover Shell, 20
recommend buying the stock
and two advise selling.
Photo by Reuters
BY TA RA PATEL
PARIS: Royal Dutch Shell plc
fourth-quarter profit was lower
than expected and the oil company will cut spending after crude
prices plunged.
Profit excluding one-time items
and inventory changes was US$3.3
billion (RM11.98 billion) in the
quarter, up from US$2.9 billion a
year earlier, Shell said yesterday
in a statement. That missed the
US$4.1 billion average of 13 analyst
estimates compiled by Bloomberg.
Shell is the first major oil producer to post earnings since crude
prices fell by half in the past six
months, forcing companies to retreat from expensive projects and
sell assets. Statoil ASA, Tullow Oil
plc and Premier Oil plc have delayed projects or cut exploration
spending. BP plc has frozen wages
and Chevron Corp delayed its 2015
drilling budget.
Shell, based in The Hague, will
pay a quarterly dividend of 47 cents a
share, the same as last quarter. It sees
US$15 billion of potential capital
Greek govt
reverses
austerity policies,
stocks hit
BY JOHN HA DOULIS/
GUY JACKSON
ATHENS: Greece’s new hardleft Prime Minister Alexis
Tsipras sent the Athens stock
market diving on Wednesday
after his government scrapped
key privatisation projects and
pressed home its demand for
debt relief.
In sweeping announcements two days after taking
power, Tsipras began reversing
many of the unpopular measures that underpin Greece’s
€240-billion (RM983.67 billion)
bailout programme.
His “national salvation” government said it was putting on
hold the previous administration’s plans to sell a majority
stake in the ports of Piraeus
and Thessaloniki, and would
also halt the privatisation of the
top electricity and petroleum
companies.
European Parliament chief
Martin Schulz was to visit Athens yesterday, the first foreign
dignitary to hold talks with the
new government, while Jeroen
Dijsselbloem, president of the
Eurogroup club of eurozone finance ministers, arrives today.
Athens’ main stock index fell
more than 9% on Wednesday
and the major banks tumbled
by a quarter although European markets remained largely
unaffected. — AFP
spending being cut over three years.
Chief executive officer Ben van
Beurden accelerated asset sales
and cut spending even before
the slump in oil prices. The Anglo-Dutch company axed a US$6.5
billion petrochemicals plant in Qatar this month and said it’s selling
a stake in an oil-producing project offshore Brazil amid declining
output and higher costs to extract
the crude.
Average Brent crude prices in
the quarter fell 30% from a year before to US$77 a barrel. This month
the benchmark extended its de-
cline, touching US$45.19 a barrel
on Jan 15.
A year ago, when oil prices
were above US$100, Van Beurden
pledged to make “hard choices” on
new projects, sell US$15 billion in
assets over 2014/15 and slow investment growth.
More than 30,000 dismissals
have been announced across the
oil industry as companies shrink
budgets, according to a tally by
Bloomberg News. Exploration and
production spending will fall by
more than US$116 billion, or 17%,
on weaker oil revenues, according
to an estimate from Cowen & Co.
Of the 36 analysts that cover
Shell, 20 recommend buying the
stock, 14 have hold ratings and two
advise selling. — Bloomberg
Beijing: ECB QE could cause
‘competitive depreciation’
BEIJING: The European Central
Bank’s (ECB) new quantitative
easing (QE) measures could trigger “competitive depreciation” of
currencies around the world, China’s commerce ministry warned
yesterday.
The ECB last week unveiled
a programme to buy €60 billion
(RM245.92 billion) of private and
public bonds each month starting
in March, a move intended to ward
off deflation in the eurozone.
The figure was more than the
€50 billion expected by analysts,
and the unprecedented scheme
will total over €1 trillion.
“The European QE may worsen the competitive depreciation
of currencies of various countries,
further increasing the uncertainties
in international cross-border capital flows,” said China’s commerce
ministry spokesman Shen Danyang.
“We will closely monitor that,”
he told reporters at a briefing.
While the measures would
make European exports cheaper
and might help boost market confidence and growth in the eurozone in the short term, he added,
their long-run effects remained
uncertain.
“It is still unclear whether in
the mid-to-long term the QE can
stop the eurozone economy from
slipping into long-term stagnation
and realise comprehensive recovery and growth,” he said.
The European Union is China’s
largest trade partner. It is the Asian
giant’s top source of imports and
its second-largest export market.
Shen said the impact of the stimulus on bilateral trade will be “both
good and bad”.
“The QE will push the euro to
further depreciate, which is likely to
lead Chinese companies expanding
imports from Europe and lowering
their investment costs in Europe.
“Meanwhile the weakening of
the euro will affect Chinese companies’s exports to Europe and Chinese firms’ existing investment in
Europe will also face the risks of
suffering losses,” he said.
According to Chinese data,
two-way shipments increased
9.9% year-on-year to US$615.1
billion (RM2.23 trillion) in 2014,
with China in surplus to the tune
of US$126.6 billion. — AFP
Sands China earnings fall as VIPs stay away
SINGAPORE: Sands China Ltd, the
Macau casino operator controlled
by billionaire Sheldon Adelson,
reported earnings that missed analyst estimates after China’s clampdown on graft and illicit fund flows
into the city deterred high-end
gamblers.
Profit fell 15% from a year earlier
to US$713.2 million (RM2.59 billion) in the fourth quarter based on
adjusted property earnings before
interest, taxes, depreciation and
amortisation, according to parent
Las Vegas Sands Corp’s earnings
statement. That compares with
the median estimate of US$728
million from 10 analysts surveyed
by Bloomberg.
Chinese President Xi Jinping’s
anti-corruption campaign has contributed to seven straight months
of revenue declines for the former Portuguese enclave’s casino
industry.
Net income in the quarter declined to US$535.3 million from
US$655.6 million a year ago,
and net revenue slumped 16%
to US$2.12 billion. Gambling at
VIP tables plunged across all four
of the company’s Macau casinos,
according to a Sands China statement issued to the Hong Kong
exchange yesterday.
Macau’s government has imposed more scrutiny over junket
operators, the middle-men who
bring in high-rollers and loan them
money to gamble, hitting the VIP
sector in the city. Fourth-quarter
volume of Macau’s VIP junkets last
year was the lowest since the same
period in 2010, Adelson said. —
Bloomberg
IN BRIEF
Evergreen Group to
charter 11 large vessels
TAIPEI: Evergreen Group, one
of Taiwan’s leading transport
conglomerates, has agreed to
charter 11 large ships as part
of its efforts to expand capacity and raise the efficiency and
economy of scale of its fleet.
Evergreen Group signed an
agreement with Japan-based
Shoei Kisen Kaisha Ltd for the
group’s subsidiaries, including
Evergreen Marine, to charter
eleven 18,000 20-foot equivalent unit ships. Delivery of the
vessels will start in 2018 and
run through 2019. The charter
agreement makes Evergreen
Group the first member of the
CKYHE Alliance to introduce
such large vessels. The alliance
also has China’s Cosco Container Lines and South Korea’s
Hanjin Shipping, as well as Taiwan-based Yang Ming and “K”
Line of Japan, which are cooperating in major east-west
shipping services. — CNA
Bridge funding for
cryptocurrency platform
SINGAPORE: Tembusu Systems, the creator of Singapore’s
first bitcoin ATM machine, has
secured S$1.2 million (RM3.22
million) in bridge funding to
develop a system using cryptocurrency technology, The
Straits Times reported. This
latest capital injection values
the company at some S$11
million, and also includes a
“million-dollar vote of confidence” from an Singapore-listed company, Tembusu said
in a press release yesterday. It
did not name the investor. The
funding comes as governments
and companies are seriously exploring various levels of
cryptocurrency adoption.
Bangkok pitches low-cost
store scheme
BANGKOK: The government is
pitching the idea of introducing
low-cost department stores as
part of efforts to help tackle the
rising cost of living. Commerce
Minister Chatchai Sarikulya said
the budget department stores
will be run and invested in by
the private sector, which will set
up the outlets at locations that
are easily accessible. The first
low-cost department store is
expected to open in May, with
the number set to rise to 14 this
year and 142 over the next five
years. — Bangkok Post
Women make up just 8%
of listed corporate boards
SINGAPORE: Companies
should strive to have women
make up at least one-fifth of
their board membership, said
Minister in the Prime Minister’s Office Grace Fu, The Straits
Times reported. She pointed
out that in 2013, just 8.3% of
board directors of Singapore
Exchange-listed firms were
women. Singapore has not set
a quota on female board representation. But that should
not be an impediment, noted
Fu at a private-sector women
leadership summit yesterday.
26 W O R L D B U S I N E S S
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Samsung’s smartphone
primacy under threat
Posts weak quarterly mobile earnings after rival Apple records biggest profit
BY SE YOU NG L EE
Samsung Electronics earnings
SEOUL: Samsung Electronics Co
Ltd is closer to losing its crown
as global smartphone leader after posting a plunge in quarterly
mobile earnings yesterday, a day
after rival Apple Inc reported the
biggest profit in corporate history.
Th e South Korean giant said
earnings from smartphones and
other mobile gadgets dropped
64% annually in the October to
December period to 1.96 trillion
won (RM6.5 billion), contributing
to its first annual earnings fall in
three years.
It was the mobile division’s fifth
consecutive quarter of decline, in
contrast to Apple’s record-breaking 74.5 million iPhone sales in
the three months to Dec 27 on
the back of the success of its bigscreen iPhone 6 and 6 Plus.
Analysts say Samsung is under
immense pressure to hang on to
its market share, with a lot resting
on the launch of its next flagship
Annual net profits
Trillion won
China stock
regulator
renews margin
trading probe
BY KA ZU N ORI TAKADA
& SU E- L I N WONG
SHANGHAI: China’s stock regulator is launching a fresh probe
into brokerages which are lending money to investors to speculate on stocks, amid concerns
that the country’s share markets
are becoming over-leveraged
and vulnerable to a crash which
could strain the banking system.
The regulator will inspect
the stock margin trading business of 46 companies, the official Xinhua news agency said.
Sources told Reuters on
Wednesday that regulators
were renewing their investigations into margin trading,
which hit record highs this
week as more investors pile
into the sizzling rally.
Banks have been ordered
to tighten lending supervision
to avoid loans being funnelled
into stock markets. Chinese
banks’ bad debt ratios are already at five-year highs and a
sudden correction in the stock
market could expose them to
significant additional risks.
“The inspection belongs to
normal regular supervision and
should not be over-interpreted,”
Xinhua said late on Wednesday,
quoting the China Securities Regulatory Commission. — Reuters
Quarterly net profits
Trillion won
30.47
23.85
7.30
23.39
7.57
6.25
5.35
I think after learning
a hard lesson,
we’ll see a significant
improvement in terms
of design,
build quality and
the specs.
4.22
13.76
2011
2012 2013
2014
Q4 Q1
Q2
2013 2014
Q3
Q4
Source : Samsung
Galaxy S6 high-end smartphone
due around March.
“I think after learning a hard
lesson, we’ll see a significant improvement in terms of design,
build quality and the specs. The
question right now is whether this
is enough,” Maybank Kim Eng analyst Warran Lau said.
While Samsung did not release
smartphone sales figures, it said
smartphone and tablet shipments
declined in the fourth quarter,
leading some analysts to declare
Apple had caught up.
“Apple’s new iPhone 6 and 6
Plus models are proving wildly popular in China, the United
States and Europe. Apple tied with
Samsung to become the world’s
largest smartphone vendor for the
first time since the fourth quarter
of 2011,” Strategy Analytics executive director Neil Mawston said
in a statement. — Reuters
HK-Shenzhen launch set for 2H
BY M ICHELLE P RI C E
HONG KONG: The Hong Kong stock
exchange expects a much-hyped
trading link with its counterpart in
Shenzhen to launch in the second
half of this year, sources told Reuters
— a timeline that could undermine
China’s chances of being included in
a major investor benchmark.
Many market watchers had expected the landmark Stock Connect
scheme linking Hong Kong with
Shanghai to be extended to Shen-
zhen before June, but individuals
briefed by Hong Kong Exchanges
& Clearing (HKEx) chief executive
Charles Li said a start towards the
end of the third quarter now looks
more likely.
Seen as China’s equivalent of the
Nasdaq, the Stock Connect link to
Shenzhen would for the first time
allow foreign investors to trade the
next generation of Chinese companies, including software, high-tech,
and biotechnology stocks, via the
Hong Kong exchange.
A spokesman for the HKEx said
the exchanges are conducting a feasibility study on a link and “will seek
approval from the relevant authorities
upon completion of their proposal”.
Market watchers had speculated
that China would look to launch the
Shenzhen link ahead of the MSCI’s
annual June review, during which
the global index provider will decide whether to include China “A”
shares in its Emerging Markets Index, the main global benchmark for
emerging markets stocks. — Reuters
Currency market still scarred by Swiss trauma
BY SWAHA PATTANAI K
LONDON: On the surface, currency trading has recovered from
brutal swings triggered nearly two
weeks ago when the Swiss National
Bank (SNB) suddenly abandoned
its franc cap. But look a little deeper, and there are still signs of trauma. A surprise policy easing from
Singapore on Wednesday will add
to the market’s unease.
For the franc, post-shock liquidity remains patchy. There has
been a widening of the bid-offer
spread, the gap between the price
at which traders are willing to buy
the Swiss currency and the one at
which they will sell. Against the
dollar, this spread was 10 times
wider during the past few trading days than its 2014 average,
Deutsche Bank strategists say.
No wonder. Many dealers were
burned when the SNB jettisoned its
cap on Jan 15 and the franc rocketed by as much as 40% against the
euro. Even banks which managed
not to lose money in the biggest
intraday currency move in living
memory will be more cautious.
There have also been some
perplexing price moves. The euro
gained 2% against the Swiss franc
during European morning trading
on Tuesday, only to cede most of
its gains within a couple of hours.
Traders scrambled for an explanation. Perhaps there was an unwinding of short euro positions or
maybe the SNB was intervening to
weaken its currency.
The twitchiness is understandable: there is high uncertainty about
what Swiss policymakers are up to.
Rising cash balances in the commercial banks’ accounts at the
central bank suggest the SNB has
been intervening. But with the
currency cap gone, traders are in
the dark about the central bank’s
tactics and strategy.
The Singapore example could be
pertinent. An SNB official has said
that the city-state’s policy of keeping the Singapore dollar within an
undisclosed trading band against a
basket of currencies “deserved closer examination”. As Wednesday’s
move by the Monetary Authority
of Singapore shows, this approach
can also invite surprises.
If Switzerland is anything to go
by, currency traders are going to
have to get used to a more ambiguous world. — Reuters
IN BRIEF
Taiwan 2014 GDP seen
robust, coming slowdown
may not be seasonal
TAIPEI: Taiwan’s export-driven economic growth could be
entering a seasonal slowdown
that may last longer than usual if current soft conditions
outside the United States herald a downswing for major
trading partners. The government is expected to report
its slowest quarterly year-onyear growth rate in five quarters today when it issues preliminary fourth-quarter gross
domestic product data, although full-year 2014 growth
is expected to be the fastest in
three years. — Reuters
Thailand’s PTTEP slips
to 4Q net loss as weak
oil prices weigh
BANGKOK: PTT Exploration
and Production Pcl (PTTEP),
Thailand’s largest oil and gas
explorer, reported its first
quarterly net loss in more
than a decade, mainly due
to higher impairment loss on
assets after declines in global
oil prices. PTTEP, the flagship
in the upstream business of
top Thai energy firm PTT Pcl,
reported net loss of US$739
million (RM2.68 billion) for
the October-December quarter, versus a profit of US$239
million a year earlier. This
compared with an average
of 22 billion baht (RM2.44
billion) loss forecast by 11
analysts polled by Reuters.
— Reuters
Skymark ﬁles for
bankruptcy in Japan,
shares poised to fall
TOKYO: Skymark Airlines
Inc, Japan’s third-largest
carrier, filed for bankruptcy protection after a decision to purchase six Airbus
Group NV A380 superjumbos flopped. The stock was
poised to fall by its daily limit. The shares were untraded
in Tokyo after sell offers outnumbered buy bids by about
215 to 1. The stock is set to
fall 25% to the lower limit
of ¥237 (RM7.29). Skymark
filed at the Tokyo District
Court with ¥71 billion in liabilities, the carrier said in
a statement. — Bloomberg
Nokia beats proﬁt
forecasts in 4Q
HELSINKI: Finland’s Nokia
yesterday reported stronger-than-expected quarterly
profits for its core network
equipment business on the
back of network roll-outs for
faster 4G mobile services in
China and North America.
Nokia, which ranks third
in the global network gear
market, said the unit’s core
operating profit rose to €470
million (RM1.92 billion) in
the fourth quarter, or 14% of
sales, from €397 million in
the previous quarter. Analysts in a Reuters poll had on
average expected a profit of
€415 million and a margin of
12.4%. — Reuters
W O R L D 27
F R I DAY JA N UA RY 3 0 , 2015 • T HEED G E FINA NCIA L DA ILY
IS purportedly sets new
deadline for hostage swap
Captured Jordanian pilot in exchange for Iraqi female prisoner
BY SULEIMAN AL-KHALIDI & LINDA SIEG
AMMAN/TOKYO: An audio message purportedly from a Japanese
journalist being held by Islamic
State militants said a Jordanian
air force pilot also captured by the
group would be killed unless an
Iraqi female prisoner in Jordan was
released by sunset yesterday.
The message appeared to postpone a previous deadline set on Tuesday in which the journalist, Kenji
Goto, said he would be killed within
24 hours if the Iraqi was not freed.
Overall crime in
Singapore rose
7.4% in 2014
The latest audio recording, which
could not be verified by Reuters, was
posted on YouTube early yesterday.
Japanese Chief Cabinet Secretary
Yoshihide Suga told a news conference that chances were high it
was Goto’s voice in the recording.
“I am Kenji Goto. This is a voice
message I’ve been told to send
to you. If Sajida al-Rishawi is not
ready for exchange for my life at the
Turkish border by Thursday sunset Jan 29 Mosul (Iraq) time, the
Jordanian pilot Muath al-Kasaesbeh will be killed immediately,” the
voice in the recording says.
Jordan said on Wednesday it
had received no assurance that
al-Kasaesbeh was safe and that it
would go ahead with a proposed
prisoner swap only if he was freed.
The audio tape message implied
that the Jordanian pilot would not be
part of the exchange deal, indicating
any swap would be between Goto
— a veteran war reporter — and
al-Rishawi. Any swap that left out the
pilot would not go down well with
the public in Jordan, where officials
have insisted he is their priority.
There was no immediate comment from Jordanian government
officials, but a security official said
the authorities were trying to verify the authenticity of the recording
and were coordinating with their
Japanese counterparts.
On Tuesday, a video was released
purporting to show the Japanese
national saying he had 24 hours to
live unless Jordan released al-Rishawi, an Iraqi woman on death row
for her role in a 2005 suicide bomb
attack that killed 60 people in the
capital Amman. — Reuters
Police gunfire killed Sydney
siege victim — inquest
BY JOYCE LIM
BY GLENDA KWEK
SINGAPORE: Overall crime in
Singapore rose by 2,212 cases
last year, a 7.4% increase from
29,984 cases recorded in 2013,
The Straits Times reported. The
republic’s overall crime rate hit
a 30-year low in 2013.
The latest statistics released
by the police yesterday showed
the increase was largely due
to a surge in cases of cheating
involving e-commerce, which
increased by more than three
times. Last year, there were
1,659 cases compared with 510
cases in 2013, the daily reported.
The newspaper quoted the
police as saying the increase is
likely due to an increase in the
number of Internet users who
do online shopping. Cases of
victims lured into making multiple payments online spiked by
236%, from 269 cases in 2013
to 904 last year.
A new type of scam emerged
last year, The Straits Times reported, in which culprits would
ask their victims to buy gift
cards or virtual credits. There
were 149 such cases reported last year, with US$138,700
(RM503,412) cheated.
Thirty-nine more youths
were arrested for rioting last
year, up from 283 in 2013. Statutory rape cases also rose by
15 cases from 51 in 2013 to 66
last year. Most offenders were
youths who knew the victims.
More outrage of modesty cases
happened onboard mass rapid
transit trains and in open areas, leading to a 3.2% increase
to 1,367 cases last year.
Meanwhile, the number of
harassment cases stemming
from unlicensed moneylending
continued to fall, from 7,052
in 2013 to 5,763 last year, The
Straits Times reported.
SYDNEY: Ricochets from police
gunfire killed one of the two hostages who died in a 16-hour siege at
a central Sydney cafe in December,
an inquest into the deadly standoff heard yesterday.
Barrister and mother-of-three
Katrina Dawson, 38, died along with
cafe manager Tori Johnson, 34, and
Iranian-born gunman Man Haron
Monis, 50, when police stormed the
financial district cafe in the early
hours of Dec 16.
“Ms Dawson was struck by six
fragments of a police bullet or bullets which ricocheted from hard
surfaces into her body,” counsel
assisting the coroner’s inquest, Jeremy Gormly, said.
“I will not detail the damage done
to Ms Dawson other than to say that
one fragment struck a major blood
vessel. She lost consciousness quickly and died shortly afterwards.”
Seventeen hostages were holed
up in the Lindt chocolate cafe, with
the New South Wales (NSW) Coroners’ Court likely to call on those
who survived to give evidence during the inquest, Gormly said.
The inquest will outline what
happened, hear about the hostages’
IN BRIEF
Thai junta orders
German NGO to cancel
press freedom brieﬁng
BANGKOK: A German rights
group said yesterday that it
had been ordered by Thailand’s junta to cancel a briefing on the health of the kingdom’s media landscape, in a
growing clampdown on freedom of expression. The ban
came as two former ministers
from the ousted government
of ex-premier Yingluck Shinawatra were summoned by
the military, which is escalating its campaign to crush
dissent since seizing power
last May. Nongovernmental
organisation, the Friedrich
Ebert Foundation, said military officers had ordered
them not to hold a briefing
at a Bangkok hotel today —
part of a series of annual reports looking at the challenges journalists face in different
Asian nations. — AFP
Police: Dozens missing
after Bangladesh
boat sinks
DHAKA: An overloaded fishing boat carrying migrants to
Malaysia sank in strong currents off the coast of Bangladesh yesterday and 24 passengers are missing, police
said. Emergency workers
rescued 32 Bangladeshis in
the Bay of Bengal after the
boat capsized some 2.5km
offshore, but others are still
unaccounted for, police said.
“Around two dozen people
are still missing. The coast
guard and police are continuing their rescue operation,”
local police chief Masud Alam
said. — AFP
MSF in Sudan to pull out
of war-torn Blue Nile,
parts of Darfur
experiences, investigate how NSW
Police managed the siege, and delve
into the background and motivations of Monis.
A separate investigation commissioned by the federal and NSW
governments is set to submit a report
in the next few days. The inquest will
review the report’s findings.
Gormly said Johnson was shot in
the back of the head by Monis with
a sawn-off shotgun just moments
after several hostages escaped.
“Johnson was made by Mr Monis
to kneel on the floor of the cafe. After a short lapse of time, Mr Monis
simply shot him without further
notice or warning in the back of
the head,” he said.
“The end of the barrel was about
75cm from Mr Johnson’s head at
the moment of discharge.” — AFP
KHARTOUM: The Br ussels-based section of Medecins Sans Frontieres (MSF)
will pull out of war-torn parts
of Sudan due to a lack of cooperation from authorities,
the medical charity said yesterday, as the country sees an
uptick in violence. The group
said that total denial of access
to Blue Nile state, forced closure of activities in East Darfur
and administrative obstacles
in South Darfur had made its
work in those conflict-hit areas
impossible. — Reuters
Philippines mourns police killed in bloodbath
Sri Lanka says military
‘sabotaging’ post-war
reconciliation
MANILA: A long, slow procession
of coffins draped in the Philippine
flag poured out of military transport planes in Manila yesterday,
as the country mourned dozens
of policemen killed in a botched
anti-terror operation.
Marching to muted drums, uniformed commandos bore the numbered coffins of comrades brought
home from the southern island of
Mindanao, the scene of the worst
COLOMBO: Sri Lanka’s new
government yesterday accused the military of trying
to sow unrest to sabotage its
efforts to bring about ethnic
reconciliation in the war-ravaged north of the country. It
said it was investigating allegations that two senior military officers were training 400
troops to provoke unrest in
Jaffna, capital of the northern
province. — AFP
loss of life by the country’s police
or troops in recent memory.
President Benigno Aquino has
declared today a day of mourning
for the 44 men slaughtered in a cornfield on Sunday when their top-secret mission — to catch or kill one
of the world’s most wanted Islamist
militants — went badly wrong.
The killings have sparked growing
calls for retribution. Relatives wept
and hugged each other as a priest
sprinkled holy water on the metal
caskets, which were laid at an air
base in front of a large national flag
at half mast. Cabinet ministers and
lawmakers watched from the stands.
“As president and as father of
this country, I am greatly saddened
that our policemen had to lay down
their lives for this mission. Without
question, these people are heroes,”
Aquino told the nation on television
late on Wednesday. — AFP
28
live it!
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
FR I
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Nu
aw
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and
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pla
in a
you
Ho
an
For
on
Hig
Tre
we
Ca
an
nat
ak
We
bu
wil
is e
Ca
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con
What to do
THIS WEEKEND
BY VI C H I TRA NADES
L
ooking for something interesting to do this weekend? Perhaps something
adventurous, relaxing, or
just something different
from your usual fare? Take
a look at our list of events and happenings this weekend and head to whichever strikes your fancy!
Jazz night
If you’re a jazz fan, make a date with
Priscillia Xavier & Friends for a night
of inspired numbers and more. Not a
newbie to the indie music scene, Priscillia has already performed in various
venues and has expanded her talent
to the Acoustic Indie/Folk genre. She
is also the recent winner of NAKED
Restaurant & Bar RM30k Unsigned
Competition (Season 1). ‘Priscillia Xavier live at Ril’s Bar!’ will start at 10pm
tomorrow at Ril’s Bangsar, Jalan Telawi 5, Bangsar Baru, Kuala Lumpur.
The bar can be contacted at (03) 2201
3846 or at [email protected].
Alternatively, connect with the artist
on social media via her Twitter, Facebook and Instagram pages at https://
twitter.com/PrisXavierMusic, https://
facebook.com/PrisXavier.Music and
https://instagram.com/pristerism respectively.
might just be your thing. Featuring 12
contemporary dance works by a host of
international dancers, bask in the ambiance of tranquillity and serenity of a
tropical garden while you enjoy the soulful performances. The best part? There
will be no entry charge. Be cautioned
that you might have to equip yourself
Dancing in Place
with mosquito repellent, an umbrella
Ever fancied the concept of dancing in a as well as a good pair of sturdy shoes.
tropical setting? Then Dancing in Place Dancing in Place will start at 3pm and
end at 6.30pm for two days beginning
tomorrow and will take place at Rimbun Dahan, Km 27, Jalan Kuang, Selangor. For more information, contact
Bilqis Hijjas at (017) 310 3769 or email
[email protected].
Masquerade party
Looking for a reason to dress up? Join DJ
Stella Nutella and DJ Jazelle tomorrow
for a Masquerade Night at SkyBar. Stella
live it! 29
F R I DAY JA N UA RY 3 0 , 2015 • T HEED G E FINA NCIA L DA ILY
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Nutella — who founded Amazon Agency,
a women’s DJ agency — has spun tracks in
over 30 countries and is also a resident DJ
and music consultant for SkyBar. DJ Jazelle
— though a newbie to the industry — has
played at several top bars in Kuala Lumpur,
in addition to some local festivals. So make
your way to SkyBar Kuala Lumpur, Traders
Hotel, Kuala Lumpur from 9pm onwards for
a night of mystery, fun and non-stop party.
For more details, call (03) 2332 9888 or log
onto http://www.skybar.com.my/.
High-tea weekend buﬀet
Treat yourself and your loved ones to a
weekend high-tea buffet at Melting Pot
Café and indulge in an array of both local
and international cuisine. Tuck into signature local delights such as Mee Mamak and chicken rice as well as a variety of
Western and Mediterranean cuisine. The
buffet — priced at RM60++ per person —
will be opened from 12.30pm to 4pm and
is exclusive only on weekends. Melting Pot
Café is situated at the Concorde Hotel, Jalan
Sultan Ismail, Kuala Lumpur and can be
contacted at (03) 2144 2200.
Astro’s ﬁrst free HD channel
Is the idiot box going to be your companion this weekend? Astro Njoi channel customers will get to be part of Malaysia’s First
Free High Definition Channel on Njoi, Astro Xi Yue HD (Channel 300). For the first
time, experience exceptionally clear, crisp
pictures with vivid colours and up to five
times more details than standard definition via Astro Xi Yue HD. The channel will
showcase some of the best drama serials
from China, Taiwan and Singapore as well
as world-class documentaries, travelogues,
musical programmes and variety shows in
Mandarin, Hokkien and Cantonese — all
in stunning detail. As bonus, key local programmes across other Astro branded channels will be broadcast on this channel as
well. So don’t miss your chance to tune in
and experience your favourite programmes
like you’ve never before.
‘Cari-Kaki’ board game session
Calling all board game lovers, what better way to spend your Saturday afternoon
than with a session of board games? Called
Cari-Kaki, this event aims to not only fulfil
your gaming pleasures, but to build friendships among those who share a common
love for the segment. There will be no fee
or charges for playing, though food and
drinks are not included. Cari-Kaki will take
place between 3pm and 6pm tomorrow at
Hobby N Coffee in Jalan Tun Mohd Fuad 2,
Taman Tun Dr Ismail, Kuala Lumpur. Visit
http://www.hobbyncoffee.com/en/cafe/
to find out more or call (03) 7731 6602.
PICK OF THE DAY
Experience an amazing sensation of softness with L’Occitane’s Whipped
Body Cream from its new Whipped Shea Butter Collection. With a texture
as light as freshly-whipped meringue, the cream “breaks up”, then melts
into the skin — helping to nourish, soften and protect you from head to
toe. L’Occitane’s Whipped Body Cream is priced at RM128 for a 125ml tub
and can be purchased at all L’Occitane stores nationwide.
30
live it!
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Zen TODAY
Waste no more time arguing about what a good man
should be. Be one. — Marcus Aurelius
LOOKING EAST
A Heavenly King
descends on CNY show
Andy Lau returns to CCTV’s Chinese New Year gala; Li Nanxing pays unexpected price in Taiwan
BY L K TA N
01. Fans will be able to catch Lau in the
Spring Festival Gala after a 10-year
hiatus. Photos from Weibo
H
ong Kong’s Andy Lau, Karen
Mok and GEM, Taiwan’s David Tao and former members
of South Korea’s EXO will be
among the line-up for China’s
CCTV Chinese New Year’s
Eve gala show on Feb 18.
According to CCTV, the 4½-hour Spring
Festival Gala will have literally all households in China glued to the TV screen while
partaking of their reunion dinner.
Singer and actor Lau, who is one of Hong
Kong’s four Heavenly Kings, is making a
comeback after a 10-year absence and
this will be his fi fth performance in the
television event. Lau last appeared in the
“live” programme in 2005 by opening the
show with Gong Xi Fa Cai — a song jointly penned by him to wish the Chinese a
prosperous year.
The other Heavenly Kings who have performed in the gala event are Leon Lai and
Aaron Kwok. Jacky Cheung is the only one
who has yet to do so.
Lau remains tight-lipped about his show
this year, telling Hong Kong media: “This
year’s gala has a theme of ‘welcoming everyone home’. This is something I want to be
a part of.”
02. Li hopes his engagement in Taiwan showbiz
will open more doors for his Singaporean
peers.
01
Singer GEM, who became an overnight
sensation in the mainland after participating in I Am a Singer last year, and China’s
own Chris Lee Yichun, who won the Chinese
singing contest Super Girl in 2005, are set to
make their maiden appearances.
Chinese teen girls will have something
to scream about with former members of
popular boy band EXO Lu Han and Kris Wu
Yifan performing alongside Hong Kong teen
idol William Chan Wai-ting.
The Spring Festival Gala is said to be China’s most-watched programme, boasting
past years’ viewerships of one billion. Hun-
02
dreds of Chinese and international artistes
vie for a spot on the show to either belt out
their titles, perform acrobatics, magic and
martial arts, or show off their range in Chinese operas.
Li Nanxing’s brush with earthquake
in Taiwan
There was an unexpected price to pay for
Singapore veteran actor Li Nanxing, 51, in
making a foray into Taiwan’s drama industry.
He was jolted by an earthquake — his first
such experience — early this month when
stepping out of the washroom.
“I thought I was having nausea and the
room was shaking altogether,” Li told Chinese-language media.
The actor, known for his roles in Media
Corp Channel 8 series The Unbeatable, The
Golden Path, Clif 2 and The Journey: A Voyage,
is the second Singaporean — Fann Wong’s
husband Christopher Lee won the 2014
Golden Bell Best Actor award — to make a
big splash in Taiwan showbiz.
Li has played a Singaporean undercover
detective in Taiwanese action serial drama
Justice Heroes since last December. He told
the media how he has got used to the fast
pace and high pressure of filming in Taiwan,
relating how he is normally given scripts
only at 4am on the day of filming.
He hopes his involvement in the Taiwan
market will provide more opportunities for
Singaporean actors and actresses to participate in drama projects away from home.
S P O RT S 3 1
F R I DAY JA N UA RY 3 0 , 2015 • T HEED G E FINA NCIA L DA ILY
More than just action
on the greens
Lots of events for families and challenge seekers at Maybank Malaysian Open 2015
KUALA LUMPUR: In conjunction
with the 10th anniversary of the
Maybank Malaysian Open (MMO),
the prestigious national Open golf
tournament is set to entertain spectators with a wide range of activities
for families and challenge seekers.
This is on top of the stunning display of golf by the world’s finest and
renowned professionals including
world-class golfers like Lee Westwood, Victor Dubuisson, Graeme
McDowell, Thongchai Jaidee, and
many more.
The excitement awaits fans from
Feb 5 till 8 at the Kuala Lumpur Golf
and Country Club.
Charity putt around the world
Golfing fans can step away from
the greens for a little R&R and
experience what it’s like to putt
like a professional golfer with
this specially designed putting
challenge set on a “World Map”
based on the concept of putting
across the world. Putting skills
and luck are highly required, as
spectators have to try to avoid
a series of holes that surround
and guard the Grand Prize — the
Race To Dubai hole. Winners of
this challenge will qualify for the
Sunday Play-Off Challenge where
qualifiers will have to compete
against each other for the Grand
Prize of two flight tickets to Dubai
and two VIP Hospitality passes to
DP World to watch the Race To
Dubai season finale.
Interested participants will be
given three tries with a minimum
donation of RM5. All proceeds from
this challenge goes to Mercy Malaysia in aid of the flood victims
in Kelantan through the Maybank
Foundation.
The large crowd at
last year’s Maybank
Malaysian Open.
Out of this world bunker
Challenge
Set to be one of the signature activities for the Maybank Malaysian
Open 2015, this Bunker Challenge
will definitely test avid golfers’ golfing skills, as participants will have
to take a bunker shot and sink a
hole-in-one (HIO) on an elevated
green. Participants who sink a HIO
will qualify for the Sunday Play-Off
Challenge where qualifiers will have
to compete against each other for
the Grand Prize of two business
class flight tickets to Thailand and
Sangakkara lifts Sri Lanka
to 34-run win
WELLINGTON: Kumar Sangakkara’s masterful double of a century
and a world-record wicketkeeping
performance inspired Sri Lanka to
a 34-run win over New Zealand in
their one-day series finale here
yesterday.
Even though it was a dead rubber, with New Zealand going into
the match holding an unbeatable
4-1 lead in the seven-match series,
it was a morale boosting win for Sri
Lanka who had underperformed in
earlier matches. They posted their
highest total of the series with 2876 from 50 overs, with Sangakkara
contributing an unbeaten 113, and
New Zealand were all out for 253
in the 46th over.
When Corey Anderson threatened to blast New Zealand into
contention with 29 off 20 deliveries,
Sangakkara’s diving one-handed
catch to remove the sixth wicket
made him the most successful oneday international keeper. It was his
473rd dismissal, one more than the
previous record set by Australian
Adam Gilchrist.
Although the victory restored
some confidence to Sri Lanka they
still have concerns about their
depth with only Tillakaratne Dilshan and Lahiru Thirimanne contributing decent partnerships with
Sangakkara.
In contrast New Zealand fell
well behind in the run chase and
appeared on the ropes when the
required rate ballooned to 8.33
after the 35th over and only four
wickets in hand. — AFP
event site, upon exiting the Exhibition Marquee with a valid ticket or pass. Restricted to one item
per person, per day. Redemption
begins from 9am onwards, while
stocks last from Thursday to Sunday, during event week.
Maybank Malaysian Open fan
car stickers
Some 2000 lucky fans with this specially designed sticker will get privileged parking at the reserved West
Open car park at the Maybank Malaysian Open 2015. Stickers are available
at Maybank branches and selected
golf clubs around Klang Valley. Visit
www.maybankmalaysianopen.com
for more information. Open to public with this fan car sticker on a firsttwo VIP Hospitality Pass to an Asian come, first-served basis.
Tour event in Thailand. Interested
participants will be given three tries Lucky pick
with a minimum donation of RM5 Open to all valid ticket holders, a
where proceeds will be donated to lucky draw will take place daily to
the JC Jacobsen Foundation.
give three lucky spectators a chance
to win mystery prizes each day.
Maybank Malaysian Open NHS Ticket holders are required to fill
In partnership with the Malaysian in their details on the ticket and to
Golf Association, Maybank Ma- drop it in the lucky pick box located
laysian Open rewards all National at the ticketing booth to participate
Handicap System (NHS) cardhold- in the draw. Winners’ names will
ers with a chance to win a spot be announced on Maybank Mawith a friend to play in the MMO laysian Open Facebook page and
Fan Day. MMO Fan Day is special- prizes to be collected on-site at the
ly designed to treat loyal fans to a information counter.
game of golf on the championship
course on Feb 10. Visit the Maybank
booth during event week with your All these and more await spectaDecember or January NHS card to tors at the Maybank Malaysian
participate. Draw will take place on Open 2015, happening from Feb
Feb 7 at 3pm.
5 till Feb 8 at the prestigious Kuala
Lumpur Golf and Country Club.
Eat for free
For more information, please visit
In line with the 10th anniversary www.maybankmalaysianopen.com
celebration, spectators are eligible / www.facebook.com/MaybankMato redeem a free food item at the laysianOpen.
Serena fends off Keys
to meet Sharapova
BY I AN RANS O M
MELBOURNE: Serena Williams
brushed aside the latest member of
“generation next” trying to steal her
crown by beating teenager Madison
Keys 7-6(5) 6-2 yesterday, setting
up a blockbuster Australian Open
final against Maria Sharapova.
Top seed Williams, who at 33 is
14 years Keys’ senior, faces Sharapova tomorrow after the Russian
trounced compatriot Ekaterina
Makarova 6-3, 6-2 earlier.
Williams was pushed hard by
her 19-year-old challenger in an
absorbing duel between two of the
game’s hardest hitters on a cool
and windy day at Rod Laver Arena.
Keys defiantly saved eight match
points as her opponent roared in
frustration before Williams sealed
the contest with a thumping ace
down the middle.
“She’s obviously a great player,”
Williams said courtside, still suffering a cold and breaking into coughs.
“I think she’s going to be winning
this tournament very soon and lots
of other grand slams. I was really
happy to see her do so well and be
such a great sport at the same time.”
Williams, who retains her world
No 1 ranking by reaching the final, will face the woman she has
tormented for over a decade in
27-year-old Sharapova, a five-time
grand slam champion with a 2-16
losing record to the American.—
Reuters
IN BRIEF
Hewitt groomed as
Davis Cup captain
MELBOURNE: Lleyton Hewitt
said yesterday he intends to
play on until next year’s Australian Open as he was positioned as the future Davis
Cup captain after Pat Rafter
announced he was stepping
down. Long-time team coach
Wally Masur will fill in as Australia’s interim captain, starting
with the Cup tie against the
Czech Republic in Ostrava in
March, before handing the job
to Hewitt at a later date. Hewitt,
33, who has won an Australian
record number of Cup matches,
said he will finish his career at
his 20th consecutive Australian Open in 2016 before taking
on the Davis Cup role. — AFP
‘Super Over’ returns for
World Cup ﬁnal
DUBAI: A “Super Over” will
be used to determine the winner of this year’s World Cup
if the final ends in a tie, the
International Cricket Council (ICC) confirmed yesterday.
The tiebreaker, in which a team
nominates three batsmen to
face six deliveries from a rival
bowler, was in place in the 2011
final but was scrapped in the
lead-up to next month’s World
Cup in Australia and New Zealand. The ICC is also allowing
captains to enter the Feb 14
to March 29 tournament with
a clean slate regarding minor
over-rate offences. — Reuters
Amla, Rossouw punish
wayward Windies again
PRETORIA: Hashim Amla and
Rilee Rossouw smashed quickfire centuries as South Africa
crushed a profligate West Indies by 131 runs in a rain-affected fifth and final one-day international (ODI) on Wednesday.
The pair put on 247 for the third
wicket, equalling the South African record they had set in the
second match of the series in
Johannesburg, as the Proteas
piled up 361 for five in their allotted 42 overs. It was the highest ever ODI score in a 42-over
or less innings as South Africa
made hay on a flat wicket and
against an equally flat bowling
attack to win the series 4-1. —
Reuters
McIlroy backs Clarke for
Ryder Cup captaincy
DUBAI: Rory McIlroy wants
fellow Northern Irishman Darren Clarke to captain Europe’s
Ryder Cup team in 2016 in what
is shaping up to be a battle between the former British Open
champion and Spaniard Miguel
Angel Jimenez. Europe will seek
a fourth successive win against
the US in Minnesota. “I’m going
to be a little biased — Darren
is a good friend of mine and
from Northern Ireland, so it
would be great to see him get
the captaincy, but if it was to be
Miguel then I’d have no problems with that either,” McIlroy
said. “They are going to have
a tough decision,” he added
ahead of this week’s Dubai Desert Classic. — Reuters
3 2 S P O RT S
FR I DAY JAN UARY 3 0 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
No love lost as managers
face title showdown
Chelsea will lead Man City by eight points if they win tomorrow
BY TOBY DAVI S
LONDON: It is hard to imagine two
more different characters than Jose
Mourinho and Manuel Pellegrini,
so it is no surprise that the Chelsea
manager and his Manchester City
counterpart seem to rub each other
up the wrong way.
Their simmering rivalry is set for
another chapter in tomorrow’s topof-the-table Premier League clash
at Stamford Bridge, with a potentially pivotal three points on offer.
Should Chelsea claim the spoils,
they will lead the champions by
eight points, while a City success
would leave them just two points
adrift with 15 games to play.
The bragging rights, however,
also count double in battles between two coaches whose spiky
relationship stretches back to their
stints in charge of Real Madrid.
Pellegrini had only one season
Golden boot
glitters as UAE
size up Iraq
Mourinho taunted Pellegrini after replacing
him at Barcelona. Photo by Reuters
Pellegrini will be without playmaker Toure.
Photo by Reuters
as coach at the Bernabeu, where,
having failed to come out on top
in the habitual two-horse race
with Barcelona, he was replaced
by Mourinho.
The Chilean joined Malaga and
Mourinho taunted him on the way
out.
“If Madrid were to fire me, I
wouldn’t go to Malaga. I’d go to a
top-level team in Italy or England,”
he said.
Tomorrow’s game could be decided by which players are absent
as much as who is on the pitch.
After a gruelling League Cup
semi-final against Liverpool,
Chelsea are likely to be without
injured midfielder Cesc Fabregas
and defender Filipe Luis, while
league top scorer Diego Costa faces suspension after being charged
by the FA for stamping on an opponent.
City, who have not won in the
league since Jan 1, will have to discover how to beat teams without
midfielder Yaya Toure whose involvement in the African Nations
Cup has hit them hard and he will
again be missing tomorrow.
Among the weekend’s other fixtures, Manchester United take on
Leicester City and Liverpool play
West Ham United tomorrow. Arsenal host Aston Villa on Sunday.
— Reuters
Asian Cup finalists gunning
for breakthrough win
BY PET ER H U TCHISON
BY JULIAN LI NDE N
NEWCASTLE:
Sharpshooter
Ali Mabkhout
(pic) can win
a tight race for
the Asian Cup’s
golden boot
when the United Arab Emirates
(UAE) face Iraq for the consolation prize of finishing third today.
The UAE went down 2-0 to Australia this week and Iraq lost by the
same scoreline to South Korea, as
their dreams of Asian Cup glory were shattered in the semi-finals.Both teams must now pick
themselves up for an unwanted
third-place play-off in Newcastle, although Mabkhout has more
motivation than most.
Deeply in tune with playmaker
Omar Abdulrahman, the striker
has already grabbed four goals,
placing him joint top of the scoring
charts alongside Jordan’s Hamza
Aldaradreh. Among his strikes
are the fastest goal in Asian Cup
history — after just 14 seconds
against Bahrain — and the volley
that put UAE 1-0 up against Japan
before they shocked the holders
on penalties.
Another goal against 2007
champions Iraq would take the
Al Jazira marksman clear on the
scorers’ list and help him towards
his aim of securing a big-money
move to Europe.
Socceroo Tim Cahill is lurking behind Mabkhout with three
goals. — Reuters
SYDNEY: The first Asian Cup held
in Australia has already exceeded
expectations and now the stars have
aligned to produce what promises
to be a classic final.
Both sides will feel confident of
emerging victorious in tomorrow’s
clash between the host nation and
South Korea at Sydney’s Olympic
Stadium when the best attack in
the tournament comes up against
the best defence.
The delicious contrast in styles is
the perfect ending to a tournament
that has been full of unexpected
twists and turns from the world’s
most populated and diverse region.
For the Australians, the final represents a chance to finally win a
major international soccer title, an
anomaly for a sports-mad country
that has succeeded in almost every
other sport in the world.
“It is a massive game. We made
the final four years ago which was
great for our nation,” the Australian
coach Ange Postecoglou said. “We
have been in Asia for a while now
and we haven’t won anything in
the men’s game, but this gives us
an opportunity at a national level
to achieve something.”
Victory for South Korea would give
the Taegeuk Warriors their first Asian
Cup title since 1960 and the country
something to celebrate after a grim
year on and off the sporting field.
“The players are desperate to
win this tournament,” defender
Park Joo-ho said. “A lot of people
at home really want us to win this
tournament after 55 years.”
Despite reaching the semi-finals
of the World Cup in 2002, South
Korea have struggled to reproduce
that sort of form since. They were
eliminated in the group stage at two
of the last three World Cups and
before this year, had not made an
Asian Cup final since 1988.
However, with the recently recruited Uli Stielike now in charge
of an ambitious team, things are
starting to look up.
The former German international is looking at a longer-term
goal of restoring South Korea as
Asia’s best team and has started by
plugging up holes in the defence.
In their five matches at the Asian
Cup, South Korea have yet to concede a goal, with first-choice keeper
Kim Jin-hyeon keeping four clean
sheets. — Reuters
IN BRIEF
Ronaldo handed
two-match ban
MADRID: Real Madrid’s Cristiano Ronaldo has been given
a two-match ban following his
dismissal for kicking out at an
opponent during their La Liga
clash with Cordoba last Saturday, the Spanish league said
on Wednesday. Ronaldo was
unable to make an impact in
the match and his frustration
saw him first lash out with his
hand at Jose Crespo, which the
referee missed, and then minutes later kick out at Edimar
for which he was sent off. —
Reuters
Blatter conﬁrms he has
submitted re-election bid
ZURICH: FIFA president Sepp
Blatter confirmed that he had
submitted his bid to run for
re-election yesterday, the deadline day for nominations to be
handed in. “Today [yesterday] is
a key date in the electoral calendar. I’ve made my submission,
now the electoral committee
follow a process,” the 78-yearold said on Twitter. Blatter, who
has been in charge of soccer’s
governing body since 1998, is
running for a fifth mandate and
is overwhelming favourite to win
the election in Zurich on May
29. — Reuters
Liverpool interest
‘ﬂattering’
SYDNEY: Australia goalkeeper
Mathew Ryan yesterday insisted that reports linking him to
English giants Liverpool will
not distract him from tomorrow’s Asian Cup final against
South Korea. “Obviously it’s
very flattering to have your
name involved with a big team
like that,” the Belgium-based
stopper told reporters yesterday. “But my mind is on the
job here,” added Ryan. — AFP
S’pore defender joins
Melbourne City
SYDNEY: Singaporean defender Safuwan Baharudin
has joined Melbourne City for
the rest of Australia’s A-League
season, the club said yesterday. Melbourne City said Baharudin, 23, impressed as a
centre back and fullback earlier this month at a training
camp in Abu Dhabi, United
Arab Emirates, arranged with
the Football Association of Singapore.— AFP
Foggy outlook on potential Nations Cup winners
BY M AR K G LE E S O N
MONGOMO (Equatorial Guinea):
At the outset of the African Nations
Cup finals in Equatorial Guinea there
were no favourites and after the first
round of the tournament there is still
a foggy outlook.
Not a single side advanced through
the group phase with a 100% record,
reflecting both the fact there was little
to choose among the 16 teams.
Thirteen draws in 24 first-round
matches over the opening 12 days
spoke of evenly matched duels and a
dearth of game-winning talent among
the 368 players. Not even a handful
of established African stars such as
Yaya Toure, Seydou Keita, and new
pretenders such as Pierre-Emerick
Aubameyang, Yacine Brahimi and
Sadio Mane have been able to impose themselves on the competition.
The end of the group-phase round
on Wednesday not only provided no
clarity on the identity of potential
champions but also left the quarter-final line-up incomplete.
Lots were scheduled to have been
drawn yesterday — for only the third
time in the tournament’s 58-year-history — to decide the runners-up berth
in Group D after Wednesday’s matches proved inconclusive. Guinea and
Mali ended dead level after drawing
all three games 1-1. There are six former winners in the last eight with
Tunisia the last of the surviving field
to be crowned champions in 2004.
The Democratic Republic of Congo
won the last of their two titles in 1974,
and Ghana the last of their four in
1982. Ivory Coast’s sole success came
in 1992, Algeria two years before that
and Congo way back in 1972.
Meanwhile, real first-round success
has come from the small host nation
who have galvanised a tide of support
to earn an unlikely quarter-final berth.
Equatorial Guinea had little time to
prepare after taking over as emergency hosts and changed their coach two
weeks before kick off. But they have
conceded only a single goal and are
in exulted company as they seek to
continue a fairytale run. — Reuters