1. business and industrial
2. company
3. merger and acquisition

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MONDAY FEBRUARY 23, 2015 ISSUE 1903/2015
FINANCIAL
DAILY
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1MDB chief:
PetroSaudi deal
made RM1.78b
in profits
6 HOME BUSINESS
Termination letters
out soon for MAS
employees
6 HOME BUSINESS
IDC expects
first-time decline
in mobile voice
revenue this year
8 HOME BUSINESS
Ecofirst and Meda
suited for a merger?
9 HOME BUSINESS
Jiankun aims to return
to black in FY15
Infiniti QX80 makes you
feel like a king
20 F O C U S
2.80
2
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
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‘Time to shift
economy towards
real estate’
IFCA MSC on a
roll as GST looms
Analysts: Courier
segment will drive
Pos Malaysia’s
growth
The Edge Communications Sdn Bhd
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MoF cash injection for 1MDB?
After loan from Ananda Krishnan, 1MDB may need ministry money
BY THE EDG E FI NANC I AL DAI LY
KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) was not
only helped by Ananda Krishnan to
settle its RM2 billion debt to banks,
but it may also require a cash injection of as much as RM3 billion
from its owner — the Ministry of
Finance (MoF).
Sources said that the controversial debt-laden outfit is facing a cash
crunch as income from its power assets is not enough for debt servicing
and that it has run out of borrowing options, as shown by it having
to turn to a businessman for help.
Ananda provided a 15-month
RM2 billion loan to enable 1MDB
to settle its loan with a consortium
of local banks on Feb 13. Sources
familiar with the matter confirmed
this with The Edge Financial Daily
while expressing their surprise that
1MDB chief executive officer Arul
Kanda Kandasamy had dismissed
media reports about the loan from
Ananda as mere speculation.
Arul had announced on Feb 13
that 1MDB had settled the RM2
billion owed to the consortium led
by Malayan Banking Bhd and RHB
Bank Bhd which had been first due
on Nov 30, 2014. The loan was settled in time to prevent the banks
from declaring a default.
Arul did not explain how 1MDB
had raised the money in his Feb 13
statement, but in an interview with
Mingguan Malaysia two days later,
he said reports that Ananda had lent
1MDB the money were pure speculation. “Ananda has never said anything
about this matter. This is speculation
by third parties,” Mingguan Malaysia
had quoted him as saying.
“I don’t know how he (Arul) can
claim that (AK [Ananda] did not
help),” says a source. “It was a simple, clean loan (with no conditions)
as AK did not want to be seen as
taking advantage (by setting tough
conditions).”
In a reply to questions by The
Edge on why he had not just come
out and disclosed where and how
1MDB had raised the money, Arul
said: “The facts on the (settlement
of the) loan will be revealed in the
appropriate forum/time that is our
next set of accounts. To demand any
different is to set a different standard for 1MDB which is not only
unfair, but also ignoring our right
and that of our stakeholders to legal
and commercial confidentiality”
Paying off the RM2 billion debt
does not solve 1MDB’s problem,
which has total debts of over RM42
billion and an annual debt servicing
of RM2.31 billion, and a negative
cash flow of RM2.25 billion in its financial year ended March 31, 2014.
Sources say that the MoF is
aware of 1MDB’s cash flow problem
and knows it may have no choice
but to step in with a RM3 billion
injection. But in order for that to
happen, approval has to be given by
the Cabinet given the large amount
of money involved and all the controversy that 1MDB has generated.
The government had on Feb 11
and 12 raised RM2.1 billion through
two treasury bill issues that money
market dealers say were unusually
large amounts. Sources said the
MoF could be getting the money
ready should it go ahead and come
to the aid of 1MDB.
The cash injection will have to
be done before 1MDB’s next financial year close on March 31, 2015
— which is just five weeks away.
Despite concerns raised by so
many parties, the MoF officials
1MDB chief: PetroSaudi deal
made RM1.78b in profits
KUALA LUMPUR: Troubled sovereign fund 1Malaysia Development
Bhd (1MDB) on Saturday claimed
that a joint venture (JV) with a Saudi Arabian company six years ago,
which critics claimed was shady,
had earned it a profit of US$488
million (RM1.78 billion).
In a statement on the company’s website, 1MDB president Arul
Kanda Kandasamy also claimed
that the money it had invested in
the JV had been converted into
murabaha notes when the plan
did not go through.
Earlier reports claimed that
1MDB had put US$1 billion into
the deal with PetroSaudi International Ltd, a company with an allegedly sketchy track record.
“In 2009, 1MDB entered into
a joint venture with PetroSaudi,
which was set up to undertake investments in certain projects.
“Both parties eventually decided not to proceed with the joint
venture and our investment was
converted into murabaha notes.
“These murabaha notes were
paid back in full, with 1MDB earning a profit of US$488 million in
2013,” Arul said in the statement.
He said this fact had already
been made public in its accounts
for the year ended March 31, 2013.
“1MDB has noted with surprise
recent online press coverage and
statements regarding a transaction
we entered into with a Saudi Arabian company in 2009.
Arul says the money 1MDB invested
in PetroSaudi was converted into
murabaha notes after the deal was
abandoned. Photo by Reuters
“We have previously provided
details on this transaction in our
publicly available audited accounts,
and in an FAQ that is published on
the company’s website,” he said.
Critics of 1MDB have seized on
the PetroSaudi deal as an example of the company’s questionable
business decisions.
On Feb 18, whistleblower site
Sarawak Report published a 26page document claiming that
1MDB had paid US$1 billion of
public funds into PetroSaudi, despite the latter’s US$700 million
debt.
The debt was in the form of
a loan from PetroSaudi’s parent
company to a subsidiary in the
deal with 1MDB, called PetroSaudi Holdings (Caymans) Ltd, said
Sarawak Report.
“Crucially, under the terms
of the joint venture, agreed to by
1MDB, the Malaysian development
fund had committed to pay back
this whopping great loan to the
parent company, PetroSaudi International, on day one of the joint
venture,” it added.
Petaling Jaya Utara member of
Parliament Tony Pua Kiam Wee
had described the deal as “buying
a house that has a great big loan of
two-thirds of its market value outstanding on the property”.
“Who in their right mind would
buy into such a deal?” Pua asked.
In his statement on Saturday,
Arul said the company also invested
US$2.32 billion in a fund under the
supervision of the Cayman Islands
Monetary Authority.
He said 1MDB had also disclosed in its audited accounts for
the year ending March 31, 2014,
how US$1.22 billion of these funds
were used.
“On 13 January 2015, we publicly
announced the redemption of the
remaining US$1.103 billion.
“[And] have subsequently stated that these proceeds are being
kept in US dollars, as an asset, to
match our US dollar liabilities and,
amongst others, to service interest
payments on our US$6.5 billion of
long-term bonds.” — The Malaysian Insider
have always insisted that 1MDB
is financially healthy and that the
government only had to put in RM1
million as initial capital because
the company was strong enough
to borrow to fund itself.
Arul, in a Feb 18 press release on
its strategic review, said 1MDB will
stop borrowing from now.
Sources said the truth is that
1MDB can no longer go to the market to borrow — whether through
bank loans or bond issues.
“The size of its debt of RM42
billion, the massive negative cash
flow it has experienced in the last
two years plus its struggle to pay
the RM2 billion makes it difficult
for any banks to lend to them,” said
one banker. “Bond investors will
also shy away from any new debt
it wants to issue.”
1MDB recently called off a
RM8.4 billion Islamic bond that
it had planned to raise cash to finance its 3B power project. Bankers say it was cancelled because of
lukewarm response. Sources said
bankers have also taken note of the
fact that 1MDB has had difficulties
proceeding with its plan to float its
power assets to raise cash.
Abbott
compared
to Shylock
JAKARTA: Angry Indonesians
have compared Australian
Prime Minister Tony Abbott
to Shylock, the moneylender in
The Merchant of Venice who demanded a pound of flesh when
his rival defaulted on a loan.
“Australians need a prime
minister, not a Shylock and
drug dealer’s cousin,” a banner said at a protest held yesterday at Jakarta’s famous Hotel
Indonesia roundabout.
According to the Sydney
Morning Herald, passers-by
scattered silver coins on banners featuring the Australian
prime minister with red tape
crossed over his mouth.
The protest is part of a campaign to “repay” the A$1 billion
(RM2.86 billion) in Australian
aid given to Indonesia after the
2004 tsunami.
Abbott reminded Indonesia
of the donation as part of his
plea for the lives of the Bali
Nine duo on death row.
His comments were interpreted as a threat and have inflamed tensions between Australia and Indonesia with the
executions of Andrew Chan and
Myuran Sukumaran imminent.
Many people came to yesterday’s protest after learning about
it from a Twitter campaign.
Rian, one of the event organisers, said he would deliver the coins to the Australian
embassy.
4 HOME BUSINESS
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
U Mobile on track to IPO
With improving financials and a subscriber base of over four million
BY KAMARUL ANWAR
KUALA LUMPUR: U Mobile Sdn
Bhd’s chief executive officer Wong
Heang Tuck still doesn’t have a
definite answer as to when the telecommunications services provider will float its shares. But since U
Mobile has finally drawn earnings
before interest, taxes, depreciation,
and amortisation (Ebitda), it is
definitely on the road to an initial
public offering (IPO).
After growing its subscriber base
to over four million before its eighth
year of business, Wong believed
there is more room for U Mobile
to grow, and could draw net profit
next year. He said U Mobile’s target
market is youths, who make up the
bulk of the country’s population
and are data-hungry.
“We can go for listing now, for
sure, because we’ve met certain
criteria [for the IPO]. But we want
to ensure that when we indeed go
for an IPO, we can deliver value
to shareholders. We also need to
achieve economies of scale and be
sustainable for at least a few quarters before we can think of going
public,” Wong said in an interview
with The Edge Financial Daily.
He denied market rumour of a
possible merger-and-acquisition
(M&A) exercise between U Mobile
and REDtone International Bhd,
both of which are affiliated with
Tan Sri Vincent Tan.
“There are no talks with REDtone. And there is no discussion
on this (M&A) at the shareholders’ level, at least, not that I know
of. As far as we at U Mobile are
concerned, it’s business as usual,”
Wong added.
Late last year when Tan’s Berjaya
Corp Bhd accumulated shares in
Telcos’ five-year subscriber counts and market shares
2009
TELCOS
Maxis
Celcom
DiGi
U Mobile
Others
2010
Market
share(%)
Subscribers
12
10.4
7.7
0.3
NA
2011
Subscribers
(mil)
Market
share(%)
39.5
34.2
25.3
1
NA
13.4
11.2
8.8
0.5
NA
2012
Subscribers
(mil)
Market
share(%)
39.5
33
26
1.5
NA
13.3
12
9.9
1.5
NA
Subscribers
(mil)
36.2
32.7
27
4.1
NA
13.4
12.7
10.5
3.5
1.2
Subscribers
(mil)
Market
share(%)
32.4
30.8
25.4
8.5
2.9
12.3
13.1
11
4.5
2.7
28.2
30
25.2
10.3
6.2
(mil)
Source: MCMC Industry Performance Report 2013
REDtone (Fundamental: 2.3; Valuation: 0.3) to a level nearing the
mandatory general offer level, it
sparked speculation of a possible M&A between REDtone and
U Mobile.
Between Dec 11, 2014 and Jan
7, 2015, Berjaya Corp bought 96.59
million REDtone shares and raised
its stake from 12.63% to 30.77%.
Additionally, on Dec 11 Berjaya
Corp bought REDtone’s derivatives
and ended up owning 128.48 million units of the ACE Market telco
player’s irredeemable convertible
unsecured loan stock and 20.1 million warrants.
Theoretically, had Berjaya
Corp exercised all those derivatives, it would have become REDtone’s largest shareholder with a
45.29% stake and consequently
trigger a general offer.
U Mobile, meanwhile, is one
of Tan’s personal investment ventures. He owns 44.67% of the telco. The other shareholders are Temasek Holdings’ unit Straits Mobile
Investments Pte Ltd (with a 49%
stake) and Magnum Bhd (6.33%).
“Listing [U Mobile] is a given.
[Telcos] will constantly need investment in new technologies, and
technology is now updated at a
much faster rate,” said Wong.
For now, U Mobile’s liabilities
mainly comprise vendors’ credit, which Wong said is normal for
businesses in their early stages.
He added that U Mobile’s recent
RM1.5 billion network expansion
programme was mostly financed
by its shareholders. By the end of
this year, U Mobile will have 1,000
3G network towers and another
1,000 4G LTE towers to enhance
its connection.
As at Dec 31, 2013 (FY13), U Mobile’s total liabilities of RM676.71
million were 1.94 times its shareholders’ funds of RM348.47 million,
according to filings with the Companies Commission of Malaysia.
However, Wong said in the “traditional sense” of gearing — the
measure of a company’s borrowings to financial institutions — U
Mobile’s debt level is about 20% to
30% of its equity.
Growing above the industry
average
Also in FY13, U Mobile’s revenue
was RM919.17 million, which was
nearly double of the previous year’s
sales. After-tax loss was cut by 18%
to RM363.24 million. Based on
Malaysian Communications and
Multimedia Commission’s Industry Performance Report for 2013, U
LTAT to pay out record RM835.1m
in dividends, bonuses
KUALA LUMPUR: The Lembaga
Tabung Angkatan Tentera (LTAT)
will pay out new record high dividends and bonuses at a rate of 15%
or RM835.1 million for the financial
year ended Dec 31, 2014.
Defence Minister Datuk Seri
Hishammuddin Tun Hussein (pic)
said the payout is a 2.1% increase
compared with the RM818.3 million paid out in 2013.
“The 15% comprises normal dividends of 7%, bonuses (1%) and special bonuses (7%) in the form of free
unit trusts for active members,” he
said in a statement here yesterday.
Hishammuddin also said the
rates of dividends and bonuses
over the past five years had averaged 15.2%.
“Based on the unaudited financial statement for the financial year
ended Dec 31, 2014, LTAT posted a
profit of RM1.014 billion, an increase
2013
Market
share(%)
KENNY YAP
of 4.9% compared with RM967 million previously.
“This is the first time too that
profit had breached the RM1 billion
mark since the formation of LTAT.
“As of Dec 31, 2014, LTAT’s total
assets had increased 2.2% to RM9.4
billion compared with RM9.2 billion
the previous year. Members’ contribution stood at RM8.7 billion in
contrast to RM8.3 billion in 2013,”
he added.
LTAT also paid out RM985.8 million to 7,031 contributors upon completion of their service and RM18.8
million to 2,568 members who were
eligible to purchase houses under
the Housing Withdrawal Scheme.
In addition, RM8.6 million was
paid to 244 contributors under
the Death and Disability Benefits
Scheme, of which RM5.3 million
went to 195 dependents of deceased
members as death benefits, and
RM1.5 million to 49 members as
disability benefits.
Hishammuddin said he was satisfied with the performance and
achievements of LTAT for 2014, and
expressed confidence that it would
be enhanced. — Bernama
Mobile had 4.5 million subscribers,
which made up 10.3% of Malaysia’s
mobile phone market share.
The report did not differentiate
between active and non-active
subscribers. Nonetheless, on a total subscriber basis, U Mobile has
eaten up the market shares of the
“Big Three” (DiGi.Com Bhd, Maxis
Bhd and Celcom Axiata Bhd) over
the years (see chart), with the telco still having less than half of the
subscribers of its closest competitor, DiGi had.
Last September, U Mobile initiated its Vision 2,000,000 campaign,
in which it planned to add two
million subscribers before 2014
ended. It succeeded in doing so
two weeks ahead of the deadline.
However, Wong declined to reveal U Mobile’s current subscriber
numbers, or its market share. He
said U Mobile managed to make
over RM1 billion in revenue in
FY14, and briefly broke even at
the Ebitda level. He is confident
that U Mobile can grow “above the
industry average” and break new
turnover record in FY15.
“We have a few ongoing initiatives. So maybe by the second half
of this year our Ebitda will turn positive. We are targeting at least next
year for profit,” he added.
Wong says U Mobile’s target market
is youths, who make up the bulk of the
country’s population and are datahungry. Photo by Patrick Goh
But with telco services regarded as parity products, what distinguishes U Mobile from the Big
Three players?
Wong said U Mobile is focused
on delivering value to Malaysia’s
youth — “the 15- to 24-year-olds”
— who are heavy users of Internet data.
“We pride ourselves on being
the best in terms of customer experience when it comes to mobile
Internet. We are currently ahead
of the other three [major players]
in terms of customer satisfaction,
based on various independent
surveys. That’s why we came up
with [the investment of building]
2,000 network sites, which will be
completed by the end of this year,”
he said.
Wong said U Mobile was the
first telco in Malaysia to provide
42Mbps connection to mobile devices, and is also looking at making
smart devices more affordable for
its target market.
He added that U Mobile had
been in talks with a few companies to provide machine-to-machine connectivity, which could
be another revenue stream for the
company. It is only a matter of time
when the market is ready to use
such technology, he said.
Federal govt ready to help enhance
efficiency of Sepangar Port
KOTA KINABALU: Transport
Minister Datuk Seri Liow Tiong
Lai (pic) said the federal government is ready to cooperate
with Sabah in enhancing the
operational efficiency of Sepangar Port.
He said by doing so, it would
help reduce the cost of goods
and services in the state and
consequently, the impact on
the cost of living of the people.
“Sepangar Port is important
for Sabah’s economy. As such,
we are now discussing with the
state government to jointly enhance its operational efficiency.
“We know it can be improved
further to draw more ships to
the port,” he added.
Liow told reporters this after attending the Sabah MCA
Chinese New Year open house
here yesterday.
The event was also graced
by Sabah Yang Dipertua Negeri Tun Juhar Mahiruddin and
KENNY YAP
Deputy Chief Minister Tan Sri
Joseph Pairin Kitingan.
Liow said his ministry was
now preparing a proposal to
be forwarded to the Economic
Planning Unit for approval with
respect to the joint development
of Sepangar Port. — Bernama
6 HOME BUSINESS
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Termination letters to be out
soon for MAS employees
Terms and conditions yet to be finalised; everything clearer once Mueller takes office
BY C Y NTHI A B L E M IN
KUALA LUMPUR: With the outgoing Aer Lingus Group plc chief
executive officer (CEO) Christoph
R Mueller due to start on March
1 as CEO-designate of Malaysia
Airlines NewCo, Malaysia Airlines
Bhd (MAB), it is understood that
plans are afoot to finalise termination letters to employees of the
beleaguered Malaysian Airline
System Bhd (MAS), said sources.
“The termination letters will be
out soon. Everyone will be getting
a minimum of one letter (termination); two letters [even] if they
are re-employed by the new company,” one source told The Edge
Financial Daily.
It could be done at the 11th
hour to prevent any operational
hiccups for the airline so that the
transition to the new company
would be smoother, the source
added.
Khazanah Nasional Bhd, the largest shareholder of MAS, in August
last year unveiled a restructuring
plan for the national airline that
would see its assets being moved to
a new company by July 1 this year.
The plan which is underway will see
job cuts of 6,000 from the existing
workforce of 20,000.
Mueller is to start on March 1 as CEOdesignate of Malaysia Airlines NewCo, MAB.
Another source close to the
matter said the terms and conditions of the termination of the
employees have yet to be finalised, perhaps everything will be
much clearer once Mueller takes
office.
Although the restructuring efforts have started gaining traction,
employees and union representative of MAS are sceptical if the new
Bashir is to chair the new Corporate
Reskilling Centre. Photo by The Edge
Corporate Reskilling Centre (CRC)
set up to retrain the thousands of
MAS employees — who will be
laid-off as part of the restructuring
plan — will be able to do the job.
The CRC is to be chaired by former
Malaysia Airports Holdings Bhd
managing director Tan Sri Bashir
Ahmad Abdul Majid.
“We hope that MAS employees
will be given the option to be re-
trained for positions that will be
commensurate with their skills
and experience and not be forced
to take a big pay cut due to the restructuring efforts,” said another
source.
According to the current collective agreement (CA) signed with
the MAS management, those who
have served 10 years and below
should get a minimum of one
month salary for every year of
service, while those serving 10
years and above should be paid
one-and-a-half-month salary for
every year of service.
It is learnt that MAS management is due to call for a meeting
with the respective unions as early
as this week.
However, it has yet to be ascertained if the unions will be engaged
to discuss the issues with regard to
the termination packages for those
affected apart from the progress of
the restructuring efforts.
Khazanah is due to give the second update on its progress report
on the 12 areas of MAS Recovery
Plan by the end of this month.
The first progress report was in
November last year.
When contacted, Malaysia Airlines System Employees Union
(Maseu) secretary-general Abdul
Malek Ariff told The Edge Financial Daily that the union had yet
to be notified or consulted on the
termination benefits for MAS staff.
Maseu has been the body taking care of the interests of the airline’s cabin crew, negotiating the
CA with MAS management and
by far, the most powerful union
in the country as seen when it
lobbied to unbundle the share
swap between MAS and AirAsia
Bhd in 2012.
Abdul Malek cautioned that
with the new MAS Act, the livelihood of the crew is at stake as it will
take away their hard-earned retirement and termination benefits.
“It (MAS Act) will end the existing CA that was agreed upon
between the [various] unions and
MAS,” he said.
Under the MAS Act, the new
entity MAB will not be responsible
for any monies due to employees
including termination benefits,
Abdul Malek added.
The MAS Act has been criticised
by employees and even by the Malaysian Trades Union Congress.
The National Union of Flight
Attendants Malaysia had also
condemned the proposed MAS
Act, after it was swiftly passed in
Parliament in November last year.
IDC expects first-time decline in mobile voice revenue
BY A H MA D NAQ I B IDR IS
KUALA LUMPUR: International
Data Corp (IDC) Malaysia expects
voice revenue for mobile telecommunications players to decline for
the first time in 2015, while data
revenue continues to grow at an
accelerated rate.
IDC Market Research (M) Sdn
Bhd research manager Alfie Amir
told The Edge Financial Daily that
the expected decline in voice revenue for mobile telco players such
as Maxis Bhd (fundamental: 1.15;
valuation: 0.9), Axiata Group Bhd’s
(fundamental: 0.85; valuation: 0.9)
unit Celcom Axiata Bhd, DiGi.com
Bhd (fundamental: 1.55; valuation:
2.1) and U Mobile Sdn Bhd will be
driven by over-the-top players and
long-term evolution adoption.
“If you look at five years ago,
before smartphones were mainstream, voice revenue accounted
for about 80% to 90% of total revenue, while data only accounted
for 10%.
“After the smartphone era, the
mobile telcos saw their voice revenue growing at a diminishing
rate. We are predicting that this
year, in 2015, voice revenue will
start to decline for the first time
ever,” he said, noting that mobile
Alfie says companies are
now focusing on providing
the best customer
experience, in a bid to
retain their subscribers
voice revenue posted a very slow
growth of 2% in 2014.
As at 2014, Alfie said voice and
data accounted for 58% and 42%
respectively of mobile players’ revenues. Based on the latest figures,
he expects revenue contribution
from data to surpass voice revenue by 2017.
Meanwhile, with the exponentially increasing demand for data,
which in turn drives up costs, coupled with the overall slowdown in
profit growth due to the saturated
mobile market, profit margins of
mobile companies are also diminishing.
He said that mobile players should look at new revenue
streams, as he said that there is
not much room for telcos to grow
their subscriber base due to the
saturated market.
“What they can do, however, is
to increase their ARPU (average
revenue per user), by converting
their non-data users to data users,
or through offering other services.
“At the same time, retaining
their data subscribers is also important, as there is a lot of churning in a saturated market,” Alfie
said, adding that companies are
now focusing on providing the best
customer experience, in a bid to
retain their subscribers.
He said that a price war to gain
subscribers will be unfavourable
for the mobile providers, as it will
further drive down margins.
On the other hand, Alfie said
that there is more room for growth
for fixed-line providers like Telekom Malaysia Bhd (fundamental:
1.1; valuation: 0.9) and Time dotCom Bhd (fundamental: 2.7; valuation: 0.6), as companies are expected to expand their portfolio of
services to include ICT solutions.
“Fixed-line providers are now
starting to become ICT providers.
They are beginning to offer a few
IT services, rolling out these services in stages,” he said.
Alfie explained that this is
mainly due to a shift in user requirements, as enterprise users
now require ICT services such as
cloud and data centre services,
instead of just connectivity.
Capitalising on their existing
network, fixed-line providers can
potentially provide end-to-end
services, ranging from fixed-line
connectivity to ICT solutions such
as cloud and data centre services.
With the expansion of their
products and services, telco companies are now entering the IT
market.
“By going into the IT market,
they are going to triple their addressable market to RM15 billion, from their current revenue
of around RM5 billion.
“However, it will not be an easy
market for the fixed-line telcos, as
the IT market is currently being
held by established IT players like
Hewlett-Packard, IBM and CSC,”
he said.
Alfie noted that telco players
in countries like Australia and
Singapore are already competing
with IT players on a level playing
fi eld in providing ICT products
and solutions, and expects the
same for Malaysian companies
in the future.
He expects the shift in the focus
of telcos to providing ICT services
will support the revenue growth of
fixed-line companies, forecasting
a 7% year-on-year expansion in
2015 to RM9.8 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.
8 HOME BUSINESS
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Ecofirst and Meda to merge?
Both developers share many similarities in terms of size of market cap and common major shareholders
BY GHO C H EE Y UAN
KUALA LUMPUR: The build up of
interests by Ecofirst Consolidated
Bhd’s chief executive officer (CEO)
Datuk Tiong Kwing Hee in Meda Inc
Bhd has raised eyebrows.
From only an 8.2% stake in Meda
last November, Tiong has over the
past few months raised his holdings
in the property developer to 14.72%
as at Feb 10, almost similar to his
15.76% stake in Ecofirst as at Feb 11.
Both Meda and Ecofirst share
many similarities. Their core businesses is property development,
and their sizes by virtue of market
capitalisation are not that far apart,
at RM287.53 million and RM226.4
million respectively on Feb 17.
Interestingly, aside from Tiong,
both companies also share common substantial shareholders in
Teoh Seng Aun and Teoh Seng
Kian. The Teoh brothers together
own 25.8% of Meda, and 22.8% in
Ecofirst.
With such similarities, market
observers have been waiting for a
corporate exercise to happen between the two listed property developers. More precisely, some say
Tiong’s recent purchase of shares
in Meda could fuel speculation of
a potential merger between Meda
and Ecofirst.
Both companies could not be
reached for comment as of press
time.
ECOFIRST CONSOLIDATED BHD
(ALL FIGURES IN MYR MIL)
Financials
Turnover
EBITDA
Interest expense
Pre-tax profit
Net profit - owners of company
Fixed assets - PPE
Total assets
Shareholders' fund
Gross borrowings
Net debt/(cash)
FY12
FY13
FY14
FY2015Q2
31/5/2012
31/5/2013
31/5/2014
30/11/2014
160.48
(0.76)
4.20
15.41
10.92
2.73
257.46
129.97
119.97
118.13
76.37
8.97
5.40
26.71
24.28
5.24
253.94
150.27
95.52
94.16
24.45
36.46
4.92
33.12
30.11
5.03
312.59
180.35
119.80
115.28
5.35
1.64
1.27
0.12
0.15
6.17
351.86
201.20
138.70
117.16
MEDA INC. BHD
(ALL FIGURES IN MYR MIL)
Financials
Turnover
EBITDA
Interest expense
Pre-tax profit
Net profit - owners of company
Fixed assets - PPE
Total assets
Shareholders' fund
Gross borrowings
Net debt/(cash)
FY11
FY12
FY13
FY2014Q3
31/12/2011
31/12/2012
31/12/2013
30/9/2014
82.32
(21.99)
3.48
9.97
6.84
23.03
193.81
166.89
59.99
52.76
170.65
39.39
2.82
35.30
27.84
44.27
239.73
213.93
39.61
32.34
181.41
27.12
2.11
23.37
18.53
42.19
255.20
231.00
32.26
27.25
26.11
2.26
0.64
1.32
0.38
43.11
280.65
238.72
49.54
44.80
In theory, such an exercise is not
without merits, said corporate finance advisers, adding that a merger between both firms could create
a mid-size property developer with
a combined market capitalisation
of more than RM500 million. This
would then allow the merged entity to implement large property
development projects.
“For any given listed entity, RM500
million is a good size to attract support from fund managers and financiers,” says a deal arranger.
It is worth noting that Ecofirst
has its eye on a 61.64 acres (24.94ha)
freehold land in Hulu Klang, said to
have a potential gross development
value of over RM2 billion.
The firm had actually proposed
in December 2013 to acquire the
land (made up of two adjoining
pieces) for RM145 million from
Zurich Insurance Group.
Both parties were supposed to
wrap up the land deal by the fourth
quarter of 2014, but it was delayed
for the second time and Zurich has
agreed to grant Ecofirst another six
months until July 31 to seal the deal,
with the latter required to pay late
payment interests.
The vacant land is located near
the Kuala Lumpur city centre and
is easily accessible via Jalan Tun
Razak, the Ampang-Kuala Lumpur
Elevated Highway and the Middle
Ring Road II.
Ecofirst has recently denied rumours that it faced funding issues
for the land, and clarified that the
deal was delayed pending “further clarification and information
from the relevant authorities on
a planned elevated highway that
may affect certain parts of the land”.
That said, the firm’s financial
position showed that it could need
further fund-raising efforts for the
RM145 million acquisition.
As of end-November 2014, Ecofirst has short-term borrowings
of RM5.43 million and long-term
borrowings of RM133.27 million,
versus cash of RM21.55 million. Its
net borrowings of RM117.15 million translates into a net gearing of
0.58 times against its shareholders
equity of RM201.2 million.
The ideal net gearing ratio for
property developer would be below 0.5 times.
At Meda, its balance sheet seems
stronger. The firm has short-term
borrowings of RM21.17 million and
long-term borrowings of RM28.37
million as of Sept 30, 2014, versus
RM4.61 million cash. Its net total
borrowings stood at RM44.93 million or just 0.19 times of its shareholders equity of RM238.72 million.
In terms of profitability, Meda
posted a net profit of RM5.26 million and earnings before interest,
taxes, depreciation and amortisation (Ebitda) of RM9.76 million for
the nine months ended Sept 30,
2014, on revenue of RM91.4 million, while Ecofirst posted a net
profit of RM848,000 and Ebitda
of RM585,000 in the six months
ended Nov 30, 2014, on revenue
of RM10.48 million.
Both property developers would
appear to be in need of land bank replenishment and more property projects to boost their earnings to another level. While this requires stronger
capital, the pooling of strength between both firms that share common
substantial shareholders could be
one of the solutions.
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.
Today’s Mall in Ulu Tiram up for sale
BY VA SA NTHA GANESAN
KUALA LUMPUR: Today’s Mall,
a shopping centre in Jalan Kota
Tinggi in Ulu Tiram, Johor has been
put up for sale by its owner with
an asking price of about RM180
million.
The owner of the mall, Today’s
Market (Ulu Tiram) Sdn Bhd, had
recently called for bids for the fiveyear-old property via valuation and
real estate firm LaurelCap Sdn Bhd.
Today’s Mall is a three-storey
building with a total gross floor
area built-up of 490,850 sq ft
and a net lettable area (NLA) of
360,610 sq ft. The mall is managed
by Today’s Management Sdn Bhd,
a subsidiary of Today’s Market (Ulu
Tiram).
LaurelCap’s managing director
Tan San Yew said that the owners
are keen to dispose the asset to
unlock the asset value. “The initial
investment, including land cost,
was RM120 million,” Tan told The
Edge Financial Daily via email.
The asset is a freehold property
which sits on 9.94 acres (4.02ha) of
land. Apart from the retail component, the mall also offers parking
which is spread over three floors
measuring 210,263 sq ft, with 800
car park bays.
The purchaser could opt to do
Today’s Mall in Ulu Tiram, Johor, currently enjoys a daily average visitorship of 7,000.
an asset enhancement or redevelop the property if they preferred.
Tan points out that the car park
block can be converted into retail
space if required, or redeveloped
in the future. Moreover, the vacant
commercial land adjacent to Today’s Mall is also for sale. The 4.45
-acre land belonging to Today’s
Market is priced at RM30 million.
The land, however, is not part of the
asset for which it is inviting bids.
A search with the Companies
Commission of Malaysia reveals
that Today’s Market (Ulu Tiram)
is 98% owned by Today’s Holding
Group Sdn Bhd and 2% by Tan
Chin Hong. Chin Hong and Lao
Geok Chin each owns 50% stakes
in Today’s Holding Group.
Today’s Mall also has a 35,000sq ft indoor water theme park. Malaysia is transforming into a theme
park capital, with a large number
of upcoming theme parks to be
located in Johor.
The current anchor tenant of
Today’s Mall is Giant Hypermar-
ket. The mall also houses a multi-screen cinema complex, multi-alley Tiram Bowl Bowling centre,
Super Star KTV karaoke and Mr
DIY.
LaurelCap’s Tan added that the
catchment areas of Today’s Mall,
apart from Ulu Tiram itself, are
townships in Johor South such as
Bandar Tiram (a Johor Land Bhd
development), Bandar Cermerlang
(a Crecendo Corp Bhd development), Kota Tinggi, Taman Desa
Jaya and Taman Tebrau.
Today’s Mall currently enjoys a
daily average visitorship of 7,000,
while the population catchment
within a 10km radius is 350,000.
The shopping centre is located 23
km from Johor Baru City Centre
and 1km from Ulu Tiram town.
The owner of Today’s Mall has in
the past developed Today’s Market
at Seri Alam, Masai. It also operates Tiram Mart which is a cash
and carry concept store.
The closing date for the bid for
Today’s Mall is March 18.
HOME BUSINESS 9
M ON DAY F E B RUA RY 23 , 2015 • T HEED G E FINA NCIA L DA I LY
Jiankun aims to return
to black in FY15
Developer in negotiations to jointly develop several projects in the Klang Valley
BY C H EN SHAUA FU I
KUALA LUMPUR: Loss-making
property developer Jiankun International Bhd (fundamental: 2.1; valuation: 0) is banking on four development projects in the Klang Valley
in the first half of 2015 to return to
profitability in its current financial
year ending December (FY15).
The group’s executive chairman
Datuk Donald Lim Siang Chai, in a
recent interview with The Edge Financial Daily, said Jiankun is now in
negotiations with a few companies
and landowners to jointly develop
several residential and commercial
developments in the Klang Valley.
“I believe we can confirm one
or two projects within the next few
months,” he said, adding that if
everything goes well, the group
should have four secured projects
in the first half of the year, followed
by related development launches
later this year.
Lim, the deputy finance minister between 2010 and 2013, also
said that demand for medium to
high-end properties is still there,
especially among foreign house
buyers who are attracted to buy
properties in Malaysia in light of
the weakening ringgit.
Hence, Jiankun, formerly Nagamas International Bhd, intends
to focus on such properties in the
Klang Valley this year.
“We are looking at Puchong and
Balakong and some terraced house
projects,” said Lim, adding that he
has just had a discussion with a
company on a commercial development in Rawang.
However, Lim declined to reveal
the gross development value of any
of these projects.
Interestingly, Jiankun, with a net
cash and cash equivalents of RM25
million as at end-2014, does not
have any land bank in the country at the moment and is talking
to several landowners to acquire
some parcels.
Lim said the group expects to
seal some deals soon. He also said
Lim: I believe we can confirm one or two
projects within the next few months.
Photo by Mohd Izwan Mohd Nazam
Jiankun is not opposed to partnering landowners for future developments, if the conditions are right.
“We want to buy land, but land
is not cheap. [If ] the landowners
don’t mind to joint venture with
us, they can make more money,”
Lim said.
Lim, who had headed three public listed companies before Jiankun
— Lim Kim Hai Holdings, Rahman
Hydraulic Tin Bhd and PJI Holdings Bhd — expects Jiankun to turn
around in FY15, with a projected
net profit of RM3 million.
Jiankun has been suffering losses since 2010 on the back of falling
revenue. It bucked the losing trend
in FY13 with a net profit of RM4.64
million, which was largely due to a
revaluation gain of RM11.09 million
from its investment properties. For
the cumulative nine months ended September 2014 (9MFY14), Jiankun lost RM1.64 million.
On the group’s fourth quarter
results for FY14, scheduled to be
released sometime this month, Lim
said he expects the company to still
record a loss, but a “minimal” one.
Lim said the company had carried out a restructuring exercise at
end-2014 to cut losses and clean up
its balance sheet to obtain financing for the group to move forward.
“In the past, we have not fared so
well — probably due to poor management and other issues affecting the company. This year, with
new shareholders coming in and
the restructuring completed, we
foresee that the company will be
able to move forward,” said Lim,
who first emerged as a substantial
shareholder of Jiankun in January
with an 8.91% stake after subscribing
to 13 million shares under a rights
issue with free detachable warrants.
However, Lim, who is now Jiankun’s largest shareholder with a
9.23% stake as at Feb 17, according
to Bloomberg data, was quick to
point out that Jiankun is not entering the Year of the Goat wearing
rose-tinted glasses.
He said the group is well aware
that the property market has been
cooling since last year and that with
the impending goods and services tax
(GST) and the difficulties to obtain
financing, Jiankun would be “cautious” in its approach to any project.
However, Lim pointed out that
the strong relationship with foreign
developers would be its strength
to gain a slice of the market in the
Klang Valley.
“We have good relationships
with developers and companies
from China, Taiwan [and] Hong
Kong. They have interest to move to
Malaysia, especially on Malaysia’s
My Second Home programme. On
this, I think we can capture some
[market] share,” Lim said.
He said Jiankun is actually the
namesake of Chinese property development firm Jiankun International China Ltd, which holds about
3% equity interest in the company,
which it intends to increase soon.
“We know our financials are not
as strong as other bigger developers, but we have a foreign partner
who has confidence in us — it will
come in to help us out, not only
financially but also in marketing,”
Lim said.
He suggested the government
lower the RM1 million minimum
to RM500,000 for foreigners to buy
condominiums and apartments in
Malaysia, though he opined that
the minimum should remain for
landed properties. “They are just buying the air
space. If we allow more of them
to buy properties, even if it is
RM500,000, they will then come in
and spend money here,” Lim said.
On its projects in China, Lim
said Jiankun had just completed 14
shops in Hui Yang, some 45 minutes
from Shenzhen, which are worth
more than RM20 million. Jiankun
is now looking for tenants.
The counter closed up two sen
last Wednesday to 31 sen, giving it a market capitalisation of
RM151.68 million.
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.
Dairy Australia
sees strong
demand in
Malaysia
BY H A R IZ A H H A N IM MO H A ME D
KUALA LUMPUR: The mushrooming number of international
cafes, bakeries and western food
stalls in the country in recent
years shows the rapid growth of
the local food industry and consequently stronger demand for
dairy-based products in Malaysia, says Dairy Australia.
Peter Myers, international
trade and development manager
of the national services body for
dairy farmers and the industry,
said he expects the export value from Victoria to the Malaysian market to grow 34% in the
2014/15 season over 2013/14.
“The higher projection for the
season is also partly due to the
Malaysia-Australia Free Trade
Agreement and Asean-Australia-New Zealand Free Trade
Agreement, which provide tariff-free status on liquid milk,
thus improving market access
for a range of products including
dairy,” he told Bernama.
Overall, Malaysia is among
Australia’s top five markets by
value for 2013/214 at A$217 million and fifth in terms of volume
at 51,501 tonnes.
Myers also highlighted the
fact that Australia’s products,
the majority of which are halal-certified and made to cater
for its Muslim population, have
contributed to the positive acceptance especially in Malaysia.
Exports to Malaysia accounted for 7% of Australia’s total exports of dairy-related products.
“There are bodies in every
state in Australia which are authorised by the Malaysian Islamic Development Department
(Jakim) to certify and inspect all
of the manufacturing facilities,
and many of them are specifically made to cater to the halal
market,” he said.
Dairy Australia is organising
a Southeast Asia programme
from March 22 to 28 to create
a better understanding of the
dairy making process across the
value chain. The inaugural programme, aimed at promoting the
quality and safety of dairy-based
products, is expected to enhance
market confidence in Australia’s
dairy industry. — Bernama
Job ads grew 48% in 2014, says recruitment firm
BY SU L H I A ZMA N
KUALA LUMPUR: Job advertisements
in Malaysia grew by 48% last year over
2013 following the government’s initiatives to strengthen infrastructure
and increase business operational
efficiency, said recruitment consultancy firm Robert Walters.
“Malaysia is one of the fastest
progressing markets in Southeast
Asia. The government’s initiatives
to strengthen infrastructure and increase business operational efficiency
continue to attract increasing numbers of multinationals to the country.
“This explains the encouraging
increases in job advertising volumes
we have seen across 2014,” said Robert
Walters’ Malaysia managing director
Sally Raj in the firm’s Asia Job Index
Q4 2014 (4Q14) report released last
Tuesday.
New shopping malls and the entrance of more international brands,
noted the recruitment consultancy
firm, created a strong 31% increase in
4Q14 over 4Q13 for retail job adver-
tising, particularly within the luxury
and mass label markets. Job advertising for marketing professionals grew
a significant 55% in 4Q14 from 4Q13
as more companies sought to attract
consumers and drive sales.
“IT candidates remained in demand, with the shortage of technically
skilled job applicants a key factor in
the 75% [year-on-year] rise [in 4Q14]
in job advertising,” the firm noted.
It also said that Malaysia’s emerging status as a key manufacturing
and logistics hub in Southeast Asia
drove job advertising in logistics up
33% in 4Q14 from the previous corresponding period.
“Companies are continuously trying to reach out to top talent in the
market. In order to ensure further
growth, hiring managers are producing very strong retention strategies to
keep their best performers,” said Raj.
“2015 will be an interesting year
ahead as businesses have already
expressed concern over the goods
and services tax (GST) to be implemented in April.”
I N V E ST I N G I D E A S 1 1
M ON DAY F E B RUA RY 23 , 2015 • T HEED G E FINA NCIA L DA I LY
I N S I D E R A S I A’S S TO C K O F T H E D AY
(ALL FIGURES IN MYR MIL)
LAND
LAND &
& GENERAL
GENERAL BHD
BHD
LAND & General (L&G) (Fundamental:
3/3, Valuation: 3/3) is one of Malaysia’s
oldest property companies, and is synonymous with the development of Bandar Sri
Damansara. The company was badly hit
during the 1997-98 Asian financial crisis,
and spent the next decade restructuring
its debts.
These restructuring efforts have since
borne fruit. After several years of large
losses, L&G has been consistently profitable since FY March 2006. From FY2010
onwards, its financial performance improved significantly as a strengthened
balance sheet, the entry of new substantial shareholders (the Mayland Group)
and the property market boom gave rise
to increased launches.
In FY2014, L&G’s revenue increased
more than two-folds to RM491.9 million
LAND & GENERAL BHD
LAND & GENERAL BHD
while its net profit jumped 71.3% to RM75.3
million. For 1HFY15, revenue grew 58.1%
to RM363.5 million y-o-y while net profit
rose 168.2% to RM89.9 million.
Its ongoing Elements@Ampang and Damansara Foresta projects are near completion and have locked in over 90% sales. Going forward, the company plans to launch
projects worth RM2 billion in the medium
term, comprising serviced apartments adjacent to Elements@Ampang, Damansara
Foresta Phase 2 and Tuanku Jaafar Homes.
While the property market is soft, L&G’s
existing projects are well located in matured areas. Looking much further out, it
has about 2,500 acres in Lembah Beringin,
north of Bukit Beruntung and Rawang.
L&G has a solid cash-rich balance sheet.
As at 1HFY2015, net cash stood at RM360.1
million, equivalent to 34 sen per share or
nearly two-third of its current share price
of 52.5 sen. The company started to pay
dividends in FY2014, amounting 2 sen per
share or a yield of 3.8%.
L&G is trading 7.9% below its September
2014 book value of 57 sen with a trailing
12-month P/E ratio of 4.2 times. However,
investor should note that there are 145.9
million of ICULS outstanding, which if
converted could potentially dilute earnings and net assets by 14%.
Insider Asia will feature a new stock pick on every alternate day.
Income Statement
Turnover
EBITDA
Depreciation
EBIT
Associates
Interest income
Interest expense
Extraordinary gain/(loss)
Pre-tax profit
Net profit - owners of company
Balance sheet
Fixed assets - PPE
Biological assets
Intangibles & goodwill
Cash and equivalents
Total current assets
ST borrowings
Total current liabilities
Total assets
Shareholders' fund
Long term borrowings
LAND & GENERAL BHD
RATIOS
DPS (MYR)
Net asset per share (MYR)
ROE (%)
Turnover growth (%)
Net profit growth (%)
Net margin (%)
ROA (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
FY12
FY13
FY14
FY2015Q2
31/3/2012
31/3/2013
31/3/2014
30/9/2014
130.80
49.32
1.31
48.01
(3.17)
3.92
1.50
(3.77)
43.50
30.37
216.29
83.64
1.66
81.98
(4.73)
3.91
1.72
(6.68)
72.76
43.97
491.92
178.87
2.15
176.73
(4.08)
4.81
2.06
(0.63)
174.76
75.33
210.29
107.14
0.62
106.53
11.08
1.02
0.26
(1.07)
117.29
60.89
70.08
0.01
122.80
329.05
6.34
84.66
391.30
282.45
51.17
72.36
0.01
172.37
400.67
9.53
89.30
460.35
327.02
57.23
82.46
0.01
183.76
543.11
12.84
109.96
632.37
481.79
7.26
82.26
0.01
443.45
860.95
0.11
212.30
856.71
606.26
83.22
FY12
FY13
31/3/2012
31/3/2013
31/3/2014
FY14 ROLLING 12-MTH
0.47
11.27
195.91
197.36
23.22
8.91
3.89
32.88
0.55
14.43
65.36
44.78
20.33
10.33
4.49
48.71
0.02
0.76
18.63
127.43
71.32
15.31
13.79
4.94
86.79
0.02
0.57
30.96
79.88
99.23
21.52
22.49
4.06
559.73
12 B R O K E R S’ C A L L
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Rise in Gas Malaysia’s
4QFY14 revenues, but
gross profit slumps
Matrix targets
RM700m worth
of sales for FY15
Matrix Concepts Holdings Bhd
(Feb 18, RM2.91)
Maintain buy call with and an
unchanged target price (TP) of
RM3.30. We maintain our TP at
RM3.30 (unchanged 30% discount
to revalued net assets valuation),
which implies an estimated financial
year ending Dec 31, 2015 (FY15E)
price-earnings ratio of 7.9 times.
Bandar Sri Sendayan remains the
largest contributor to the group. The
township launched RM575 million
worth of projects throughout FY14,
with average take-up rate of 76.1%
of its ongoing projects. Lower takeup was due to progressive take-up
rates from its new launches (Hijayu
3A, Phase 3 and 4).
Matrix plans to promote its private and international schools once
the final portion of the development
is completed in May 2015. In order
to break even, the group has to have
at least 1,000 students enrolled. The
management does not see difficulties
in reaching this figure by end-FY15.
We believe Matrix’s future earnings growth is sustainable given its
large land bank of more than 1,300
acres (526ha) to be developed across
eight years (estimated gross development value of RM6.4 billion).
For FY15 alone, the group targets to launch RM1.1 billion worth
of projects. With a high capital expenditure (capex) phase coming
to an end (development of school
and clubhouse), Matrix guided that
capex for FY15 would be low at approximately RM20 million to RM30
million. The management assured
that dividend policy of minimum
40% remains intact.
The group targets RM700 million
worth of sales for FY15 (flattish year-
Gas Malaysia Bhd
FYE DEC (RM MIL)
Revenue
Operating Ebitda
Net profit
Core EPS (RM)
Core EPS growth (%)
FD core PER (x)
DPS (RM)
Dividend yield (%)
EV/Ebitda (x)
P/FCFE (x)
Net gearing (%)
P/BV (x)
ROE (%)
% change in core EPS
estimates
CIMB/consensus EPS (x)
An aerial view of Hijayu.
2013A
2014A
2015F
2016F
2017F
2,299
254.8
165.9
0.13
8.6
21.77
0.12
3.83
14.69
36.08
(28.0)
3.92
16.3
3,170
293.0
203.8
0.16
22.9
17.28
0.10
3.34
12.60
19.93
(31.3)
3.71
19.3
3,468
229.9
142.3
0.11
(30.2)
23.71
0.10
3.18
15.99
26.38
(32.4)
3.65
13.0
3,351
276.2
177.0
0.14
24.4
19.69
0.13
4.00
13.38
27.29
(30.0)
3.59
15.9
3,451
284.5
183.1
0.14
3.5
19.12
0.13
4.18
12.99
23.19
(29.2)
3.51
16.1
-
-
(31.7)
0.68
(26.5)
0.81
-
Source: CIMB, Company reports
Matrix Concepts Holdings Bhd
FYE DEC 31 (RM MIL)
2013A
2014A
2015E
2016E
Revenue
Rep net profit
Norm. net profit
Norm. EPS (sen)
EPS growth (%)
Norm. PER (x)
FD PER (x)
Net DPS (sen)
Div yield (%)
BVPS (RM)
P/BV (x)
574.7
152.9
152.9
50.8
16.5
5.8
5.8
20.6
7.0
1.8
1.6
598.3
182.6
182.6
48.9
(3.7)
6.0
6.3
17.3
5.9
1.8
1.6
689.3
190.4
190.4
41.6
(6.5)
7.0
7.0
16.7
5.7
1.7
1.7
955.3
255.0
255.0
55.8
34.0
5.3
5.3
22.3
7.6
2.0
1.5
Source: HLIB
on-year) of which RM600 million
would be under residential and commercial projects, and the remaining
RM100 million for industrial land
sales. However, the management is
positive that Matrix would be able
to surpass the RM100 million sales
target for land sales.
To meet regulations for low-cost
housing developments, Matrix plans
to purchase a 20-acre piece of land
by end-2015 to develop 600 units of
landed low-cost houses across three
years. Due to lower house prices,
the management shared that the
group could incur losses of RM9
million cumulatively for the mentioned 600 units.
However, we do not see this as a
significant setback and this could
potentially be offset by the higher
margins fetched by its upcoming
projects which comprises more midto high-end developments. — Hong
Leong Investment Bank Research,
Feb 16
Gas Malaysia Bhd
(Feb 23, RM2.65)
Downgrade to hold rating with a
lower target price (TP) of RM3.03.
We cut our financial year ending Dec 31, 2015 (FY15) and FY16
earnings forecasts by 26% and 31%
respectively. Our previous optimism over the company’s outlook
was unjustified as we did not consider the fact that Gas Malaysia’s
sales volumes would grow beyond
the threshold for gas subsidy, resulting in declining margins.
Our TP is lowered to RM3.03,
based on 22 times FY16 price-earnings ratio as we widen the discount
to Petronas Gas Bhd’s valuation,
given the latter’s more secure
earnings underpinned by its fixed
agreements.
Gas Malaysia’s fourth financial quarter ended Dec 31, 2014
(4QFY14) core net profit of RM23.3
million took the full-year figure to
RM167 million, 13% short of our
and consensus forecasts. The main
culprit was a subpar gross margin
which fell about 6% due to the use
of liquefied natural gas (LNG).
Although a higher volume of gas
sold fuelled a 29.2% rise in 4QFY14
revenues, gross profit slumped
43% year-on-year (y-o-y). The
weaker gross profit was mainly
due to higher feedstock costs as
Gas Malaysia used LNG to supply
its customers.
Around 70% to 80% of Gas Malaysia’s gas volumes are subsidised
and priced at RM15.55 per mmbtu while LNG is priced at RM40 to
RM45 per mmbtu.
As a result of the weaker gross
margins, Gas Malaysia’s 4QFY14
core net profit fell by 41.6% y-o-y
and 56.6% quarter-on-quarter.
In tandem with the weak earnings, Gas Malaysia’s dividend payout ratio was reduced from 100%
in FY13 to 69% in FY14, equivalent to a nine sen total dividend
per share (five sen and four sen
interim dividends).
We are disappointed with the
lower payout ratio, though we recognise that the payout ratio has
been lowered to ensure that there
is sufficient cash to acquire feedstock, given the weak earnings
and uncertain gas cost outlook in
FY15. — CIMB Research, Feb 13
Titijaya’s balance sheet remains strong
Titijaya Land Bhd
(Feb 18, RM2)
Maintain buy call with a lower
fair value of RM3.10. We maintain
our “buy” call on Titijaya Land Bhd
with a lower fair value of RM3.10
per share (versus RM3.25 per
share previously) pegged to an
unchanged 25% discount to its
net asset value per share, following a downward revision to our
earnings forecast post its second
quarter ended Dec 31, of financial
year 2015 (2QFY15) results.
Titijaya recorded a 2QFY15 net
profit of RM18 million on the back
of RM66 million in revenue. This
took first half of FY15 (1HFY15)
earnings to RM41 million (+25%
year-on-year [y-o-y]). During the
quarter, property billings fell about
25% quarter-on-quarter as work
progress for some of its projects
was hampered by heavy rainfall
during the monsoon season.
Accordingly, we have lowered our FY15 (FY15F) net profit
forecast by 10% (RM81 million)
to mainly factor in the slower
property billings in 1HFY15. We
have also toned down our FY15F
new sales and pre-sales assumptions to RM700 million (previous:
RM1 billion) and RM530 million
(previous: RM500 million) respectively, in light of some nearterm challenges in the property
market. The group achieved new
property sales of RM275 million
in 1HFY15. Key contributors
include H20 Block A in Ara Damansara, Petaling Jaya, 3 Elements SoHo and SoFo in Puchong,
Subang Parkhomes Phase 1, Embun/Emery @ Kemensah in Selangor and Kuala Lumpur respective-
Titijaya Land Bhd
FYE JUNE (RM MIL)
Revenue
Core net profit
FD core EPS (sen)
FD core EPS growth (%)
Consensus net profit
DPS (sen)
PER (x)
EV/Ebitda (x)
Dividend yield (%)
ROE (%)
Net gearing (%)
2014
2015F
2016F
2017F
283.8
71.3
19.1
(11.2)
4.0
10.5
7.0
2.0
24.0
nm
371.9
80.8
21.6
13.3
5.5
9.2
6.8
2.8
19.0
12.5
461.8
97.2
26.0
20.3
6.5
7.7
5.5
3.3
19.5
6.2
625.3
116.2
31.1
19.6
7.5
6.4
4.5
3.8
19.9
4.8
Source: AmResearch, company report
ly, and its Klang-based projects.
Nevertheless, sequential earnings momentum is set to recover
moving into FY16F with net profit rising to RM100 million (+24%
y-o-y) as work progress improves
along with better weather conditions. This is anchored by a healthy
unbilled sales buffer of about
RM700 million or about 2.5 times
its FY14 property revenue.
More importantly, we understand that upcoming launches for
2015 will include Block B of its H20
project (RM191 million), Emporia Soho and Office Suites in Shah
Alam (RM225 million), and Emery
(RM98 million).
Furthermore, news flow momentum should be supported by
updates of its two prime pieces of
land in Kuala Lumpur Sentral and
Jalan Eaton in the coming months,
which mark its progression into the
high-end residential market.
Furthermore, Titijaya’s balance
sheet remains strong with a net
cash position of about RM28 million as at Dec 31, 2014. This puts
the group in a sweet spot to pursue
more value-accretive land bank/
projects in the near future. — AmResearch, Feb 17
B R O K E R S’ C A L L 13
M ON DAY F E B RUA RY 23 , 2015 • T HEED G E FINA NCIA L DA I LY
Worst is over for
Petronas Dagangan
Petronas Dagangan Bhd
(Feb 18, RM18.80)
Upgraded to hold with a lower
target price (TP) of RM17.70. Our
RM17.70 TP is based on 27 times
forecasted financial year ending
Dec 31, 2015 (FY15F) earnings per
share (EPS), which is its five-year
average price-to-earnings ratio
(PER).
We are cutting our FY15F/FY16F
earnings by 19% each, after adjusting for lower unit gross profit and
sales volume assumptions.
We think Petronas Dagangan
Bhd has seen its worst in its fourth
financial quarter ended Dec 31,
2014 (4QFY14).
Despite the 35-sen and 20-sen
retail price cut in January and February respectively, the actual impact will be minimal as Petronas
Dagangan’s actual selling price
(after duty) tracks Means of Platts
Singapore (MOPS) prices, which
stabilised in the last two weeks of
January.
Meanwhile, dividend payments
should hold up well, given the
group’s large cash pile (RM1.84
billion).
Petronas Dagangan’s retail segment’s margins suffered, due to
the steep fall in global oil prices
in 4QFY14.
This is because the government
levies a duty on the group, which
Petronas Dagangan Bhd
FYE DEC (RM MIL)
Revenue
Ebitda
Pre-tax profit
Net profit
Net profit (pre ex.)
EPS (sen)
EPS pre ex. (sen)
EPS growth (%)
EPS growth pre ex. (%)
Diluted EPS (sen)
Net DPS (sen)
BV per share (sen)
PER (X)
PER pre ex. (X)
P/Cash flow (X)
EV/Ebitda (X)
Net dividend yield (%)
P/Book value (X)
Net debt/equity (X)
ROAE (%)
2013A
2014A
2015F
2016F
32,342
1,428
1,109
812
812
81.7
81.7
(3)
(3)
81.7
61.5
482.2
21.7
21.7
13.2
12.5
3.5
3.7
0.0
16.9
32,341
1,049
710
502
502
50.5
50.5
(38)
(38)
50.5
60.0
478.3
35.1
35.1
6.9
15.5
3.4
3.7
Cash
10.5
31,092
1,240
920
650
650
65.5
65.5
30
30
65.5
49.1
485.0
27.1
27.1
18.3
13.3
2.8
3.7
Cash
13.6
31,899
1,314
970
686
686
69.0
69.0
5
5
69.0
51.8
502.9
25.7
25.7
16.2
12.4
2.9
3.5
Cash
14.0
Source: Company, AllianceDBS, Bloomberg Finance L.P.
is calculated based on difference
between the selling price and average MOPS price for the month.
This effectively tags the group’s
actual selling price for the retail
products to global oil prices, which
fell significantly in 4QFY14.
4QFY14 retail sales volume declined by 12% year-on-year (y-o-y),
mainly due to disruption from the
floods along the east coast of Peninsular Malaysia and increased regulatory enforcement which curbed
diesel sales in the border states.
Commercial sales volume also
fell by 8% y-o-y, due to lower diesel,
aviation fuel and bunker fuel sales.
— AllianceDBS Research, Feb 16
Batu Kawan hit by lower
plantation profits
Batu Kawan Bhd
(Feb 18, RM18.24)
Maintain hold call with an unchanged target price (TP) of
RM17.80. We retain our financial
year ending Sept 30, 2015 (FY15)
and FY16 net earnings forecast.
Hence, maintaining our TP
based on an unchanged priceto-earnings ratio of 12 times over
FY15 earnings per share estimates.
Batu Kawan’s first financial quarter ended Dec 31, 2014
(1QFY15) net profit of RM117 million came in within expectations,
making up 20% of our full-year
estimates.
Its 1QFY15 net profit came
down by 25% vis-à-vis 1QFY14
of RM157 million and lower net
margins from 6% to 4%.
This was largely attributed to
its lower plantation profit (-6.2%
year-on-year, [y-o-y]) caused by
weaker crude palm oil (CPO) and
rubber prices averaging at RM2,138
per tonne (-6.7% y-o-y) and RM6.6
per kg (-24.2% y-o-y) and reduced
crops for both CPO and rubber.
Its manufacturing division also
dipped by 55% y-o-y as the weak
oil price affected the fatty alcohol
and surfactant businesses.
Batu Kawan Bhd
FYE SEP (RM MIL)
Turnover
EBIT
Pre-tax profit
Net profit
EPS (sen)
PER (x)
DPS (sen)
Div yield (%)
NTA/share (RM)
Margins
Ebit margin (%)
Pre-tax margin (%)
Effective tax rate (%)
ROE (%)
ROA (%)
Net Gearing (x)
Growth ratios
Turnover (%)
Ebit (%)
Pre-tax profit (%)
Net profit (%)
2012
10,403.7
126.7
625.6
605.7
145.5
12.2
65.0
3.7
8.61
2014
2015E
2016E
9,147.3 11,130.0
1,302.0 1,488.1
1,199.8
1,317.7
917.7
991.7
233.6
265.1
7.6
6.7
50.0
55.0
2.8
3.1
17.80
19.81
2013
12,750.1
840.4
763.1
574.3
148.5
12.0
31.9
1.8
15.37
14,317.9
948.8
864.1
650.3
169.0
10.5
36.1
2.0
16.34
1.2
6.0
2.2
16
16
net cash
14.2
13.1
19.4
12
8
0.1
13.4
11.8
21.6
12
8
0.2
6.6
6.0
21.6
7
4
0.1
6.6
6.0
21.6
7
5
0.1
(5)
36
(20)
(22)
(12)
928
92
52
22
14
10
8
15
(44)
(42)
(42)
12
13
13
13
Source: BIMB Securities
However, quarter-on-quarter
Margins from the manufactur(q-o-q) net profit improved by 29%, ing division were seen to increase
thanks to contributions from its from 0.8% to 3.1% q-o-q. — BIMB
manufacturing division.
Research, Feb 17
Lekir Bulk Terminal.
Integrax’ earnings to be unexciting
Integrax Bhd
(Feb 18, RM2.81)
Downgraded to take profit with a lower target price
(TP) of RM2.46. As earnings
should be unexciting until there
is a major breakthrough to secure a sizeable customer (an
uphill task), we advise minority shareholders to take profit
as the share price is currently
above the offer price of RM2.75.
This is to avoid the risk of
the deal collapsing, as it is unlikely that the offer price will be
raised to a level that guarantees
a successful takeover.
As such we change our call to
“take profit” (from buy/accept
offer) with our TP at RM2.46.
Financial year ended Dec
31, 2014 (FY14)’s RM38 million earnings (-7% year-on-year,
[y-o-y]) were in line within our
estimates.
Despite volume rising 3.1%
y-o-y, the lower earnings were
due to higher depreciation costs
and lower associate earnings
contributions. A higher dividend for FY15 (7.5 sen) was also
announced (FY14: 5 sen).
We revisit our earnings model, now factoring in the revenue stream expiry from the Jetty Terminal Usage Agreement
1 (JTUA1) facility payment in
FY14.
The JTUA comprises payments from fixed facility, base
operating, and tonnage handling (dependant on agreed
tariff per tonne).
The fixed facility payment
revenue reflects the compensation for capital expenditure
(capex) incurred for the facilities divided over 13 years of
equal payments annually.
We estimate this amount to
about RM36.1 million per year
for JTUA1.
This is derived by multiplying the FY12 coal volume handled, with the implied average
handling charge of RM7.78 per
tonne (disclosed in the JTUA2
circular for a proposed related-party transaction dated Aug
9, 2012) and subsequently deducting this amount from its
total revenue.
This amount will completely
vanish in FY15, although this
could partly be cushioned by
the revenue contribution from
JTUA2.
This is slated to start contributing in March 2015 and
we estimate it to total RM27.2
million.
To conclude, we expect FY15
revenue/earnings to weaken
11.9%/10.1% respectively.
We do not argue that Integrax’s replacement cost of its
asset reflecting revalued net assets valuation could amount to
the independent advisers’ view
of RM3.60-RM3.62 per share.
We opine that the earnings
outlook does not justify this.
Post earnings revision, we value
it at RM2.46 per share (9.8% cost
of equity on its free cash flow to
equity). — RHB Research, Feb 17
Integrax Bhd
FYE DEC (RM MIL)
2013
2014
2015F
2016F
2017F
Total turnover
93
100
88
94
116
Reported net profit
40.9
38.7
34.2
36.0
43.2
Recurring net profit
40.9
38.0
34.2
36.0
43.2
Recurring net profit
(1.9)
(7.0)
(10.1)
5.4
20.1
growth (%)
0.14
0.13
0.11
0.12
0.14
Recurring EPS (RM)
0.05
0.05
0.08
0.08
0.10
DPS (RM)
20.6
22.2
24.6
23.4
19.5
Recurring PER (x)
1.36
1.31
1.29
1.27
1.24
P/BV (x)
21.2
19.7
29.3
23.6
18.4
P/CF (x)
1.6
1.8
2.7
2.8
3.4
Dividend yield (%)
12.9
11.1
13.3
12.6
10.1
EV/Ebitda (x)
6.8
6.1
5.3
5.5
6.4
ROAE (%)
Net debt to
Net cash Net cash Net cash Net cash Net cash
equity (%)
Our vs consensus
(49.5)
(46.8)
(36.1)
EPS (adjusted) (%)
Source: Company data, RHB
14 H O M E
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Two women continue
quest for MH370 answers
Hopeful plane is found this year for answers and closure
PETALING JAYA: It is close to one
year since the disappearance of
Malaysia Airlines flight MH370 and
two women continue to seek answers, as they still hold out for all
possibilities to the mystery they call
greater than the Titanic.
Amanda Lawton and her maternal aunt Jeanette Maguire spoke to
the Herald Sun in Australia over the
emotional struggle and the search
for truth amid all the rumours, conspiracy theories, and misinformation on the missing plane.
Lawton is the daughter of MH370
passengers Bob and Cathy Lawton,
and she went on her own journey
late last year to follow the path that
her parents had planned to complete all those months before.
After confronting her fear of
flying, something she shared with
her father, Lawton was able to get
to Kuala Lumpur and Beijing during her four-month trek. And every
time she was in flight, her aunt
tracked her movement on FlightAware.
According to the Australian daily, Lawton met relatives of MH370
passengers in the two cities and
compared notes on the various sinister scenarios that they had heard
or read about the missing plane.
She returned home shortly before Christmas, and during her time
away, Maguire’s continued research
into what could have caused the
plane to turn left from its original
path brought her to the conclusion
that there could have been some
“foul play”.
She shared with her niece the
A member of the search-and-rescue team from Singapore scanning the ocean for any
trace of the missing flight MH370 last year. Almost a year after the plane vanished,
Lawton and Maguire are still struggling to overcome the loss of their loves ones. Photo
by AFP
briefing session by the Australian
Transport Safety Bureau (ATSB)
that she attended in early December, and the questions she fired
at them.
Maguire told the Herald Sun that
MH370’s left turns convinced her
of cockpit choices, but on where
the plane ended its journey, she
wondered if there could have been
a struggle.
It was a couple of days after
Christmas, though, that a fresh
flurry of ideas as to the outcome
of MH370 hit them.
However, it took another tragedy for this to happen: Indonesia
AirAsia flight QZ8501, en route to
Singapore from Surabaya, crashed
into the Java Sea on Dec 28.
The Herald Sun reports Lawton
describing the sight of oil slicks as
a kind of flashback, as she remembered news of oil slicks in the South
China Sea where MH370 was originally thought to have gone down.
Maguire, too, started comparing
the search and discovery of Flight
QZ8501 for clues. She realised that
there was little wreckage on the
surface from the disaster.
“The plane was found upside
down, with the cargo on top. And
this kept the fuselage weighed
down. You’re thinking, well, this
could have happened to MH370
too,” she told the Herald Sun. Still,
with the closure to the QZ8501 tragedy since, for Lawton and Maguire
and other MH370 families affected,
the search goes on, as they look to
separate emotion and logic getting
to the truth on the fate of MH370.
In the meantime, their lives go
on as normal as it possibly can but
with major changes to certain routines.
According to Herald Sun, Maguire, who has two young sons, said
although she decided to return
to work a week after the plane’s
disappearance, her niece is still
on hiatus, not returning to her job
at a state government agency in
Queensland.
Aside from their own continued
research and discussions, there is
also the weekly calls and emails
from both Malaysia Airlines and
the ATSB to update families of any
new development.
Maguire, who is 20 years older
than Lawton, shared the words of
ATSB head Martin Dolan, who had
told her with “cautious optimism”
that “we will find something in the
search area by the end of May.” She
accepts, though, that the evidence
may take far longer to find.
“After all, it took seven decades
before scientists found the Titanic,” Maguire said, suggesting that
equipment may yet be developed
to aid in the search for the missing plane.
Still, Maguire is hopeful the
plane is found this year for the answers and closure the family needs,
the Herald Sun reports.
In the meantime, she admits to
staring at the Indian Ocean whenever she sees a map or globe. — The
Malaysian Insider
Bersih to EC: Stop delineation inquiry
KUALA LUMPUR: Electoral watchdog Bersih 2.0 wants the Election
Commission (EC) to stop local
inquiries into the new electoral
boundary in Sarawak pending the
outcome of PKR’s judicial review
on the constitutionality of the EC’s
proposal.
The group also questioned the
EC’s determination in holding the
local inquiries today despite knowing that the judicial review could
see the entire redelineation proposal declared null and void.
“To hastily schedule the inquiry within three weeks of the
one-month objection period suggests that the EC is disrespectful
of the judicial review process and
couldn’t care less about wasting
the time, energy and resources of
all parties in the event of a “null
and void” judgement, said Bersih
in a statement yesterday.
“To save the time, energy and
resources of all parties including
the court, the EC should instead
consider withdrawing the first display notice and redo the process
constitutionally, whereupon See
(Chee How) may then withdraw
his application,” said Bersih.
Kuching High Court judge Yew
Jen Yie had on Feb 17 granted leave
for Sarawak PKR vice-chief See’s
judicial review application.
The court had set March 19 for
further mention and to set a date
to hear the review filed by the Batu
Lintang assemblyman, and a voter
in Ulu Baram named Paul Baya.
In their affidavit, the two had
claimed the publication, or notification of the EC to review the
delineation, was not in compliance with the provisions of the
13th Schedule of the Federal Constitution, and that the EC did not
have the power to make changes
to parliamentary consitutuencies
in the delineation exercise.
Both are seeking court orders
to declare the exercise “null and
void and of no effect”.
Bersih warned yesterday that
the EC’s refusal to halt its inquiry
sessions may result in applications
for injunctions.
It also criticised the EC for setting “unreasonable restrictions” on
the inquiry, including a maximum
of three spokespersons, a maximum of 20 persons in attendance,
and a slot of only 30 minutes, allowing no legal representation and
media presence, banning cameras
and mobile phones.
“The EC’s unreasonable restrictions are defeating the purpose of
meaningful public participation in
the redelineation exercise and it
may again be challenged in court,”
said the group.
Bersih said the EC should have
fulfilled Section 4 of the 13th
Schedule by making sure the notice was published in “at least one
newspaper circulating in the constituency”, which also states “the
effect of their proposed recommendations”.
It added that the EC’s proposal
must abide by Section 2 of the 13th
Schedule, especially sub-section
2(c), which requires constituencies within the same state to be
“approximately equal” with exceptions for low-density areas (termed
“a measure of weightage for area”
and also sub-section 2(d), which
stresses “maintenance of local ties”.
“Bersih is willing to meet the
EC to discuss how constitutional
requirements should be met in
the redelineation,” said the group.
Last Friday, See objected to EC’s
apparent rush to hold the inquiries, saying that there were no written notices in the media and that
complainants were only informed
by phone.
He also questioned the EC’s decision to go ahead with the inquiry,
despite the Kuching High Court
still waiting to hear the party’s application for a judicial review on
the redelineation exercise. — The
Malaysian Insider
IN BRIEF
12-year-old boy drowns
in hotel swimming pool
in Penang
GEORGE TOWN: A 12-yearold boy drowned in a swimming pool of a hotel in Tanjung Bungah here yesterday.
Ong Jing Jie was with his
parents in a pool meant for
adults at about 10am when
the incident occurred about
30 minutes later. Northeast
district police chief ACP Mior
Faridalathrash Wahid said
a swimming coach at the
pool had earlier reprimanded the victim’s parents but
his comments were ignored.
“According to the child’s parents, the incident happened
so fast they did not realise he
had drowned,” he said in a
statement here yesterday. He
said the family from Skudai,
Johor had come for a holiday in Penang. The body was
sent to the Penang Hospital.
— Bernama
Car goes up in flames
in Senawang
SEREMBAN: An unoccupied Kia Sorento car burst
into flames in the parking lot
near a building in Senawang
Business Park near here early
yesterday morning. An eyewitness, Mohd Faeizal Aidel
Rosli, 22, said he and four of
his colleagues who worked in
an insurance company on the
top floor of the building heard
a loud explosion at 4am and
rushed downstairs to check
what was happening. He told
Bernama: “My friends and I
tried to put off the fire with
water and fire extinguishers but were not successful.
Then I immediately contacted the fire department.” —
Bernama
Smoke sends ferry
passengers into a frenzy
LANGKAWI: About 400 passengers feared the worst when
smoke billowed from a ferry’s
toilet after a smoker had failed
to extinguish a cigarette butt
while the vessel was at sea
between the island and Kuala
Kedah yesterday. It was learnt
that the lit butt had burnt the
toilet seat before smoke began emerging from the twodecked vessel. The ferry returned to the jetty before the
passengers were transferred
to another ferry to continue
their journey to Kuala Kedah.
— Bernama
Search for man feared
drowned widens
KOTA BARU: The search for
a man feared drowned while
bathing in Pantai Irama, Bachok near here last Thursday
has been extended by 4km
from where the incident occurred. Bachok Fire and Rescue Department operations
chief, senior fire officer Abdul
Razak Abdul Rahman said the
search for Mohd Firdaus Mat
Adam, 24, would cover up to
Kuala Besar, Pantai Cahaya
Bulan here. — Bernama
H O M E 15
M ON DAY F E B RUA RY 23 , 2015 • T HEED G E FINA NCIA L DA I LY
‘Minister deluded over
education standards’
Parents’ groups say we need to compare our students to the rest of the world
BY A NI SA H SHU K RY
KUALA LUMPUR: Parents’ groups
have castigated Second Education
Minister Datuk Seri Idris Jusoh for
claiming that Malaysia’s higher education system is on par with those
in the United Kingdom, Australia
and Germany.
They said Idris seemed unable
to comprehend that there were numerous reasons why foreign students chose to pursue their studies
in Malaysia, and it was not because
the country’s higher education was
“world-class”.
Shamsuddin Hamid, the founder
of the Association of Parent Groups
in Reforming Education (Aspires)
coalition, said many of Malaysia’s
private higher education institutions employed specific tactics for
higher enrolment.
“They can lower their fees, offer
a number of specialised courses.
It’s not that difficult to do. So to say
that our higher education system is
on par with those countries just because of high foreign student enrolment is just stretching it a bit too far.
“We must look at the entire picture. We have to look at the accomplishment of our students in Malaysia compared to the rest of the
world. He is being self-delusional
and is trying to deceive the public
on the state of higher education,”
said Shamsuddin.
Mak Chee Kin, the chairman of
the Malacca Action Group for Parents in Education (Magpie), said
Idris should study why foreign students preferred Malaysia, and suggested it may be due to the lax immigration process.
He also wanted to know which
countries the foreign students came
from.
“Maybe Malaysia is an easy place
for them to come to. In fact, there
have been many cases of foreigners
coming here with student visas, only
to pursue other activities.
“But that definitely doesn’t mean
Malaysia is on par with universities
in Australia, the UK and Germany
in terms of quality. That is definitely
ridiculous,” said Mak.
He added that Universiti Malaya’s
(UM) 2014 QS World Ranking of 151
was not something to be proud of,
despite Idris insisting otherwise,
and that the facilities provided in
local varsities were way behind their
foreign counterparts.
Parent Action Group for Education (Page) chairperson Datin Noor
Azimah Abdul Rahim said Idris
was being somewhat misleading,
as it was only last year when he had
admitted that Malaysia’s education
system was below par.
“Surely we haven’t solved all the
problems and become on par with
the rest of the developed world within just a year? If he’s talking about
world class, we definitely aren’t
world class yet.” said Azimah.
“But I also think he’s not totally
incorrect, because those countries
do have universities which are not
ranked in the top 400,” she added.
Azimah said one of the reasons
foreign students flocked to Malaysian higher education institutions
was because English was the medium of instruction here, adding that
this should be an impetus for the
education ministry to allow school
students to learn mathematics and
science in English.
“If our universities didn’t offer
English, they wouldn’t come here.
That’s why we are pressing for our
students to be more proficient in
English in schools, particularly in
science.
“There’s no use offering all these
courses if our students can’t enrol
in these universities. If we make our
students more competitive, then we
will have even more enrolment from
foreign students,” she said.
On Saturday, Bernama reported
Idris as saying that Malaysia’s higher
education is now on par with those
of developed nations. He said this
was proven by the fact that 135,000
foreign students made up 10% of
students at national higher educational institutions in the country.
“Now, foreign students are confident of studying in Malaysia compared with previously, more so with
the strong economic development,
and the stable and well-administered government in the country,”
Idris had told reporters in Jerteh.
He said Malaysia was now the
ninth most popular destination for
foreign students in various fields
including engineering, agriculture,
and information and communication technology.
Idris said UM was now ranked
151 (up from 167) in the 2014 QS
World Ranking, while four other
Malaysian institutions that had improved their ranking compared with
last year were Universiti Kebangsaan Malaysia at 259 (269 in 2013),
Universiti Teknologi Malaysia at
294 (355 in 2013), Universiti Sains
Malaysia at 309 and Universiti Putra
Malaysia at 376.
Idris said the countries that had
started sending their students to
study in Malaysia included Australia
and China. He urged the public not
to be influenced by those whom he
said were tarnishing the government
by saying that the education system
in the country was still backward. —
The Malaysian Insider
Land clearing,
logging among
causes of
Kelantan floods
GUA MUSANG: Gua Musang
Member of Parliament, Tengku Razaleigh Hamzah does not
exclude the possibility that uncontrolled land clearing for
agriculture and logging activities were the main causes of
the massive floods which hit
Kelantan in December.
He said these activities had
resulted in the riverbeds of several main rivers, especially Sungai Belatop in Lojing, rising
and overflowing in heavy rain
during the monsoon season.
“I don’t dismiss the possibility that these activities had
caused the recent major floods.
Residents in low-lying, foodprone areas in Hulu Kelantan
must be prepared to face the
monsoon in future.”
He said this in his speech at
the Sekolah Kebangsaan (SK)
Sri Wangi 2, Parent-Teacher
Association annual general
meeting, here, yesterday.
Tengku Razaleigh, who is
also Gua Musang Umno division chief, said the Orang
Asli in several villages in Pos
Brooke and Lojing had previously voiced their concerns over
uncontrolled land clearing.
“Their worries turned to reality when the massive flooding occurred. We had also not
expected the flood waters to
rise so fast,” he said.
Tengku Razaleigh said the
authorities should in the future closely monitor such land
clearing and logging activities
so as to protect the environment. — Bernama
DAP: What world-class universities?
KUALA LUMPUR: Second Education Minister Datuk Seri Idris
Jusoh is fooling himself with his
claim that Malaysia’s higher education system is on par with that
of developed nations such as the
UK, Australia and Germany, a DAP
lawmaker said yesterday.
Dr Ong Kian Ming said the proof
Idris gave to back his claim — that
foreign students made up 10% of students at national higher educational
institutions here — was laughable.
“To think that our education system is world class and on par with
countries like the UK and Australia
just because we have a large number of foreign students is dangerous, especially coming from the
Education Minister.
“By this reasoning, this means
that if we have a larger percentage
of foreign students in our universities, our education standard has exceeded that of the UK and Australia,”
Ong said in a statement yesterday.
He said decisions made by foreign students in studying abroad
were governed by a number of factors including the cost of a programme, the cost of living, the entry
requirements, the availability of
programmes, the medium of instruction, the ease of getting stu-
Universiti Malaya is the only Malaysian
university ranked in the Top 200 at 151.
dent visas, the availability of scholarships, the prestige of a university,
the number of places available to
foreign students and the quality
of teaching.
He added that according to the
2014 QS World University Rankings,
Malaysia was trailing far behind
universities in the UK and Australia.
Universiti Malaya is the only
Malaysian university ranked in the
Top 200 at 151, compared with 19
UK universities, eight Australian
universities and three German universities placed within the top 100,
said Ong.
“Unless the minister has access
to the 2015 QS rankings and knows
in advance that it shows a significantly different ranking for Malay-
sian universities, it seems silly to
conclude that our higher education
standards are on par with the UK,
Germany and Australia, based on
the rankings which the minister
had refered to in the Bernama report,” he said.
The Serdang MP said that if Idris truly believed that the nation’s
education system was on par with
those countries, he should produce
a list of foreign students who were
accepted to Cambridge or Oxford
University, Imperial College, the
University College of London, or
Australia National University but
had given up their places to study
in Malaysia.
“I am in no way trying to put
down our local universities. For
some programmes, such as medicine and law, it is probably more
difficult to gain entry into these programmes in our public universities
compared to foreign universities.
“But even our local universities
would have to admit that they had
much progress to make in terms
of teaching quality, infrastructure
and funding for research before
they reached the standards of universities in the UK and Australia.”
Ong said the second education
minister was doing a great disservice to local universities by “unfairly” comparing them to other
universities in developed countries
as they had a longer history, higher
per student funding and more established research infrastructures.
“Those are standards which our
universities should aspire to but
have not yet reached,” he said. —
The Malaysian Insider
16 H O M E
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Gobind: Hudud bill means
the end of PAS in Pakatan
It amounts to open move against Pakatan Rakyat’s common policy
KUALA LUMPUR: PAS will no
longer be seen as part of Pakatan
Rakyat if it tables the hudud bill
in the Kelantan State Assembly
next month as it does not have the
backing of the coalition, warned a
DAP lawmaker.
Puchong MP Gobind Singh
Deo said that should PAS carry on
with the tabling of the hudud bill,
it would amount to an open move
against the Pakatan Rakyat common policy framework.
“In such an eventuality, those
leaders in PAS who are behind the
move must then be brave enough to
acknowledge that they have pushed
PAS to part ways with Pakatan Rakyat and put into question its credibility in terms of projecting itself
as a party which is focused on and
wants to work towards strengthening Pakatan Rakyat,” he said in
a statement yesterday.
Gobind, who is head of DAP’s
legal bureau, urged the PAS leadership to show commitment and
Gobind said the tabling of the hudud
bill would go against the agreement
reached by the Pakatan leadership.
Photo by The Malaysian Insider
respect the decisions made by the
Pakatan leadership council.
“The tabling of this bill will also
go against the agreement reached in
the last Pakatan leadership meeting
where it was made clear that there
should be further discussions between all three parties before any
further steps are taken on the matter.”
He also said PAS should not warn
the DAP to keep out of the affairs of
Kelantan.
He said PAS must remember that
for as long as it chooses to remain in
Pakatan Rakyat, DAP not only has
the right but is also duty bound to
ensure that PAS does not act in any
manner which undermines Pakatan’s common policy framework.
In late December Gobind had
warned that Pakatan would have to
suspend working ties with PAS if the
Kelantan government goes ahead
with its plan to amend the Syariah
Criminal Enactment that will pave
the way for hudud implementation
in the state.
He said Pakatan which consists
of PKR, DAP and PAS must demonstrate its commitment to uphold the
common policy framework, even if
it means suspending or cutting ties
with any partner who threatenes the
spirit of the loose coalition.
“We must inspire confidence and
demonstrate our commitment to
the common policy framework in
Pakatan. We must be firm and show
that it is something that cannot and
must not to be taken lightly,” Gobind
had said.
Kelantan is proposing changes
to the law ahead of its plan to table
a private member’s bill in Parliament to facilitate implementation
of hudud in the state.
Hudud covers crimes in Islamic
law such as theft, highway robbery,
adultery, alcohol consumption and
sexual intercourse outside marriage.
Those convicted could face punishment such as amputation of
limbs, flogging and death by stoning.
However, the tabling of the bill
was delayed due to the massive
floods that hit the east coast states
in December. The bill is now scheduled to be presented in the legislative assembly on March 18. — The
Malaysian Insider
PAS, Umno must unite, says ex-CJ
KUALA LUMPUR: PAS and Umno
must unite to save Barisan Nasional
(BN) should Pakatan Rakyat win the
14th general election, former chief
justice Tun Abdul Hamid Mohamad said yesterday.
“If the BN federal government
falls after the 14th general election, PAS should join BN so that it
is saved at the federal level,” wrote
Hamid in a column in Mingguan
Malaysia yesterday.
“PAS must realise that the cooperation between DAP and PKR will
sacrifice the interests of the Malays
and Islam,” he said.
Hamid claims PAS and Umno’s
ideologies are similar, and the only
thing preventing the two parties
from working together is their respective leaders’ fears that it would
rob them of their interests.
“Umno and PAS leaders who
are both Malays and Muslims, who
would both gain and suffer [the
same things], must focus their attention on the big threat before
them ...
Filepic of Hamid (centre) with Perkasa president Datuk Ibrahim Ali (right) and vicepresident Datuk Abdul Rahman Bakar at the Malay group’s national convention last year.
Hamid claims PAS and Umno’s ideologies are similar. Photo by The Malaysian Insider
“They should set aside their differences that were created for political purposes, and focus their
efforts into saving the Malays and
the position of Islam.”
Hamid said that PAS need not
join BN yet, but should leave Pakatan and contest in the next election
on its own and govern the states it
wins by itself. He suggested that in
cases where a state may fall to DAP
and PKR, the Islamist party should
work with BN to form a unity government.
“At the federal level, PAS can
choose to join the Cabinet and sit
with the BN MPs in Parliament. Or
they can choose not join the Cabi-
net and sit separately in Parliament
like other independents, but in issues that involve the interests of the
Malays and Islam, they will support
the BN government.
Attempting to show similarities
between the two parties, Hamid
said many of Kelantan’s syariah
laws were actually enacted during
BN’s time.
“If Kelantan is ‘more Islamic’
than other states and the Kelantanese want an ‘Islamic’ nation, then
why are the Kelantanese the highest number of people who leave
their state to earn a livelihood?”
he added.
“Umno must also tackle the perception that its leaders are corrupt,
it is the main factor why Malays
‘hate’ Umno, whether or not that
perception is correct.”
Hamid reminded the public
that under BN’s rule, the country
has been peaceful and harmonious, and everyone enjoys a high
standard of living. — The Malaysian Insider.
Monitor children’s activities for deviant behaviour, parents told
KOTA KINABALU: Parents should
constantly monitor their children’s activities to prevent them
from getting involved in organisations like the Islamic State in
Iraq and Syria (IS) and the Sabah,
Sarawak Keluar Malaysia separatist group.
Deputy Defence Minister Da-
tuk Abdul Rahim Bakri said some
young people in the country are
influenced by the activities of these
groups and are now facing legal
action.
“Their ability to recruit young
people with their false struggles
is worrying. To date, there have
been several of our young people
who not only joined them in the
IS territories as supporters but
also became directly involved in
military activities such as suicide
bombing.
“Going by the experience of
neighbouring countries, we should
also give the separatist group serious attention,” he said in a state-
ment here yesterday.
He gave the assurance that
monitoring bodies or intelligence
units from the police force and the
military had the ability to monitor
the movements of these groups
and would not let them grow to
the point they could threaten the
security of the nation. — Bernama
Body of doctor
who died four
years ago to
be exhumed
today
BY V A N B A L AG A N
KUALA LUMPUR: More than four
years after a doctor died under mysterious circumstances in Langkawi,
his remains will be exhumed today
for a second post-mortem to determine the cause of death.
His family’s lawyer M Visvanathan said the body of Dr Sebastian
Joseph would be exhumed at the
Christian cemetery in Shah Alam
in the presence of Australian pathologist Dr Richard Byron Collins,
a local pathologist, police, local government officials as well as church
representatives.
“Depending on the condition of
the body, Dr Collins must conduct
the autopsy at the Universiti Malaya
Medical Centre on Monday [today]
as the Malaysian Medical Council
has only given him a practising certificate for a day only,” Visvanathan
told The Malaysian Insider.
He said an application to conduct
a second post-mortem after exhuming a body is rare in Malaysia.
“The family is hoping the exhumed remains will be sufficient
to determine the cause of death and
to hold an inquest,” he added.
The Alor Setar High Court last
month granted an application by Dr
Sebastian’s mother, Santaamal Philip, for an inquest to determine how
her son, a medical officer at the Kuah
government clinic in Langkawi, died.
DPP Mohamad Rizal Fadzil and
Visvanathan came to a compromise
that the post-mortem will be jointly handled by the pathologist of the
family’s choice, Dr Byron Collins and
local pathologists.
The family would undertake all
costs related to the exhumation
and post-mortem.
Dr Sebastian, 30, was found dead
in his government quarters in Padang Matsirat on Nov 17, 2010.
He was said to be in a kneeling
position with his hands clenched.
In her application to the court in
November last year, Santaamal said
the post-mortem on Dr Sebastian
was conducted at Langkawi Hospital by Dr Muhamad Arif Mohamad Rasat but the report stated the
cause of death as “unascertained”.
She said the doctor who conducted the post-mortem was not
a pathologist but a general practitioner.
According to Santaamal, a
month before her son’s death, she
had visited him to help him furnish
his five-bedroom quarters, and that
he had shared some “troubling” information of what was going on at
his workplace.
Declining to elaborate, Santaamal only said it had to do with the
number of the patients at the health
clinic being prescribed Panadol for
all sorts of ailments.
Dr Sebastian had also told his
mother that various types of medication prescribed by him were not
available in the clinic pharmacy, and
that he wanted to report the matter to
his superior. — The Malaysian Insider
H O M E B U S I N E S S 17
M ON DAY F E B RUA RY 23 , 2015 • T HEED G E FINA NCIA L DA I LY
WEEK
IN FOCUS
1
Kelantan State Treasury Department’s state treasurer
Abdul Ghafar Sulaiman (left)
receiving a mock cheque of
RM100,000 from Gamuda
Bhd chairman Datuk Mohammed Hussein at Menara
Gamuda in Petaling Jaya on
Feb 13.
2
Konsortium Transnasional
Bhd chairman and managing director Tan Sri Mohd
Nadzmi Mohd Salleh (left)
and executive director and
chief operating officer Tengku Mohd Hasmadi Tengku
Hashim at the group’s extraordinary general meeting
in Kuala Lumpur on Feb 17.
— Photo by Sam Fong
AWARDS NIGHT... (From left) Tian Siang Premium Auto Sdn Bhd (Butterworth)’s Tan Ka Kin Kin, BMW Group Malaysia managing director Alan Harris, Regas Premium Auto
Sdn Bhd’s Simon Wang, and Auto Bavaria Malaysia (Kuala Lumpur)’s Jeffrey Gan (representing Low Yuan Lung) at the BMW Dealer Awards Night 2014 in Kuala Lumpur recently.
1
2
3
Hyundai-Sime Darby Motors was awarded The BrandLaureate President’s Award
2014/2015 in Automotive (sedan) for the first time after
winning The BrandLaureate BestBrands in Automotive (sedan) consecutively
in 2011/2012 and 2013/2014.
(From left) The BrandLaureate board of governors Tan
Sri Datuk Dr Augustine Ong
Soon Hock, president Dr KK
Johan, Hyundai-Sime Darby
Motors managing director
Lau Yit Mun, Malayan United
Industries Bhd chairman and
chief executive officer Tan Sri
Dr Khoo Kay Peng, and The
BrandLaureate adviser Datuk
Wira Jalilah Baba.
4
Allianz Malaysia chief executive officer Zakri Khir (left)
and Jabatan Keselamatan
Jalan Raya Malaysia deputy
director-general Haris Lakar
(right) with a motorcyclist
who received a new helmet in
conjunction with their road
safety campaign for the Lunar
New Year at the Sungei Besi
toll plaza in Kuala Lumpur
on Feb 16.
5
3
4
SMTrack Bhd chief executive
officer Yow Lock Sen (left)
and Sino Renewable Energy Corp managing director
Zheng Quan Jiang at a press
briefing in conjunction with
the signing of an agreement
involving the export of palm
oil sludge or palm acid oil
in Kuala Lumpur on Feb 13.
6
Malaysia Building Society
Bhd (MBSB) chief financial
officer Tang Yow Sai (left) and
chief executive officer Datuk
Ahmad Zaini Othman at the
MBSB press conference following the release of its fullyear results for the financial
year ended Dec 31, 2014 in
Kuala Lumpur on Feb 16. —
Photo by Patrick Goh
5
6
18 C O M M E N T
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Is Japan Asia’s next autocracy?
Its people might be tricked into signing away their own freedoms
BY N OA H SMI TH
E
arlier this year, I highlighted a troubling
trend in many countries
around the world — the
move toward illiberal
government and away
from human rights. Unfortunately,
Japan is catching the bug.
This might seem like a strange
claim. Prime Minister Shinzo Abe
has implemented some liberal policies, such as a push for equality
for working women, and he has
championed increased immigration. Japan’s society has, in general,
become more liberal in recent decades, for example by implementing trial by jury. Furthermore, the
country recently repealed a longstanding ban on dancing in clubs.
But all this could become largely
irrelevant if Abe’s party changes the
nation’s constitution in the ways that
it wants.
The Liberal Democratic Party of
Japan (LDP) has governed Japan for
most of its postwar history, with only
the occasional brief interruption.
A substantial chunk of the party
is philosophically, organisationally
and often genetically descended
from the political class of Japan’s
militarist period. As one might expect, it didn’t completely internalise
the liberal values that the US imposed on the country during the
American occupation. That faction,
once a minority, now appears to be
dominant within the party.
The LDP is now campaigning to
scrap the US-written constitution,
and replace it with a draft constitution. In a booklet explaining the
draft, the LDP states that “Several
of the current constitutional provisions are based on the Western-European theory of natural human
rights; such provisions therefore
[need] to be changed.”
In accordance with this idea,
the draft constitution allows the
state to restrict speech or expression that is “interfering [with]
public interest and public order.” The draft constitution also
repeals the clause that prohibits
the state from granting “political
authority” to religious groups —
in other words, abandoning the
separation of church and state.
Even more worse, the draft constitution adds six new “obligations”
that it commands the citizenry to
follow. Some of these, such as the
obligation to “uphold the Constitution” and help family members, are
vague and benign. A third, which
requires people to “respect the national anthem and flag,” is similar
to constitutional amendments advocated by conservatives in the US.
But the other three “obligations”
are an obvious move toward illiberalism and autocracy. These state:
“The people must be conscious of
the fact that there are responsibilities
and obligations in compensation for
freedom and rights.”
“The people must comply with
the public interest and public order.”
“The people must obey commands from the State or the subordinate offices thereof in a state of
emergency.”
The deeply illiberal nature of
this draft constitution has largely been ignored, especially in the
West. Most people in the West hear
only about one piece of Japanese
constitutional change: the revision
of Article 9 of the current constitution, which forbids Japan from
having a military.
It is true that the LDP draft constitution does repeal Article 9. And it
is true that repealing Article 9 is a big
reason why Abe wants constitutional
change. But focusing on demilitarisation is a dangerous distraction.
Repealing Article 9 is a sensible
thing to do. Japan already has a military (called a “Self-Defense Force”),
and interprets the demilitarisation
clause so loosely that it’s unlikely
that repealing Article 9 would change
much. It is very doubtful that Japan
would invade other countries if the
constitution were rewritten. Japan
might as well call its army an army.
But the focus on the military
issue has drawn attention — especially Western attention — away
from the severe blow that the draft
constitution would deal to the freedom of the Japanese people.
Now, Japan’s people, of course,
don’t want to live in an illiberal state.
Japanese people have grown extremely fond of the freedom they
have enjoyed in the past seven decades. The risk is that the Japanese
people might be tricked into signing away their own freedoms. Like
Western journalists, they may focus
too much on the repeal of Article
9, and ignore the replacement of
human rights with “obligations.”
Now, it’s important not to overreact to all this. A constitution is
just a piece of paper, and not all
countries take their constitutions as
seriously as the US does. Obviously, if Japan’s leaders want to create
an illiberal state, the US-written
1947 constitution isn’t going to hold
them back; in fact, some revisionist
members of the LDP may already
silently regard its draft constitution
as the “true” law of the land.
Nor is everything in the draft illiberal — the ban on gender, racial and
religious discrimination is preserved,
and even extended to the disabled.
But there is real danger in this
new constitution. First, it may be
part of a wider LDP effort to crack
down on civil society, which has
become more obstreperous in the
wake of poor economic performance and the Fukushima nuclear
accident. The government secrets
law and other crackdowns on press
freedom are a worrying sign — Japan has already slipped from 10th
in Reporters Without Borders’ global press freedom ranking in 2010 to
61st in 2015.
Second, adopting the LDP’s draft
could be an international relations
disaster. If Japan opts for the kind of
illiberal democracy that is currently
the fashion in Turkey and Hungary, it could weaken the country’s
regional appeal as an alternative
to China’s repressive state. It could
also lead to the weakening of the
US-Japan alliance — without the
glue of shared values holding the
alliance together, the US might be
tempted to adopt a more neutral
posture between an illiberal China
and a mostly illiberal Japan.
The optimal solution would be
for Japan to repeal Article 9 of its
constitution while leaving the rest
untouched. But politically, that
seems to be an impossible trick to
pull off — any measure that would
allow the LDP to change Article 9
would also open the door for the
authoritarian “obligations” and the
weakening of human rights. The
best realistic solution is for Japan
to delay rewriting its flawed constitution at all, and wait for a time
when the people in power are not
still mentally living in the 1940s.
Japan is at a critical juncture in
its history. It has the potential to
become a more liberal society, or
a much less liberal one. The former
choice is both the wise and the
moral choice. — Bloomberg
You say debt relief, I say theft
BY L EONI D B ERSHIDSKY
AS someone who sides with Germany in the matter of Greek debt,
I often hear that creditors should be
held culpable for driving deadbeats
like Greece to the brink of bankruptcy. That’s true to an extent, but not
when the debtor is a government.
Nation-states have confiscatory
powers that allow them to do to
their creditors what medieval kings
did to their Jews. It’s a big mistake to
pretend that a country like Greece
is more vulnerable than it really is.
Nobel prizewinning economist
Joseph Stiglitz eloquently described
the concept of lenders’ fault in a recent column:
“Debts are contracts — that is,
voluntary agreements — so creditors
are just as responsible for them as
debtors. In fact, creditors arguably
are more responsible: typically, they
are sophisticated financial institutions, whereas borrowers frequently
are far less attuned to market vicissitudes and the risks associated with
different contractual arrangements.”
But governments are hardly unsophisticated borrowers, and they
know that if worst comes to worst,
they will simply refuse to pay. If
they do, there’s no debtors’ prison for them. There’s no bankruptcy mechanism, either: A country
cannot be liquidated and sold off
piecemeal to satisfy its creditors.
In the end, the bankers that buy a
country’s bonds are as dependent
on the sovereign’s will as European
Jews were 1,000 years ago.
“An absolute ruler’s ability to confiscate hinders his opportunities to
strike deals with his subjects,” Yoram Barzel wrote in a 1992 paper
on Jewish lending in the Middle
Ages. “Loans to the ruler are especially vulnerable to confiscation. In
Medieval England, Jews who were
major lenders were entirely at the
king’s mercy.”
Having apparently arrived on
the British Isles with the invading
Normans, the Jews quickly came
to dominate England’s loan market.
Christians could not openly charge
each other interest without violating
Church dictates. Judaism banned
usury, but not to Gentiles. So, in an
arrangement that was convenient for
everybody, Jews, banned from most
other trades, became the country’s
bankers. They charged 21% to 43%
annually. Beginning in the 1190s,
England had an official loan registry that recorded every transaction.
The reason the system worked
was that the Jews were providing
one-seventh of the crown’s total
revenue in the form of tax payments.
The government made sure to strict-
Stiglitz: Debts are contracts —
that is, voluntary agreements
— so creditors are just as
responsible for them as debtors.
Photo by Reuters
ly enforce the repayment of debts;
if they didn’t, the Jews would not
have been able to pay their taxes.
Even when the king himself needed
to borrow, he made sure to repay.
Then, in the 13th century, Italian
bankers emerged as competition,
offering better terms to the English.
It was suddenly more profitable for
the English monarchs to confiscate
Jewish capital than to continue collecting taxes on its use. That’s what
Henry III and his successor, Edward
I, proceeded to do. In 1290, King
Edward expelled the now-indigent
Jews from England.
A modern nation-state, too, can
suddenly decide that the benefits
of imposing a partial expropriation
on its creditors outweigh the risks.
The risks of expropriation tend to
be minimised these days. Governments are getting adept at whipping
up public anger against creditors to
intimidate them. Syriza, the Greek
ruling party, has perfected the art.
People already hate bankers, and, in
many parts of the world, Germans
don’t fare much better, so bashing
them is politically popular.
Those creditors who resist and
go to court to chase the sovereign’s
property and funds to ensure repayment are condemned as vultures.
The polite, reasonable thing to do
is to make a deal and slink away
with one’s tail between one’s legs.
Greece’s private creditors have already done that, accepting a more
than 50% haircut on the bonds they
owned.
When a deadbeat country is seen
as the hero and its creditors as villains, the only consideration that deters more countries from defaulting
— the threat of financial ostracism
— loses its power. A country that
has successfully done a restructuring deal knows it can be welcomed
back to the debt market with open
arms. Lenders, apparently suffering from a strange form of masochism induced by all the editorial
ink shaming them, prepare to take
out their wallets again.
If Greece gets its way, more
countries will be tempted to declare responsibility a dirty word.
The International Monetary Fund
predicts that this year, only 6 out
of 34 advanced economies — Germany, Hong Kong, Korea, Norway,
Singapore and Switzerland — will
have a positive fiscal balance. Nations are hardly deleveraging: The
average debt level of a G20 nation
in 2014 was 113.5% economic output, the same as a year before and
only slightly lower than the record
of 115.3% reached in 2012. So why
pay all that money back?
I would argue that, if Greece’s
new government succeeds, it should
result in a fundamental repricing
of all public debt in line with the
realisation that any government’s
creditors are as powerless as the
Jews in Edward I’s England.
Stiglitz has long called for a universal mechanism for sovereign
bankruptcies that would make the
risks of non-payment transparent
to all lenders and borrowers. In the
absence of such a framework, Germany is doing the right thing by
making sure no other government
is tempted to go down the Greek
path just because it wants to spend
more than its debt burden allows.
— Bloomberg
20 FO CU S
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
MO
PHOTOS BY BLOOMBERG
Infiniti QX80
makes you
feel like a king
01.
02.
03.
04.
The Infiniti QX80 looks better
in person than it does in
photos. But there’s no getting
around it — it’s one huge SUV.
It doesn’t have the biggest engine, but it performs well
BY HANNAH ELLIOTT
O
ne of my favourite treats is
the nostalgia that comes on
winter mornings as I warm
up a truck or sport utility vehicle (SUV) after a night’s new
snowfall.
I grew up in Oregon in the United States,
which means I spent many cold mornings
helping my dad brush powder off windshields and remove icicles from side mirrors
before he drove me to school. I loved how the
scrape, scrape, scrape of the ice pick sliced
the muffled silence of winter, and how the
puff of our breaths and the exhaust from
the truck rose around us like the smoke in
a sorcerer’s chamber.
It made me feel like a queen preparing a
sleigh to survey her frozen kingdom.
So I loved it this morning when I stepped
outside of my apartment to see my little
New York neighbourhood covered in white.
I had the perfect conveyance: the
US$89,000 (RM323,960) 2015 Infiniti QX80
Limited, the highest-priced Infiniti on the
market today. The “Limited” note affixed to
this QX80 means each Infiniti dealer gets
(maybe) one a month for the year, no more.
It’s on sale nationwide now; the wait time is
currently four months.
The car is big and tall enough to feel like
a carriage rather than a sleigh, really — the
roof soared well over my 1.78m head and the
step up into the driver’s seat is a fair distance
from the ground, even in my heeled black
booties. I got inside and immediately started
the car to warm it up, turned on the wipers
front and back, activated the seat heaters,
and jumped out again to clear a path onto
the street. I used a venti Starbucks cup to
brush snow from its three rows of windows
— a stiff brush probably would have been
more elegant, but I was in no mood to go
searching for one.
This is the part where a footman would
have been most helpful.
Big and tall
The QX80 proved suited for just such wintry wanderings because of its great heft, its
dexterity, and the many interior comforts
offered within its confines.
Let’s talk about each of those elements.
First, if the photos haven’t proven descriptive enough, know that this rig has quite the
footprint. It’s taller and longer and heavier
than things like the Cadillac Escalade, Land
Rover LR4, and Mercedes-Benz GL; its considerable height gives it a vantage point so
elevated that it will change your sense of self.
Two pilot seats in the middle fold down to
make a veritable table and a long walk back
to the third-row bench seats. If you want to
get away from it all, just climb on board and
find a spot at the rear.
Here’s the twist: It’s actually 528.32cm
long — just 5.08cm longer than the BMW 7
Series I drove last week. So while you feel
very high and mighty driving this car, parking
doesn’t feel like backing an elephant into a
refrigerator box. On first glance, I worried
I’d have nowhere to put this thing on a quick
trip downtown to the Ludlow Hotel, but I
had no trouble parallel parking it along the
streets in the Lower East Side. The 7 Series
gave me more awkward situations than this
rig. I think it’s because you expect it to feel
so long — that height! — that when it comes
down to its actual dimensions, manoeuvring
it is a surprise.
Everything inside is enormous, too, from
the centre console and lockable glove compartment to the sunroof and the gauge of
the diamond pattern quilted into the leather
The two middle pilot chairs can
fold down to create a tabletop
through the middle of the car.
seats. Simply driving this gilded tank over
the frozen tundra of Manhattan makes you
feel like inclement weather is not an issue;
in fact, I felt so secure driving one snowy,
cold morning last week I actually offered
to chauffeur my colleagues Nic Screws and
Moti Ankari to their menswear shows for
the Autumn/Winter 2015 collections. I just
wanted the rush.
Muscle control
Of course, all that body needs the muscle
control to be good. The QX80 has all-wheel
drive and multiple motion control systems
that work under a supremely stiff suspension to monitor and tune torque between the
wheels. The seven-speed automatic transmission pleased me as it swelled through
the car’s lower gears; the Snow mode (one of
several drive modes from which to choose)
is slow and safe, as is fitting.
I was surprised this car has only a V8 engine (better for efficiency anyway), and at
first glance on paper the 400 horsepower (hp)
seems paltry compared with the 445hp and
higher coupes and sedans I’ve been driving
lately. Maybe that’s a commentary on just
how silly we’ve all gotten about power ratings. Call it engine bloat. Anyway, this engine
performed fine. Not fine like ho-hum. Fine
in a good way, a solid way. It’s not flashy as a
performer, but it’s smooth and commanding.
The QX80 has lots of safety systems, as
you’ll no doubt become aware regardless of
whether you want to. The automatic braking kicks in during heavy traffic. I worry I’m
becoming too used to the blind-spot and
lane-departure warning systems that are
now par for the course in these sorts of vehicles, but I can’t deny how useful they are
in driving something of this size.
The parking monitors — which were so
helpful showing my wheel alignment and
views from every possible angle of the car
— kept sounding their alerts this morning
as clumps of snow slid down from the hood
and covered their sensors. It would have
been awkward had anyone else been riding
with me. I felt relieved when they stopped,
and they did, eventually.
Truffle butter
I’ve saved talking about looks until last because, well, I’m not sure what to say. The
QX80 looks like a polished mahogany tree
trunk, a gleaming wooden fortress affixed
with a chandelier grille and light-emitting
diode headlights illuminated day and night.
In person, it doesn’t come across as bad as
it does in the photos. That’s a backhanded
compliment, but it’s accurate according to
the unscientific polls I conducted among
friends and colleagues last week.
It comes with a unique truffle-toned leather interior, the aforementioned quilted seating, special badging, Alcantara throughout,
and exclusive exterior paint colours (imperial black, deep mocha almond, and a Dakar
bronze — I would stick with black). I don’t
like the fact that when you order the limited-edition QX80 it means you’re stuck with
that brown interior, but I hear it goes over
big in the burbs.
I do like the rubber-capped stainless steel
side steps, the darkened chrome trim along
the sides of the body, and the massive 55.88cm wheels. I especially like the “open-pore”
wood trim on the console and dashboard,
the first finish of its kind in an Infiniti vehicle and whose matte, bare finish lends the
interior another tactile singularity. (Unfortunately the finish is non-negotiable in the
Limited.) And the noise-insulating glass,
tinted rear windows, and Bose 13-speaker
sound with two subwoofers make it easy to
feel like a ruler of some domain.
To enhance the feeling, I also recommend
hiring that footman. — Bloomberg
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FO CU S 21
M O N DAY F E BRUA RY 23 , 2015 • T HEED G E FINA NCIA L DA ILY
PHOTOS BY BLOOMBERG
BERG
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01. The UK’s Queen Elizabeth II and Prince Philip
arrive in one of their famous royal Bentleys (left),
which sport custom car mascots of St George and
the Dragon (right).
02. The ‘Starry Night’ headliner in Rolls-Royce cars uses
tiny individual light bulbs to recreate the night sky in
whichever constellation a client may want.
03. Something tells us that this Bentley was
customised by a lover of an orange Hermès bag.
04. Fux, the well-known mattress mogul, is famous for
his collection of outré cars. The mint-green RollsRoyce Wraith he ordered took more than a year to
develop.
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01
You can fine-tune your Aston Martin
or Rolls-Royce as much as you want
BY HA NN A H EL L I OT T
“WE are not the taste police.”
That’s Eric Shepherd’s take on what RollsRoyce will and will not do to its cars on behalf of customers. Basically, as the head of
Rolls-Royce North America told me over
brunch in New York, nothing is forbidden.
“Outside of compromising the safety of
the car — or disfiguring the Spirit of Ecstasy
— we won’t say no,” he said.
Which in Rolls-Royce world can mean saying yes to mother-of-pearl inlays, crocodile
skin seating, rabbit pelt lining, and mahogany trim. Or building watch cases into the
doors of the car for quick changes between
the office and the opera. Or customising
a diamond-studded interior, US$30,000
(RM109,200) picnic set, and fibre-optic constellation across the interior roof of a RollsRoyce Celestial, a Phantom one-off it made
in 2013 reportedly for an oil baron.
In fact, 95% of all Rolls-Royce customers
order their cars bespoke in some way. The
number rises to 99% in Middle Eastern markets.
Across the board
This trend encompasses much more than
just Rolls. Consider Lapo Elkann’s famous
camouflage-and-denim Ferraris, Justin Bieber’ chromed-out Fisker Karma, or David
Beckham’s brigade of matte Bentleys.
“It’s the freedom to think beyond specification sheets and options lists,” said Matthew Bennett, who manages Aston Martin
VIP and bespoke sales.
So much for subtlety. These days, such
companies as Rolls-Royce, Aston Martin,
Bentley, and Jaguar are catering to their
fastest-growing bespoke markets: Eastern
oligarchs and Silicon Valley wunderkinds
who love bright colours, two-tone paint
jobs, and exotic trimming. And automakers cial Ops cars will even appear in Spectre,
are spending millions to open and expand the next James Bond flick.)
their bespoke houses to meet the appetite
Since 2011, Bentley has seen a 70% infor extreme personalisation.
crease in bespoke orders in its Mulliner programme, while Aston Martin has gone from
A growing business
40 to 400 cars since 2012. More than 40% of
Last year Jaguar Land Rover was the latest Lamborghini Aventadors were customised
in the ranks to launch a bespoke division — last year, while 3% of those were specialised
this one called Special Operations — which to the highest level, becoming basically oneincludes teams for making new cars totally offs, a spokesperson said.
“There is an increased interest in differunique. They also have a “heritage” division
that works on classic vehicles such as the entiation, in doing things in a unique way,”
iconic E-Type Jaguar. (A few of these Spe- Bentley’s Geoff Dowding said. “Being given
04
mal outfitting programme, for instance, is
called Ad Personam, and Bentley’s standard
Mulliner shop offers more than a million
potential combinations of leather, threads,
02 wood, and paint. That’s personalisation.
Truly bespoke programmes go beyond that,
allowing customers to dictate what they want
out of thin air. There’s plenty of precedent. At
the turn of the last century, patrons of Messieurs
Rolls and Royce would visit their favourite Savile Row tailors before walking up the street to
deliver the same fabric to the guys at Rolls, to
use it on the seats. And Mercedes-Benz used
special tartan to line the seats in some of its
most prized vintage 300SL Gullwings.
These days ladies bring in handbags so
workers can match the leathers. Men bring
in family crests for special embroidery; they
ask for hidden storage boxes and humidors
and coolers sized to fit their favourite brand
of champagne. Emotions — and emotional
engagement with the process —run high.
03
that opportunity is something that makes
you feel good. It makes you feel on top of
the world.”
Ultimate personal experience
There’s a difference between what we’re
talking about when we say “personalised”
and “bespoke,” in the automotive sense of
the terms. What I’ve been describing are bespoke cars. But many high-end automakers
offer wide, if standard, options of leathers,
paint colours, and materials from which to
choose when you buy. Lamborghini’s nor-
Wait for it ...
With that level of specification, it takes a
while to finish the perfect product. Fortunately this calibre of client is willing to wait.
The mint-green Rolls-Royce that mattress
mogul Michael Fux ordered took more than
a year to develop, and even simple embroidering or wood embossing can delay a car
delivery several months.
It looked like a big scoop of Coney Island
ice cream. Not that it mattered a whit to the
folks at Rolls.
“We don’t feel the need to somehow defend a sense of prestige — we want to make
our customers happy,” Shepherd said.
After all, they’re not the taste police. —
Bloomberg
22 F E AT U R E
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Dispute unearths skeletons
Kaisa debts are double the level it reported at the end of June
BY JOHN FOL EY
W
hen investing in property, check the
basement.
Kaisa shows
what happens
when that advice is ignored. Days after rattling lenders with a late interest
payment, the Chinese developer has
announced that its debts are double
the level it reported at the end of
June. That raises the stakes for the
company’s restructuring, and others
that may follow.
Kaisa, putting its affairs in order
ahead of a potential takeover from
rival Sunac, says its debt at the end
of December totalled 65 billion yuan
(RM37.85 billion), around half of it
from lenders other than banks. That
may help explain why the apparently cash-rich company failed to pay
a US$26 million (RM94.64 million)
interest payment on time, and recently had to raise US$380 million
for working capital.
Where the extra debt came from is
a mystery. Part of it may be borrowing by unconsolidated subsidiaries:
those entities had 42 billion yuan of
debt at the end of 2013. But if Kaisa
is now recognising those liabilities,
it should count the subsidiaries’ assets too. Another explanation could
be that Kaisa has reclassified other
liabilities as debt.
Painting a bleak picture could be
a tactic. Kaisa’s offer from Sunac depends on the company restructuring
its debts, and one way to soften up
creditors is to suggest they’re much
worse off than they thought. The
company’s bonds due 2017 dropped
from 70 US cents on the dollar to 66
US cents on Feb 16. But if bondholders resist, the rescue could fall apart.
The dispute has wider resonance.
China’s property sector is unusually complex when it comes to raking over who owes what to whom.
Projects are often set up through
minority investments in separate
BY PE T E R T H A L L A R S E N
vehicles. Kaisa has hundreds. The
debt doesn’t show up on the balance
sheet unless it is guaranteed by the
parent company.
Investors should start looking for
other dark crannies. Sunac had 36
billion yuan of consolidated debt at
the end of June — but its subsidiaries
had at least 85 billion yuan, according to its last bond filing. Shimao,
which just issued an US$800 million bond, reports 55 billion yuan
of debt, but more than 115 billion
yuan including subsidiaries. When
debts sit not just across the border but also below ground, there’s
plenty of room for confusion — and
disappointment. — Reuters
Chinese Muslims hold strong to CNY traditions
BY SA K I N I MOHD SAID
THE days preceding Chinese New
Year (CNY) always finds Lim Ah
Hong busy in the kitchen at her
home in Taman Rakyat, Taiping,
Perak.
She can count on help from her
children and daughters-in-law, but
only the 70-year-old knows how to
prepare “mee suah”, a traditional
Tionghua dish.
The salted Chinese noodles
made from wheat flour are her
specialty. It a treat that her children have enjoyed since young,
and they have always regarded the
mee suah made by their mother
the best and tastiest.
However, these days, Lim uses
a special set of utensils and wok
to prepare the noodle that is usually served with boiled eggs and
chicken soup.
The meat served with the dish
is bought from Muslim suppliers
at the wet market.
This extra effort from her is in accordance to the dietary restrictions
of her fifth child, who embraced
Islam seven years ago.
“I have never doubted the food
prepared by mother as she thoroughly understands the issue of
halal and haram and the Muslim
lifestyle. Furthermore, we have been
neighbours with Malay families for
over 34 years,” said Lee Choon Kooi,
popularly known as Adam Corrie
Lee Abdullah.
Family bond
Mee suah, also known as “longevity
noodles”, is normally eaten on the
morning of the Chinese New Year
or during birthday celebrations.
It is the favourite dish of the
47-year-old actor, choreographer
and professional stuntman.
Lim, who has 10 children, is
well-acquainted with each of her
children’s tastebuds and tries to
cater for all of them during the auspicious celebration.
She believes the benefit in keeping her family close together despite
their differences.
02
01
Not a hindrance
Her beliefs and values make it easier for Adam to inform his mother
of his decision to become a Muslim
in 2007.
“Embracing Islam does not stop
me from celebrating CNY with my
family. Blood is thicker than water.
Though we subscribe to different
faiths, our family ties remain strong.
“I make it a point to go back to my
hometown for the CNY celebrations
every year,” he said.
His wife Fazima Fuad, 37, whom
he married in 2008, also enjoys a
close relationship with his family.
In fact, his family looks forward
to the couple’s arrival for the reunion dinner on the eve of every CNY.
“What is important is the respect we have for each other. Isn’t
it wonderful how we can still get
together although we are of different faiths?
“As a son, I often remind myself
to not leave my mother by herself,”
said Adam, who has been featured
in many local films such as KL Gangster 2 and Gerak Khas.
Still Chinese
Adam’s family may be cognisant
of what a Islamic lifestyle entails,
but there are still those who have
a misconception that new Chinese
Muslims can no longer practice
Chinese culture and customs.
This is not true, said Sharin Low
Abdullah, 68, who owns a chain of
Chinese Muslim restaurants.
Islam has always celebrated the
differences between the races and
encouraged new Muslims to retain
their racial identity, as long as the
rituals do not clash with Islamic
principles and values, he said.
The grandfather of eight, who embraced Islam 47 years ago, still practises Chinese rituals in his daily life.
His chain of 26 restaurants nationwide is recognisable from the
red Chinese lanterns hung at the
entrance.
Red is the favoured colour
among the Chinese as it signifies
happiness, prosperity and success.
“We maintain the Chinese elements as it is the identity of the
restaurant. Only those who eat at
my restaurants will be able to identify it as a Muslim restaurant due to
the Islamic calligraphy and Quranic verses at the entrance,” he said.
A ‘father’ to many
Sharin, who embraced Islam when
he was 21, understands the challenges faced by new Muslims and
is actively providing assistance for
new Chinese Muslims through the
Japan Post
pays US$5.1b
for global
expansion
stamp
01. Adam (right), with
his mother and wife
having a CNY meal of
‘mee suah’ at home
in Taiping. Photo by
Bernama
02. Sharin, who embraced
Islam 47 years ago, still
practises Chinese rituals
in his daily life. Photo
by Bernama
Malaysian Chinese Muslim Association (Macma).
He provides temporary housing
and jobs to those who suffer opposition from their families or who have
been thrown out of their homes for
accepting Islam.
“They have nowhere else to go.
Together with Macma Selangor, I, as
a ‘father’ to over 200 Chinese Muslims, try my best to help them. Many
of them have even been disowned
by their families,” said Sharin, who
is chairman of Macma Selangor.
In light of the situation, Macma
Selangor is hosting a grand CNY
dinner for them, says Sharin.
The dinner, to be held at his restaurant in Ampang, is an annual
event that is in its seventh year.
The event is also open to other
new Muslims who would like to
celebrate CNY with a halal Chinese
meal. — Bernama
JAPAN Post is paying a hefty
price to stamp “global expansion” on its roadshow presentation. The state-owned
giant’s cash offer for Australia’s Toll Holdings values the
logistics group at US$5.1 billion (RM18.56 billion). Adding
an international arm will help
spruce up Japan Post’s upcoming initial public offering — and
fuel further deal-making.
There’s no obvious justification for Japan Post to pay a
49% premium — or 11 times
the consensus forecast for this
year’s earnings before interest,
taxes, depreciation, and amortisation (Ebitda) — for the 127year old Australian group.
In keeping with many other
Japanese outbound acquisitions, the state-owned giant is
planning to leave Toll’s brand
and management untouched.
The new owner may help beef
up Toll’s Japanese unit, but this
brought in less than 6% of total
revenue in the six months to
December.
Japan Post’s main motive is
diversification.
Prime Minister Shinzo Abe’s
government is parcelling up
parent Japan Post Holdings for
a long-awaited privatisation,
with plans to separately list the
group’s banking, insurance and
postal arms. The letter-delivering unit alone brought in revenue of 2.8 trillion yen (RM83.72
billion) in the year to last March.
But it faces a double squeeze
from Japan’s declining population and the shift to electronic
communications. An international strategy, with a bigger
footprint in the logistics and
express businesses, offers prospective investors some potential for future growth.
Assuming it gets the Australian government’s blessing, Japan
Post is likely to make further
acquisitions through Toll. Asian
logistics operators are expanding and consolidating as manufacturers become leaner and
consumers more demanding.
E-commerce giant Alibaba has
taken a stake in Singapore Post.
Hours before the Toll takeover,
Japanese freight carrier Kintetsu
World Express announced it was
paying US$1.2 billion for Singapore’s APL Logistics. Buyers in
the sub-sector are now regularly
paying double-digit multiples
of operating profit or Ebitda,
according to Citi analysts.
What’s less clear is how
well Japan Post will be able to
manage its overseas expansion.
Cross-border deals are always
tricky; combining a private business with a state-owned parent
brings extra challenges. Investors will hope Japan Post’s new
subsidiary displays greater discipline on future acquisitions
than its new parent has shown
so far. — Reuters
24 W O R L D B U S I N E S S
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
S’pore businesses get a boost
Firms gain from various productivity schemes
SINGAPORE: Many Singapore companies have benefited from a range
of schemes to help them in their
productivity drive, according to figures by the Ministry of Trade and
Industry, The Straits Times reported.
The schemes fall into three categories, the daily said. The broadbased schemes are available to all
businesses to encourage investment in productivity, technology
and innovation. These include the
Productivity and Innovation Credit
(PIC) and the Innovation and Capability Voucher (ICV).
A second category is where programmes help companies in specific areas such as the Technology
Adoption Programme (TAP).
The third category covers sector-specific schemes under the National Productivity Council (NPC),
such as the Construction Productivity and Capability Fund, and the
Community Health Improvement
and Productivity Scheme. Among
the broad-based programmes, PIC
is possibly the best-known. Companies had enjoyed over US$1.8
billion in (RM6.55 billion) PIC benefits as of Aug 31 last year for years
of assessment 2011 to 2013. Another popular programme is the ICV.
Since 2013, Spring Singapore has
awarded 8,500 vouchers amounting
to S$42.5 million (RM113.8 million) for consultancy and capability
building, the daily reported.
As at June 30 last year, 6,600 ICV
applications had been approved
since the programme was launched
in June 2012, and 3,500 were approved since last January.
There has been a surge in ICV
applications approved since the
scheme was expanded on March
1 last year to support small and
medium-sized enterprises (SMEs)
in implementing solutions after
completing consultancy projects
Broad-based schemes
are available to
all businesses to
encourage investment
in productivity,
technology and
innovation.
in innovation, productivity, human resources development and
financial management.
More than 75% of the applications approved between January
and June last year were for productivity solutions, The Straits Times
reported.
Since the launch of TAP in 2013,
12 technology solutions have been
commercialised, and 650 local companies have benefited from them.
Over the last two years, there
has been a rise in the SMEs that
are adopting automation, and information and communication
technology.
As of last September, about 1,300
food companies have embarked on
productivity upgrading projects since
the productivity road maps for the
food service and food manufacturing sectors were rolled out in 2011.
As of last October, over 620 retailers had been supported in various productivity upgrading initiatives since the launch of the Retail
Productivity Plan in 2011.
Excluding the PIC and ICV
schemes, around S$490 million
has been committed to companies
through the various broad-based
and sectoral productivity schemes
under the NPC.
More than 22,000 companies
have benefited from these initiatives, with 7,000 companies in 2013
alone, the daily wrote.
Hike in Taiwan’s property investments abroad
BY WEI SHU & FR ANCES HUANG
TAIPEI: Taiwan’s outbound property investments are likely to increase
significantly in 2015 amid growing
interest in overseas markets and a
slowdown in the domestic market,
an investment consulting firm in
Taipei said on Saturday.
In a research note, Asia Pacific International Property (APIP)
forecast that Taiwan’s overseas investments will rise this year by an
annual 50% from the NT$50 billion
(RM5.75 billion) recorded in 2014.
With the local property market
slowing down, an increasing number of real estate sales agencies
in Taiwan have been setting up
offices specifically geared toward
encouraging overseas investments,
the advisory firm said.
In 2014, transactions of homes,
shops and offices in Taiwan totalled
320,598 units, compared with 371,892
the previous year, according to the
Ministry of Interior Statistics. The
2014 figure was the lowest since 2002.
Chang Han-chao, an analyst
with APIP, said that many local
investors are interested in familiar
markets such as Japan, Malaysia,
Australia, the United Kingdom and
the United States.
Japan’s main attraction as an
investment market is the high returns in its major cities such as
Tokyo, Chang said.
He said the UK is also attractive
to Taiwan investors because of its
stable economic growth compared
with other countries in the European Union.
APIP said it would recommend
Malaysia over Singapore because
of the relatively low property valuation in Kuala Lumpur despite an
increase of more than 10% in 2014.
It said the property market in
Malaysia has great growth potential
as the country’s economy continues
to steam ahead this year. — CNA
Limp Japan recovery may be immune to monetary cure
BY A NDY MU KHERJEE
SINGAPORE: Japan’s economy
has dragged itself out of recession, but the country’s limp job
market is hobbling the recovery.
While money-printing can further weaken the yen and boost
exports, stronger domestic demand depends on creating more
full-time, well-paid jobs.
Gross domestic product expanded at a 2.2% annualised rate
in the final three months of 2014,
reversing two straight quarters of
declining output. However, the
revival was weaker than expected.
Economists surveyed by Reuters
had forecast growth of 3.7%.
A third of the expansion came
from increasing net exports. By
contrast, domestic demand —
which plunged after the government hiked the sales tax last
April — remains weak. Despite
a 60% increase in the Bank of
Japan’s (BoJ) quantitative easing programme in October, private non-residential investment
barely grew. Spending on new
homes declined, and consumption growth was flat.
Much of the blame lies with
Japan’s fractured labour market.
Since Shinzo Abe was elected
prime minister in December 2012,
the ranks of temporary and parttime employees and short-term
contract workers have swelled by
more than 10%. Better-paid, fulltime jobs have shrunk by 1%.
Reforming Japan’s crusty labour
laws should give those non-regular
employees greater job security, encouraging them to demand higher
wages — and spend the proceeds.
However, companies will continue to resist change, viewing any
interference in hiring practices
as a raid on their profitability. As
a short-term demand palliative,
Abe may need to boost government spending instead.
Japanese stocks rose after the
GDP report, as investors bet that
the weaker-than-expected recovery will eventually force the
BoJ to reach for an even bigger stimulus package. But more
yen-printing on its own is highly
unlikely to translate into faster
wage growth.
Japanese worker productivity
has slowed over the last two decades. Overdependence on poorly trained non-regular workers
could bring efficiency gains to
a standstill, in turn making employers even more reluctant to
raise wages. The GDP report is
a reminder that a limp recovery
is becoming immune to monetary medicine. Unless Japan’s
labour market is fixed, the remedy might lose all its potency.
— Reuters
IN BRIEF
Ausgroup ceases
business units in S’pore,
Australia
SINGAPORE: Ausgroup said
last Friday that it has ceased
management of its fabrication
and manufacturing business
units in Singapore and in Kwinana, Western Australia, after
a strategic review, The Straits
Times reported. The move
was caused by the slump in
offshore commercial and industrial investment in recent
years in Australia, the company
said in a statement to the Singapore Exchange. “The company’s specialisation in the
fabrication of subsea components for the LNG sector has
provided a number of major
fabrication packages over the
past five years. That work is
now being completed and the
LNG investment cycle for West
Australian projects is coming
to an end,” it said.
United Arab Bank CEO
sees ‘good loan growth’
as economy expands
DUBAI: United Arab Bank will
have “good loan growth” in
2015 as the United Arab Emirates economy expands 2% to
3%, chief executive officer Paul
Trowbridge said. Assets grew to
to 25.7 billion dirham (RM25.48
billion) last year from seven billion dirham in 2009, according
to data compiled by Bloomberg.
The expansion came by taking
market share, Trowbridge said.
The UAE economy is diversified enough in logistics to residential real estate and tourism
that low oil prices will only be a
“moderating factor” to growth,
Trowbridge said. — Bloomberg
US refinery strike spreads
to one-fifth of national
capacity
HOUSTON: The largest US refinery strike in 35 years entered
its fourth week as workers at
12 refineries accounting for
one-fifth of national production
capacity were walking picket
lines as of yesterday, according to union officials. A total of
6,550 members of the United
Steelworkers union at 15 plants,
including the 12 refineries, are
involved in the work stoppage
that began on Feb 1 when talks
for a new three-year contract
between the union and lead
oil company negotiator Shell
Oil Co stopped. Talks were resumed but have halted again
— Reuters
Jaguar Land Rover to
recall 61,793 vehicles
for air bag flaw
NEW YORK: Jaguar Land Rover
North America will recall more
than 61,000 vehicles after finding that some passenger-side
air bags may not open on impact because of faulty software.
The company will recall 61,793
Range Rover and Range Rover
Sport models manufactured
from 2012 to 2015, according
to a statement posted on the
US National Highway Traffic
Safety Administration’s website. — Bloomberg
W O R L D B U S I N E S S 25
M ON DAY F E B RUA RY 23 , 2015 • T HEED G E FINA NCIA L DA I LY
‘Real’ fight for Tsipras
after initial aid extension
His government must submit list of economic measures today
BY PAU L T U GWEL L
& R E B ECC A C H RI STIE
ATHENS: Greek Prime Minister
Alexis Tsipras began the task of
selling domestically a provisional
deal with euro-area partners to extend bailout funds after securing a
reprieve from the prospect of the
country’s insolvency.
“We won a battle, but not the
war as the difficulties, the real difficulties, not only those related to
the discussions and the relation-
Freight shipping
prices sink on
oversupply
ship with our partners, are ahead
of us,” Tsipras said in a televised
speech on Saturday.
Talks in Brussels between officials from the 19 euro-area countries concluded late last Friday with
an agreement to extend bailout
funds to Greece for four months.
Tsipras’s government must submit
a list of economic measures it will
undertake today. Finance chiefs will
then decide whether his proposals
go far enough.
While the agreement potential-
ly frees up some money to meet at
least some of the pledges made by
Tsipras before last month’s election,
the outcome may still prove politically bruising for him.
Even after last Friday’s agreement, his policies are subject to validation by the International Monetary Fund, the European Central
Bank and the European Commission, the institutions collectively
known as the troika from which
Tsipras vowed to break free.
Tsipras said the deal “cancels
austerity” and pledges by the previous government to cut wages,
pensions and public sector employees and increase sales taxes.
The list of reforms will be “based
on the current arrangement,” the
Eurogroup meeting of finance
ministers said in a statement.
That will include corruption
fight, public administration and
tax system changes, government
spokesman Gabriel Sakellaridis
said on Mega TV on Saturday. —
Bloomberg
Tentative deal reached
for US West Coast ports
BY CA ROL I N E VA RIN
BY STEV E GOR M AN
LONDON: Freight shipping
prices have plummeted to
a historic low, fuelled by a
long-standing problem of too
many ships and lower demand
from China, but experts cautioned against seeing it as a
warning on the global economy.
The Baltic Dry Index (BDI),
which tracks the cost of transporting dry commodities such
as coal, iron ore and grain
across 20 shipping routes,
dropped last Wednesday to
509 points, its lowest level
since the creation of the index in 1985.
There has never been more
commodities transported by
sea, but the sector has been
plagued with a surplus of ships
ordered in good times, while
China has put further downward pressure on rates.
The index used to be seen
as a reliable indicator of global
economic health or looming
crisis, but the gauge has lost
its edge in recent years. — AFP
LOS ANGELES: A group of shipping
companies and a powerful dockworkers union reached a tentative
labour deal late last Friday after
nine months of negotiations, settling a dispute that disrupted the
flow of cargo through 29 US West
Coast ports and snarled trans-Pacific maritime trade with Asia.
The agreement, confirmed in a
joint statement by the two sides,
was reached three days after US
Labor Secretary Thomas Perez arrived in San Francisco to broker a
deal with the help of a federal mediator who had joined the talks six
weeks earlier.
The dispute reverberated
throughout the US economy, extending to agriculture, manufacturing, retail and transportation. Supply
chain disruptions have hit groups
from automakers to consumers of
french-fried potatoes at McDonald’s
Corp restaurants in Japan.
Wal-Mart Stores Inc said last
Thursday the dispute had caused
delays of “pockets of merchandise”
NEW YORK: True to form, Costco
customers may come out ahead in a
valuable commercial arrangement.
That’s at least one way to read the
market tea leaves from this week’s
divorce between the US warehouse
retailer and American Express, its
long-time exclusive payment partner. The news swiped some US$8
billion (RM29.12 billion) from the
card issuer’s value. Only part of that
has accrued to rivals MasterCard and
Visa. The shortfall reflects the benefits to millions of discount shoppers.
Amex boss Kenneth Chenault
shocked the market last Thursday
by saying he was unable to reach an
agreement “that would have made
economic sense for our company
and shareholders,” and would cease
its 16-year partnership with Costco at the end of next March. It’s a
big deal considering that Costco
accounts for about one of every 10
Amex cards in circulation, a fifth of
its loan portfolio and 8% of Amex
customer spending worldwide.
While the precise terms are not
fully disclosed, investors decided
they were worth as much as US$8.2
billion in market capitalisation. Us-
US court backs family
over Bob Marley shirts
NEW YORK: A US court has sided
with Bob Marley’s family, which
sued a company that sold shirts
depicting the reggae legend, in
a case with potential ramifications for merchandise of other
deceased stars. The estate of the
Jamaican icon filed a suit after
low-cost T-shirts — featuring a
photo of a speaking Marley next
to the yellow, green and red colours associated with his Rastafarian faith — went on sale at
Walmart, Target and other major
US retailers. A jury in the western
state of Nevada in 2011 awarded more than US$2 million in
damages and legal fees to firms
owned by Marley’s children but
the defendants lodged an appeal
that was rejected last Friday by
a federal court, which agreed
that the non-family companies
violated the 1946 Lanham Act, a
key US law on copyright infringement. — AFP
Korean Air, Airbus sign
accord for jet fighter bid
SEOUL: Korean Air and European aerospace giant Airbus
have signed an agreement to
jointly bid for an US$8 billion
(RM29.12 billion) fighter jet
project, a company spokesman
said yesterday, pitting the pair
against a Lockheed Martin, Korea Aerospace Industries teamup. The project is designed to
develop and produce 120 F-16
fighter jets to replace the country’s ageing fleet of F-4s and
F-5s. One of the conditions of
the bid is that local enterprises
should tie up with foreign companies to secure technological
assistance, according to Seoul’s
Yonhap news agency. — AFP
Brazil prosecutor seeks
to block leniency deal in
Petrobras case
Wal-Mart Stores Inc said last Thursday the dispute had caused delays of “pockets of
merchandise” and that the potential cost had been included in the company’s earnings
forecasts last week. Photo by Reuters
and that the potential cost had been
included in the company’s earnings
forecasts last week.
Tensions arising from the talks
have played out since last fall in
chronic cargo backups that have
increasingly slowed freight traffic at
the ports. According to the Ameri-
can Association of Port Authorities,
some US$3.8 billion (RM13.83 billion) worth of goods move in and
out of US seaports each day.
The West Coast ports handle
nearly half of all US maritime trade
and more than 70% of the country’s
Asian imports. — Reuters
Costco customers look like winners in Amex scrum
BY ROB COX
& ST EPH A NI E ROGA N
IN BRIEF
ing Amex’s price-to-earnings ratio
of about 14 as a proxy suggests the
partnership brought in something
on the order of US$500 million to
US$600 million of net income annually, or about 8% of its bottom line.
Not surprisingly, the two Amex
rivals best placed to nab the business
saw their market values blossom.
Over the past two days, MasterCard
is up almost US$3 billion and Visa
about US$2.5 billion. What’s peculiar, however, is how Costco’s value
nudged up less than US$200 million,
to just under US$65 billion. So there’s
still a couple of billion dollars of market value unaccounted for.
That’s a numerical reflection of the
Costco model. The company is always
seeking cost-cutting opportunities
from suppliers, whether it is Procter
& Gamble, an Argentine producer
of Malbec or even the provider of
payment services. The bulk of those
savings are passed along to customers, who then loyally renew their club
subscriptions, which account for the
majority of the company’s profit. The
gap between the Amex decline and
the equity increases elsewhere implies
savings worth around US$2 billion.
The market may not have totally understood the dynamics of the
relationship. — Reuters
SAO PAOLO: Brazil’s prosecutor is seeking to prevent agreements between the federal government and construction and
engineering companies accused
of involvement in a corruption
scandal enveloping state-run oil
producer Petrobras. State Prosecutor Julio Marcelo de Oliveira
last Friday sent a letter to the Brazilian Federal Audits Court asking for an order stopping some
so-called leniency agreements,
according to a copy of the document published on the Contas
Abertas website, a non-governmental group that monitors fiscal
accounts. — Bloomberg
Disney raises Magic
Kingdom tickets to above
US$100 for first time
LOS ANGELES: Walt Disney Co
raised the cost of a single-day
admission to its flagship Magic
Kingdom park in Orlando, Florida, by 6% to US$105 (RM382),
breaking the US$100 level for the
first time. Prices for the company’s three other Orlando resorts
will rise 3% to US$97. At Disneyland and the Disney California
Adverture parks in Anaheim,
California, tickets will rise 3% to
US$99. The increases took effect
yesterday. — Bloomberg
26 WORLD
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Sydney siege report signals
tighter immigration curbs
Abbott says legal system has let the country down
BY MORAG MACKINNON
PERTH: Australian Prime Minister
Tony Abbott foreshadowed tighter
immigration controls yesterday when
he released the first report into a siege
last December in Sydney’s Lindt cafe,
in which two hostages and the gunman were killed.
The legal system “had let the
country down”, Abbott said, almost
10 weeks after Iranian refugee Man
Myanmar army:
More than 130
dead in fighting
near China
BY HL A - H L A H TAY
NAYIPIDAW: Myanmar ’s
army on Saturday said more
than 130 people had died in a
deepening battle with rebels
in the northeast, declaring it
would not rest until stability
is restored to the border area,
which tens of thousands have
fled.
Fighting raged in the remote
Kokang region of the Shan state,
where conflict erupted on Feb
9 with insurgent attacks on soldiers that triggered a military
onslaught, prompting at least
30,000 civilians to escape into
bordering China.
In the first press conference
since clashes began, Defence
Ministry spokesman Lieutenant General Mya Htun Oo said
the conflict had killed 61 military and police officers, and
around 72 insurgents. More
than 100 military members
have been injured since fighting broke out.
He did not provide figures on civilian deaths in and
around Laukkai town, where
the conflict has centred, as
efforts to evacuate remaining communities have been
hampered by an attack last
Tuesday on a local Red Cross
convoy, which wounded two
aid workers — leading relief
groups to officially suspend
rescue missions.
The defence spokesman
blamed the convoy attack on
the rebels, saying: “Our military
only provides protection to civilian convoys ... we are going
to take action against Kokang
rebels’ offence.”
The ethnically Chinese
Kokang rebels or National
Democratic Alliance Army,
who are fighting for regional
autonomy, have denied attacking the convoy. — AFP
Haron Monis walked into the cafe to
hold 18 hostages at gunpoint during
a 17-hour siege and bring Australia’s
largest city to a standstill.
The joint federal and state government report found that all decisions
authorities made in relation to Monis
were reasonable under current laws,
though it recommended changes to
conditions for immigration, citizenship and bail.
“Plainly, this monster should not
have been in our community,” Abbott said in Sydney. “He shouldn’t
have been allowed into the country. He shouldn’t have been out on
bail. He shouldn’t have been with a
gun, and he shouldn’t have become
radicalised.”
Monis, who sought asylum in Australia within a month of arriving on a
business visa in 1996, later received
citizenship.
At the time of the siege, the self-
styled sheikh, who tried to align himself with the Islamic State group, was
on bail on a charge over the murder
of his ex-wife. He was killed by heavily
armed police who stormed the cafe
after he killed a hostage.
The New South Wales government
adopted new bail laws after the siege.
The review wants these laws stiffened
to take into account an accused person’s links to terrorist outfits or violent extremism. — Reuters
1,500 homes damaged by
Cyclone Marcia in Australia
MACKAY (Australia): Australian
officials said yesterday that all
efforts were being made to help
those hit by Tropical Cyclone Marcia, which smashed through the
Queensland state, leaving 1,500
homes damaged and thousands
without electricity.
Marcia was one of two fierce
cyclones which hit northern Australia within hours last Friday.
The first, Tropical Cyclone Lam,
hit remote communities in the
northern territory near Elcho Island, some 500km east of Darwin.
Marcia, a maximum Category 5 storm, tore through the east
of Queensland and badly affected Yeppoon, 670km north of the
capital Brisbane, before heading
south to Rockhampton.
“We’ve had assessments of over
1,500 houses that have had some
kind of structural damage,” said
Queensland Premier Annastacia
Palaszczuk.
“In Yeppoon and Rockhampton, around 100 are severely impacted ... people can’t go back into
their homes. Our fundamental
priority now is on those families
who have been the most severely
impacted.”
As the clean-up gathered pace,
BANGKOK: Thai police plucked at
least three people off the streets
of the capital yesterday, after they
held a small gathering to “exchange views” with the country’s
military junta.
Thailand’s military has severely
restricted public gatherings since
seizing power in a coup last May.
Taking a hard line on dissent, it
has detained more than 300 peo-
Turkey evacuates troops
guarding tomb inside Syria
ANKARA: Almost 600 Turkish
soldiers crossed the border deep
inside Syria overnight in a successful operation to repatriate
troops guarding a Turkish enclave surrounded by Islamic
State militants, Prime Minister
Ahmet Davutoglu said yesterday. The Turkish troops, reportedly numbering around 40, were
guarding the mausoleum complex of Suleyman Shah, grandfather of the Ottoman empire’s
founder, Osman I, which under a
1920s treaty is considered sovereign Turkish territory. The tomb
containing the remains was also
brought back to Turkey, and Suleyman Shah will be reburied in
a different pocket of Syria over
which Turkey has also secured
control, Davutoglu said. One
soldier was killed in an accident
during the operation. — AFP
Both sides agree to start
pullback in Ukraine
KIEV: Both sides in Ukraine’s
conflict have agreed to pull back
their heavy weapons from the
front line in accordance with a
United Nations-backed truce, a
Ukrainian military official told
AFP yesterday. “The papers have
been signed to begin withdrawing heavy weapons all along the
front line,” general Olexander
Rozmaznin said. The rebels
confirmed separately through
their own news agency that they
had also signed the agreement.
Earlier, Ukrainian forces and
rebel separatists traded dozens of prisoners in a front-line
eastern town on Saturday, the
first clear sign of progress for an
otherwise shaky truce signed a
week ago. — AFP
Pentagon chief reviews
plans to shut base
some 50,000 properties remained
without electricity, and some residents in more remote areas were
expecting to wait a week to be
reconnected.
“There are over 1,800 [power] lines down. This is absolutely significant, and we are doing
everything we possibly can to
restore power,” Palaszczuk said.
The government has committed army reservists to help with
the clean-up in Yeppoon, as well
as disaster relief funding to those
affected in Queensland.
Despite the destruction, authorities have so far not received
reports of serious injuries or
deaths. But residents have spoken
of the terror of the storm. — AFP
Bangkok police detain at least three
over street demonstration
BY JUAR AWE E K I TTI S I LPA
IN BRIEF
ple, including activists, journalists
and politicians.
The leader of a group of four
people, Akkarakit Noonchan, was
dragged away by plainclothes officers shortly after the beginning of
the event at Bangkok’s downtown
Victory Monument, according to
a Reuters witness.
Akkarakit told reporters that the
event by the group, calling itself
“Serichon Thailand 58”, was not
intended as a protest.
At least two other people were
seen being detained. They had
earlier displayed T-shirts depicting a bird with its beak and claws
bound, as dozens of uniformed
police stood by.
One person has been questioned by the police, said Lieut
Col Thepitak Saengla, the head
of investigations at the nearby
Phayathai police station. He did
not give any further details. —
Reuters
KANDAHAR (Afghanistan):
Pentagon chief Ashton Carter
headed to southern Afghanistan yesterday to review plans to
withdraw US forces in a volatile
area that has long preoccupied
American commanders. In his
first visit abroad days after he
took over as US Defence Secretary, Carter met senior officers
and troops at Kandahar Airfield,
a key base that hosts US special
forces and advisers, as well as
helicopters and other aircraft.
After talks in Kabul with President Ashraf Ghani on Saturday,
Carter made clear that President
Barack Obama’s administration
was considering slowing down
a planned timetable for a troop
pullout. — AFP
Dozens feared missing
after ferry sinks
DHAKA: Dozens were feared
missing yesterday when a ferry
sank in central Bangladesh after
colliding with a cargo ship, the
police said. Survivors said the
MV Mostofa was carrying between 70 and 150 passengers
when it capsized in the Padma
river, local police chief Rakibuz
Zaman told AFP. “Some 50 people swam ashore or were rescued by other vessels,” he added. — AFP
W O R L D 27
M ON DAY F E B RUA RY 23 , 2015 • T HEED G E FINA NCIA L DA I LY
‘Birdman’ vs ‘Boyhood’
Oscar battle heats up
Both movies took top honours at Independent Spirit Awards
BY PI YA SI NHA - ROY
SANTA MONICA: Dark showbiz
satire Birdman, and coming-of-age
tale Boyhood, took the top honours
at the Independent Spirit Awards on
Saturday, a day before Hollywood’s
biggest night when both will face
off in the top Oscars categories.
Birdman, nominated for nine
Oscars on Sunday (9.30am today,
Malaysian time), won three Spirit
Awards, including the top prize of
best feature.
“We’re threatened as a species
into extinction,” Alejandro Iñárritu, director of Birdman, said of
independent filmmakers in his acceptance speech. “These kinds of
awards are where we can celebrate
the cinema that is being forgotten.”
Birdman led the nominees with
five nods along with jazz drama
Whiplash, which won two accolades, and civil rights drama Selma,
which left empty-handed.
Boyhood, filmed over a span of
12 years and nominated for six Oscars, won the best director award
for Richard Linklater and best supporting actress for Patricia Arquette.
Fresh nuke leak detected
at Fukushima plant
TOKYO: Sensors at the Fukushima nuclear plant have detected a fresh leak of highly
radioactive water to the sea,
the plant’s operator announced
yesterday, highlighting difficulties in decommissioning
the crippled plant. Tokyo Electric Power Co (Tepco) said the
sensors, which were rigged to
a gutter that pours rain and
ground water at the Fukushima Daiichi plant to a nearby
bay, detected contamination
levels up to 70 times greater
than the already-high radioactive status seen at the plant
campus. Tepco said it shut the
gutter to prevent radioactive
water from going into the Pacific Ocean. — AFP
Japan calls for return of
isles from S Korea
All four acting categories were
won by Oscar-nominated frontrunners, including Michael Keaton for
best actor for Birdman. In his acceptance speech, he called the film
“bold cinema,” and a “game-changer.” Julianne Moore was named best
actress for her portrayal of a woman
suffering from Alzheimer’s disease
in Still Alice.
The 30th annual Spirit Awards,
hosted by Film Independent, honours the best achievements across
movies made under US$20 million
(RM72.8 million) and are often
an indicator of Academy Award
winners, with drama 12 Years a
Slave, taking top honours at both
the Spirit Awards and Oscars last
year. Unlike the formal glitz of the
Oscars, the Spirit Awards opts for
a relaxed, boozy lunch in a Santa
Monica tent on California’s coast.
— Reuters
Kirk Cameron, Cameron Diaz take anti-Oscar Razzie awards
LOS ANGELES: Kirk Cameron’s
Saving Christmas, a film which
promises to “put Christ back into
Christmas,” and actress Cameron
Diaz triumphed on Saturday at the
Razzies anti-award show, Hollywood’s hall of shame.
On the eve of the Oscars, the
movie took the worst picture, as
well as worst actor, worst sceen-
IN BRIEF
play and worst screen combo. The
film has the dubious honour of a
straight zero rating on the Rotten
Tomatoes movie ranking website,
where the LA Times critics said of
it: “Virtually everything about this
production feels thrown together.”
Blockbuster filmmaker Michael
Bay meanwhile was named worst
director for Transformers: Age of
Extinction at the ceremony, formally called the Golden Raspberries, which celebrated Tinseltown’s
worst output of 2014.
Diaz was named worst actress
for The Other Woman and Sex Tape,
while worst supporting actress went
to Megan Fox for Teenage Mutant
Ninja Turtles.
In the anti-awards show hosted
in a downtown Hollywood theatre,
the worst supporting actor accolade was won by Kelsey Grammer
for performances including in The
Expendables 3 and Transformers.
Big-screen musical adaptation
Annie, starring Jamie Foxx and Oscar-nominated child star Quvenzhane Wallis, was named the worst
remake, sequel or rip-off. — AFP
TOKYO: Japan urged South Korea again yesterday to return
disputed islets, one of the issues
which have soured ties between
the two US allies. Seoul controls
the islands in the Sea of Japan
(East Sea) which it calls Dokdo. They are known in Japan
as Takeshima. The Shimane
prefectural government in
southwest Japan held its annual convention yesterday, after enacting a local ordinance
in 2005 which designated Feb
22 as “Takeshima Day”. — AFP
Cuba frees Canadian
businessman Tokmakjian
after 3 years in jail
HAVANA: Cuba has freed Canadian businessman Cy Tokmakjian after more than three years
in jail, his company said on
Saturday, resolving a case that
had strained Cuban-Canadian
relations and alarmed foreign
investors. Tokmakjian, founder
of the Ontario-based company,
was convicted of bribery and
other charges and sentenced
to 15 years in September in
what the transport company
had called a “show trial” and a
“travesty of justice.” — Reuters
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MO
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Personal
ASSISTANT
COMPI L ED BY VICHITRA NADES
WORK. LIFE. BALANCE
CALLING all foodies; if you’re in the
Bangsar vicinity, give Fatto A Mano
Restaurant a try. The newly-opened eatery
offers casual Italian cuisine specially
prepared by its Michelin-star trained
head chef, Frank Denis Ruidavet. From
traditional pastas to Italian breads to
bruschetta, you’d be spoilt for choice. In
addition to the delicious food, bask in the
ambiance of the restaurant’s cosy yet
modern décor. Fatto A Mano is in Jalan
Telawi 2, Bangsar, Kuala Lumpur. To know
more, call (03) 2280 0200 or visit www.
yeastbistronomy.com.
vill
yar
in a
01
The one that did not
MAKE THE CUT
BOOK a date tomorrow night at The Bee,
Publika for an open mic show, and stand a
chance to win a recording deal with iSeek
Music Studios. Belt out your favourite
tunes while entertaining the crowd for
the night — which will also feature acts
by Darren Ashley and Japanese musician
Kenta Hayashi. As a bonus, the best
performer of the night will get to open for
one of The Bee’s upcoming Lot36 shows.
Registration starts at 7pm and is limited
to 15 sign-ups per show. The Bee is at 36B,
Level G2, Publika, Solaris Dutamas, Kuala
Lumpur. For details, call (03) 6201 8577 or
log on to www.thebee.com.my.
IF you caught The 87th Academy Awards
on the small screen today, then you
won’t want to miss tomorrow’s episode of
Fashion Police. Prepare to cringe as the
show’s hosts — led by Kathy Griffin —
shamelessly scrutinise and criticise what
our favourite celebs donned on the red
carpet. The show will be sure to have you
rolling on the floor with laughter at the
witty and humorous take on the fashion
choices of Hollywood’s most glamorous
event of the year. Fashion Police: The
2015 Academy Awards will be broadcast
on E! (channel 712) on Astro at 10.30pm
tomorrow night.
India’s entry fails to reach the finish line in its dicey journey to the Oscars
BY C ARM E L DO M I NI C
G
loria Stuart coined the
phrase ‘A women’s heart is
a deep ocean of secrets’ as
part of the dialogue in the
11-time Academy Award
winning romantic disaster film, Titanic. While it was used as a
means to validate the events in her life,
it generally applies to those of the fairer
gender who manage to keep their emotions to the minimal in dealing or having dealt with harrowing life situations.
In Liar’s Dice, directed by Geetu Mohandas, the phrase applies to Kamala,
the protagonist in the 103-minute film.
Her ocean of secrets is the mystery of why
her husband, Harud, had lost touch with
her after moving to a big city. Worry and
anxiety are apparent on her face, further
underlined by the constant checking of
her mobile phone to see if, by some miracle, Harud had replied to one of the million text messages she incessantly sent to
him over the span of five months. Despite
many remarks from her village women
folk that her husband was either dead or
had left her to start a new family, Kamala, who is played by Geethanjali Thapa,
26, is more than determined to find the
answers herself.
The film centres on her story — the
tale of a young mother and her audacious three-year-old daughter Manya,
who leave their home in a small village
on the mountains of the India-China
border called Chitkul in search of Harud.
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Their search leads them to New Delhi and
it is during this journey that Kamala is
exposed to life’s cruel realities, from the
moment she leaves her serene village.
One of the few key scenes is when
they meet Nawazuddin, or Nawaz, who
seems to be going in the same direction.
There is an underlying love story — one
that is born out of the need to survive.
As the story progresses, it is clear that
Nawaz is a character that dwells mostly
in the grey — either playing the role of a
protector or the ever-ready opportunist.
Nawaz and Manya are the only characters
using real names.
Blessed with flawless almond-skin,
Thapa, who is from Nepal, said connecting with her character was not difficult.
“I think as a woman, though one may
not have a clear idea of what motherhood
is really about, maternal emotions come
naturally from the moment you hold a
child. Other than that, Kamala is in love
with her husband and the film is about
relationships, more than anything else.
“We went to the village ahead of the
shooting schedule. That helped me understand the essence of the character
because I was able to observe the culture,
the daily routines of the women in the
live it! 29
M O N DAY F E BRUA RY 23 , 2015 • T HEED G E FINA NCIA L DA ILY
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
03
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02
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ectult.
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ood
me
da
ove
out
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the
unter
ure,
the
village and learn things like how to spin a
yarn so I could blend in,” she told ‘live it!’
in an exclusive interview.
Once Thapa was able to understand the
core of her character and formed a bond
with Manya, she was able to depict Kamala
both as a mother and a woman. Her main
concern during the journey was the safety
of Manya and the little girl’s pet, a billy goat.
Thapa observed how the village women
of Chitkul had strong personalities, thus
inspiring the character for her role, especially after Nawaz was introduced in the
plot. Her interaction with Nawaz showed
clear progression from being distrustful of
him in the beginning to completely relying
on him at the end.
“While Nawaz proved to be harmless to
Kamala and Manya, he was a stranger and
just because he saved me from the humiliation of being raped or saved the goat from
abandonment or because he had given me
his shoes once mine gave out, as a mother, I cannot use these paltry instances as
reasons to trust him. He is still a stranger,”
Thapa explained of Kamala’s stand.
In role, Nawaz is an army deserter who
is on the run. His military training gives
him leverage to adapt to any situation that
comes his way. Hence his opportunistic
take on life, since leaving the service. A
drifter by circumstances, Nawaz’s character communicates with actions rather
than words and speaks only out of necessity. He blows hot and cold and it is easy
01. In a scene from Liar’s Dice,
Kamala and Manya follow
Nawaz to Harud’s last
known address.
02. Actors Geetanjali Thapa and
Nawazuddin Siddiqui share
with The Edge Financial
Daily about their experience
in embracing their roles in
Liar’s Dice. Photo by AFP
03. Kamala looks on as Manya
has a snack as they break
journey.
04. The trio check into a lodge
in the city.
to understand why he behaves the way
he does when the film comes to its end.
Nawazuddin Siddiqui shares how it was
difficult to play the character.
“It was not a black and white character and usually, this kind of people have
unpredictable temperament. It was hard
going back and forth as the nice guy and
then as the survivor because I am not like
04
that in real life. But because we hear stories like this all the time, to some extent, I
had an idea of how I wanted to portray this
particular army deserter and of course, I
played off Kamala’s reactions.”
Admitting that he couldn’t say no to be
part of this “brilliant story,” the 40-year-old
Indian actor who has starred in some of
Bollywood’s major films like Black Friday
(2004) with Kay Kay Menon and Pavan
Malhotra, and New York (2009) alongside
John Abraham and Katrina Kaif, notes how
fundamentally survivors like Nawaz were
edgy and while there may be emotions
involved, the ultimate goal is to survive
against all odds.
“Sometimes, I really love Kamala and
sometimes I detach. My character may be
thinking about making Kamala and Manya
his family but also how to provide for them
should he decide to do so. This is why he
doesn’t tell Kamala the truth about Harud but assimilates Harud. The character
is constantly thinking and changing and
the ending of the movie is a cliff-hanger.
It is up to the audience to decipher how
the characters end up.”
Both Thapa and Nawaz hope that when
people watch Liar’s Dice, they will be compelled to have a little more compassion towards migrants and go the extra mile and
ensure that the well-being of the community is everyone’s responsibility, not just
the employers’.
Migrants or not, they are people and we
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are all citizens of the world, the actors said.
And of course the age-old phrase ‘If this
migrant was your loved one, would you be
so nonchalant about their death?’ should
apply and that alone should convict us to
speak up against this atrocity. Further, the
movie demands the audience to deal with
issues such as migrant labourers and human exploitation involved in migrating to
cities and the horrible realities about the
social issues that plague India.
The independent film beat thousands
to be selected as India’s official entry for
the Best Foreign Picture nomination at
the 87th Academy Awards, or the Oscars,
which takes place today at the Dolby Theatre in Los Angeles, US. Unfortunately, as
the Jan 15 nominations were announced,
Liar’s Dice did not make the cut.
Nevertheless, Liar’s Dice was accorded
a special jury award at Sofia International Film Festival and at the 61st National
Film Awards in India in early December,
it bagged the Best Actress and Best Cinematography titles.
The film made its first appearance at the
Mumbai Film Festival in October 2013, and
had its world premiere at the Sundance
Film Festival in January 2014. It was also
screened at the International Film Festival
Rotterdam 2014.
The small but passionate team behind
the film appreciates the honour to have
been nominated for the coveted golden
statue.
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WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Zen TODAY
The thing women have yet to learn is nobody
gives you power. You just take it. — Roseanne Barr
AWARDS ALERT
10 things to look out for at Oscars night
T
he Academy Awards have seen
its fair share of “moments” —
both scripted and unscripted — over the years. Here are
10 things to look out for at the
87th Oscars.
New host
All eyes will be on Neil Patrick Harris, who
has the tough task of following widely-praised
Ellen DeGeneres as the Oscars host. The
Emmy-winning 41-year-old is not short on
talent — his past hosting duties include the
Emmys and Broadway’s Tonys, and he can
sing and dance with the best of them — but
how will he make his Oscars mark? Watch
for that opening monologue/set piece.
one make a fashion statement on the scale of
Bjork in her swan dress at the 2001 Oscars?
Or Lady Gaga emerging from her egg at the
2011 Grammys? Watch out, Gaga is due to
perform at this year’s Oscars.
Will veteran actress Julianne
Moore be fifth time lucky at
the 87th Academy Awards,
and finally win Best Actress
for Still Alice? Photo by AFP
Name game
Saturday Night Fever and Pulp Fiction icon
John Travolta is among a star-studded lineup of presenters — but he will be hoping
to avoid a repeat of last year’s mangling of
Frozen songstress Idina Menzel’s name (it
came out as Adele Dazeem). Read those lips.
Mexican repeat?
Can Alejandro Gonzalez Inarritu repeat fellow Mexican Alfonso Cuaron’s Best Director
triumph last year — and maybe go one better? Inarritu is the front runner in the category for his dark comedy Birdman, which is
also tipped for Best Picture honour. Cuaron
won Best Director last year for Gravity, but
missed out on the night’s top prize.
Viral moment
Speaking of DeGeneres, the daytime talk
show hostess nearly broke the Internet with
her famed selfie with Bradley Cooper, Meryl
Streep and a host of other stars at last year’s
show. Can Harris — or anyone else — top that
this year? Watch out for those smartphones. Finally Moore?
Veteran Julianne Moore, a self-declared “late
Brit invasion
bloomer” at the age of 54, is hoping to make
The Brits are in town again, and this time in her fifth time lucky, after four previous Oscars
force — Eddie Redmayne leads the pack as nods. She is the front runner for Best Actress for
a favourite for Best Actor as astrophysicist her portrayal of a linguistics professor sufferStephen Hawking in The Theory of Everything, ing from early-onset Alzheimer’s in Still Alice.
but other nominees include Benedict Cumberbatch and Keira Knightley (The Imita- Politics?
tion Game), Felicity Jones (The Theory of Probably the most famous political moment
Everything) and Rosamund Pike (Gone Girl). in Oscars history came in 1973 when Marlon
Brando won for The Godfather — and refused
Fashion alert
the award, sending up on stage a native
The parade of stars on the Oscars red car- American woman to protest at the abuse of
pet is, for some, almost as big a show as the her kin by the film industry. Possible causes
Academy Awards itself. Who will wear what? this year — the recent surge in police killWhat colours will be in (and out)? Will any- ings of African Americans? The lack of any
black acting nominees? The Charlie Hebdo In memoriam
attacks? Watch those acceptance speeches. Each year the show includes a segment
dedicated to Hollywood greats who passed
Snowden flick
away. This year, Tinseltown’s biggest loss
Talking of politics, a movie about Nation- was comic actor Robin Williams, who comal Security Agency whistleblower Edward mitted suicide in August. Others mourned
Snowden could generate some debates — include The Graduate director Mike NichCitizenfour by United States film-maker Lau- ols and actress Lauren Bacall, along with
ra Poitras is a front runner for Best Documen- Britain’s Richard Attenborough and Bob
tary. Watch out for her speech, if she wins. Hoskins. — AFP
S P O RT S 3 1
M ON DAY F E B RUA RY 23 , 2015 • T HEED G E FINA NCIA L DA I LY
City to give Barcelona
tougher test — Pellegrini
Manager says his team is in better form this year
BY I A N WH I T TEL L
MANCHESTER: Manuel Pellegrini
believes Manchester City are in far
better form to take on Barcelona in
this season’s Champions League
than they were when they lost to
the same opponents in the competition 12 months ago.
The Catalan club visit the Etihad
Stadium tomorrow for the first leg
of the last-16 tie, a repeat of last season’s two-leg meeting from which
Barca emerged as 4-1 aggregrate
winners and City had players sent
off in each game.
But, after a 5-0 victory over Newcastle United hauled City to within five points of Premier League
leaders Chelsea, Pellegrini said
his side will be far tougher opponents in 2015.
“It is better because last year we
arrived in February after we played
18 games, nine in December and
nine in January,” said Pellegrini. “Of
those 18, we won 16 and drew two.
I think we arrived not in our best
moment. It was important also the
sending-off of Martin Demichelis.
“Maybe it is not a normal game
because it is 180 minutes so you
must try to score but try not to concede. But on Tuesday [tomorrow] I
am sure you will see our team trying
to play in the same way.”
Victory over Newcastle came
courtesy of two goals from David
Silva, a Sergio Aguero penalty,
Samir Nasri and a goal from Edin
Dzeko, his first since late September.
New £28 million (RM157 million) striker Wilfried Bony came off
the bench as a second-half substitute and his introduction to the City
squad seemed to have the desired
effect on his fellow forwards who
looked in scintillating form — none
more so than Dzeko.
“For Edin it is very important,”
said Pellegrini of the Bosnian.
“Maybe one of the things that hapBony (right) being challenged by Newcastle’s Argentinian defender Fabricio Coloccini
pened in January was that Edin was
just coming from a long injury and
during their match at the Etihad in Manchester on Saturday. Photo by AFP
Sergio also.
“In this year we played fewer are going to try from the beginning
“Both of them will return to their
games in January so we will try to as we did today [Saturday] to be normal performance. Edin not only
continue in the Champions League. an aggressive team and to try and scored but worked very well the
All the games are different but we score goals.
whole game.” — AFP
Wenger happy
to see Arsenal
win ugly
Van Gaal frustrated by
Man United slip-up
BY N I CK SZC ZEPA NIK
BY GR AHAM CLU TTO N
LONDON: Arsene Wenger insisted he had no problems watching
Arsenal win ugly as the Gunners
ground out a hard-fought 2-1 victory at Crystal Palace. Wenger’s
sides have traditionally excelled
at overwhelming opponents with
their flowing football, only to
crumble against teams that pose
a more physical challenge.
But they showed a
much-needed resiliency to resist Palace’s aggressive approach
at Selhurst Park on Saturday and
climb to third place in the Premier
League, even though they had a
late scare when Glenn Murray
pulled a goal back in stoppage
time and then hit the post with
a header in the dying seconds.
After scoring early and late in
the first half through Santi Cazorla’s eighth-minute penalty and
Olivier Giroud’s close-range finish, Arsenal faced an onslaught
in the second half and they rose
to the challenge.
Wenger said: “Crystal Palace
is a team which plays with a lot of
intensity and with a very direct
game. It was important for us to
resist. We did that well ... But in
the end it was a very important
win for us.” — AFP
SWANSEA: Manchester United
manager Louis van Gaal expressed
frustration after his side squandered a chance to avenge their
Premier League opening day loss
to Swansea City in a 2-1 defeat.
Ander Herrera gave the visitors
a 28th-minute lead at the Liberty
Stadium on Saturday, but Swansea
equalised less than two minutes
later through South Korean midfielder Ki Sung-yueng.
The game was won 17 minutes from time when Bafetimbi
Gomis inadvertently deflected Jon-
jo Shelvey’s long-range strike over
David de Gea to bring United’s
19-game unbeaten run to a halt.
“It is always frustrating when
you dominate a team and lose,”
Van Gaal told reporters after a
result that saw his team slip to
fourth place.
“Your disappointment is much
bigger because of that. If you think
they deserved to win, you have
to say. The first half, I think, was
equal. I counted the number of
chances Swansea had and we had
the same. We scored one each, so
there was no big difference.
“In the second half, there was
a big difference. But we were not
effective. We dominated the game,
even with 10 men, because Robin
van Persie could not run anymore
after his injury. I cannot say anything about my players except
that we lost.”
Van Persie left the stadium on
crutches after injuring himself late
on and his striker partner Wayne
Rooney admitted it had been a
day to forget.
“We certainly deserved to win
the game,” said the United captain.
“That’s the disappointing thing.
When you play well and can’t get
the win. But that’s football.” — AFP
Glory edge ahead in A-League over Victory
SYDNEY: Perth Glory held Melbourne
City to a scoreless draw yesterday
to extend their lead in Australia’s
A-League to two points. Glory extended their winless run to five matches
at Melbourne’s AAMI Park and didn’t
have a shot on target, leaving much of
the attacking to finals-chasing City.
Melbourne Victory were frustrated by Brisbane’s big wet when their
match with Roar was postponed last
Friday, costing them a chance of taking over at the top of the standings.
An injury-time goal from Spaniard
Sergio Cirio gifted Adelaide United a
dramatic 2-1 over luckless Asian club
champions Western Sydney Wanderers in Adelaide.
A stoppage time free kick from
Jason Hicks rescued a 2-2 draw for
Wellington Phoenix against Newcastle Jets in Wellington yesterday.
The fourth-ranked Phoenix looked to
have wasted too many opportunities
as the ninth-placed Jets scored twice
off set pieces in the opening 20 minutes and threatened to pick up just
their second win of the season. The
hard-tackling Jets had defender Ben
Kantarovski sent off for a second yellow card in the 86th minute.
Sydney FC heaped more misery
on Central Coast Mariners with a late
double securing a 4-2 win at Allianz
Stadium. Austrian Marc Janko and
Rhyan Grant scored a goal in each half
to cancel out a brace from Mariners’
Portuguese import Fabio Ferreira. But
Shane Smeltz came on late to regain
the lead for Sydney with Janko striking
again to give Sydney their first home
win in seven matches. — AFP
IN BRIEF
Racism victim snubs
Chelsea offer to attend
match
LONDON: The man subjected to racist chanting by Chelsea fans and pushed off a train
in Paris has snubbed the Premier League club’s invitation
to attend a match at Stamford
Bridge. Video footage showed
a group of Chelsea fans preventing the man, named as
Souleymane, entering a metro train and chanting “we’re
racist, and that’s the way we like
it” before the 1-1 Champions
League draw against Paris St
Germain last Tuesday. Chelsea
have suspended five supporters
from attending matches after
conducting their own investigations. However, Souleymane
told French newspaper Le Parisien: “I appreciate Mr Mourinho’s invitation, but I can’t
get my head around being in
a stadium at the moment.” —
Reuters
Barca’s run of 11 straight
wins ended by Malaga
BARCELONA: Barcelona’s
11-match winning streak came
to an end on Saturday when
Malaga pounced on a bad mistake by defender Dani Alves
to score a shock 1-0 win that
cost the Catalans top spot in
La Liga. The stage was left clear
for a Barca victory to take them
two points ahead of Real but
they were unable to reproduce
the slick football that has seen
them terrorise opponents recently. Seventh-placed Malaga
grabbed the only goal when
Alves tried to nonchalantly
side-foot a back pass but Juanmi nipped in and rounded
keeper Claudio Bravo before
slotting the ball into an empty net after seven minutes. —
Reuters
Argentine coach hit by
object, suffers head wound
BUENOS AIRES: A match was
held up because of crowd violence in the Argentine first division on Saturday. Tigre coach
Gustavo Alfaro needed stitches
to a head wound from an object
thrown from the stands during his team’s match at Rosario Central. Alfaro could have
told the referee he was unfit
to carry on in the Tigre dugout and the match, which was
held up for 13 minutes, would
have been suspended. However, Alfaro told reporters on the
touchline: “We’re not going to
stop the match because of an
idiot but Argentine football is
shameful.” — Reuters
Genoa derby called off
due to waterlogged pitch
ROME: Saturday’s derby match
between seventh-placed Sampdoria and Genoa, who are sixth,
has been postponed after heavy
rain left the pitch waterlogged.
It was the second Serie A fixture to be called off this weekend. Yesterday’s game between
Parma and Udinese was also
postponed because the hosts
are in the middle of a financial
crisis. — Reuters
3 2 S P O RT S
M ON DAY FEB RUARY 2 3 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
‘Good time’ to play
England, says Mommsen
Scotland prepared against border rivals in Christchurch
CHRISTCHURCH: Scotland captain Preston Mommsen said now
is a “good time” to play England as
his side prepared for a World Cup
clash against their border rivals in
Christchurch today.
England suffered a humiliating
eight-wicket defeat by New Zealand
last Friday, leaving them bottom
of Pool A following a 111-run loss
to Australia, the other co-hosts, in
their tournament opener in Melbourne.
Scotland were also beaten by
New Zealand in their only match
Nadal stunned
by Fognini in Rio
semi-final
RIO DE JANEIRO: Fabio Fognini
pulled off a huge upset, stunning
top seed and holder Rafa Nadal 1-6, 6-2, 7-5 in the Rio Open
semi-final on Saturday.
The Italian’s spectacular victory ended world No 3 Nadal’s
52-match winning streak in
semi-finals on clay, and earned
him a place in the final against
another Spaniard David Ferrer.
“I’m really happy about this
match. I beat the best player on
this surface,” said the world No
28, who has been in good form
this year since winning the Australian Open doubles title with
Simone Bolelli last month.
Nadal had complained of
poor scheduling after last Friday’s quarter-final win over Uruguayan Pablo Cuevas finished at
3.30am on Saturday.
Fognini played a long lasteight match that lasted more
than three hours on last Friday
before he overcame Argentine
Federico Delbonis.
“I’m super happy, and obviously tomorrow (yesterday) I will have
to battle David, who has always
beaten me ... I will obviously be
happy if I win. If I lose, I will also
leave with the good memories
from this week in Rio.” — Reuters
of the tournament so far, but lost by
just three wickets and scored 142
compared to England’s 123 against
the Black Caps.
Former England all-rounder
Ian Botham labelled last Friday’s
hammering in Wellington as the
worst one-day performance he had
seen in 40 years of playing for and
watching England.
And Mommsen told reporters
yesterday: “Obviously, it is a good
time to be playing them, but at the
same time, we’re pretty focused
on our own game, and that’s been
the mindset over the last couple
of days in the preparation leading
up to the game tomorrow [today].”
England were undone at Wellington’s Westpac Stadium by a
sensational spell of swing bowling
from Tim Southee, who took seven wickets for 33 — the third-best
World Cup return of all time.
But someone who wasn’t
stunned was Scotland coach Grant
Bradburn, who coached Southee at
New Zealand’s Northern Knights
domestic team.
“Having coached the Knights
and having Tim Southee and Trent
Boult in that environment for a
number of years, not really, I was
not surprised. They’re fantastic
bowlers at the top of their game.
“I think it vindicated the 10 overs
that they bowled at the start of our
game in Dunedin [when Scotland
collapsed to 12 for four], and would
have had any side in the world in
trouble.
“We don’t read too much into
the actual scores, what England
scored and what we scored.” —
AFP
Ethiopians seal Tokyo marathon
double as police runners patrol
BY CHISAKI WATANABE
TOKYO: Endeshaw Negesse and
Birhane Dibaba claimed a double
win for Ethiopia at the Tokyo Marathon yesterday amid tight security
in Japan’s capital.
Negesse won the men’s race in
two hours and six minutes, followed
by Stephen Kiprotich of Uganda
and Kenya’s Dickson Chumba, who
took the top spot last year. In the
women’s event, Dibaba went one
better than her runner-up position
last year.
About 36,000 runners took to
Tokyo’s streets for the first of the
World Marathon Majors on a rainy
morning in temperatures about
6°C. The other five majors are in
Boston, London, Berlin, Chicago
and New York.
Organisers deployed more than
10,000 security officials, according
to the Yomiuri newspaper. Some
64 on-duty police officers ran as
part of the event’s surveillance,
according to the paper.
The heightened security comes
after bombings at the Boston Marathon in 2013 and amid increased
concern about terrorism in Japan
following the murder this year of
two Japanese who had been taken hostage by the Islamic State.
— Bloomberg
PACIFIC PALISADES (California): Retief Goosen has won two
US Opens in a stellar career, and
the chance to claim the first PGA
Tour title in six years at the Northern Trust Open felt like he was in
another US Open campaign.
Tough scoring conditions all
week on a firm Riviera Country
Club layout had forced the players
to keep grinding in major championship style, ideal territory for
Goosen — who is known for his gritty, ice-cool approach to the game.
“Patience is a big, big key on a
course like this,” Goosen, who won
the US Open in 2001 and 2004, told
reporters after seizing a two-shot
Garcia delivers ‘one
of his top three’
miraculous pars
PACIFIC PALISADES (California): Sergio Garcia conjured
up one of the most miraculous
pars of his career, “in my top
three” he assessed later, as
he moved into contention for
the Northern Trust Open on
Saturday. Playing the par-four
13th at Riviera Country Club,
the Spaniard hit a wayward
drive that sailed way right into
a bunker on the adjacent 10th
hole from where he struck a
low-cut three-iron through a
narrow gap just short of the
green. Though a poor chip
shot settled 16ft (4.8m) short
of the cup, he coolly sank the
par putt to remain at four-under before ending the third
round just three shots off the
lead. — Reuters
Ko overcomes Yang as
youngest Australian
Open champion
MELBOURNE: World’s No 1
Lydia Ko became the youngest Australian Open winner
yesterday, prevailing in her
final-round duel with South
Korean Amy Yang to add another title to her ever-growing list of achievements.
The 17-year-old from New
Zealand shot a final round
of two-under 71 for a twoshot victory over Yang at Royal Melbourne. “I’ve always
played well in Australia, so
it’s always cool coming back
here,” said Ko, who claimed
the title at nine-under ahead
of Yang who carded 72 yesterday. — Reuters
sIndia rout South Africa
by 130 runs
MELBOURNE: Defending
champions India routed
South Africa by 130 runs in a
World Cup demolition at the
Melbourne Cricket Ground
yesterday. Chasing 308 to win,
South Africa looked nothing
like one of the title favourites
as they crumbled to 177 all out
in the 41st over in front of a
crowd of almost 87,000. Only
Faf du Plessis, 55, showed any
meaningful resistance after
Indian opener Shikhar Dhawan hit 137 and Ajinkya Rahane made 79 in the champions’ imposing total of 307 for
seven. — AFP
Sri Lanka survive scare
to beat Afghanistan
Riviera win would feel like a US Open for Goosen
BY MA RK L A MPORT-STOKES
IN BRIEF
lead after Saturday’s third round.
“I have the experience, but it’s
been quite a long time ago now, 14
and 11 years ago since I won a US
Open. It wasn’t easy out there for me.
“But I like the tougher golf courses where you grind it out. They seem
to be the ones I tend to win on. Most
of my tournament wins came on
the tougher golf courses.”
Goosen, 46, has not triumphed
on the PGA Tour since the 2009
Transitions Championship, and he
did not hesitate when asked what a
victory at Riviera yesterday would
mean to him.
“Oh, this would be an awesome
win,” the soft-spoken South African
said after carding a two-under-par
69 in the third round. — Reuters
DUNEDIN (New Zealand): Sri
Lanka survived a scare to beat
Afghanistan by four wickets in
their World Cup Pool A match
at Dunedin’s University Oval
yesterday. Chasing 233 to win,
the 1996 champions were 51 for
four at one stage before Mahela Jayawardene, who hit exactly 100, and skipper Angelo
Mathews, 44, put on 126 for the
fifth wicket. Asghar Stanikzai
top-scored for Afghanistan with
54 and Samiullah Shenwari
made 38. — AFP