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2. government

FBM KLCI 1806.09
19.45
KLCI FUTURES 1798.50
15.00
STI 3395.27
20.26
RM/USD 3.6480
CPO RM2321.00
PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.50
FRIDAY MARCH 6, 2015 ISSUE 1912/2015
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
www.theedgemarkets.com
6 HOME BUSINESS
SC forecasts Bursa
IPOs to raise
RM13b in 2015
8 HOME BUSINESS
PPB upbeat on its
prospects for FY15
9 HOME BUSINESS
RGB to diversify into
gaming machine
parts business
1718 FOCUS
A voice in the
wilderness
22 C O M M E N T
Oil won’t swing
back to US$100
40.00
OIL US$61.46
Mah Sing
forges
ahead with
launches
in 2015
20 P R O P E RT Y
0.91
GOLD US$1199.20
1.70
FBM KLCI 1806.09
19.45
KLCI FUTURES 1798.50
15.00
STI 3395.27
20.26
RM/USD 3.6480
CPO RM2321.00
PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.50
FRIDAY MARCH 6, 2015 ISSUE 1912/2015
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
www.theedgemarkets.com
6 HOME BUSINESS
SC forecasts Bursa
IPOs to raise
RM13b in 2015
8 HOME BUSINESS
PPB upbeat on its
prospects for FY15
9 HOME BUSINESS
RGB to diversify into
gaming machine
parts business
1718 FOCUS
A voice in the
wilderness
22 C O M M E N T
Oil won’t swing
back to US$100
40.00
OIL US$61.46
Mah Sing
forges
ahead with
launches
in 2015
20 P R O P E RT Y
0.91
GOLD US$1199.20
1.70
2
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
For breaking news updates go to
www.theedgemarkets.com
ON EDGE T V
www.theedgemarkets.com
Experts: Condo
fees will only
go up by 3-6%
after GST
SC: Malaysia
capital market
resilient
despite global
uncertainties
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BritishIndia, Suria
KLCC given more time
Both will have to report outcome to judge on March 23
BY V ANBALAG AN
KUALA LUMPUR: An injunction
hearing on alleged harassment
brought about by premium fashion brand BritishIndia, against its
landlord Suria KLCC, has been put
on hold again to give both parties
more time to settle their dispute
amicably.
The parties will have to report to
Kuala Lumpur High Court judge Datuk Nor Bee Ariffin on the outcome
of their settlement on March 23.
Lawyer M Sivaraj, who appeared
for BritishIndia, said the Suria
KLCC management had proposed
an undertaking in relation to the
injunction three days ago.
“Our client sent a counterproposal to Suria KLCC yesterday (Wednesday). The judge has fixed another case management on March 23
pending the outcome of the negotiation,” he told The Malaysian Insider.
He said the court would likely
fix a date to hear the injunction
application if both parties could
not come to an agreement.
On Feb 24, the judge deferred
the injunction hearing to give BritishIndia and Suria KLCC time to
find common ground.
BritishIndia has
filed a suit against
Suria KLCC for
forcing it to move
from its current
prime location
to another spot
in the mall.
The Malaysian
Insider file photo
BritishIndia, which is known
for its branded apparel, has filed a
suit against Suria KLCC for forcing
it to move from its current prime
location to another spot in the mall.
The order to move was served in
July last year, where BritishIndia was
given four days to accept unconditionally the mall’s relocation offer.
Since then, BritishIndia has been
negotiating to stay at its current location, adding that the order came
after it had paid the rental for July
last year.
BritishIndia also filed an injunction to prevent the management of
Suria KLCC from interfering in its
business at the current premises
pending the disposal of the suit.
Suria KLCC has also filed a
counter suit for vacant possession of the property.
The injunction hearing is to prevent the mall management from
carrying out its threat to board up
the premises.
BritishIndia believes that the
current lot will be leased to a foreign fashion brand.
“If BritishIndia is forced to leave,
it will mark the end of a successful
Malaysian fashion brand having a
presence in the country’s iconic
shopping mall,” the store’s founder
Pat Liew said.
BritishIndia has more than 40
outlets, including 20-odd stores in
leading malls in Singapore, Thailand and the Philippines. — The
Malaysian Insider
Petronas begins US$17b bond
and sukuk drive
KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) began roadshows
yesterday to raise up to US$17 billion
(RM62.05 billion) from conventional and Islamic bonds, or sukuk, for
working capital.
State-owned Petronas met potential investors for a US$15 billion
multi-currency conventional bond
programme and a one-off dollar-denominated sukuk issuance of US$2
billion, two sources told Reuters.
A spokesman from Petronas confirmed the plans.
Bank of America Merrill Lynch,
CIMB Group Holdings, Morgan Stan-
ley MUFG, JPMorgan and Citibank
are lead arrangers, while HSBC and
Deutsche Bank are playing smaller
supporting roles, the sources said.
Petronas will conduct roadshows
in Kuala Lumpur, Abu Dhabi, Dubai, London, Hong Kong, Boston, Los
Angeles and New York until March
10, they added.
Rating agency Standard & Poor’s
assigned a preliminary rating of “A-”
to the Petronas sukuk yesterday.
The move by Petronas comes after the company announced its first
quarterly loss in at least five years last
Friday due to the global slump in oil
prices. It stated plans to cut capital
expenditure by 10% and operating
expenses by up to 30% this year.
Malaysia, a net energy exporter,
relies heavily on Petronas for most
of its oil and gas revenue. But weaker global oil prices have dented its
income and left the Southeast Asian
nation with a devalued currency
and risk of a sovereign downgrade
due to mounting debt from its state
investment fund 1Malaysia Development Bhd.
The company said it will provide
RM26 billion in dividends to the government this year. — Reuters
Missing MH370
‘a travesty’
as Clark sees
search dropped
TOULOUSE (France): The disappearance of Malaysia Airlines
flight MH370 almost exactly a year
ago is a “travesty” without precedent in modern civil aviation that
raises questions about tracking
data made available, Emirates
president Tim Clark said.
Speaking in an interview
with Bloomberg Television,
Clark, whose company is the
world’s biggest international
airline, said information typically available on a jet’s journey,
including a “second-by-second
flight path” that can be dissected
by experts, has not been forthcoming in the case of MH370.
“We’ve actually seen very little
about what actually happened
to the plane,” Clark said in Berlin, adding that authorities may
be searching in the wrong place.
See related story on Page 14
“It’s a modern-day jet, a formidable airplane that has the
latest communication technology on board — for it to disappear
and for the industry not to know
why it disappeared is a travesty.”
No trace of the Boeing 777
jet has been found since the
wide-bodied plane carrying 239
people vanished en route from
Kuala Lumpur to Beijing on March
8 last year, with the Malaysian
government declaring the flight
an accident on Jan 29 and all on
board presumed dead. The yearlong search has broadened from
a regional effort in Southeast Asia
to the depths of the Indian Ocean
southwest of Perth, Australia, after authorities concluded that the
jetliner was taken far off course.
Clark, who is regarded as an
aviation industry sage, having
run his airline for more than a
decade, speculated that efforts
to locate the wreck of MH370
may be called off, as government
ministers from China, Australia
and Malaysia will discuss next
month whether to fund another
stage of the hunt. Current search
operations are being funded
jointly by the Australian and
Malaysian governments.
“Whether it was ever there in
the first place is a question that
needs to be answered,” Clark
said. “But I don’t think they’re
prepared to continue. After it’s
finished I would suspect the file
will be closed.” — Bloomberg
TNB’s Seberang Perai plant on track for operation in 2016
BY CHEN SHAUA FU I
KUALA LUMPUR: Tenaga Nasional Bhd’s (TNB) 1,071mw
combined-cycle power plant in
Seberang Perai, Penang, is on
track for commercial operation
on Jan 1, 2016.
The RM2.5 billion project, utilising the world’s largest and most efficient gas turbine (Siemens H-class),
is currently 94% complete, TNB
(fundamental: 1.3; valuation: 1.8)
said in a statement yesterday.
One of the project’s major milestones involved “back energisation”
which took effect last Friday, added
TNB, noting this enabled pre-commissioning and testing works on
various subsystems.
The power plant was built on
the same site as TNB’s decommissioned Prai Power Station.
Construction work commenced
on May 2, 2013, after TNB and its
partner Samsung Engineering &
Construction beat 18 other international bidders to build, own
and operate a 1,000mw to 1,400mw
power plant. Samsung is the engineering, procurement and con-
struction contractor of the project.
TNB shares closed 8 sen or 0.54%
lower at RM14.64 yesterday, giving it a market capitalisation of
RM83.07 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.
4 HOME BUSINESS
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
MACC probes
fees paid in London
property purchases
Top Felda Investment Corp executive to help in investigations
BY TERENC E FERNANDEZ
PETALING JAYA: RM1 million in
commissions paid to an “agent”
to facilitate property purchases
in London is one of the reasons
why a top Felda Investment Corp
(FIC) executive has been remanded
by the Malaysian Anti-Corruption
Commission (MACC) for five days
until today.
Sources told The Edge Financial
Daily that the officer is “helping”
the anti-corruption agency with
regards to agent fees paid for the
purchase of properties in London
worth RM830 million.
It is understood that the fees were
paid by FIC and not the seller, which
should be the normal procedure
when facilitators are concerned.
It is not known if the officer, in his
40s, will be charged today when the
remand expires. This is because for
the payment to be made, the entire
FIC Board would need to approve it.
The MACC is tight-lipped about
the charge as investigations are ongoing, with more people expected
to be picked up.
MACC deputy commissioner
Datuk Mustafar Ali confirmed investigations are underway, but declined to elaborate.
It is however understood that the
MACC is seeking the cooperation
of Encorp executives to shed light
on the purchases, as well as FIC directors to determine if procedures
were followed.
Last May, FIC, the investment arm
of the Federal Land Development
Authority (Felda), paid RM239.72
million to buy a controlling stake
in property developer Encorp Bhd.
FIC acquired 72.27% of shares
held by Encorp’s two major shareholders: Lavista Sdn Bhd and Pegang Impian Holdings Sdn Bhd.
Both Lavista and Pegang Impian
were jointly held by former federal
minister Datuk Seri Effendi Norwawi and his daughter Efeida.
FIC also paid £60 million (RM330
million) to buy a Kensington hotel
in London.
Felda had also paid £98 million
(RM500 million) last year to buy the
Grand Plaza serviced apartments
in Bayswater, London.
FIC was incorporated in Malaysia on July 2, 2013 and is wholly
owned by Felda.
Declare role in PetroSaudi scandal, KPMG told
BY C H EN SHAUA F UI
KUALA LUMPUR: The opposition
wants 1Malaysia Development Bhd’s
(1MDB) former auditor KPMG to
declare its role in the “PetroSaudi
scandal”, and if there has been omission and negligence, intentional
or otherwise, in its audit of 1MDB.
KPMG was 1MDB’s auditor between 2010 and 2012.
In a statement yesterday, DAP national publicity secretary Tony Pua
said failure to do so would necessitate
an investigation into the audit firm’s
conduct by the Malaysian Institute
of Accountants as the statutory body
established under the Accountants
Act 1967 to regulate the accountancy
profession in the country.
Citing latest documents disclosed
by United Kingdom-based whistleblower website Sarawak Report, Pua
said there appeared to be a discrepancy in the date a Murabaha Financing Agreement (MFA) was signed.
“In a ‘Notice of Drawing’ documents dated July 23 and Sept 8, 2010,
the notices referred specifically to the
‘Murabaha Financing Agreement
dated June 14, 2010 between 1MDB
PetroSaudi Ltd and 1MDB’,” Pua said.
“If the Murabaha loan agreement
was only signed on June 14, 2010, why
is it that the 1MDB financial statements for (the financial year ended)
March 2010 already claimed that the
1MDB shares in the (1MDB and PetroSaudi) joint venture (JV) have been
converted into Murabaha notes on
the last day of the financial year, that
is March 31, 2010?” he asked.
“Further to the [exposure of the]
documents, there was also an email
in May 2010 from Patrick Mahony
to the ‘Project Uganda’ team, which
included officials from PetroSaudi
and 1MDB, which discussed the
various agreements involved in the
transaction: the “Murabaha Loan
Agreement”, the “PetroSaudi Letter of Guarantee” and the “Letter
of Agreement between PetroSaudi
and 1MDB”.
“These emails raise the suspicion
that the entire share conversion exercise by 1MDB in the JV into a loan was
an afterthought, well past the March
2010 financial year-end,” said Pua.
A financial statement has shown
that 1MDB sold its 40% stake in
1MDB PetroSaudi Ltd for US$1.2
billion (RM4.14 billion) and subsequently signed the MFA with 1MDB
PetroSaudi on March 31, 2010.
However, the “Notice of Drawing”
documents showed that the MFA
was signed on June 14, 2010, three
months after the financial year ended. Pua argued that KPMG, which
audited 1MDB’s account between
2010 and 2012, and signed off 1MDB’s
financial statement ending March 31,
2010 on Oct 4 the same year, should
have seen the content of the 1MDB’s
JV agreements with PetroSaudi and
all the relevant documents to arrive
at its conclusion in the report.
“The auditors surely would have
seen these documents — the fact
that the agreement was only signed
on June 14, 2010. In fact, the entire
Murabaha discussion was after the
financial year March 31.
“How is it that they can sign off
an account to state that the Murabaha agreement was signed and
took place on March 31?” asked Pua.
Pua claimed that the whole Murabaha Note exercise was to cover the
1MDB PetroSaudi transaction which
saw US$700 million cash channelled
to a company, Good Star Ltd, controlled by businessman Low Taek Jho
or better known as Jho Low.
By converting to the Murabaha
Notes, the JV agreement details no
longer needed to be reported in the
March 31, 2010 financial report,
including that US$700 million was
taken out from 1MDB PetroSaudi,
he added.
The Edge Financial Daily understands that the office of KPMG’s
managing partner had issued a gag
order on March 3, 2015, forbidding
its employees from saying anything
about 1MDB. In the circular, KPMG
also gave its assurance that there
was no reason to believe anything
was wrong at the company and no
reason to doubt its audit findings.
Institute for Democracy and
Economic Affairs (Ideas) chief executive Wan Saiful Wan Jan said
it is time for the government and
the public to scrutinise the government’s discretionary powers in
setting up government-linked companies and state-owned enterprises
that have extremely weak checks
and balances, and no examination
whatsoever from Parliament.
“1MDB is wholly owned by
the government and has received
funds of more than RM3 billion to
date from the Ministry of Finance.
Greater accountability needs to be
embedded into the structure of
government, especially when taxpayers’ money is involved,” he said
in a statement yesterday.
1MDB to be
dismantled under
debt plan – sources
KUALA LUMPUR: Malaysia’s indebted and controversy-ridden
state investor 1Malaysia Development Bhd (1MDB) will be left as
a skeletal structure and possibly
dissolved under a debt repayment
plan in which most of its assets will
be sold, sources with direct knowledge of the matter said.
The power and property fund, a
pet project of Prime Minister Datuk
Seri Najib Razak with assets worth
US$14 billion (RM51.1 billion), was
hit by losses last year and nearly
defaulted on a loan payment. The
near-miss drove down the ringgit
currency and Malaysian government bonds, and prompted calls
from opposition leaders to make the
fund’s accounts more transparent.
The state fund’s RM42 billion
debt includes a US$3 billion bond
sale in 2013 that was one of the
largest global issues from Southeast Asia.
Under the aggressive restructuring plan, crafted by new boss Arul
Kanda Kandasamy and approved by
the government, the fund will sell
80% of its power unit Edra Energy
Bhd via a stock market listing, three
sources with direct knowledge of
the situation told Reuters.
More than RM18 billion of
1MDB’s debt linked to its power
assets will go under Edra Energy
ahead of the listing, which is due
to kick start in six to nine months’
time, the sources said.
The fund, which has Najib as
chairman of its advisory board, will
also sell the bulk of its land assets
and stakes in two high-profile property projects, Tun Razak Exchange
(TRX) and Bandar Malaysia, after
splitting them into separate entities, as already partially indicated
in a strategic review unveiled last
month.
The Finance Ministry, which
is headed by Najib and is the sole
owner of 1MDB, did not respond
to a request for comment.
1MDB said in an email that Edra
Energy would be “monetised” in
2015 and the TRX and Bandar Malaysia projects would be ultimately
owned by the finance ministry.
This would turn 1MDB into a
skeletal structure that could eventually be dissolved completely, said
one person, who spoke on condition of anonymity because of the
sensitivity of the issue.
“It has become a hot potato for
the Malaysian government. It was
just too much to handle,” said another source.
1MDB said on Wednesday that
its plans to list Edra Energy were
on track. It said the fund would
re-submit an application for an
initial public offering (IPO) after
cancelling a submission made in
November. It did not elaborate.
Arul, appointed in January to
revamp the fund, has carried out a
strategic review of 1MDB’s finances and announced last month the
fund would monetise Edra Energy
this year, run real estate projects as
standalone entities and sell assets
to repay lenders. He did not disclose
Najib has instructed the Auditor-General
to independently verify 1MDB’s accounts
after allegations of 1MDB siphoning off
public funds. Photo by Suhaimi Yusuf
any financial details.
A respected former investment
banker who was previously at Abu
Dhabi Commercial Bank, Arul was
brought in to see if it was possible to
salvage the fund, but decided it was
best to wind down its businesses
after carrying out a thorough sixweek review.
1MDB, which analysts view as a
cross between a sovereign wealth
fund and a state-backed strategic
fund, was established in 2008 as
the Terengganu Investment Authority with RM10 billion to manage oil royalty payments to the resource-rich state of Terengganu.
But as Najib came to power in
2009, he renamed it 1MDB and
turned it into a fully-fledged investment fund.
1MDB expanded by purchasing
pricey power assets from Malaysian tycoon Ananda Krishnan and
gaming-to-plantation conglomerate Genting Bhd, and large plots of
land in the capital and other regions
of Malaysia, racking up debts in
the process until it plunged to a
loss last year.
Ananda lent RM2 billion to
1MDB last month, pulling the fund
back from the brink of a possible
default on a bank loan payment,
sources said. Officials at Ananda’s
investment vehicle Usaha Tegas
were not immediately available
to comment.
Political leaders, including former prime minister Tun Dr Mahathir Mohamad, have demanded
an inquiry into 1MDB’s finances
and are also calling on the government to explain transactions that
they allege resulted in siphoning
off public funds.
Najib said on Wednesday he
had instructed the Auditor-General to independently verify 1MDB’s
accounts after the allegations. But
question marks remain on whether
investors would be interested in the
fund’s IPO and sale plans.
“On 1MDB, it really boils down
to the lack of transparency which
cements it as a known unknown,”
said Weiwen Ng, an ANZ analyst
based in Singapore.
“Greater transparency and accountability of the 1MDB issue
would certainly help for future sales
of assets and any such possible restructuring.” — Reuters
6 HOME BUSINESS
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
SC forecasts Bursa IPOs
to raise RM13b proceeds
This is more than double the amount of RM5.9 billion raised last year
BY FATI N RA SY I QAH M USTAZA
KUALA LUMPUR: The Securities
Commission Malaysia (SC) expects
funds raised via initial public offerings (IPOs) on Bursa Malaysia are
likely to more than double to RM13
billion this year, up from RM5.9 billion raised in 2014.
“The expected capital raised
through IPOs this year is anticipated to be in the range of RM10 billion to RM13 billion, higher than the
amount raised last year,” chairman
Datuk Ranjit Ajit Singh told a news
conference on the release of the SC’s
annual report 2014 yesterday.
Funds raised through IPOs fell for
the second year last year to RM5.9
billion from RM8.1 billion in 2013
and RM22.1 billion in 2012.
Ranjit noted that the decline in
IPO proceeds during the period was
observed across Asean.
RHBCap
identifies new
group MD to
succeed Kam
BY GHO C H EE YUAN
KUALA LUMPUR: RHB Capital
Bhd (RHBCap) has identified a
successor to assume the role of
group managing director (MD)
and group chief executive officer
(CEO) following the resignation
of the incumbent, Kellee Kam
Chee Khiong, on Feb 12.
“A successor has been identified. The board will now proceed to seek approval from
Bank Negara Malaysia (BNM)
to appoint the said successor.
An announcement will be
made upon receipt of BNM’s
approval,” said RHBCap (fundamental: 1.5 valuation: 2.1) in
a statement yesterday.
Kam will step down as group
CEO on May 4 this year but he
will continue to carry out his responsibilities until then. Meanwhile, in the group’s filing with
Bursa Malaysia yesterday, RHBCap said Kam will also retire as
the MD of RHBCap, pursuant
to Article 80 of the Company’s
Articles of Association, at the
forthcoming 20th annual general
meeting (AGM), to be scheduled
tentatively in April 2015, and that
he will cease office as group MD/
MD of RHBCap at the conclusion
of the 20th AGM. It added that
its board has approved the appointment of Datuk Khairussaleh
Ramli, the current MD of RHB
Bank Bhd/deputy group MD to
be the acting group CEO/group
MD in Kam’s absence.
This year, the biggest IPOs are expected to come from the relisting of
MMC Corp Bhd’s power unit Malakoff
Corp Bhd, which is expected to raise
about US$1 billion (RM3.65 billion),
and Sunway Construction Group
Bhd’s RM712.32 million listing.
There is also the wait on 1Malaysia Development Bhd’s power arm,
Edra Global Energy Bhd’s US$3 billion IPO, which recently saw a setback as the documents for the listing
were said to have been returned to
its adviser and will be resubmitted
to the SC at a later date.
Commenting on Edra’s listing,
Ranjit said: “Any issuer that meets
our eligibility criteria and fulfils the
provisions for listings would be allowed access to public listings, but
they must meet our requirements”.
Moving into 2015, the SC will undertake a review of primary market
regulations regarding capital raising,
disclosure and retail fund approvals.
“The review of the primary market regulation is all about creating
efficiencies in our approval process,
of which any regulator will do periodically,” said Ranjit.
Meanwhile, the corporate bond
market’s fundraising figures are expected to hover around the RM85
billion range.
Last year, RM86 billion was
raised in the corporate bond market, a decline from RM86.3 billion
raised in 2013. In 2012, RM123.8
billion was raised in the corporate
bond market.
“We anticipate the [2015] figures
[raised] in the bond markets to be in
the RM85 billion range, and therefore we anticipate that we will have
a fourth year of in excess of RM90
billion raised with the capital markets on a stronger growth in the IPO
segment,” said Ranjit.
In total, private debt securities and
IPO fundraising activities exceeded
the SC’s RM90 billion target for the
third time last year at RM91.9 billion.
According to the SC’s annual report, the Malaysian capital market grew to RM2.76 trillion in 2014,
which is equivalent to 2.6 times the
size of the local economy.
The country has also affirmed its
global leadership in the Islamic capital market, having grown at an average
12% per year over the last five years
to RM1.59 trillion in 2014, which accounted for 58% of the capital market.
“By end-2014, 74% of Malaysian-listed companies were classified as syariah-compliant with market capitalisation of more than RM1
trillion. Malaysia also retained its
position as the largest sukuk market
in the world, accounting for 66% of
global issuances,” it said.
The SC said that fund manage-
Ranjit noted that the decline in IPO
proceeds during the period was
observed across Asean. Photo by Sam
Fong
ment continued to be the fastest
growing market segment with assets under management (AUM) increasing 7.1% to RM630 billion, while
Islamic AUM grew to RM111 billion
from RM98 billion in 2013.
“We have a strong and diversified
capital market, regulatory framework
and institutions. We also believe that
fundamentals are strong, therefore
the story of sustainable growth in
the capital markets will continue,”
said the SC.
“Overall, we remain very vigilant
against global market conditions.
Our view is that our capital market
remains resilient against any external volatility that have an impact on
markets to ensure that the growth
path continues,” said Ranjit.
Bank Negara keeps OPR at 3.25%
BY SUP RIYA S U RE NDRAN
KUALA LUMPUR: As widely expected, Bank Negara Malaysia (BNM)
has decided to maintain the overnight policy rate (OPR) at 3.25%,
following its monetary policy committee (MPC) meeting yesterday.
Similar to its January statement,
it maintained that domestic demand has continued to support
growth amid a moderation of exports in the fourth quarter of 2014
(4Q14), and going forward it will
remain a key driver for growth.
“While the introduction of the
goods and services tax (GST) and
the lower earnings in the commodity sector are expected to have some
impact on private consumption,
household spending will continue
to be supported by the steady in-
crease in income and employment,”
it said in a statement yesterday.
It said that lower fuel prices will
contribute to higher disposable
income and investment activity is
also expected to remain resilient,
with broad-based capital spending by both the private and public
sectors, thus cushioning the lower
investment in the oil and gas sector.
“While export growth will be
affected by the lower commodity
prices, the performance of manufactured exports is expected to
improve. The prospects are therefore for the Malaysian economy
to still remain on a steady growth
path,” it said.
Noting that inflation declined in
January — slowing to 1% year-onyear — BNM said it is expected to
remain low in 1Q15.
“For the rest of the year, headline inflation is expected to trend
higher, but to be below its historical average. The lower fuel prices
will partially offset other domestic
cost factors,” it said.
The central bank added that
while the monthly headline inflation would be subject to the volatility in global oil prices, underlying inflation is expected to remain
contained amid the stable domestic
demand conditions.
M&A Securities said in a note
yesterday that the central bank’s
decision not to raise the OPR was
predicted by market watchers and
followers. “With the challenging
economic outlook in 2015 and its
potential spillover into 2016, it is
perhaps best to leave the OPR unchanged for now and do the assess-
ment [on the need for an OPR hike]
periodically,” its head of research
Rosnani Rasul wrote.
On the global economy, the central bank said it is expected to “continue on a moderate recovery path.”
“Nevertheless, the downside
risks to the global economic outlook remain given the weak growth
momentum in a number of major
economies. The uncertainties in
the policy environment are also
contributing to the shift in sentiments in the international financial markets.
It said that although the Malaysian financial markets have been
affected by these global developments, there remains ample liquidity in the domestic financial system
with continued orderly functioning
of the financial markets.
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Bina Puri bags RM129m job to build Terengganu spa resort
BY CHONG J I N HU N
KUALA LUMPUR: Bina Puri Holdings Bhd has bagged a RM128.5 million contract to build a spa resort to
be known as Movenpick Spa Resort
in Kuala Terengganu, Terengganu.
In a filing with Bursa Malaysia
yesterday, Bina Puri (fundamental:
0.15; valuation: 1.8) said its wholly-owned subsidiary Bina Puri Sdn
Bhd had on Feb 27, 2015 received
a letter of award from Success Diar
Sdn Bhd to undertake the proposed
project. It added that the project is
expected to contribute positively to
the net assets and earnings of Bina
Puri Group for the financial year
ending December 2015.
In a statement yesterday, Bina
Puri group managing director Tan
Sri Tee Hock Seng said with this
latest contract, the group’s unbuilt
order book stands at RM1.86 billion
as at to date.
“We are confident of securing
more projects in the upcoming year,”
he said. He added that the Bina Puri
group has been actively participating in the tender for projects both
local and overseas, but he did not
elaborate.
Located on a 25-acre (10ha)
beachfront site at Chendering
Beach, the proposed spa resort will
feature eight blocks of 2-, 3- and
5-storey buildings, nine pavilions,
a spa and a multipurpose building
and related facilities.
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
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
PPB upbeat on its
prospects for 2015
Fitch Ratings keeps
TM at ‘A-’ with
negative outlook
BY A H MA D N AQ IB ID R IS
Flour, animal feed and grains to drive group’s top-line growth
BY MEENA L A KSHANA
KUALA LUMPUR: PPB Group Bhd,
the Malaysian-listed flagship of billionaire Robert Kuok, expects to record growth in revenue this year, driven largely by its core segment of flour,
feed milling and grains.
PPB Group managing director
Lim Soon Huat said the group is optimistic about its prospects for 2015
but stopped short of revealing figures
on its expected growth.
“The flour, feed milling and grains
segment has always been the largest
contributor of our core segments,” he
told reporters after a briefing on the
group’s prospects for 2015 yesterday.
“We expect to see a similar proportion this year,” he said.
In financial year 2014 (FY14), the
flour, feed milling and grains segment
contributed 61% to the group’s total
revenue of RM3.701 billion and 57%
of its total segment profit of RM313
million. This was due to higher flour
sales volume in Indonesia, Vietnam
and Malaysia, as well as increased
animal feed volume. Higher profit
in the segment was due to improved
net foreign exchange value, increased
sales volume, better recovery of fixed
costs, and margins.
Lim also said PPB Group (fundamental: 2.7; valuation: 0.6) is optimistic about its financial performance
this year, although he conceded it is
going to be a challenging year ahead.
“We are optimistic. If you look at
our prospects in the core segments
other than Wilmar (International
Ltd), our revenue is sustainable for
this year,” he added.
PPB Group is the single largest
shareholder in Wilmar, with an 18.3%
stake.
Wilmar’s earnings contribution to
PPB Group had declined in FY14 to
67% or RM695 million compared with
71.8% or RM764 million in FY13, due
to low crude palm oil (CPO) prices.
This, coupled with lower income
from its investment in equities and
losses in the packaging business, had
impacted PPB Group’s profit before
tax (PBT) in FY14, which dipped 3%
Lim said the environmental and
engineering segment is expected to
achieve a higher revenue this year as the
contracts progress to the construction
phase. Photo by Shahrin Yahya
to RM1.03 billion compared with
RM1.06 billion in FY13.
PPB Group’s revenue, however,
rose 12% to RM3.7 billion in FY14
compared with RM3.31 billion in
FY13, largely driven by the growth of
its core segments, even though Wilmar remained its largest contributor
in earnings. This year, PPB Group is
committing RM208 million in capital expenditure to its flour, animal
feed and grains segment. This sum
is inclusive of its investment in its
associates in China as well as expansion and upgrading of related plant
machineries.
PPB Group director Datuk Ong
Hung Hock said there will be increased production of its flour mills
in Vietnam as its newly-commissioned mill in northern Vietnam in
January this year will be producing
500 tonnes of flour per day. The company will also be expanding its mill
in Pasir Gudang, Johor.
Meanwhile, Lim said the environmental and engineering segment is
expected to achieve a higher revenue
this year as the contracts progress to
the construction phase.
He said the group’s current construction order book stands at RM413
million, which should last it 2½ years.
The group secured six projects with a
combined sum of RM261 million last
year and also secured a subcontract
for the mechanical and electrical
works for project air mentah Refinery
and Petrochemical Integrated Devel-
opment project in Pengerang, Johor.
PPB Group will also be committing RM283 million to expand and
upgrade the stable of cinemas under
Golden Screen Cinemas Sdn Bhd
(GSC), the wholly-owned unit of
its entertainment arm, PPB Leisure
Holdings Sdn Bhd.
GSC chief executive Koh Mei Lee
said GSC will be opening 11 cinemas
this year; three of them have recently
opened in Nu Sentral in Kuala Lumpur, IOI City Mall in Putrajaya and
Ipoh Parade shopping mall in Ipoh.
Meanwhile, PPB Group expects its
property segment to perform satisfactorily despite subdued sentiments
in the local property market.
It is banking on its Puteri Harbour
project in Nusajaya, Johor, with a gross
development value (GDV) of RM1.5
billion, to drive the segment’s performance, said PPB Group (properties) chief operating officer Chew
Hwei Yeow.
Chew said 50% of its phase 1, comprising 456 condominium units in
two towers, with a GDV of RM650
million, have been snapped up even
before its official launch. The development is helmed by Southern
Marina Development Sdn Bhd, of
which PPB Group holds a 28% indirect stake. Southern Marina is a 70:30
joint-venture company between Huge
Quest Realty Sdn Bhd (in which Kuok
Brothers Group holds a 60% stake,
with the remaining 40% under PPB
Group) and Khazanah Nasional Bhd’s
wholly-owned unit, Tanjung Bidara
Ventures Sdn Bhd.
PPB closed at RM14.58 yesterday,
down 38 sen, with a market capitalisation of RM17.28 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.
MKH targets RM850m property sales in FY15
BY C H ESTER TAY
KUALA LUMPUR: MKH Bhd has set
an internal sales target of RM850
million for its property development business for the financial year
ending Sept 30, 2015 (FY15).
The sales target, albeit amidst a
property slowdown, is a 60.79% increment to the group’s FY14 property sales of RM528.63 million.
“This year is indeed a challenging year for us, but we are wellpoised to overcome the challenges with our prudent land-banking
strategy over the years and flexibility in our product launches,” MKH
(fundamental: 1.2; valuation: 2.4)
managing director Tan Sri Eddy
Chen Lok Loi told the press after
the group’s annual general meeting yesterday.
For FY15, Chen said the group’s
property sales would mainly be
driven by demand for affordable
housing, as catered by its HillPark
project in Shah Alam, with about
RM366 million in gross development value. The project is slated
to be launched soon.
“We will also focus more on affordable housing both in Kajang-Semenyih and greater KL for FY15
launches,” he said.
Despite challenges, Chen assures that the group will continue
paying dividend in FY15.
“We have been consistently paying dividend to our shareholders
since listing and will continue to
do so,” he said.
MKH shares closed one sen or
0.35% lower to RM2.88 yesterday,
giving it a market capitalisation of
RM1.21 billion.
KUALA LUMPUR: Fitch Ratings
has maintained Telekom Malaysia
Bhd’s (TM) long-term foreign-currency issuer default rating (IDR)
and its foreign-currency senior
unsecured rating at “A-”, with a
negative outlook.
In a note yesterday, the ratings
agency said the negative outlook
reflects the Malaysian sovereign’s
A-/negative rating, due to its 56%
ownership in TM (fundamental: 1;
valuation: 0.9) as at January 2015,
held through Khazanah Nasional Bhd, the Employees Provident
Fund and Amanah Raya Trustees Bhd.
“The fixed-line incumbent
continues to be strategically important to the government, and
Khazanah exercises significant
influence on TM’s strategic and
operational decisions through
board representation,” it said.
For 2015, Fitch expects TM’s
2015 funds flow from operations (FFO)-adjusted net leverage to rise to 1.8 times, compared with 1.7 times in 2014. The
ratings agency said it may consider a negative rating action if
its FFO-adjusted leverage rises
above two times.
It forecasts TM to post FFO of
RM3.1 billion in 2015, which could
be insufficient to fully cover capital expenditure of RM2.6 billion
and dividends of RM900 million.
“Consequently, in our opinion,
there is little scope for deleveraging,” said Fitch.
On the telco’s earnings before
interest, taxation, depreciation,
amortisation, and restructuring
or rent costs (Ebitdar), Fitch expects a margin of around 34%
from 2015 to 2017, compared with
35% in 2014.
This is attributed to rising cost
pressures and ongoing Ebitda
losses of Packet One Networks
(M) Sdn Bhd (P1), TM’s 55.3%subsidiary.
“However, we believe that continuing growth in its fibre network-based services should continue to drive Ebitda expansion,
albeit at a slower rate. TM has
set a target for the non-wireless
business to grow by 4% to 4.4%
in 2015 in terms of revenue and
Ebit (earnings before interest and
taxation),” said Fitch.
Meanwhile, the ratings agency
expects TM’s capital expenditure
(capex) to rise to RM2.6 billion
to RM2.8 billion in the medium
term, compared with between
RM2 billion and RM2.5 billion
previously.
The extra capex will be allocated for long-term evolution expansion, as TM plans to invest
approximately RM1 billion in P1,
over three years.
For its fixed line business, TM
plans to increase capex to 20% of
revenue, from 16.3% in 2014, to
fund copper network enhancements.
Looking ahead, Fitch said TM’s
outlook could be upgraded to
stable from negative if Malaysia’s
outlook is revised to stable.
TM closed six sen or 0.83%
down at RM7.17, bringing its
market capitalisation to RM26.7
billion.
IRDA partners Ronser in
Iskandar’s waste management
THE EDGE FILE PHOTO
BY C H E S T E R TAY
KUALA LUMPUR: Iskandar Regional Development Authority (IRDA) and Ronser Bio-Tech
Berhad (Ronser) have signed a
Memorandum of Understanding
(MoU) to collaborate in waste
management in Iskandar Malaysia.
“Iskandar Malaysia will reach
its third phase of development
next year as stated in the Iskandar
Malaysia Comprehensive Development Plan and it is all about
sustainability and innovation,”
IRDA chief executive officer Datuk Ismail Ibrahim (pic) said in a
statement last week.
Ismail added that this collaboration is one of Iskandar Malaysia’s initiatives towards achieving
its objective in reducing carbon intensity emissions by 50%
through Iskandar Malaysia’s Low
Carbon Society Blueprint.
Under the MoU, Ronser is
committed to set up a plant in
Iskandar to manufacture Mass
Bio System, which according to
the integrated wastewater solutions provider, is a high technology and high value biological
products by world standard
“I am happy to report that we
had finalised the lease of a factory
of 12,000 sq ft in Frontier Industrial Park at Maju Cemerlang, Ulu
Tiram to set up the production
facilities and expect to reach a
production value of RM100 million for local and export market
in three years and production is
planned to commence in the first
half of 2016,” Ronser’s chairman
Woo Min Fong said.
HOME BUSINESS 9
F R I DAY MA RC H 6 , 20 1 5 • T HEED G E FINA NCIA L DA ILY
RGB diversifies to grow
Company is venturing into the gaming machine parts business in FY15
BY Y EN N E FOO
KUALA LUMPUR: Penang-based
RGB International Bhd is planning
to venture into the business of selling parts — for the electronic gaming machines it manufactures — to
its existing clients in order to grow
its revenue stream for the financial
year ending Dec 31, 2015 (FY15).
“We are looking to be a technical service and parts provider for
gaming machines in the region.
We have recently tied up with a
business partner — a company
that provides turnkey technical
support and parts,” RGB chief operating officer Steven Lim told a
media briefing yesterday.
Lim said RGB will first start with
a pilot project in the parts business
in the Philippines, where its biggest
customer for gaming machines is.
It has tied up with an established
gaming machine parts provider for
the new venture.
This, he said, will allow RGB
(fundamental:1.7; valuation: 1.5)
to be a “complete solutions provider”. It will also help add value
to RGB’s customers in a market
where demand for both gaming
machines and their replacement
parts is high due to a mushrooming
of new integrated resorts
“Parts are important because
machines cannot stay down. What
has always been challenging in the
regulated gaming market is that
regulations surrounding import
of parts makes replacement very
difficult. So, we are providing a
service where customers can order
parts and we can provide the part
and servicing,” said Lim.
Meanwhile, RGB is aiming to grow
both its profit and revenue by 5%
in FY15, driven by the sale of 1,500
gaming machines, the placement of
an additional 500 Bingo machines in
the Philippines and its 7,000 machine
concessions across Asia.
“As a rule of thumb, casinos upgrade their floors after one or two
years of operation. This means that
they undergo a replacement programme or undergo a floor expansion. So, they will need to replace
or add to their gaming machines,”
said Lim.
RGB is also planning to expand
its footprint in new markets in Asia
you an idea of what the returns are
like,” said Lim.
RGB currently has 90 gaming
machines operating in Timor Leste
from which it is reaping revenue
through concession agreements
based on a profit-sharing scheme
with its customer.
RGB assured investors the company will not incur more debt for
its expansion plans. Instead, internally generated funds and possibly
a corporate exercise will be used
for fundraising.
RGB shares closed down 3.13% at
15.5 sen yesterday, bringing a market
capitalisation of RM182.96 million.
Lim: We have recently tied
up with a business partner
... that provides turnkey
technical support and
parts. The Edge file photo
— both for supplying its gaming
machines as well as acquiring minority stakes in “clubs” which host
such machines.
“Currently, our income is coming from the technical support and
management (TSM) division. Moving forward, we want to buy equity
in clubs which operate these gaming machines. We are looking at a
minority stake of 20% to 30% to
have another stream of recurring
income,” Lim said.
RGB is already in the process
of completing the first such acquisition, with its subsidiary RGB
(Macau) Ltd acquiring a 30% stake
in Timor Holding, Lda. The deal is
expected to be completed in the
middle of this year but the success
it is seeing from Timor Leste makes
a good case for more acquisitions.
“As we can see now, the results
in Timor Leste are very encouraging. We are not putting in top-end
machines because the market does
not need it. We are bringing in refurbished machines.
“Based on what we have seen
since November 2014 when we
started sending gaming machines
to Timor Leste, we are looking at
US$400 (RM1,460) to US$500 per
machine per day. These are numbers that we will not get in the other
markets we are in now. That gives
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.
12 B R O K E R S’ C A L L
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Telcos continue to perform
well despite lofty valuations
SapuraKencana
may face
substantial risks
on liquefied
natural gas
Telecommunications sector
(March 5)
Maintain neutral with an unchanged top pick of DiGi.Com
Bhd. The sector continues to perform well despite its lofty valuations, likely as portfolio funds seek
certainty and yields amid macro
uncertainties.
We think the sector can continue
to hold onto its gains despite dividend yields compressing. We are
projecting sector earnings growth
of 3.9% for 2015 underpinned predominantly by revenue expansion
and stable margins.
For sector exposure, we like
DiGi.Com which continues to gain
market share on improving cover-
SapuraKencana Petroleum Bhd
(March 5, RM2.45)
Downgrade to sell with an unchanged target price (TP) of
RM2.20. Our forecast financial year
ending January 2016 (FY16F) and
FY17F earnings are lowered by 6%
to 7% as we value upstream at an 8%
discount to our oil price assumption
(pending the gas sales agreement
[GSA]).
Our sum-of-parts (SoP) is unchanged as we reduce our net debt
assumptions attributable to the holding company.
SoP comprises exploration and
production (E&P) [91 sen per share
discounted cash flow, for Malaysia
and Vietnam producing fields], five
times enterprise value over earnings before interest, taxes, depreciation and amortisation for offshore
construction and subsea services
and tender rigs, and eight times
price-earnings ratio for fabrication.
On top of SapuraKencana Petroleum’s more than one time high net
gearing, we view risks highlighted in
our previous reports as heightening.
In the environment now, we fear
for its long-term pipelay contracts
stability as Petróleo Brasileiro SA has
cancelled/renegotiated various service contracts (Brazil: 47% of order
book). We are unsure how protected the service contractors are from
termination clauses.
About 40% of its 17 operational
rigs are also up for renewal (three by
FY16, three to four by FY17). Weaker
E&P earnings and asset impairment
possibilities could arise in the earning quarters.
The latest foreign shareholding
fell to 20% (from 23%, ex-Seadrill
Ltd) and Tan Sri Mokhzani
Datuk Mokhzani Mahathir’s resignation from the board could provide
uncertainty on Kencana Capital’s
holdings (over 10%).
Despite our 2015 US$72 (RM263)
per barrel (bbl) assumption (2016:
US$80 per bbl), we see SapuraKencana facing substantial risks on liquefied natural gas (LNG). The over
three trillion cu ft gas reserves for
SK408 and SK310 are sizable in total
oil and gas future production profile
estimates.
While we cannot predict exactly
when it will sign a GSA with Petroliam Nasional Bhd, we note that expectations for Asia demand for LNG
are now bearish.
Japan’s spot LNG already contracted over 40% year-on-year (y-o-y)
to average US$10 per million mmBtu
in January and some LNG producers are facing difficulty in locking in
long-term GSAs with Asian buyers.
Industry experts think LNG, which
tracks oil price on a half-year lagged
basis, will fall by another 30% in 2015.
Note that SapuraKencana paid
RM2.9 billion for Newfield International Holdings Inc’s assets. While
we believe the GSA (to be signed per
well) will likely be long-term tenures,
another uncertainty is the offtake
level negotiated between the signing
parties. —RHB Research, March 5
age and network quality. Its attractive bundling packages and low device price strategy should continue
to spur growth, while its dividend
upside remains as management
continues to work on executing a
business trust plan.
The 2014 core earnings for the
telco sector slipped by 2.8% yearon-year (y-o-y) due to earnings
declines at Axiata Group Bhd (9.3%
y-o-y), Maxis Bhd (8.9% y-o-y) and
Telekom Malaysia Bhd (TM), 9.4%
y-o-y.
Axiata’s weaker earnings were
attributed largely to weaker performances at both its key units, PT
XL Axiata Tbk and Celcom Axiata
Bhd. For Maxis, the earnings de-
cline was due to continued erosion
in revenue market share, although
its transformational plans have begun to bear some fruit, evident in
the fourth quarter of financial year
2014 ended December.
TM’s weaker earnings were
largely due to tax incentives in 2013,
which were absent in 2014. Excluding this, at the pre-tax level, TM’s
2014 earnings were higher y-o-y.
Notably, DiGi.Com was the only
telco to register stronger earnings
in 2014, up a hefty 19.1% y-o-y.
With the exception of Celcom,
the two other large telcos registered positive net adds which largely came from the prepaid segment.
Maxis ended 2014 with a net
add of 180,000 subcribers from a
net loss of 1.1 million in 2013, as
its transformational programmes
got underway. Nevertheless, DiGi.
Com remains the clear winner in
terms of gaining revenue market
share, ending 2014 at 31%, up from
28.9% in 2013.
But on the whole, in terms of
subscriber share in 2014, DiGi.Com
gained second spot in the prepaid
market, pushing Maxis to third spot.
In the post-paid segment, Maxis regained its position as market leader.
Margins for the telco operators
remained healthy and well contained, despite increased competitive pressures. — AffinHwang Research, March 4
Telco sector
STOCK
Axiata
DiGi
Maxis
TM
RATING
SH PR
(RM)
TP
(RM)
MKT CAP
(RM MIL)
YEAR
END
CORE PER (X)
CY15
CY16
Sell
Buy
Hold
Hold
7.10
6.36
7.09
7.20
6.39
7.05
7.19
6.98
60,932
49,449
53,216
26,780
Dec
Dec
Dec
Dec
24.0
23.5
27.0
26.6
23.4
22.0
26.1
23.1
EPS GROWTH (%)
CY15
CY16
3.7
3.6
3.1
6.8
2.4
6.8
3.6
15.5
EV/EBITDA
(X)
9.9
15.0
14.3
7.6
P/BV
(X)
10.2
212.0
(8.1)
3.5
ROE (%)
CY15
CY16
12.1
306.8
43.5
13.3
12.0
327.6
49.4
15.3
DIV YIELD (%)
CY15
CY16
3.2
4.3
4.5
3.8
3.4
4.5
4.5
4.3
Source: Affin Hwang estimates
‘Bearish’ plantation sector,
say industry experts
THE EDGE FILE PHOTO
Plantation sector
(March 5)
Maintain neutral with an unchanged crude palm oil (CPO)
price of RM2,550 per tonne. We
are keeping our “neutral” call on the
plantation sector with an unchanged
CPO price forecast of RM2,550 per
tonne for the calendar year 2015
(CY15) and CY16 respectively.
We like Genting Plantations Bhd
and Ta Ann Holdings Bhd for their
(i) pure plantation upstream focus;
(ii) double-digit growth in fresh
fruit brunch production; (iii) young
age profile of plantation; and (iv)
cheaper valuations.
We attended the three-day Palm
and Lauric Oils Conference 2015,
organised by Bursa Malaysia.
With a huge turnout of about
1,500 participants including 12
prominent speakers, and in contrast to last year, the general sentiment among all was more bearish
given the current low performance
of CPO prices.
In general, industry experts are
looking in the range of RM1,650 to
RM2,800 per tonne.The average
consensus forecast of RM2,200 per
tonne is significantly lower compared with RM2,850 last year.
Industry players generally view
that CPO prices will continuously
be under pressure, attributed to
high soybean supplies coming from
the United States and the weak
crude oil price outlook.
The most bullish speaker was
well-known industry speaker Thomas Mielke (ISTA Mielke GmbH executive director),
who sees CPO prices touching
RM2,800 per tonne this year.
On the other hand, Harald Sauthoff (BASF Group, global procurement natural oils and oleochemicals vice-president) has the most
bearish view as he foresees CPO
prices averaging RM1,940 per tonne
this year.
Interestingly, the most notable
speaker, Dorab Mistry (Godrej International Ltd director), sees a
trading year for CPO prices which
he expects to touch RM2,500 per
tonne between now and May before coming down to RM2,100 per
tonne after July, a trading spread of
20% in five months.
Industry players are also generally not so positive on the downstream business mainly due to:
(i) excessive capacities due to too
much coming on stream from Indonesia at one time; (ii) lower margins due to stiff competition; (iii)
crude oil prices remaining weak;
and (iv) European demand remaining sluggish. —PublicInvest
Research, March 5
Plantations sector
COMPANY
Felda Global Ventures
Genting Plantations
IOI Corp
KL Kepong
Sime Darby
Ta Ann
TSH Resources
PRICE (RM)
@04MAR
MARKET CAP
2.27
10.38
4.69
22.76
9.34
3.93
2.25
8,281.4
7,9884
29,957.8
24,284.9
56,638.7
1,456.1
3,048.8
Source: PublicInvest Research estimates
(RM MIL)
EPS(SEN)
2015F
2016F
11.3
50.0
17.4
91.1
45.5
33.5
10.8
12.4
54.6
18.9
95.6
46.4
36.6
11.5
EPS GROWTH (%)
2015F
2016F
16.2
0.8
(15.1)
(1.5)
(10.6)
15.5
8.0
9.7
9.2
8.6
4.9
1.9
9.2
6.4
P/E (X)
2015F
2016F
20.1
20.8
27.0
25.0
20.5
11.7
20.8
18.3
19.0
24.8
23.8
20.1
10.7
19.6
2015F
P/B(X)
2016F
1.2
2.0
5.2
3.0
1.9
1.3
1.6
1.2
1.9
4.7
2.8
1.9
1.3
1.5
ROE(%)
2015F 2016F
7.6
9.7
16.8
11.7
9.3
11.4
11.5
8.1
9.9
16.7
11.7
9.2
11.9
11.2
DIVIDEND YIELD (%)
2015F
2016F
3.3
1.4
1.9
2.4
3.3
5.3
0.9
3.6
1.6
2.0
2.4
3.3
5.8
0.9
F R I DAY MA RC H 6 , 20 1 5 • T HEED G E FINA NCIA L DA ILY
B R O K E R S’ C A L L / T E C H N I C A L S 13
A potentially softer market tone
BY LEE CHENG HOOI
A
merican stock markets ended lower on
Wednesday as the
February ADP job
reports came in at
212,000 jobs and
below the 219,000 number that
economists estimated. Ahead of
the jobless claims and non-farm
payrolls reports later this week, the
S&P 500 Index inched down 9.25
points to 2,098.53 points whilst the
Dow tumbled 106.47 points to end
at 18,096.9.
In Malaysia, the FBM KLCI
moved in a narrow and weaker
range of 20.25 points for the week
with higher volumes of 2.11 billion to 2.83 billion traded. The index closed at 1,806.09 yesterday,
down 19.45 points from the previous day as blue-chip stocks like
CIMB Group Holdings Bhd, Genting Bhd, Petronas Dagangan Bhd,
Public Bank Bhd, PPB Group Bhd
and SapuraKencana Petroleum Bhd
caused the index to fall on consistent profit-taking activities. The ringgit was much weaker against the
US dollar at 3.654 as Brent crude
oil remained steady at US$60.20
per barrel.
The index rose on a rally from
the 801.27 low (October 2008)
to its 1,896.23 all-time high (July
2014) and it represents an extended Elliott Wave “Flat” rebound in
a “Pseudo-Bull” rise completed.
The next few months’ index price
movements since July 2014 had key
swings of 1,837.28 (low), 1,879.62
(high), 1,766.22 (low), 1,858.09
(high), 1,671.82 (low), 1,810.21
(high), 1,706.18 (low) and 1,831.41
(high).
All the index’s daily signals are
mixed with negative readings for its
CCI, MACD and Stochastic but positive readings for its DMI and Oscillator. As such, the index’s weaker
support levels are seen at the 1,738,
1,770 and 1,800 levels, while the resistance areas of 1,806, 1,831 and
1,858 will cap any index rebound.
The FBM KLCI’s 18 and 40 simple moving averages (SMA) depict a
neutral trend for its daily chart. However, the price bars of the index are
now between the 50 and 200 SMA
and remains in a neutral position on
that front. The recent fall from its alltime high of 1,896.23 saw a trough
at 1,671.82. The price rebound from
1,671.82 stalled at 1,831.41 (on Feb
4 2015) and remains below the 200SMA line of 1,828.61.
Due to the poorer tone for the
FBM KLCI index, we are recommending a chart “sell” on Brahims
Holdings Bhd (Brahims). Recently,
Brahims made the news after agreeing to new terms for its in-flight
supplies agreement with Malaysian
Airlines (MAS). As part of the MAS
cost restructuring by Khazanah Nasional, Brahims’ 25-year RM6.25
billion exclusive contract will take
a 25% cut in monthly bills, pending
a new catering deal. Brahims also
agreed to a 60% cut in payments
withheld by MAS. The negative news
flow has triggered the wave of recent
selling that drove Brahims’ share
price down below RM1.
Looking at its fourth quarter of
financial year 2014 (4QFY14) results
announcement, Brahims recorded
a 27.5% fall in revenue to RM79
million in this quarter from RM109
million in 4QFY13. The group also
recorded a pre-tax loss of RM58
million in 4QFY14 compared with
a profit of RM22 million in 4QFY13.
The poor profitability was due to
concessions given to MAS under its
recovery plan amounting to RM56
million by its subsidiary.
Brahims also pointed out that the
in-flight catering segment continues
Iris Corp’s Gerehu Heights
township gets positive response
Iris Corporation Bhd
(March 5, 29.5 sen)
Maintain hold call with higher
target price (TP) of 36 sen. This is
based on an unchanged price-toearnings ratio of 20 times and calendar year 2015 earnings per share
of 1.8 sen.
Continue to expect an improved
performance ahead based on: resumption of works in Tanzania and
Republic of Guinea; improved contract flow for Rimbunan Kaseh (RK)
and Sentuhan Kasih (SK) projects;
completion of upgrading works for
waste incineration power plant in
Phuket; ramp up of production in
its food waste to fertiliser plant in
China; and contributions from its
Gerehu Heights project.
Overall performance has been
let down by losses due to a lack of
scale in RK and SK projects.
Gerehu Heights.
This was attributed to a slow
award of projects by both the state
government and Felda.
However, recent showings displayed narrowing losses from the
segment.
For 2014, the group has secured
a combination of five RK and SK
projects. This should contribute
positively as it looks to turn around
the segment.
The soft launch of Gerehu
Heights was met with positive responses as 50 houses were sold
within two days.
Sold in phases over the next 1.5
years, the township will have a total
of 300 housing units.
Potential gross development
value is estimated at RM300 million with gross margin of between
20% to 30%. Positive contributions
are expected in financial year 2016.
Also, expect a ramp up in production for its food waste to fertiliser plant in China. Currently, incurring losses, it operates at only
one-third of its capacity.
It recently received a permit from
the local government to secure waste
from other regions in the area. The
move will allow the plant to achieve
the scale necessary to generate positive contributions. — TA Securities
Research, Feb 26
to remain challenging despite the expected increase in passenger load as
its profit margins may be adversely
impacted by the implementation of
a new pricing methodology.
A check of the Bloomberg consensus reveals that only two research houses have coverage on
Brahims. Of the two research houses there is one “sell” call and one
“hold” call. Brahims’ 12-month
trailing earnings per share on
Bloomberg indicate a loss of 14
sen. Its price-to-book value ratio
of 0.68 times indicates that its share
price is trading at a discount to its
book value.
Brahims’ chart trend on the daily, weekly and monthly time frames
is very firmly down. Its share price
made a massive decline since its
all-time high of RM2.71 on March
7, 2014. Since that RM2.71 high,
Brahims fell to its recent low of 81
sen this month.
As prices broke below its recent
key critical support levels of RM1.16
and RM1.12, look to sell Brahims
on any rebounds to its resistance
areas as the moving averages depict very firm short- to long-term
downtrends for this stock.
The daily, weekly and monthly indicators (like the CCI, DMI, MACD,
Stochastic and Oscillator) have issued sell signals and now depict
very firm indications of Brahims’
eventual move towards much lower
levels. It would attract firm selling
activities at the resistance levels of
81 sen, RM1.12 and RM1.16. We
expect Brahims to witness weak
buying interest at its supports of 55
sen, 74 sen and 80 sen. Its downside
targets are located at 40 sen, 36 sen,
30 sen and 18 sen.
Lee Cheng Hooi is the regional
chartist at Maybank Kim Eng.
The views expressed in the article are the opinions of the writer
and should not be construed as
investment advice. Please exercise
your own judgment or seek professional advice for your investment
decisions. Technical report appears
every Wednesday and Friday.
Favelle’s strength is building
to client’s specs
Favelle Favco Bhd
(March 5, RM3.10)
Initiated coverage with neutral
call and target price (TP) of
RM3.20. We re-initiate coverage of Favelle Favco Bhd (FFB)
with a TP based on its forecast
financial year ending Dec 31,
2015 (FY15F), and FY16F earnings per share of 32 sen pegged
to price-to-earnings ratio (PER)
of 10 times.
FFB, a 61%-owned subsidiary of Muhibbah Engineering
(M) Bhd, is a niche integrated
international manufacturer of
customised cranes, operating
in the oil and gas, construction
and port industries.
Our valuation at PER 10
times is based on the average
PER of the consensus value
(eight times) and Top 20 lower-tier crane manufacturers in
the world’s PER of 11 times because we feel FFB has no close
listed local competitor and is
of a size sandwiched between
top players.
As at November 2014, the total secured order book outstanding is approximately RM1.091
billion, providing earnings visibility of at least two years.
FFB’s main strength is in its
ability to manufacture cranes
accommodating customers’
unique specifications and requirements.
FFB was ranked 18th in publishing house KHL Group’s
ICm20 ranking of the Top 20
largest crane manufacturers
globally by revenue in 2013. FFB
is the only crane developer to
have achieved this ranking in
Malaysia and Southeast Asia.
FFB cranes participated in
the construction of nine out of
10 of the world’s tallest buildings. — InterPacific Research,
March 5
14 H O M E
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
MH370 families vow
not to give up hope
They ask MAS and its insurer to treat them with compassion
KUALA LUMPUR: Just days before
the first anniversary of the disappearance of Malaysia Airlines
(MAS) flight MH370, families of
the missing passengers and crew
have vowed not to give up hope
until there is physical evidence of
the aircraft.
In a statement yesterday,
Voice370 — a group made up of
wives, husbands, children, parents and other close relatives of
the missing passengers and crew
— also called on Putrajaya to commit to the search for the missing
plane and their loved ones until
they are found.
“Despite the complete lack of
wreckage found or physical evidence of a catastrophic event, the
Malaysian government has officially declared that the airplane
crashed, leaving no survivors, and
it has ended the rescue phase of
the search effort.
“We do not accept this finding
and we will not give up hope until
we have definitive proof of what
happened to MH370,” it said.
On March 8 last year, flight
MH370 vanished en route from
Kuala Lumpur to Beijing with 239
people on board. There has so far
not been any sign of the plane and
those on board.
Voice370 said it is unlikely that
on Sunday, the next of kin would
find out anything more about the
final moments of the flight or the
whereabouts of their family members.
It said the disaster was devastating for the families and caring
people all over the world, and in the
months following the disappearance of the plane, MH370 families
were subjected to “a disorganised
barrage of information from varied sources, much of which later
proved to be incorrect”.
“This included when the plane’s
transponder and Acars (Aircraft
Communications and Reporting
System) stopped sending data in
relation to the crew’s last recorded
radio call, what was said in the last
radio call, what items were stored
in the plane’s cargo bay, and other
critical details.
“We were initially told that the
airplane went either on a northern
route, which would bring it over
land and possible landing sites, or
a southern route, but the possibility of a northern route was quickly
abandoned.
“Since then, the entire search
effort has been focused on a relatively small area of the southern
Indian Ocean, a search area that
was determined by a never-before-employed analysis of automatic communications between
the plane and a communications
satellite.”
Voice370 said the determination of the area as the only place to
IN BRIEF
Appeals Court rejects FT
Islamic council’s
intervention bid
PUTRAJAYA: The Court of Appeal has dismissed an application by the Federal Territories
Islamic Council to intervene
in the government’s appeal
against a High Court ruling
ordering the return of eight
Christian CDs with the word
“Allah” to a Sarawakian clerk.
However, Justice Datuk Tengku Maimun Tuan Mat, who
chaired a three-member panel,
allowed the council to hold a
watching brief in the appeal
and said it could make a submission upon the invitation of
the court. The judge said the
council should have invoked
Order 53 of the Rules of Court
for judicial review and not relied on Order 15 of the Rules
of Court which was used for
civil cases. — Bernama
Melaka religious schools
constantly monitored: CM
Wang Run Xiang, 58, the mother of a passenger aboard missing Malaysia Airlines Flight MH370, holds a picture of her grandson
whose father was aboard the plane as she talks with the media outside the Malaysia Airlines headquarters in Kuala Lumpur on Feb
12. Photo by Reuters
search remains questionable, and
accused Putrajaya of abandoning
hope of finding their loved ones
alive early in the search effort.
Recalling the March 24 announcement by the government
last year that MH370 had crashed
into the southern Indian Ocean
and that there was no hope of survivors, Voice370 said some families
only received the information by
text message.
It added that the announcement was “emotionally devastating” and “unacceptable” at the
time, when it was too early to make
such a determination, especially
given the mistakes, miscalculations, misinformation and lack of
crash evidence associated with the
search then.
The group also recounted the
second blow, which came with little
warning when Putrajaya declared
on Jan 29 that the plane was lost in
an accident and all on board were
killed, and that the rescue effort
would be called off.
It expressed concern that the
Jan 29 announcement was the first
step towards the government calling off the search effort completely,
with the underwater search of the
area of the southern Indian Ocean
scheduled for completion in May.
“We do not accept this decla-
ration and will not give up hope
until we have definitive proof of a
crash and a determination of location — even if it is just one piece
of the wreckage.
“The majority of that area has
already been searched with no
findings. The search must continue
and all options explored if nothing
is found in the coming weeks.
“Finding MH370 is important
not only for humanitarian reasons,
but also to discover what caused
the plane to disappear,” they said,
expressing fears that MAS and Putrajaya want to put the tragedy behind them.
Voice370 said the group harbours no ill-will towards MAS,
which is going through a restructuring exercise to recover from the
tragedies it suffered last year, including the shooting down of flight
MH17 in Ukraine, but added that it
could not accept the government’s
announcements and move on.
The group also asked MAS and
its insurer to treat the MH370 families with compassion. They said
neither had offered settlements to
the families other than a US$50,000
(RM180,000) advance per family.
“They told us that we will need
to prove our losses in accordance
with whatever the law in our home
countries requires MAS to pay. This
plan, however, is in stark contrast
to how we understand other families have been treated in recent
accidents,” it said.
It said that in the TransAsia
Flight 222 crash, the airline reportedly offered each family approximately US$500,000 and did
not require the affected families
to go through the painful steps of
proving their emotional and financial losses as the investigation
unfolded.
“We ask Malaysia Airlines and
its insurer to treat us fairly, to not
require us to initiate the painful
process of obtaining death certificates in order to discuss compensation, and to consider the benefits
to not only us, but the future of the
airline, if we are treated with compassion,” it said.
The group also expressed gratitude to the countries that helped
in the search for MH370, and the
people around the world who sent
their good wishes and sympathy as
the families endured the tragedy.
Voice370 is organising “A Day of
Remembrance” on Sunday to pay
tribute to their missing loved ones
at The Square @ Publika in Kuala
Lumpur from 3.30pm to 6.30pm.
The event will also feature live links
to India, France, Australia and New
Zealand. — The Malaysian Insider
MELAKA: The Melaka government and agencies under its
administration have been continuously monitoring religious
schools in the state to ensure
such institutions are not turned
into bases for recruiting militants, the Melaka chief minister said. Datuk Seri Idris Haron said setting up a religious
school in the state requires
the approval of agencies like
the Melaka Religious Department. “Even after approval, we
will continue to monitor such
schools to ensure no negative
elements filter through such
learning institutions, including
deviant teachings and militant
activities like the Islamic State,”
he told reporters after a state
legislative meeting here yesterday. — Bernama
Polls body in contempt of
court, says Bersih
PETALING JAYA: The Election
Commission (EC) is in contempt of court by proceeding
with its local inquiry on proposed new electoral boundaries in Sarawak pending the
outcome of a judicial review
on the constitutionality of the
exercise, polls reform group
Bersih 2.0 said. Repeating its
call for the EC to stop the inquiry and halt the redelineation exercise, Bersih chairman
Maria Chin Abdullah said the
commission had ignored its
explanation on why the exercise is unconstitutional. — The
Malaysian Insider
PKR’s Rafizi says will
declare assets
PETALING JAYA: PKR secretary-general Rafizi Ramli said
he would take up an Umno
leader’s suggestion that Pakatan Rakyat leaders declare
their assets before criticising
the wealth of Barisan Nasional
leaders. The Pandan MP said
that he would make a statutory declaration of his assets
and distribute it in Parliament
when it begins its first sitting
of the year next week. — The
Malaysian Insider
H O M E 15
F R I DAY MA RC H 6 , 20 1 5 • T HEED G E FINA NCIA L DA ILY
Violence, dirty tricks bring
PAS to a new low
Central committee member Dr Dzulkefly Ahmad assaulted at his Shah Alam home
BY ZU L K I FL I SU LON G
KUALA LUMPUR: The assault on
PAS central committee member
Dr Dzulkefly Ahmad yesterday
morning has only strengthened
claims that the current situation in
the Islamist party is worse than in
1982, when former president Tan
Sri Asri Muda was kicked out, say
party leaders.
Observers said yesterday’s incident puts PAS on the same level, or
worse, than what used to happen in
MIC or Umno, where violence has
been reported on several occasions
over the years.
In the late 1970s and early 1980s,
scuffles and chair-throwing at MIC
grassroots meetings became synonymous with the Barisan Nasional
component party.
Even today, the party, which has
split into two factions, is accusing
each other of using gangsters to
subdue members and control the
party.
Umno, too, has seen its share of
shouting matches and violence at
division meetings with the last one
in 2008 when two Umno delegates,
including a woman, were injured
after they were hit by chairs flung
during a scuffle which broke out
at the Seremban Umno divisional meeting at the Tuanku Ja’afar
Golf Club.
Analysts, observers and PAS activists said yesterday’s incident was
a manifestation of a culture that
should not be associated with an
Islamist party with followers taking
pride in the way its leadership had
settled party matters.
PAS practises the concept of
leadership by ulama (clerics) but
that is now marred by recent events
Police officers recording a
statement from Dzukefly
on the attack.Photo by The
Malaysian Insider
involving violent behaviour like assaults and torching the property of
party leaders, and members using
foul language on one another.
Dzulkefly had previously told
The Malaysian Insider that all this
while, PAS leaders had attacked
Umno by accusing them of not being united.
He said former PAS president
Datuk Fadzil Mohd Noor had always read a Quranic verse from surah Al-Hashr which means: “They
look united but in their hearts, they
are divided.”
“The verse was used by Fadzil
against Umno because of the division in the party, but now it has
fallen back on PAS,” he said.
Dzulkefly was assaulted by unknown assailants armed with sticks
in the porch of his Shah Alam home
early yesterday morning after returning from morning prayers.
The PAS research director’s lips
were split and he suffered a swelling on the head. Dzulkefly lodged
a police report in Shah Alam after
receiving treatment at a clinic.
In a WhatsApp message following the incident, Dzulkefly warned
all his friends to be careful in the
light of what had happened. “Be
careful, my friends,” he said.
Former PAS secretary-general
Datuk Kamarudin Jaffar, who is
Tumpat MP, said that the incident
was disheartening and expressed
his sympathy for his PAS colleague
over the attack.
“First, [PAS elections director]
Dr Hatta’s [Ramli] car was torched,
and now it is Dr Dzul’s assault. Like
I said, this is worse than Asri’s time,”
Kamarudin told The Malaysian Insider.
He also said factions are prone
to criticise each other using coarse
language. He said the ulama wing,
which has adopted a position that
it is above criticism, is not averse to
criticising others, using terms like
“pig” and “devil” against its critics.
Similar ugly scenes played out
in 1982, which led to Asri’s resignation. He resigned during the 1982
PAS muktamar (general assembly)
after his policy speech was rejected by the delegates. He was also
mocked by a faction in the party.
Prior to that, the PAS Youth muktamar was held elsewhere, and it
approved a motion for PAS to accept
the concept of “ulama leadership”.
With Asri’s resignation in 1982,
the leadership of PAS passed over
to the ulama. The PAS leadership
was taken over by Yusof Rawa and
the Ulama Council was formed as
the highest authority in the Islamist party.
Kamarudin was a political analyst then as he was a political science lecturer with Universiti Kebangsaan Malaysia.
Since Yusof Rawa’s time, the position of the PAS president has never been contested as those chosen
had won by default.
But now, the leadership of Datuk Seri Abdul Hadi Awang and the
concept of ulama leadership in the
party are being challenged.
In the last muktamar held in
Batu Pahat last year, Youth repre-
sentatives who were in support of
Abdul Hadi’s leadership left the
hall when PAS deputy president
Mohamad Sabu began giving his
speech.
During a debate, those who were
not aligned with the conservatives
were booed while another ulama
leader had recited a prayer, cursing
other PAS leaders in his speech.
In his closing speech at the time,
Abdul Hadi hit out at certain PAS
leaders, calling them “barua” (lackeys) and asked those who were
not in agreement with his leadership to “find new land, build new
mosques and become their own
imams”, which was seen as an attempt to get his critics to leave the
party.
PAS central committee member
Datuk Dr Mujahid Yusof Rawa, in a
book titled Menuju PAS Baru, said
PAS needs a new theme after using
the ulama leadership concept for
more than 30 years.
He said PAS has to find a new approach as ulama leadership, which
started with his father Yusof Rawa,
had reached a plateau and is bound
to go down.
Meanwhile, PAS Youth chief
Suhaizan Kaiat, in responding to
Dzulkefly’s assault, said he does
not believe PAS members were
responsible for the attack, suggesting instead that the attack
was by those who wanted to take
advantage of the situation in the
Islamist party.
“I do not discount the possibility
that there are certain parties who
want to take advantage to provoke
PAS leaders,” he said in a Facebook
post. “Their aim is to break PAS up.
May Allah punish their evil doings.”
— The Malaysian Insider
Foreign observers to monitor Free Anwar rally
PETALING JAYA: International observers will be present at tomorrow’s
mass rally in support of jailed opposition leader Datuk Seri Anwar
Ibrahim, organisers said yesterday.
PKR Youth’s #KitaLawan movement said that a delegation of foreign observers from human rights
organisations as well as from the
Malaysian Bar Council will be present to monitor the rally.
“We have informed local and international legal and human rights
organisations of the plan to hold the
#KitaLawan rally on March 7, 2015,”
the group said in a statement.
It said the declaration by police
that the rally is illegal was “baseless”
as the right to gather peacefully is enshrined in the Federal Constitution.
“The opinions of lawyers and law
experts are consistent in explaining
that the job of the police is not to stop
The #KitaLawan movement led
by PKR Youth chief Nik Nazmi
Nik Ahmad (second from right)
holding a press conference
in front of Dang Wangi police
station in Kuala Lumpur last
Friday. The mass rally tomorrow
will draw foreign and local
human rights observers. Photo
by The Malaysian Insider
but to make it easier and help in the
movement of the rally.”
This comes after Dang Wangi police chief ACP Zainol Samah said rally
organisers had failed to give police
enough advance notice to hold the
rally as required under the law.
The police had also suggested
three locations for the gathering,
but #KitaLawan organisers had decided to go ahead with the demonstration outside Sogo in Jalan Raja
Laut, Kuala Lumpur.
The police ban on the gather-
ing follows a police report lodged
by the management of the Sogo
shopping complex against the rally organisers, on the grounds that
the demonstration would be bad
for business. To date, six police reports have been lodged by individuals and business entities against
#KitaLawan.
The rally tomorrow is to push
for Prime Minister Datuk Seri Najib
Razak’s resignation and to demand
for the release of Anwar.
Anwar’s sodomy conviction and
five-year jail sentence was upheld
by the Federal Court on Feb 10. His
supporters said it was a ploy to end
his political career.
Lawyers have said the Peaceful
Assembly Act cannot be used to criminalise rallies, based on a landmark
ruling by the Court of Appeal last
year that upheld the right to peaceful gatherings.
Lawyers have also warned that
police seem to be using a new “tactic” to nab demonstrators by using
the Penal Code instead.
The #KitaLawan rally will begin
at 3pm at three locations — Central
Market, Masjid Jamek and the PAS
headquarters in Jalan Raja Laut —
before the march to Sogo. — The
Malaysian Insider
16 H O M E
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Cabinet to give MACC
more clout, says Leong
Bar president says step could bolster the anti-corruption body’s fight against graft
BY SHERI DA N MAHAV ERA
KUALA LUMPUR: The Cabinet has
agreed in principle to amend the
Federal Constitution to allow the
Malaysian Anti-Corruption Commission (MACC) to hire and fire
its own staff and commissioners, a
step which could bolster the body’s
fight against graft, a forum heard
on Wednesday night.
Bar Council president Christopher Leong said the agreement was
conveyed to the council by Minister in the Prime Minister’s Department Datuk Paul Low at a meeting
in December last year to discuss
ways to increase the commission’s
independence and effectiveness.
The proposals were crafted by
the Bar Council together with the
MACC.
Input was also given by other
groups such as the Institute for
Democracy and Economic Affairs,
Centre to Combat Corruption and
Cronyism, and Transparency International Malaysia.
However, MACC has not shown
the Bar Council the final draft of
the proposed amendments to be
tabled in Parliament.
The proposals, however, do not
include giving MACC the power to
prosecute its own cases, an oft-repeated demand by legislators and
some civil society groups.
Instead, the Bar Council said the
power to take cases to court should
be given to a separate public prosecutor’s office.
“Paul Low has said that the
Cabinet agrees, in principle, to the
proposal to amend the constitution,” Leong said at a Bar Council
talk in Kuala Lumpur on Wednesday night.
It is learnt that Putrajaya wants
to table the amendments this year,
but not in the March parliamentary meeting.
Leong said the proposals would
see the creation of an Anti-Corruption Service Commission (ACSC)
under the constitution, similar to
the Armed Services Commission
and the Judicial Appointments
Commission.
Under the plan, ACSC would
act as an oversight body to decide on policy and direction for
MACC, which in turn would be
responsible for field work and
investigations.
ACSC would essentially take
over the five bodies currently supervising MACC. Its actions would
also be scrutinised by Parliament.
ACSC would not be dependent
on the Public Services Department
(PSD) to hire MACC commissioners and officers as was the case
now, which limited its ability to
be independent, said Bar Council
Leong said the proposals
would see the creation of
an Anti-Corruption Service
Commission under the
constitution, similar to the
Armed Services Commission
and the Judicial Appointments
Commission. Photo by The
Malaysian Insider
vice-president Steven Thiru, who
was also at the talk.
With ACSC, the MACC’s chief
commission would have security of tenure that is protected by
the constitution and outside the
influence of the prime minister
or Cabinet.
The MACC chief commissioner
would then be chosen by members
of ACSC before being officially appointed by the prime minister.
Currently, the MACC’s chief
commissioner was still a civil servant under PSD, Leong said. With
ACSC, the chief commissioner need
not be a civil servant.
The proposal also calls for 40%
of ACSC staff and officers to be
from civil society and the remaining 60% from the public sector,
said Thiru.
Thiru also outlined other proposals MACC felt were necessary.
This includes making misconduct
‘Stupid’, ‘recalcitrant’ not
defamatory, court rules
THE MALAYSIAN INSIDER
BY V A N B A L AGA N
PUTRAJAYA: The Court of Appeal has dismissed an appeal by
Jelutong MP Jeff Ooi (pic) who
had brought a defamation suit
against a state Gerakan leader,
Dr Thor Teong Gee, finding that
the words used by Thor — “stupid” and “recalcitrant” — were
not defamatory in the legal sense.
“We do not think in law that
the words uttered are capable
of being defamatory. Of course,
they are not nice words to use,”
Datuk Mohd Hishamudin Mohd
Yunus, who chaired a three-man
bench, said.
Thor’s counsel, Baljit Singh,
was not required to respond to
the submission by Ramesh Sivakumar, who appeared for Ooi.The
court also ordered RM10,000 in
costs to be paid to Thor.
In April last year, the then judicial commissioner Nurmala Salim
Ooi said the words “maliciousdismissed the suit filed by Ooi after ly defamed” his profession and
Thor allegedly called him in Chi- honour.
nese, “stupid and recalcitrant”, at
In making her decision, Nura press conference in 2010.
mala, who listed four grounds to
support her decision, said Ooi
failed to state the exact words
used in the original language in
his statement of claim.
“Secondly, the words ‘stupid
and recalcitrant’ in Chinese were
used in circumstances that are not
personally directed to Ooi but in
relation to the issue on radiation
waves from telecommunication
towers.
“The actual words in Chinese
read ‘ming wan bu ling’ which
means ‘sangat degil’ (very stubborn) and ‘yu chun’ meaning
‘stupid’,” she said.
She said that Ooi failed to
prove that his image and reputation were tarnished.
In fact, she said that Ooi went
on to win the Jelutong parliamentary seat with a bigger majority in
the 2013 general election.
Nurmala added that the court
was “inclined” to concur with the
defendants that “stupid and recalcitrant” were commonly used
words by Malaysians when they
were angry and in an argument.
— The Malaysian Insider
in public office, such as negligence
and misuse of public funds by civil
servants, a criminal offence.
Such a law would make government servants involved in leakage,
such as those highlighted yearly in
the auditor-general’s reports, liable
to be hauled to court.
“MACC would also like the
power to investigate public servants who have excessive wealth
or who live beyond their means.
Currently, they can only carry out
probes if the civil servant has a
prior offence.
“By amending the MACC Act,
they can investigate public servants
based on suspicion,” Thiru said.
MACC also wants a law compelling civil servants and politicians
to declare their assets before and
after leaving office.
“Corruption cannot be eliminated without this law,” Thiru said.
Other laws that need to be
amended are the Whistleblowers
Act, Witness Protection Act and
Official Secrets Act.
The other critical proposal would
be to split the Attorney-General’s
(AG) functions between being a
lawyer to the government and a
public prosecutor who acts on public interest.
This would create a separate
public prosecutor’s office, which
would be a department independent of the AG and having powers
to investigate anyone.
“The heart of the matter is less
who should have prosecution powers and more about whether those
powers are exercised in the public
interest.
“The AG is a political appointee,
so it is difficult to see him as independent. But a public prosecutor
would have the ability to bring any
case to court if they felt it was in the
public’s interest,” said Thiru. — The
Malaysian Insider
Zahid: Preventive law will address
terrorism
KOTA BARU: The proposed Prevention of Terrorism Act (PoTA) is meant
specifically to address the threat from terror groups such as the Islamic State
(IS) militants, said Home Minister Datuk Seri Dr Ahmad Zahid Hamidi.
A bill is to be tabled in the Dewan Rakyat this month to provide for
the legislation. The Dewan Rakyat sits for 20 days from Monday.
Ahmad Zahid said the new legislation was a preventive law aimed at
anticipating and preventing terror activities and acting against IS members from Malaysia and other nations who come to this country. “This
month, I will table the Prevention of Terrorism bill in the Dewan Rakyat.
Yesterday, the Cabinet was briefed on the draft by the Attorney-General.
The draft will be finalised next week,” he told reporters after an appreciation reception for personnel of the Department of Civil Defence
(JPAM) who were involved in flood relief work.
Ahmad Zahid was asked to comment on the involvement of Malaysians in the IS militant group as well as the latest report of two Malaysians, one from Kedah and the other from Melaka, seen in a video clip
showing the beheading of Syrian nationals in the strife-torn country.
Ahmad Zahid said PoTA would strengthen existing laws such as the
Security Offences (Special Measures) Act 2012 (SOSMA) and the Prevention of Crime Act (PoCA), though SOSMA and PoCA were not specifically for prevention of terrorism.
On the video clip, he said the authenticity of the clip was being verified.
“I could see that they were Malay faces but the police anti-terrorism
unit, with the cooperation of Interpol, is getting the clip verified. “Action
will be taken, [and] not just confined to existing laws such as PoCA, SOSMA and the Penal Code,” he said.
On another matter, Ahmad Zahid said JPAM, which had over 800,000
permanent and volunteer personnel nationwide, was ready to face
natural disasters including floods. JPAM was targeting up to one million permanent and volunteer personnel over the next two years, and
it would acquire more equipment and machinery to make their work
more effective, he said. He also launched 12 high-powered motorcycles
for the Kelantan Anti-Smuggling Unit. — Bernama
FO CU S 17
F R I DAY MA RC H 6 , 20 1 5 • T HEED G E FINA NCIA L DA ILY
A voice in the
wilderness
Public Accounts Committee chairman (PAC)
Datuk Nur Jazlan Mohamed tells Terence Fernandez
and Azril Annuar why his voice against corruption
and mismanagement of public funds must not be in
the minority
Filepic of the GB3 power plant in Manjung, Perak, which is 75% owned by Malakoff Corp Bhd. Nur Jazlan said
the government introduced IPPs after two peninsular-wide blackouts.
Terence Fernandez (T): The only way Umno
can reform is if it is voted out, inculcates
its old values and comes back rejuvenated.
Nur Jazlan (NJ): Just get a fresh group who
loves the party and the country. I’m not saying the folk up there now aren’t doing that,
they don’t display enough evidence of it.
T: Umno focuses on vote banks...
NJ: That’s what I’m saying, vote banks, but
Umno’s cause was once led by the elites for
all. And the rakyat followed. Malaysia that
time, we were all poor. Back then, when
you were one of the elites and you led, the
people followed you. Now it’s the other way
around. The elites no longer support Umno.
They want an alternative. And Umno is getting filled up with the lower educated and
lower income group.
T: Have you spoken about this in Umno?
NJ: Yes. I said it in my Pulai Divisional Annual General Meeting: we need to press the
reset button. My branch also hancur. I know
that myself. There are 40 names but the ones
who are really active are only about 20-30
guys. The rest are active in meetings only.
I take responsibility for the actions of my
division’s members. But they are getting too
old. And some are lower level government
staff, class F contractors, lower level education ... I admit that because I also blame the
good Malays. They talk so much and then
never offer their services. Cakap aje ...
Azril Annuar (A): But Datuk, when I tried
to join Umno in Perak, the leadership
tried to “kill” me almost immediately. So
if Malays like me want to do something
for the country through politics, we end
up joining the Opposition because Umno
itself doesn’t welcome us.
NJ: The problem is those who want to stop the
young from coming in and also the ones who
do come in are of “lower quality”. Those like
you, urban guys, don’t want to join Umno.
A: Is it Umno’s fault that the elites turned
against them?
NJ: We have the power ... because the Malays think that only a new group of elites
in Umno itself is getting everything. What
[Datuk Seri] Anwar [Ibrahim] said 16 years
ago when he left Umno ... it’s the same but
he was also one of them.
Nur Jazlan said Umno is now a party that fights for
the poor and the less educated.
man was a Prince, Tun Abdul Razak was a
nobleman, a “ Bangsawan” and it continued,
Tun Hussein Onn ... and then Tun Dr Mahathir Mohamad broke the mould and Pak
Lah (Tun Abdullah Ahmad Badawi) came
along and broke it further. Now the cycle is
back to the elites: Datuk Seri Najib Razak,
his cousin (Datuk Seri Hishamuddin Hussein) as successor.
But back in the old times ... they led the
country. The British gave Tunku, Tun Razak
and Tun Dr Ismail Abdul Rahman a university education and these guys came home
and screwed the British back. And people
followed.
Today, we are being led by the elites again
but the elites are being shunned in Umno.
And the way Najib behaves, he is going to
the lower end of the socio-economic scale
with BR1M and so on ... He is focusing on
welfare and handouts, so Umno from a party
of elites became a party for the poor.
T: Maybe their profile doesn’t fit their vision of what Umno should be?
NJ: That’s another thing. Those that join
Umno are chasing after something. In my
case, I bring up youth issues. My Youth Chief
now is one of the National Excos. I pushed
him up as Youth Chief and then I called
[Umno Youth Chief ] Khairy [Jamaluddin]
and asked him to allow my Youth Chief to
become an Exco.
So he contested and got number 21. He
just missed it and Khairy appointed him as
one of the Excos. I’ve already lined up my
successor to take over from me.
T: There’s no comprehensive and sincere policy to elevate poverty. After over
A: That’s refreshing ... never heard of any 40 years, the New Economic Policy is not
Umno guys doing this before.
working if there are still many poor Malays.
NJ: I tend to do whatever I say in my articles. NJ: Our poverty is focused on rural poverty.
Where can you find [an Umno] division chief That’s where all our policies were focused
who willingly trains his Youth Chief to be- on. Giving out rice seeds ... but the new poor
come one of the national youth excos? Most are the urban poor and they are in town. And
of the division chiefs are not on good terms then there was the presentation that said
with their youth chiefs. Look at the General they have tackled the urban poor via BR1M.
Exco of Pemuda Malaysia ... how many of
them are [youth] division chiefs in their own A: It doesn’t work. Can RM500 make a real
right and how many of them get along with dent in the city?
their bosses if they are the local Youth Chief? NJ: Well ... right now it’s BR1M handouts
and the PR1MA housing scheme. Two good
A: Are you saying that there is a gap be- things. But what about job opportunities
tween the youth and the veterans?
and income? That’s why during Umno asNJ: There is a big gap! Umno is now a party semblies we are still focusing on the rural
that fights for the poor and the less educat- poor ... in Sabah and Sarawak which is not
ed. During Merdeka, Umno’s leadership your constituency. Sarawak doesn’t even
consisted of the elites. Tunku Abdul Rah- have Umno.
it from you but at a higher price?’
It’s just like the IPP (independent power providers) before. I was in a forum with
Rafizi and he said that the IPP would be
received only by the cronies. I asked him
some simple questions.
Who owns Tenaga Nasional Berhad?
Khazanah. Who owns Khazanah? The rakyat... thus that means every Malaysian is a
crony.
Now let me tell you why the IPPs happened. Before IPP it was all under Tenaga
but they were slow in electricity generation.
And then there was a huge peninsular-wide
blackout in 1995. It happened twice.
Because of these unfortunate incidents,
the government implemented IPP. Of course,
being the first proposers, it was a seller’s
market. How do you determine the correct
rate, supply, how many IPPs? The price was
dictated to Tenaga.
At that time we wanted to invite people
to invest and put money in for two to three
years and then put in a few hundred million
ringgit. That’s why the first IPP deals were
lopsided because Tenaga didn’t do their
job because they were heavily indebted too.
I think 10 years later, the new IPP agreements were renegotiated. So who are the
cronies? Was the government doing its job or
not? First we negotiated the new agreements.
We did it in the best interest of the people.
T: Corruption, abuse of power ... there
is nothing on him. All you have is Saiful.
After 16 years, that is all one has on him.
NJ: I was Youth Exco when Anwar was sacked
in 1998. I had to go down and meet the Youth
Wing ... I was the only one in the room who
had to explain Mahathir’s stance. But 16
years later, his time has passed. But I agree
politically, take Anwar out and the Opposition is in disarray. Buys BN another five to
10 years. With Anwar running around, he
will still be a thorn and a unifying force for
Pakatan to mount their election campaign. T: But the former Tenaga CEO of that time
himself disagreed (and stepped down).
A: Now they can turn him into a martyr. NJ: I know ... but at the end of the day, Tan
Isn’t that bad for Umno?
Sri Ani Arope wanted it his own way. But
NJ: Well... when he isn’t there ... Malaysian good-lah, he was a principled fellow, he repolitics is very simple, that’s why PAS keeps signed. But my final question is this: Since
on going back to the same script ... they the IPPs happened, did we have any more
don’t do much work but every time there is nationwide blackouts?
an election they would send out their fiery
It was a government policy that worked.
orators, throw out some Quranic scriptures Yes, it cost a bit more money but the govand Malays will start applauding and being ernment had to privatise power generation.
impressed ...
But this is where it breaks apart with 1MDB.
That’s why the voters, despite thinking IPP is supposedly for one term only and then
that they are smart, still vote emotionally. it was to be given back to Tenaga so everything
That’s why in my work as PAC [chairman], can be housed under one body. Then you
I try to inject process and evidence. Work establish 1MDB and bought over SIPP (Enthat cannot be disputed factually, instead ergy Sdn Bhd) and extended the concession
of just making political accusations and period. That’s where it breaks down.
innuendos. Like [DAP Publicity Secretary]
Tony [Pua]. Not everything that [PKR Sec- T: No one is saying don’t do it...do it right.
retary-General] Rafizi Ramli and Tony say NJ: That’s why when PAC looks at things
is true. But the way it is presented makes and the government’s point of view. We try
people think they are 100% right, but they to comment on what’s there. But if you ask
are not. Like the 1MDB deals including the about IPP and even the North South Highbonds that were sold to Goldman Sachs way concessionaire PLUS, it was a seller’s
...the Board approved it. Names like Tan Sri market. And now the highways are all owned
Nordin Kamaruddin ... Tan Sri Ismee Ismail by the government again.
and other members of the board. These are
Who is the crony in PLUS? The governestablished names.
ment. The people. Khazanah owns it ... so
Goldman came up to them and said: “It’s” the cronies are the people but Tony Pua and
hard to sell without a government guarantee’. Rafizi will take it and twist it and say cronies
And then Goldman might come up and say: gain from it. But look at the facts.
“It’s” hard to sell these bonds even with the
That’s why I’m very careful in doing my
government guarantee. How about we take
CONTINUES ON PAGE 18
18 FO CU S
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
It is up to the people to decide if PAC is effective
FROM PAGE 17
job because at the end of the day, my own
reputation is at stake.
T: But today there are more players out
there... why is there a need for 1MDB to
get involved in IPPs?
NJ: That was my argument before when
Mahathir said it ...why did you privatise IPP
and now you are taking it back? And taking it
back under a new government organisation
instead of just putting it back under Tenaga.
T: So is 1MDB able to recoup the money?
NJ: Why it was done ... it’s up to the government to explain. But the right thing to do is
to give it back to Tenaga. Because you said
20 to 30 years ago that Tenaga couldn’t do
it, that’s why you had to privatise.
T: There were no takers that time except
for one.
NJ: Yes, go back in history. Even Tony Pua
was still in school back then. So was Rafizi
while I was already working. So that’s why
by being factual at least people will get better information.
That’s our job at PAC — to make the system more transparent and give more information to the people. But how many people
read the PAC reports anyway?
And partly it’s my fault also because I
asked the Parliament administration to put
the reports as a downloadable PDF file in
Parliament’s website. We are just starting
but I bet you there won’t be a lot of people
downloading it.
The thing with Malaysians... they’re not
[good at going into] details. They think they’re
very clever and quickly make their own conclusions and assumptions.
A: How effective is PAC?
NJ: It’s up to the people to think if we are
effective or not. But if we produce good reports, factual accounts with historical rhetorical context, then it will become a good
reference for the people to refer to the issue.
And then it’s been vetted by the opposition
and the government members and our report is always a consensus, there is no veto
power, it must be unanimous.
In the chamber, there are block votes but
we don’t have that. We don’t play politics.
T: Your terms of reference grant you a wider
net compared with the Auditor General’s
Department, right?
NJ: The problem is always about basis. The
Auditor General’s Department is akin to an
audit committee in a company. There is an
internal audit team and they do investigations and prepare the report to be handed
over to the audit committee. And the committee goes through it and recommends
measures to be taken to the board.
Then at the AGM, the General Body decides whether the board is doing its job or
not.
So, PAC is like the audit committee for
the whole country and the government for
the shareholders who are the rakyat.
But the shareholders need to read the
reports instead of just reading news reports
that have been spun out of control. Like
Malaysiakini.
Every time I hold a press conference, there
would be a lot of coverage, around 20-30 people. I have to inform MalaysiaKini on what
to write because it will just go and change
the angle ... the rest follow, even if they are
Malay Mail Online, The Malaysian Insider ...
they are quite factual and not biased.
A: When you call up the civil servants, are
they frightened?
NJ: The civil servants especially because
they have never faced anything like this before. They would hold a prep session before
Pudu Jail is a perfect example. When I requested money for the project [as chairman
of UDA Holdings], they say they didn’t have
the money. So, they asked me to go and tender and I asked them which tender model
did they want to use? SPV (special purpose
vehicle) or another model?
They said they preferred SPV. This meant
UDA will get the land and join venture with
another company and then we sign over the
rights and hope that the project will be built.
That’s what happened with Plaza Rakyat. If
the project is built, UDA’s land as capital is
not enough.
We needed more money to build it, so
that was the capital cost. We needed to raise
loans and guarantees. We couldn’t afford to
do that. So we found another model which
was more like a turnkey.
The point was to find people with money
so we wouldn’t have to borrow money. So
we decided from the outset, we build, we’ll
take the shopping centre and you take the
rest. The shopping centre itself was already
equivalent to 30% of the value of the whole
project.
And then in construction, the building
design is also very important because you
have to make sure that the contractor will
build our side first. So once completed even
if it is a failure, we can still get our end of
the bargain.
There’s no guarantee or anything and the
land is not encumbered. And the land isn’t
transferred. We can [get] strata [titles done].
At that time, I already knew what kind of
building was suitable. Build the offices, hotels
on the podium. The podium is the shopping
centre. Everything was already there from
the financing down to the design. So we did
An artist’s impression of the Bukit Bintang City Centre project on the former Pudu Jail land in Kuala Lumpur.
it and the Chinese came and offered 30%
more than the rest. And they had cash and
Nur Jazlan said when he requested money for the project (as chairman of UDA Holdings), the Ministry of
a letter of support from China Construction
Finance said it didn’t have the money.
Bank, the second biggest bank in the world.
Others say give us first and we find the
financing later ...
I went to see the PM and he agreed. I said
the Chinese wanted to do it as a G2G thing.
It’s a Chinese government company. Everbright (China Everbright Ltd). It’s no small
company. It’s worth RM20 billion!
And I was attacked before the board meeting to approve the project. And then PM
abandoned me. Recently, it was awarded
without a tender to [Tan Sri] Liew Kee Sin.
And it’s already signed!
That’s why I’m already fed up ...
The thing is, if Umno continues this way
sooner or later we will lose. And worse of all,
if I know you want to rob the country blind
Nur Jazlan said the klia2 project was awarded to a company that did not follow the specifications.
because I know you know that the end is
meeting us. They know that the chairman of until the investigation had been completed. near ... why should I help you?
PAC knows what he is doing. I come from a So our recommendation was that we urged
And this perception has permeated
commercial audit background.
the government to allow the Auditor Gener- throughout the whole country.
Usually the ones who will ask the ques- al to investigate klia2 based on our report.
tions will be me or Pua.
It was the other way around. Actually the T: That makes you the odd guy out. What
I would say something and the others pick AG should be investigating and handing about your own (political) survival? Even
up. I normally direct the session so that the their report to us and we will zero in on that. in UDA they went after you.
rest will focus on the issue at hand.
But then again, this is a Khazanah compa- NJ: It doesn’t matter, because at the end of
Look at klia2. There were some chang- ny which the AG is not mandated to audit. the day Umno needs to press the restart or
es during construction and originally they
Another thing I want to know, why should reset button. If you don’t press that button,
engaged a Netherlands-based company to Khazanah companies have special privi- you will lose.
design the airport and then they held a ten- leges just because their board of directors
der based on that.
are luminaries ... who were actually former T: So ... for you it doesn’t matter in the end?
Seven companies went in, six followed civil servants.
NJ: Either way I’m going to lose.
the tender documents specified by MAHB
and designed by the Netherlands company, T: But do you have to go through an act of T: Even if you reset, after the reboot ... will
but it was awarded to the one that did not Parliament to change it?
we be seeing people like you or Khairy Jafollow the specs.
NJ: No. They were under the Ministry of Fi- maluddin or Saifuddin Abdullah?
So the board has to explain. That com- nance (MoF) until the Putrajaya GLC Com- NJ: It’s all right, I’ve done my bit and I can
pany should have been disqualified from mittee was created in 2006 and it was all already walk away. I’m already 50 years old.
the start. So if anyone wants to read up on taken out. TNB, Khazanah ... all!
klia2, it’s all there. But people must use
T: You’re still young, Anwar might become
the information because otherwise they A: Why?
a PM when he is 80, you never know.
will just listen to the opposition who will NJ: In a way, they have a point there because NJ: I want to experience my retirement. At
take it from a political angle instead of a they wanted to remove MoF’s interference. least after politics I can go back (as an aufactual one.
Based on my experience in Telekom, where ditor) on a project basis and earn a living
The best part about klia2 after we did it was we wanted to run it like a profitable business but I need my reputation intact and not in
we couldn’t accuse them of any wrong-doing venture but MoF would say no ...
tatters because I have to do all these things.
2 0 P R O P E RT Y
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Mah Sing forges ahead
with launches in 2015
To achieve its RM3.43 billion sales target this year
BY RAC H EL C H EW
D’sara Sentral is an
integrated development
with GDV of RM938
million. Completion is
expected by 2018. Photo
by Mah Sing Group
KUALA LUMPUR: Mah Sing Group Bhd will
not be slowing down on launches for ongoing projects in order to achieve its RM3.43
billion sales target this year.
“We forecast that GST (goods and services
tax) will have some effect on the property,
but we feel that we have already planned
properly and [the] RM3.43 billion sales target is achievable,” Mah Sing Group general
manager of sales and marketing for commercial property Winston Tan told The Edge
Financial Daily recently.
Mah Sing recorded RM3.43 billion sales in
financial year 2014 (FY14) and announced
the same sales target for FY15. “We are aggressive, but we don’t want to be so optimistic about our objective in 2015,” said Tan.
Mah Sing has 12 launches scheduled this
year. One of the launches is in its D’sara Sen- development value (GDV) of RM938 million.
tral development, which is situated along The development comprises six buildings,
Jalan Sungai Buloh, Selangor. The developer where one building will feature 105 units
will also launch its D’Residenz Suites’ Tow- of 1- and 2-storey retail shops. Another is a
ers 2, 3 and 4 of serviced residences, where tower block called D’Sovo Suites with 322
units have built-ups from 809 sq ft and are SoVo units. The last four blocks will house
selling from RM538,000. Towthe serviced residences.
er 1, launched in September
D’sara Sentral is located
last year, has achieved 80%
opposite the soon-to-be-comtake-up. Tower 2, being softpleted Kampung Baru Sunlaunched on Sunday, has algai Buloh mass rapid transit
ready achieved 40% pre-regis(MRT) Station, the second statration. “Towers 3 and 4 will be
tion on the Sungai Buloh-Kalaunched from the third quarjang MRT line. There will be a
ter. We are still in the planning
covered walkway linking the
stage, but the units will be of
development to the MRT staa dual-key concept,” Tan said.
tion.
D’Residenz Suites will have a
Tan said that Mah Sing has
total of 938 units, with more
substantial land bank that will
than 40 indoor and outdoor
keep them busy for some time.
recreational facilities such as Tan: We will be focusing
“Mah Sing has 3,822 acres of
a swimming pool, yoga and tai on mid- to high-end
land right now, which could
chi decks, viewing deck and developments in four focus
last us about eight to 10 years.
floating gym.
Of course, if there is any suitaareas. Photo by Suhaimi Yusuf
D’sara Sentral is an inteble and potential land, we will
grated development with small office/ver- look into it,” said Tan. He added that Mah
satile office (SoVo) units, lifestyle shops and Sing will be focusing on mid- to high-end
serviced residences that sit on 6.58 acres developments in four focus areas, namely
(2.66ha) of land and has an estimated gross the Klang Valley, Johor Baru, Penang and
Kota Kinabalu, in the near future.
Tan said he also believes that the demand
for affordable houses remains strong, and the
focus for this year is to ensure affordability
of Mah Sing’s products. About 84% of Mah
Sing’s planned residential product launches
are priced below RM1 million, 71% below
RM700,000 and 44% below RM500,000.
Meanwhile, Mah Sing will be launching the final two condominium blocks of
Savanna Executive Suites in Southville
City@KLSouth this year. Savanna Executive Suites has built-ups that range from
950 sq ft to 1,017 sq ft with prices starting
from RM350,000.
Southville City is a mixed township in Bangi that spreads across 428 acres with a GDV of
RM8.31 billion, comprising commercial hubs
and retail shops, corporate and boutique
office towers, gated and guarded stratified
and landed residential properties, neighbourhood retail shops and amenities such
as schools, a clubhouse and urban parks.
As at Dec 31, 2014, Mah Sing’s unbilled
sales combined with remaining GDV is approximately RM65 billion, while balance
sheets remained strong with a cash pile of
RM639.2 million and a net gearing at 0.36
times.
Slower take-up
for 2015 property
market
BY Z AT IL H US N A WA N FAUZ I
KUALA LUMPUR: The overall property market for 2015 will be cautious with
slower take-up and occupancy rates as
compared with last year, which was still
resilient despite the market slowdown,
according to C H Williams Talhar and
Wong Sdn Bhd.
“I refer to the previous market survey by
the Real Estate and Housing Developers’
Association in September last year, where
a take-up rate of 49% was achieved within
the first three months and 90% in a year,”
said managing director Foo Gee Jen during the presentation of the C H Williams
Talhar and Wong Property Market Report
2015 yesterday.
“This year, we foresee the take-up rate to
be slower by 5% for the first three months
and it will take developers more than one
year to be able to achieve a 100% takeup rate.”
Foo noted that price growth in 2014
had been moderate compared with the
double-digit growth experienced between
2011 and 2013.
“The moderate price growth is attributed to the cooling measures imposed by
the federal government as well as the higher loan rejection by the banks,” said Foo.
In the Klang Valley, while landed residential properties remain as the popular
choice among buyers and saw healthy
growth in certain popular, mature areas
like Taman Tun Dr Ismail and Bangsar,
the high-rise residential segment saw a
69% occupancy rate as at 2014.
The high occupancy rate is attributed to
the ample supply of serviced apartments
compared with condominiums.
“With new supply coming in this year, it
will put pressure on the prices and rental
yields, which has remained at 3.5% for the
condo market last year,” said Foo.
The Klang Valley will see more office
supply coming in 2015, reaching almost
100 million sq ft of net floor area. This gives
Kuala Lumpur the highest supply of office
space in the region, with Singapore and
Bangkok offering 80 million sq ft to date.
Developers in
Cyberjaya to deliver
2,400 homes
BY Z AT IL H US N A WA N FAUZ I
KL launch of UK £33.5m Royal Quay
BY L I M KI A N WEI
KUALA LUMPUR: London-based property
developer Regal Homes will be launching
a 90-unit apartment project in London, the
United Kingdom, at The Westin Kuala Lumpur this weekend.
“The development’s proximity to Canary
Wharf ensures that each property represents
a solid investment, as well as an exceptional
residence,” said Regal Homes founder and
chief executive officer Paul Eden.
The £33.5 million (RM186 million) Royal
Quay comprises a total of 90 studio, 1- and
2-bedroom apartments. They are priced
from £229,950 to £555,225 with built-ups
between 287 sq ft and 673 sq ft. It will have a
999-year leasehold tenure. The target completion date is April 2016.
The partly furnished apartments will come
with concierge and close-circuit television se-
An artist’s impression of Royal Quay, which is expected to be completed by April 2016. Photo by Regal Homes
curity services. The development will be within
a seven-minute walk from the Westferry Docklands Light Railway station in London E14.
Royal Quay residents may access retail shops,
and bars and restaurants in Canary Wharf via
the railway station within three minutes.
Moreover, the development will also be
accessible via a new Crossrail route which
is slated for completion in 2018.
C H Williams Talhar & Wong Sdn Bhd is
the exclusive real estate agent for the project in Malaysia.
CYBERJAYA: Developers in Cyberjaya will
be delivering 2,400 residential units this
year to add to the 8,742 residential units
delivered in 2014, said executive director of
Setia Haruman Sdn Bhd Lao Chok Keang
in his welcome address at a media event
on Wednesday for the Cyberjaya Premier
Property Showcase 2015 (CPPS 2015).
The property showcase will be held
on March 14 and 15.
The media event featured a panel of six
developers who will be showcasing their
Cyberjaya development in CPPS 2015. The
developers are Areca Holdings Sdn Bhd,
featuring its Areca Contempo Homes,
MCT Consortium Bhd with LakeFront
Villa, Paramount Property Development
Sdn Bhd with Sejati Residences, S P Setia
Bhd with Setia Eco Glades, UEM Sunrise
Bhd with Symphony Hills and Verdi Condominium, and Setia Haruman Sdn Bhd
with CBD Perdana 3, Ceria Residences
and Westlink 1. The projects have a gross
development value of RM8.95 billion.
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P R O P E RT Y 2 1
F R I DAY MA RC H 6 , 20 15 • T HEED G E FINA NCIA L DA ILY
Investment opportunity in south Perth
BY ZAT I L H U SNA WAN FAUZI
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KUALA LUMPUR: Finbar Group Ltd, an Australian-based developer, will be launching
Aurelia in Kuala Lumpur tomorrow. Aurelia is
a 21-storey high-rise consisting of 116 apartments and two penthouses located on the
riverside suburb of south Perth in Western
Australia. The unit built-ups are from 560 sq
ft to 2,702 sq ft and selling price starts from
A$435,000 (RM1.24 million).
The apartment complex is due for completion in early-2017 and will have the 96
Mill Point Road, South Perth address. Knight
Frank is the marketing agent for Aurelia.
According to Knight Frank’s associate
director of residential research, Michelle
Ciesielski, the South Perth market witnessed
average annual capital growth of 4.1% over
the past three years.
“For investors over the same time, gross
rental yields averaged 4.84%, up from the
4.24% averaged over the previous three-year
period. Apartments make up approximately
45% of the total dwelling mix in the South
Perth local government area, with most of
these in well-established medium-density
complexes,” Ciesielski said.
Aurelia is due for completion
in early-2017 and will have
the 96 Mill Point Road, South
Perth address. Photo by
Finbar Group Ltd
KAJANG: MKH Bhd’s latest township, Hillpark@Shah Alam North saw its Cherry III
product achieve 85% take-up of the 236 units
sold during the launch last week.
Cherry III are 2-storey link homes with
built-up size of 20ft by 80ft, with prices starting
from RM540,000 and carrying an estimated
gross development value of RM116 million.
Hillpark@Shah Alam North is a RM1.3 billion township located on 550 acres (222ha)
of leasehold land in Puncak Alam.
“Hillpark@Shah Alam North is strategically located within the mature township
of Puncak Alam, the Northern Corridor of
Shah Alam, with easy access to six major
highways such as Guthrie (Guthrie Corridor Highway), Latar (Kuala Lumpur-Kuala
Selangor) Expressway, Sungai Buloh-Kuala
Selangor Highway, NKVE (New Klang Valley Expressway) interchange, Puncak Alam
Highway and the proposed Dash (Damansara–Shah Alam Elevated Expressway). It
is just 25 minutes away from Shah Alam,
Petaling Jaya and Kuala Lumpur, thus providing an opportunity for cross-selling and
giving potential buyers alternatives,” said
managing director Tan Sri Eddy Chen in a
press release.
Other phases in the township have done
well. For instance, its Pines (Phase 2) and Cherry I and II (Phase 6) were 100% sold, whereas
its Olive (Phase 8) was 85% sold. These pro-
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2-storey terraced house at Taman Sri
Bintang, Kepong
Built-up: 2,000 sq ft; 4 bedrooms; 3
bathrooms; Freehold; RM960,000
This house was sold as a basic unit and was occupied at the time of sale. It is an intermediate
unit with a 22ft by 75ft land area. Facilities in
the area include a children’s playground and
jogging track. Educational institutions in the
vicinity are SK Sri Kepong, SRJK Kepong and
SMK Sinar Bintang, while public transportation options available include KTM Kepong
and KTM Kepong Sentral.
Sale concluded by Loke Low of Real Estate
Finders (MY) Sdn Bhd (016-328 7767)
On the market
jects were launched between 2013 and 2014.
Hillpark@Shah Alam North features 50
acres of greenery for its residents to enjoy,
not including neighbourhood parks which
will be built in each percinct.
In conjunction with the Cherry III launch
and Chinese New Year celebrations, Hillpark Avenue (Phase 11) was previewed.
This phase comprises 2- and 3-storey shop
offices in various sizes such as 20ft by 70ft,
22ft by 75ft, and 22ft by 80ft. The selling price
starts from RM1.2 million. Hillpark Avenue
received strong interest during the preview.
Other upcoming and exciting launches
in this new eco-themed township this year
include Meranti (Phase 3) featuring 2-storey link homes.
Sunway Property to launch RM1.7b GDV worth of projects
BY C H A I Y EE HOONG & LIM KIAN W EI
KUALA LUMPUR: Sunway Property, the
property division of Sunway Bhd, revealed
its key launches for this year in the Klang
Valley, Penang, Ipoh and Johor, which
amounts to around RM1.7 billion in gross
development value (GDV), at a media event
yesterday.
According to Sunway Bhd’s managing
director of property development (Malaysia and Singapore), Sarena Cheah, the
launches will be in Sunway South Quay,
Sunway Velocity and Sunway Damansara
in the Klang Valley; Sunway Wellesley in
Penang, Sunway City Ipoh in Perak, and
Sunway Iskandar in Medini, Johor.
The company will be launching the first
landed homes within the 1,800-acre (728ha)
Sunway Iskandar integrated township this
year. The township commands a GDV of
around RM300 million and comprises
serviced apartments, offices and a retail
podium.
“We are holding back the retail as we
want to hold back strategic assets to ensure that a longer-term value of the whole
township is kept,” Cheah said.
Meanwhile in the Klang Valley, Sunway
Velocity will see the launch of a 5-storey office block and 3-storey retail shops within
Cheah: The company’s strategy will be to solidify
its property investment offerings to strengthen its
position as a master community developer. Photo
by Haris Hassan
the development. It will also be completing
the RM1.6 billion Sunway Velocity Shopping Mall. The Sunway Velocity’s V-Residences Suites and V-Residence 2 within the
development recorded sales over RM480
million last year.
According to Cheah, the company is
targeting to achieve RM1.7 billion in sales
this year.
“Besides the launches within its integrated developments, the company’s strategy
will be to solidify its property investment
How much is your property worth?
Which and what property has just been
sold, and for how much? What interesting
buys are now on the market? Check out
the following Hot Deals of the week.
Go to www.theedgemarkets.com for more.
Sold
“Aurelia represents smart and sophisticated living in a highly desirable suburb
that not only enjoys the best views of the
city, but also has a bustling urban mix of
cafes, restaurants, bars and boutiques,” said
Knight Frank Australia senior director (residential) Neil Kay. “From sv outh Perth, it’s
only a short ferry ride to the Perth central
business district and Elizabeth Quay, a precinct being transformed to integrate the
city’s riverfront into a vibrant destination
for locals and visitors.
Associate director of Knight Frank Malaysia, Herbert Leong believes that, “South
Perth offers all the investment characteristics we look for when advising our clients on
overseas property investment. By teaming
up with Finbar, we know their enviable track
record combined with our professional advice will appeal to a wide range of Malaysian
investors and we’re looking forward to the
exclusive launch in Kuala Lumpur.”
MKH’s latest project Cherry III enjoys 85% take-up upon launch
BY ZAT I L H U SNA WAN FAUZI
HOT DEALS
offerings to strengthen its position as a
master community developer,” said Cheah.
The company’s property investments,
which amounts to RM2.6 billion GDV includes Sunway University’s academic block,
Sunway Medical Centre 3, Pyramid Tower West and Sunway Velocity Mall. All the
properties will be completed this year except for Sunway Medical Centre 3, which
will be completed in early 2017.
Sunway Property currently has RM2.6
billion investment properties under construction, which are expected to be completed within the next two years. The division’s unbilled property sales of RM2.8
billion as of Dec 31 last year, combined with
its remaining land bank of 3,362 acres of
RM49 billion GDV will keep the property
division busy in the next 12 years.
“Sunway Property and its communities have both thrived on co-investment
partnerships, which are derived from our
unique business model, build-own-operate. As Sunway retains an interest in the
townships and integrated developments
we build, we are able to assure our investors consisting of both homebuyers and
business owners that we will perpetually
grow the developments, leading to assured
gains in footfall and capital appreciation
for all,” she said.
2-storey terraced house at Taman Bukit
Maluri, Kepong
Built-up: 4,000 sq ft; 6 bedrooms; 4
bathrooms; Leasehold; RM1.68 million
This house comes fully-renovated with new
roofing and extension, dry and wet kitchen,
two living halls, and a dining hall. The unit
comes equipped with a water pump to all taps
and a solar powered heater, along with new
wiring, piping, Internet cable and automated
gate. Sale handled by Chris Tye of Focus Properties Sdn Bhd (011-1299 9733)
WHAT’S
HAPPENING &
WHERE
Launch of Spire Brisbane CBD (Australia)
Date: Tomorrow and Sunday
Venue: The Regent Hotel, Level 3,
Boardroom 2 and 3, 1 Cuscaden, Singapore
Time: From 11.30am
Contact: +65 6276 5001
Spire is located within walking distance to
retail hubs such as Spring Hill Market place,
Woolworths and Queen Street Mall, Brisbane
in Australia.
Launch of Royal Quay, London, United
Kingdom
Date: Tomorrow and Sunday
Venue: The Westin Kuala Lumpur, 199
Jalan Bukit Bintang, Kuala Lumpur
Time: 11am to 7pm
Contact: (03) 2616 8888
The apartments will be partly furnished, and
a seven-minute walk to Westferry Docklands
Light Railway station.
Aurelia Apartment launch, Perth, Australia
Date: Tomorrow and Sunday
Venue: JW Marriott Hotel Kuala Lumpur,
183 Jalan Bukit Bintang, Kuala Lumpur
Time: 11am to 7pm
Contact: (03) 2289 9629
There will be 116 apartments and two penthouses on offer to Malaysians.
Soft launch of D’sara Sentral serviced
residence Tower 2
Date: Sunday
Venue: D’sara Sentral Sales Gallery@Star
Avenue
Time: 11am to 6pm
Contact: (019) 292 2338
The soft launch will offer 247 units for sale.
The selling price starts from RM558,000 for a
built-up range between 809 sq ft and 1,136 sq ft.
22 C O M M E N T
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Oil won’t swing back to US$100
Not so soon; consequences of the plunge have yet to play out fully
BY
MOHAMED A EL-ERIAN
L
ast summer, after an
unusually long period
of relative stability, oil
prices embarked on a
downward journey, decreasing by half in just
six months.
In the last few weeks, however,
the market has worked on establishing a floor, enabling prices to
regain some of the lost ground.
Even so, they are unlikely to return
to US$100 (RM365) a barrel soon,
and the consequences of the plunge
have yet to play out fully.
The reasons for the sharply lower
oil prices include increased supply
from both traditional and non-traditional sources, such as shale;
lower demand, particularly from
high-intensity users such as China;
and a change in the willingness of
the Organization of the Petroleum Exporting Countries (Opec),
and Saudi Arabia in particular, to
continue to play the role of swing
producer (lowering production in
response to declining prices, which
in the past provided an earlier and
broader floor for the market).
The shock to oil prices reflected
what economists would characterise as unusually unfavourable
The reasons for the sharply lower oil prices include increased supply from both traditional and non-traditional sources. Photo by Bloomberg
movements both on and among
supply and demand curves. These
developments in combination
caught many off guard.
Now, however, the sharply lower
oil prices are inducing enormous
supply destruction that has yet to
run its course: The price drop has
rendered many existing oil fields
uncompetitive, curtailed alternative
energy sources and stalled longer-
term expansion investments.
While this supply destruction
buttresses oil prices in the shortand medium-term, there are three
strong reasons it will probably prove
insufficient to lift prices back to the
level that prevailed in the first half
of last year any time soon.
First, significant demand creation appears to be materialising
more slowly than expected. Part of
Second, lower prices have created economic, financial and political
pressures on some oil-producing
countries — Nigeria, Russia and Venezuela — that, under certain conditions, could entail future disruptions
in their supply to the global energy
market. The impact has been to accentuate concerns about instability
in countries such as Iraq and Libya.
Third, Saudi Arabia reaffirmed
this week its November decision not
to play the role of swing producer,
and the oil minister added that this
approach would be proven correct.
More specifically, this time, the
output reduction will be borne less
by Opec and more by higher-cost
non-Opec producers. As such, Opec
— and Saudi Arabia in particular
— won’t need years to re-establish
some of the lost market share.
Assuming there is no major geopolitical shock, there are three implications for oil prices for 2015.
First, expect continued consolidation, though volatile at times, with
a tendency toward higher oil prices
over the course of the year. Second,
there will be no quick return to the
US$100 level. Third, low-cost producers of oil and traditional energy
products will expand their market
share. — Bloomberg
the reason is specific to the energy
market, including consumer uncertainty about the durability of lower
oil prices, and the costs involved in
altering energy consumption patterns. Another contributor has to
do with general hesitation to take
economic risk, as opposed to financial risk, particularly for companies
that might consider expansion and Mohamed A El-Erian is the chief
capital investments.
economic adviser at Allianz SE.
India’s fiscal fortune after revising calculation methodology
BY GI TA GOPI NATH
INDIAN Prime Minister Narendra
Modi’s government must be feeling
lucky. The decline in world commodity prices, led by crude oil, has
made managing the national budget
easier. And now, after the Central
Statistics Office (CSO) revised its
methodology for calculating gross
domestic product (GDP) data, that
task has become easier still. According to the CSO, as a result of
the methodological change, annual
output growth in the second quarter of 2014 stood at 8.2%, up sharply
from the original estimate of 5.3%.
Based on the revised GDP figures, India is expected to average 7.4% growth in the fiscal year
ending March 2015. Moreover, the
country is projected to grow at an
8% to 8.5% rate in the next fiscal
year. No budget changes could
generate such a marked, cost-free
acceleration in growth. It is fair to
say that the usually staid statistics
department stole the thunder from
this year’s budget.
Nonetheless, Finance Minister Arun Jaitley’s budget succeeds
on several fronts — not least in its
alignment of vision and implementation. Specifically, it advances the
government’s vision of a pro-growth
agenda that enhances the ease of
doing business in India, while targeting better delivery mechanisms
for welfare schemes.
On the expenditure side, the
budget is expansionary, scaling up
investment spending dramatically, introducing new welfare programmes, and increasing credit for
various sectors. While there is no
significant effort to cap spending
on some of the largest fiscal programmes, including the National Rural Employment Guarantee
Act (which guarantees 100 days
of wages to rural households) or
the fertiliser subsidy, measures
to improve implementation and
reduce leakage are being put in
place. Though the budget mentions
disinvestment in loss-making public-sector units, the budget conveys
no sense of urgency on this front.
With private investment remaining weak, owing to the corporate
sector’s heavy debt burden and
banks’ huge volume of bad assets,
the government has clearly decided to jump-start the process
through infrastructure spending.
But India’s infrastructure needs
far exceed what the government
can spend. In this sense, the new
“plug and play” scheme for public-private partnerships, whereby
“all clearances and linkages will
be in place before the project is
awarded”, is a major improvement
over the previous public-private
partnership model.
The budget’s success will be determined by how these public-sector investments play out, which in
turn will depend on other policies,
especially the Land Acquisition Bill
(designed to enable industrial development in rural areas), which
has already run into trouble. Moreover, government investment and
allocation of resources has long
been tainted by corruption, and
Modi’s government has yet to show
that it can implement the budget’s
promises in a transparent and sustainable manner.
On the tax side, there is one major announcement: a reduction of
the corporate-tax rate from 30%
to 25% over the next four years,
thereby encouraging private-sector
investment. The implementation
of the goods and services tax — a
form of value-added tax on which
the government has made admirable progress — would be a major
accomplishment and a huge boost
for the economy. Despite raising
expenditure substantially, however, the budget relies mainly on
growth and improved tax collection
to keep the country’s fiscal deficit
within reasonable limits.
Of the budget’s many proposed
Jaitley’s budget succeeds on several
fronts.
measures to boost inflows of foreign
investment, one appears risky from
a macro-prudential perspective. The
government would “do away with the
distinction between different types
of foreign investments, especially between foreign portfolio investments
and foreign direct investments, and
replace them with composite caps”.
There are many reasons to treat
the two types of investment differently. Portfolio investment, often called “hot money” because
of its volatile nature, can increase
the economy’s vulnerability to the
vagaries of international finance.
Foreign direct investment, on
the other hand, is far more stable
and driven by domestic fundamentals. With interest rates set to
rise in the United States this year,
volatility in international capital
markets can be expected to increase. In this context, it would be
prudent to maintain the distinction between portfolio and foreign
direct investment.
In general, the budget plan
addresses the major issues facing
India’s economy. But translating good intentions into desired
outcomes will depend crucially
on the government’s ability to
push through complementary
and urgently needed reforms on
hot-button regulatory issues like
land, labour and the environment.
In any case, the budget sends
a clear signal about the Modi
government’s intentions. At least
in the near term, it is shifting its
practice of “minimal government
and maximum governance” to one
of “moderate government and
maximum governance”.
Gita Gopinath, professor of economics at Harvard University, is a visiting
scholar at the Federal Reserve Bank
of Boston, a research associate with
the National Bureau of Economic
Research and a World Economic
Forum Young Global Leader.
24 W O R L D B U S I N E S S
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Singapore to see fastest
growth of super-rich
Survey says numbers will be ahead of Hong Kong, New York, London and Mumbai
BY WONG WEI HAN
SINGAPORE: The country set to
have the world’s fastest growth in
the number of super-rich individuals within the next 10 years is Singapore, Knight Frank forecast in its
latest annual wealth report, The
Straits Times reported.
Between 2014 and 2024, the
number of ultra-high-net-worth
individuals (UHNWIs) — who have
a net US$30 million (RM109.5 million) in assets — will rise by another 1,752, the property consultancy
firm said in its Wealth Report 2015
released yesterday, the daily said.
Noble
defends
write-down
timing
BY A NSHU MA N DAGA
& RUJUN SHEN
SINGAPORE: Commodity trading house Noble Group Ltd has
defended its decision to book an
impairment charge on the day
it reported earnings, and said it
would be detailing its recently
criticised accounting methods
in a bid to reassure markets.
The Singapore-listed group,
one of Asia’s biggest commodity traders, has seen US$1 billion
(RM3.65 billion) wiped off its
market value since Iceberg Research last month said Noble’s
accounting methods inflated
the value of its assets, a claim
Noble rejected and blamed on
a disgruntled former junior employee, Reuters reported.
Since Iceberg’s first report,
the Hong Kong-based group
has reached out to analysts and
investors, explaining why it regards the claim as incorrect.
Pressure on Noble was exacerbated when the company
reported an unexpected net
loss soon after a second report from Iceberg. Noble said
the two issues were unrelated.
Noble said it conducts an
impairment review of longterm assets every quarter and
had the option of impairment
charges for its stake in miner
Yancoal Australia Ltd between
zero and US$200 million, based
on different assumptions.
Its board and management
decided last Thursday to adopt
“the most prudent assumptions”
and took an impairment charge
of US$200 million. — Reuters
This puts the republic at the
No 1 spot in terms of growth of
UHNWIs, ahead of Hong Kong,
New York, London and Mumbai,
in descending order.
The daily reported Singapore
also currently has the world’s
third-largest concentration of the
ultra-rich, behind Monaco and
Luxembourg. There are now 60 super-rich people for every 100,000
residents here. Switzerland came
in fourth in this ranking, with 54
ultra-rich for every 100,000 people.
The trend reflects the rapid
growth of Asia’s wealth, with the
region overtaking North America
to see the second-fastest increase
in UHNWIs in the world. Last year
some 1,419 people moved past the
US$30 million mark in Asia, Knight
Frank said, behind only Europe’s
1,834.
The ultra-rich in Asia also hold
more in total wealth with combined net assets of US$5.9 trillion,
7% more than North America’s
US$5.5 trillion, the newspaper reported.
In a separate survey, Singapore
lost out to its regional rival Hong
Kong in a ranking of most important cities to UHNWIs in 2015. Hong
Kong came in third in the ranking,
behind London and New York and
followed by Singapore.
But Nicholas Holt, Knight Frank’s
head of Asia-Pacific research, said
the jury is still out on the perennial
competition between Singapore
and Hong Kong as Asia’s top spot
for wealth and investments.
The Straits Times quoted him
as saying: “Singapore continues to
diversify its economy and attract
large multinational businesses.
Commercial property in both cities have been targeted by UHNWI
investors looking for an income
return and potential capital appreciation upside.”
India helps small businesses borrow to grow
BY DEV IDUTTA TRI PATHY
MUMBAI: A new bank announced in
India’s annual budget last week could
boost loans and cut borrowing costs
for the country’s cash-starved small
businesses — tailors, mechanics and
phone booth operators who account
for around a fifth of the economy.
Mudra bank, to be set up with
US$3.2 billion (RM11.68 billion) of
capital to help microfinancing firms
to lend more, should help leverage
up firms which account for 40% of
India’s exports, just as India tries
to rekindle growth, lenders and
entrepreneurs say.
India’s small businesses employ
more than 106 million workers, according to government statistics,
in a country that brings a million
new workers into the workforce
every month.
Yet according to government estimates, only 4% of 57.7 million small
A tailor (right) waiting for customers at his shop in the Indian state of Rajasthan.
Photo by Reuters
business units in India have access to
institutional finance, leaving many
to rely on informal lenders. Industry experts estimate that demand
for loans from the sector outstrips
supply by more than US$80 billion.
Rating agency Crisil estimates that
microfinance lenders have loan assets totalling US$5.6 billion. But they
have had a limited impact on small
businesses as they primarily target
lending to individuals or groups of
individuals among the poor.
Even for the microfinance institutions that would like to lend more
to businesses, rules cap the amount
they can lend to a single borrower
at 50,000 rupees (RM2,928), making them an unviable option for
any businesses. — Reuters
Europe’s rebound poses new questions
BY EDWAR D HADAS
LONDON: The good news keeps
coming in Europe. Brussels lifted
growth forecasts last month. More
recent data shows consumer confidence at multi-year highs, German
retail sales soaring, Britain thriving,
and eurozone unemployment falling, albeit to a still painful 11.2%.
After years of disappointments, policymakers and investors have to
adapt to a better world.
With the worst probably over for
the Old Continent, Europhiles can
take some satisfaction. A mix of reform, moderate fiscal restraint and a
big-talking European Central Bank
(ECB) seem to have been effective
enough to ward off interminable
stagnation.
For the ECB, better times pose a
good problem. Even if inflation remains well below its near 2% target
for a while, the disaster scenario of
deflation leading to loan losses and a
credit squeeze is likely to be avoided.
The bank’s long-delayed quantitative
easing (QE) programme, scheduled
to start this month, may have come
too late. It might not last long.
For politicians in office, life will
get easier. The rising economic tide
could help the incumbent British
Conservative Party in the forthcoming election and weaken outsider parties in Spain and Italy. It
could also ease negotiations between Greece and its creditors. A
recovering Greece may have to ask
for less help, which countries with
strengthening economies may be
more willing to offer.
To be sure, there could be up-
sets. The economic dividend from
the declines in the oil price and the
euro, two big boosts, will soon fade.
Financial and structural reforms
may have been too shallow to create a self-sustaining recovery. And
there are always political risks, not to
mention the continuing drag of trade
imbalances and excessive debts.
Still, investors would be wise
to prepare for a more optimistic
outcome. Folk wisdom holds that
in strong economies stocks do well
and bonds do poorly. But years of
ultra-easy monetary policy may
have complicated the relationship.
Indeed, if strong growth reduces the
need for new government borrowing and even a brief QE programme
reduces supply, market prices might
keep rising. So negative yields may
last a while longer. — Reuters
IN BRIEF
Thai developer LPN
sees demand in condo
market slowing
BANGKOK: Thailand’s biggest
condominium developer LPN
Development Pcl said yesterday the company is cautious
about buying land as domestic
demand for high-rise buildings weakens and banks restrict lending to homebuyers.
Several property developers
have changed strategies to focus on single-detached houses
and townhomes after bookings
of condominiums slowed in
recent months, managing director Opas Sripayak told investors during a quarterly earnings
presentation. LPN missed its
revenue target last year, hit by
weak demand from consumers
after months of political unrest
in Thailand. — Reuters
CVC, GIC raise US$710m
after HKBN prices IPO
at top end
HONG KONG: Private equity
firm CVC Capital Partners, a
unit of Carlyle Group LP, and
Singapore’s sovereign wealth
fund GIC raised a combined
US$710 million (RM2.59 billion) after Hong Kong’s second-largest broadband Internet provider, HKBN, priced its
initial public offering (IPO) at
the top of expectations, IFR reported yesterday. The IPO was
priced at HK$9 (RM4.23) per
share, at the top of the HK$8
to HK$9 marketing range. CVC,
GIC and Carlyle’s AlpInvest
Partners were among HKBN
shareholders offering 645 million existing shares in the IPO.
— Reuters
Weakening rupiah top
concern for Jokowi
JAKARTA: The weakening of
the rupiah is the top concern
for Indonesia’s President Joko
Widodo (Jokowi). He has called
economic ministers to discuss
the matter several times, his
cabinet secretary Andi Wijdajantosaid said yesterday. “In
yesterday’s meeting, the president asked ministers to keep
a watch on the rupiah’s movement,” he said. Bank Indonesia
governor Agus Martowardojo
said the rupiah, which yesterday fell below the psychological
support level at 13,000 per US
dollar, the weakest level since
August 1998, is in good condition and the central bank is
not worried. — Reuters
Thailand’s Robinson aims
for 15% sales growth
BANGKOK: Thailand’s Robinson Department Store Pcl
said yesterday it aimed for
2015 sales growth of 15% and
planned to spend 3.3 billion
baht (RM371.98 million) to
open four more branches in
major cities this year. Robinson
plans to boost the number of its
branches to 60 over the next six
years from 39 now, to tap demand after the planned formation of a Southeast Asian single
market in late 2015, its president Alan George Thomson
said in a statement. — Reuters
26 W O R L D B U S I N E S S
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
China signals ‘new normal’
World’s No 2 economy announces lower annual growth target of around 7%
A screen showing Li at the
National People’s Congress
yesterday. The premier tells
delegates the downward
pressure on China’s
economy is intensifying.
Photo by Reuters
BY KOH GU I QI NG & KEV IN YAO
BEIJING: China announced an economic growth target for 2015 of
around 7% yesterday and said it
would boost government spending,
signalling that the lowest rate of expansion for a quarter of a century
is the “new normal” for the world’s
No 2 economy.
Speaking at the opening of the
country’s annual parliamentary
meeting, Premier Li Keqiang vowed
to fight corruption and pollution,
and stressed the need for more
painful reforms to put the economy
on a more sustainable footing after
three decades of breakneck growth.
“The downward pressure on China’s economy is intensifying,” Li told
around 3,000 delegates gathered at
the Great Hall of the People.
“Deep-seated problems in the
country’s economic development
are becoming more obvious. The
difficulties we are facing this year
could be bigger than last year. The
new year is a crucial year for deepening all-round reforms.”
Outlining the government’s
policy priorities for 2015, Li said
those priorities included pushing
ahead with reforms of the giant
Banks brace
for Fed capital
buffers check
BY D OU WE MI E DEM A
WASHINGTON: The largest US
banks and their foreign rivals are
facing a tough two-step checkup of their financial health by
the Federal Reserve, forcing the
firms to get a far better grip on
how they measure risk.
In its annual “stress tests”, the
Fed gauges whether banks have
enough shareholder capital to
withstand a severe economic
shock like that of the 2007 to
2009 crisis.
It was to publish the first leg
of the tests yesterday, announcing which of the 31 banks have
dropped below the 5% minimum for top-tier capital. But the
toughest part of the test comes on
March 11, when the Fed reveals
if the banks get approval for any
planned increases in shareholder payouts. Last year, four banks
failed that hurdle, while only one
fell short of the first.
Next week’s review takes a
look under the hood of the banks
— which Wall Street critics say
are “too large to manage” — by
scrutinising whether managers
are truly in control of their firms.
Global regulators have forced
banks to borrow less to fund their
business after the crisis, and the
stress tests are increasingly becoming an important instrument
for the Fed to test the industry’s
resilience. — Reuters
state-owned enterprises that still
bestride the economy, and moves
to liberalise the banking system and
financial markets.
“In order to defuse problems and
risks, avoid falling into the ‘middle
income trap’, and achieve modernisation, China must rely on development, and development requires
an appropriate growth rate,” said
Li. “At the same time, China’s economic development has entered a
‘new normal’.”
In the short-term, China’s top
policymakers are grappling to sustain an economy weighed down by
a cooling property market, high
debt levels and excess factory capacity. Over the longer run, they
are seeking to restructure it to boost
consumption at the expense of exports and investment.
Underscoring the challenges
faced in striking that balance, the
People’s Bank of China cut interest
rates at the weekend for the second
time in three months.
Adding a fiscal boost to the
central bank’s monetary support,
Beijing plans to lift government
spending to 17.15 trillion yuan
(RM10.01 trillion) in 2015, an increase of 10.6% on 2014.
That will mean raising the
budget deficit to 1.62 trillion yuan,
or around 2.3% of gross domestic product, compared with 2.1%
last year.
China’s economy grew 7.4% last
year, roughly in line with the government’s growth target of around
7.5% and robust by global standards, but still the slowest in 24 years.
— Reuters
Low boost from Stock Connect
HONG KONG: Hong Kong’s stock
exchange operator said yesterday a stock connect programme
with Shanghai launched on Nov
17 contributed just US$8.8 million (RM32.12 million) to revenue
last year, showing how disappointing trading on the programme has
capped profit growth.
Hong Kong Exchanges and
Clearing Ltd (HKEx) said in a filing in Hong Kong that the stock
connect programme contributed
HK$68 million (RM32.07 million)
in revenue in 2014. Fourth-quarter profits were HK$1.52 billion
according to a Reuters calculation
from company figures.
HKEx chief executive Charles Li
has banked on the Shanghai-Hong
Kong Stock Connect, which allows
investors in mainland China to buy
Hong Kong shares and vice versa,
to boost falling trading volumes in
the financial hub.
Daily trading volumes via the
scheme, however, have remained
lacklustre, due mainly to regulato-
ry and technical hurdles that make
the scheme unappealing to many
institutional investors.
The programme only launched
halfway through the fourth quarter,
meaning its impact has not been
fully felt.
Average daily turnover in the
fourth quarter rose to HK$80 billion
from HK$59 billion a year ago, the
filing showed, a 35% increase but
not yet the transformative boost
some market participants had
hoped for. — Reuters
Actavis sale dresses up barely investment grade
BY ROBERT C Y RAN
NEW YORK: Actavis is showcasing
the value of being barely investment
grade. The acquisitive drug maker
attracted huge demand this week
for US$21 billion (RM76.65 billion)
of bonds a mere notch above junk.
They yield less than Verizon’s bigger
and better-rated issue did in 2013.
Buyers of top-tier debt can’t help
but keep looking further downward.
Fears of deflation, government
bond buying, slow growth and a lack
of alternatives are squeezing interest
rates in developed countries. Germany, for example, persuaded investors
to pay for the privilege of lending to
it for five years. The US markets are
a bit less desperate. Uncle Sam is
paying 2.09% for 10-year debt.
That has left corporate issuers in
a sweet spot, especially those edging
toward junk. When Verizon issued
US$49 billion of debt rated BBB-plus,
it caused a stampede. There was more
than US$100 billion of demand for a
yield of 2.25 percentage points over
10-year Treasuries, or a rate of about
5.2% at the time.
Only 18 months later, Actavis
encountered nearly the same level
of demand. Yet the US$83 billion
company, rated two notches below
Verizon, is paying only 3.84% on its
10-year bonds, or a spread of 1.75
percentage points.
Actavis is using the funds to help
pay for its US$66 billion acquisition of Allergan. The transaction
will leave it with debt of about 4.8
times earnings before interest, taxes, depreciation and amortisation
(Ebitda) estimated for this year, ac-
cording to Fitch. Actavis anticipates
US$1.8 billion in cost cuts from the
merger, savings that should pare the
ratio to less than four times Ebitda
within a year of the deal closing.
More big purchases can be expected, though. Before Allergan,
Actavis agreed to buy Forest Laboratories for US$25 billion last year.
Actavis says it wants to retain its
investment-grade credit rating, but
there’s a risk that slowing growth
and over-accommodating bond
buyers may lead it to overpay for
lower quality assets.
There’s no sign of fear in the market yet. Many funds carry mandates
that preclude them from straying
into the high-yield market. Like a
shipwrecked castaway offered a
sip of water, any drop of yield looks
sufficiently appealing. — Reuters
IN BRIEF
Beijing says will back
e-commerce expansion
BEIJING: China will back
e-commerce development and
guide international expansion
by Chinese Internet companies,
Premier Li Keqiang said yesterday, in an endorsement for firms
such as Alibaba Group Holding
Ltd and JD.com Inc. Addressing the opening of China’s annual parliamentary meeting
in Beijing, Li broadly laid out
China’s “Internet Plus” strategy, which includes promoting cloud computing, online
banking and mobile Internet,
along with logistics, to help
e-commerce expansion. Li’s
support would benefit Alibaba,
the world’s largest e-commerce
company, which is already investing in cloud computing and
Internet finance. Its biggest rival, Beijing-based JD.com, has
seen its transactions more than
treble in its online marketplace.
— Reuters
Huawei, Intel expand
existing tie-up
BEIJING: China’s Huawei Technologies Co Ltd and Intel Corp
are expanding an existing alliance to provide cloud computing to global telecoms carriers.
The partnership comes as US
and other Western tech firms’
scramble to burnish their bona
fides with China. Joining hands
with Chinese companies, including technology transfers
and adopting Chinese partners’
branding, can make tech products more palatable to local
buyers and authorities in the
world’s No 2 economy. China’s
government has been pushing
for the use of more Chinese and
less foreign-made technology,
both to grow its own tech sector and as a response to former
US National Security Agency
contractor Edward Snowden’s
leaks about US cyber surveillance. — Reuters
Shenzhen, Hong Kong stock
exchanges to be linked
BEIJING: China will link trading between its Shenzhen and
Hong Kong stock markets as
part of a push for financial reforms, Premier Li Keqiang said
yesterday, following a similar scheme with Shanghai’s
flagship bourse. The “Shenzhen-Hong Kong Stock Connect” trial will be launched “at
an appropriate time”, Li told
the opening of the annual session of the National People’s
Congress. He gave no further
details. — AFP
Greece, QE programme
tops ECB meeting
NICOSIA (Cyprus): The European Central Bank (ECB), meeting
in Cyprus yesterday, was set to
update its economic forecasts
and reveal details of its new
bond purchase programme,
analysts said. Greece would also
be high on the agenda of the
ECB’s decision-making governing council, following the recent
eurozone deal to extend aid to
the debt-wracked country, the
experts said. — AFP
W O R L D 27
F R I DAY MA RC H 6 , 20 1 5 • T HEED G E FINA NCIA L DA ILY
Indonesia rejects
prisoner swap
IN BRIEF
Kerry briefs Iran’s Gulf
rivals on nuclear talks
Attorney-general says proposal to save two Australian prisoners ‘not relevant’
BY PRESI MA NDA RI
JAKARTA: Indonesia rejected the
offer of a prisoner swap yesterday,
proposed by Canberra in an 11thhour bid to save two Australian
drug smugglers facing execution,
saying it is determined to put to
death those “who have poisoned
our nation”.
Andrew Chan and Myuran Sukumaran, the ringleaders of the socalled “Bali Nine” drug trafficking
gang, could be shot within days
after being moved on Wednesday
to the Indonesian island where
they are due to face a firing squad.
Russia starts
large-scale
military exercises
in disputed
territories
MOSCOW: Russia’s Defence
Ministry said yesterday that
large-scale military exercises
had started in southern Russia
and in disputed territories on
Russia’s borders. The exercises
involve over 2,000 anti-aircraft
troops and 500 items of weaponry and will last until April 10,
Interfax news agency reported.
The Defence Ministry said
the exercises are taking place
in Russia’s Southern and North
Caucasus Federal Districts, as
well as Russian military bases in
Armenia, the Georgian separatist
regions of Abkhazia and South
Ossetia and Ukraine’s Crimea,
which Moscow annexed last year.
They are likely to be viewed
in the West as a show of force as
relations between Russia and the
West are at their most strained
since the Cold War because of
the Ukraine crisis. Ukraine and
the West accuse Russia of directing a separatist assault in eastern
Ukraine with its own troops and
weapons. Russia has repeatedly
denied those accusations.
At a news conference in Moscow unrelated to the exercises,
Russian Deputy Defence Minister Anatoly Antonov said Nato
activities on Russia’s borders far
exceeded anything the Russian
military was undertaking.
“Nato states are using the situation in the south-east of Ukraine
as an excuse to ... move forward,
closer to Russia’s borders,” Interfax quoted Antonov as saying.
On Wednesday, a Nato flotilla
arrived in the Black Sea to train
with ships from the Russian, Bulgarian, Romanian and Turkish
navies, the defence alliance said.
— Reuters
Authorities must give convicts
72 hours’ notice before they are executed and in a last-ditch effort to
save them, Foreign Minister Julie
Bishop proposed a prisoner swap.
She said she had spoken to her
counterpart Retno Marsudi in what
was reportedly “a very tense phone
call”.
“I’ve spoken to her on a number
of occasions about this, and I wanted to explore any other avenues or
opportunities to save the lives of
these two young men who have
been so remarkably rehabilitated,”
Bishop told ABC radio.
She said that she had noted there
were Australian prisoners in Indonesia and Indonesian prisoners in
Australia, and raised the possibility
of an exchange of inmates.
However, Indonesia’s attorney-general, Muhammad Prasetyo, insisted the executions would
go ahead and that the offer from
Australia was “not relevant”.
“Are you willing for people who
have poisoned our nation to be
exchanged?” he said. “That has
never been carried out, and never
thought of.”
Security Minister Tedjo Edhy
Purdijatno also insisted the executions would go ahead.
President Joko Widodo has been
a vocal supporter of the death penalty for drug traffickers, saying that
Indonesia is facing an “emergency”
due to the rising use of narcotics.
The Sydney Morning Herald had
reported that any deal could involve three Indonesians in prison
in Australia over their role in an
infamous 1998 drug bust.
They were named as Kristito
Mandagi, Saud Siregar and Ismunandar, the captain, chief officer
and engineer respectively of a boat
carrying 390kg of heroin that was
seized near Port Macquarie, some
400km north of Sydney. — AFP
‘Bendable guns’ in use in Shanghai
SHANGHAI: The Shanghai police
have released photos showing the
the city’s SWAT team in training
with “bendable guns” which can
be used to see and shoot around
corners, The South China Morning
Post has reported.
The guns are already in use by
a number of Chinese police forces, the daily reported, including in
Beijing, Guangzhou and Xinjiang.
The weapons are similar to an
Israeli Defence Force design, the
CornerShot, developed by Amos
Golan with financial support by
the US. The Chinese weapon was
developed by Chongqing Changfeng Machinery Co and Shanghai
Sea Shield Technologies, according
to the Hong Kong daily.
The original gun was designed
in the early 2000s for use by SWAT
teams and special forces teams
against terrorist organisation or in
hostage situations.
“Today’s combat situations, especially in low intensity conflicts,
involve fighting in urban terrain,
and inside inhabited buildings,
Indonesia govt, farmers
still at odds over project
JAKARTA: Land acquisitions
for Indonesia’s US$4 billion
(RM14.6 billion) Batang power
station have finally been completed, a government minister said this week, although an
activist working with farmers
in the area said they are still
not ready to give up their property. The 2,000mw coal-fired
power plant in Central Java has
been held up many times due to
the difficulties in buying land.
Claims by the government that
disputes over land for the power
project had been settled are not
correct, Greenpeace campaign
coordinator Arif Fiyanto told
Reuters by text yesterday. “It’s
not true,” he said. — Reuters
Two Germans to be caned,
jailed for S’pore graffiti
China’s ‘bendable gun’ is said to bear a strong resemblkence to an earlier one developed
by the Israeli defence forces.
forced entry into airplanes, buses
or trains. This unnecessarily exposes security forces to the enemy and
presents an immediate risk to their
lives,” The South China Morning
Post quoted CornerShot designer
Golan as saying. He said his weapon
“removes the need for this initial
exposure”, the daily reported.
The chief designer of the Chinese HD-66 and CF-06 “bendable
guns”, Qing Shansheng, has denied
that either weapon was inspired or
based on the CornerShot.
The South China Morning Post
reported that comparisons were
drawn between the guns and the
James McAvoy, Angelina Jolie movie, Wanted, which features fighters
who have been trained to shoot
bullets around corners, the Hong
Kong daily reported
Taiwan rated the world’s 5th happiest nation
TAIPEI: Taiwan is the fifth happiest
economy among 51 major countries and territories featured in a
report released on Wednesday by
New York-based Bloomberg News.
Based on inflation and unemployment — two major factors causing unhappiness — Taiwan scored
4.88 points, finishing behind South
Korea (4.8), Japan (4.5), Switzerland
(2.4) and Thailand at 1.6 points.
According to Bloomberg, the
survey’s top 15, including Austria,
Denmark, Norway, the United Kingdom, United States and mainland
China, enjoy “remarkably low” joblessness and price increases.
At the other end of the scale,
RIYADH US Secretary of State
John Kerry met Gulf Arab foreign
ministers in Riyadh yesterday
to brief them on progress in the
nuclear talks with Iran. Kerry arrived in Riyadh late on Wednesday from Montreux, Switzerland,
where he said he had made progress in talks with Iranian Foreign
Minister Mohammad Javad Zarif.
Kerry was scheduled to meet
King Salman and Deputy Crown
Prince Mohammed Nayef, who
is also interior minister, after his
meeting with foreign ministers
of the six members of the Gulf
Cooperation Council. Kerry also
held a separate meeting at the
start of the day with Oman’s Foreign Minister Yusef Alawi Abdullah. — Reuters
Venezuela scored 86.5 on the basis of a projected inflation rate of
78.5%. It is followed by Argentina
(32), South Africa(29.3), Ukraine
(27) and Greece with 23.4 points.
In a similar survey released Jan
25 by Washington-based public policy research organisation Cato Institute, Taiwan ranked 105th among
108 economies in the World Misery Index survey for its low unemployment.
Wu Ming-huei, director of the
Department of Economic Development under the National Development Council (NDC), said the ratings adequately reflect the general
conditions in Taiwan. “Joblessness
has been steadily improving over
the years, while the country’s consumer prices constantly remain at
a low level.”
Directorate-General of Budget,
Accounting and Statistics (DGBAS)
data revealed Taiwan’s consumer
price increases and unemployment
rate were 1.2% and 3.96%, respectively, in 2014, while the gross domestic product (GDP) grew 3.74%.
The DGBAS estimates Taiwan’s
GDP growth to gain another 3.78%
this year, with the consumer price
index set to inch up 0.26%. The
NDC expects joblessness to hover between 3.8% and 3.9%. —
Taiwan Today
SINGAPORE: A Singapore court
sentenced two Germans to nine
months in prison and three
strokes of the cane yesterday after they pleaded guilty to breaking into a depot and spray-painting graffiti on a commuter train
carriage. Andreas Von Knorre,
22, and Elton Hinz, 21, both expressed remorse while being
sentenced. “This is the darkest
episode of my entire life,” said
Von Knorre. “I want to apologise to the state of Singapore
for the stupid act ... I’ve learnt
my lesson and will never do it
again.” Hinz said: “I promise I
will never do it again. I want to
apologise to you, and my family
for the shame and situation I’ve
put them into.” — Reuters
US ambassador slashed
and bloodied in Seoul
SEOUL: The US ambassador to
South Korea, Mark Lippert, was
recovering from surgery yesterday after being slashed on his
face and arm in Seoul earlier in
the day by an activist opposed
to ongoing US-Korean military
drills. The United States condemned the “act of violence”
which saw the ambassador
rushed to hospital where his
condition was described as stable after 2½ hours of treatment
by plastic and orthopaedic surgeons. North Korea described
the attack as “just punishment
for US warmongers”. — AFP
28
live it!
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
FR I
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
What to do this
WEEKEND
live it! has a list of venues and activities
BY C A RMEL DOM INIC
L
MM
The
Fes
(M
Sun
fes
roc
wil
ooking for something interesting to do this weekend?
Perhaps something adventurous, relaxing or just different from your usual fare. Take
a look at our list of events and
happenings this weekend and head on
to whichever strikes your fancy!
Tribute to the great Luther Vandross
Best remembered for his lush vocals and
soulful tunes, the Theatre Lounge Café
pays tribute to the king of R&B, the great
Luther Vandross, who has captivated
fans all around the world with popular
tunes such as Always and Forever, Power
of Love and many more. Come and be
serenaded by Vince Chong’s interpretation of Luther’s tunes like Dance with My
Father and Endless Love in an intimate
setting with a small ensemble of strings
and keys. Aptly titled English Oldies Series, the musical tribute starts today and
will go on until Sunday at the Theatre
Lounge Café. Please note that there is
a RM65 cover charge. Log on to http://
www.theatreloungecafe.com/booking.
php?aid=59&view=&key= to book your
seats and check for show times.
Last chance for a CNY-themed
dining experience
If you have not eaten enough of food associated with the Lunar New Year, this
is your last chance! The Kuala Lumpur
Golf and Country Club invites you to
feast one last time at their award-winning
restaurant China Treasures. Executive
chef Eddie Chua offers you the majestic
splendour of an exclusive and innovative Chinese dining experience. There
are five sets to choose from — Wealth
Prosperity, Prosperity, Fortune, Abundance and Happiness. The first three sets
cater to big dining parties while the last
two are for smaller ones. Diners will also
receive complimentary angpow packets and mandarin oranges during this
special season when they dine at China
Treasures. China Treasures is open from
Monday to Sunday at 11.30am to 2.30pm
for lunch, and 6.30pm to 10.30pm for
dinner. For reservations, call (03) 2011
9191 or visit www.klgcc.com for more
information.
Launch of #SALEversary campaign
Reebonz commemorates turning six
with its #SALEversary campaign. This
global campaign invites members from
Singapore, Malaysia, Indonesia, Australia, New Zealand, Thailand, Taiwan and
Hong Kong to rally “shares” and influence the discount of its biggest online
anniversary sale event on March 9. The
Reebonz team wants its members to
influence the prices of its sought-after
designer products by sharing the #SALEversary campaign on Facebook and
Twitter via the microsite. Each “share”
brings members closer to unlocking
higher levels of discount to the #SALEversary online event. A garnering of over
25,000 shares will unlock a first-ever flat
70% sale event of new “arrivals” until
March 8. Furthermore, participants will
be rewarded with a 12% off discount code
after they have successfully shared the
campaign. This code can be used instantly when you shop during the sale
day. Check out http://www.reebonz.
com.my/ for more information.
Nathan’s Famous now in Malaysia
New York’s iconic frankfurter brand
Nathan’s Famous made its Southeast
Asian debut with the opening of its first
outlet in IOI City Mall, Putrajaya. The
brand, long known to be a favourite of
New Yorkers began with its first stand
in the historic Coney Island, New York
in 1916. Now, Malaysians can enjoy the
taste of the famous New York hot dogs
without getting on a plane. The restaurant offers the best of both worlds for its
customers — restaurant-style table service and made-to-order food. To know
more, log on to http://www.nathansfamous.com.my/
Art exhibition
Alamiah: That’s Nature is a solo art exhibition by Yusoff Osman, one of the
earliest pioneers and members of Anak
Alam, a multidisciplinary collective. In
this exhibition, the public will be able to
observe an array of 31 remarkable works
from several series’ he produced between
2009 and 2014. The exhibition will be
held at Hom Art Trans, Kuala Lumpur
until March 14. It will serve as a platform
to reintroduce, for the first time, the artist
and his works to today’s art audience.
It is also hoped that this exhibition will
be able to reveal his invaluable contribution to the local art scene. For more
information about the exhibition, log
on to http://www.homarttrans.com/
Women, be empowered!
In conjunction with International Women’s Day on Sunday, Kota Wanita aims
to bring together the women of Kuala
Lumpur to discuss matters concerning
all women varying from safety to personal liberty, and celebrate togetherness
through workshops, panel discussions
and other fun activities. There will also
be rooftop performances and photo
exhibitions. The event takes place tomorrow at Findars, 8, 4th Floor, Jalan
Panggong, Kuala Lumpur from 12pm
to 10pm. For more information, send
your emails to [email protected]
or call Kaka at (012) 2543 714 or Sarah
at (012) 9781 287.
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live it! 29
F R I DAY MA RC H 6 , 20 15 • T HEED G E FINA NCIA L DA ILY
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
MMF 2015
The inaugural Malaysian Live Band Music
Festival dubbed My Music Festival 2015
(MMF 2015) will take place on Sunday at the
Sunway Surf Pool from 5pm to 11pm. The
festival will feature the international British
rock legend Smokie as the highlight. The band
will be playing as part of its 47th Anniversary
World Tour. MMF 2015 will also feature 20
of Malaysia’s top live bands such as Joe Flizzow, Kyoto Protocol, Hydra, The Union and
JunkOFunc. The mega festival is aimed at
supporting and elevating our home-grown
artistes to an international landscape. The
concert is open to the public and the venue
can fit about 15,000 people. Don’t be late!
PICK OF THE DAY
ARE you suffering from oily skin and constant breakouts? Read on, as Dr Sebagh’s
Breakout Kit may offer you the solution you have been looking for. The advanced
skincare breakout kit is a two-part set covering all aspects of a breakout. Consisting of five 1.95g tubes of the breakout antibacterial powder and the
breakout crème (50ml), the
kit claims to be able to
reduce oil on the skin by
up to 44%. The kit can
also be used all over
the body and does not
contain benzoyl peroxide or salicylic acid.
Dr Sebagh’s Breakout
Kit is now available at
the Dr Sebagh outlet
in Bangsar Village II
for RM479.
30
live it!
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Zen TODAY
Nothing to me feels as good as laughing incredibly hard.
— Steve Carell
LOOKING EAST
M’sia to get ‘Lost in the Pacific’
Chinese-Hollywood film starring Brandon Routh, Zhang Yuqi to begin shoot locally
BY L K TA N
E
xpect to see familiar faces and
recognise local sights when China-Hollywood mega project
Lost in the Pacific debuts on the
big screen at the end of the year.
The sci-fi movie, which tells
of a group of elite passengers on board
2020’s inaugural luxury, transoceanic flight,
has roped in big names such as American
actor Brandon Routh (Superman Returns)
and Chinese starlet Zhang Yuqi (Stephen
Chow’s CJ7).
And since the project is shooting in Malaysia from the end of March through early
May, it will take advantage of local talents,
claimed Chinese director Vincent Zhou.
“This is an international collaboration
engaging talents from China, the United
States, Taiwan and Hong Kong.
“There is an important role for which
we have decided to go with a Malaysian.
We have shortlisted three candidates but
have yet to finalise the outcome,” Zhou told
China Press.
Auditions for locals and foreigners based
in Malaysia began earlier, the report said,
adding that the ability to speak fluent English was a prerequisite as the production
caters to an international audience.
Zhou was attracted to the incentives
offered by the Malaysian government to
film projects by foreign outfits. While New
Zealand and Australia offered similar perks,
he said Malaysia stood out with its tropical
weather and affordable labour cost.
(From left) Routh, Zhang and Zhou attending a press conference last week in Los Angeles to announce the
shooting of ‘Lost in the Pacific’. Photo by Weibo
He gave Pinewood Iskandar Malaysia
Studios (PIMS) the thumbs-up, saying its
quality is on par with Hollywood and some
80% of Lost in the Pacific will be filmed in
PIMS.
In a quest to become the region’s leading television and movie production hub,
Khazanah Nasional Bhd joined hands with
the UK-based Pinewood Studios Group to
launch PIMS in June 2014. The venture is
expected to contribute as much as RM1.8
billion in revenue and create some 1,700
freelance jobs over the next eight years.
Zhou was in Malaysia last August to
scout for locations for the film. In addition
to PIMS, he visited Bukit Bintang in Kuala
Lumpur and Melaka as well as the Subang
Airport, and it is suspected that all three
will make an appearance in the movie,
China Press said.
The director is said to have developed
a soft spot for local food, including kaya
toast and cendol, during his discovery trip.
Best known for directing Chinese 3D
thriller Last Flight in 2014, Zhou is the first
Chinese director to sign with US talent
and literary agency United Talent Agency,
known for representing actors like Johnny
Depp and Angelina Jolie.
Actress Zhang, 28, got her break through
Chow’s 2007 Hong Kong film CJ7, which
put her acting career on the fast track. But
her fame has been largely limited to CJ7,
despite winning some accolades for other
film projects and having worked with Hong
Kong director Tsui Hark.
American TV and film star Routh, 35,
gained greater recognition for his role as
the titular superhero of 2006 film Superman
Returns. He currently plays Ray Palmer/
The Atom in CW Television Network’s superhero series Arrow.
Bruce Jones, famed for his visual effects
in The Italian Job and Star Trek, will take on
the role of visual effects supervisor. Also on
the crew are production designer and art
director Ian Bailie (Atonement and Pride
and Prejudice) and Scott Winig as director
of photography.
Zhou promises Lost in the Pacific will
be an adventure of “monumental proportions for audiences all over the world that
will keep them on the edge of their seats
until the very end and even after they leave
the theatre”.
S P O RT S 3 1
F R I DAY MA RC H 6 , 20 1 5 • T HEED G E FINA NCIA L DA ILY
United vs Arsenal, another
FA Cup blockbuster
Liverpool confident of reaching semi-finals
BY JU ST I N PA L MER
LONDON: Manchester United and
Arsenal have served up some classic FA Cup encounters going back
to their first 109 years ago and next
Monday’s quarter-final under the
Old Trafford floodlights promises
another special occasion. Fans of
both sides can pick out plenty of
memorable moments between the
two most successful clubs in the
competition with 11 wins apiece.
Holders Arsenal beat United in
the 1979 and 2005 finals but United
have won their last two meetings in
the competition since that defeat on
penalties at the Millennium Stadium in Cardiff 10 years ago.
Alan Sunderland’s last-minute
winner for the Londoners in an epic
1979 final and Ryan Giggs’ semi-final wonder goal for United 20 years
later are just two standouts.
There was also Arsenal’s 2-0
fifth-round win in 2003 that became infamous after David Beckham was struck above his eye by a
boot that had been kicked in anger
in the dressing room by United
Eriksson,
Cannavaro cash
lifts hope in China
BY N EI L CON N OR
BEIJING: China’s football season
kicks off this week with hopes
of a resurgence for the beautiful
game after former England boss
Sven-Goran Eriksson and rookie
coach Fabio Cannavaro put the
league among the world’s biggest
spenders.
Chinese Super League clubs
spent €122.2 million (RM493.2
million) during the recently-closed
winter transfer window, almost
double of last year’s figure, second only to the English Premier
League (€186.8 million) and ahead
of Italy’s Serie A, according to statistics from German website transfermarkt.
Socceroo Tim Cahill, once of
Everton, is the star name among
the 47 foreign imports — including many Brazilians — who will
double the number of overseas
players in the competition.
An invigorated national team
who reached the quarter-finals of
January’s Asian Cup and top level
political support are also giving
fans hope the game has bounced
back after years of turmoil.
Chinese President Xi Jinping
— who state media describe as
an “avid” fan — backed a “football reform plan” last week.— AFP
IN BRIEF
JFA set to name Bosnian
Halilhodzic as coach
TOKYO: Bosnian Vahid Halilhodzic has agreed to become
the new coach of Japan’s national team following the sacking of Mexican Javier Aguirre,
Japanese football officials said
yesterday. Japan Football Association (JFA) technical director
Masahiro Shimoda told reporters: “The technical committee
has decided to recommend
Halilhodzic to the executive
board as the next coach of Japan.” The appointment of the
62-year-old Halilhodzic, who
guided Algeria to the knockout
stages of the World Cup for the
first time last year, is expected to be formalised after the
JFA’s board meeting on March
12. — AFP
With season near, MLS
averts player strike
West Brom’s Ben Foster (right) after fouling Aston Villa’s Matthew Lowton (left) in the box for a penalty. In the centre is West Brom
defender Chris Baird. Photo by Reuters
manager Alex Ferguson.
Go further back in time and the
history books tell of Arsenal’s 5-0
fourth-round demolition of United
in 1937, a record home win against
the Red Devils that still stands.
Just four days after securing
three much-needed league points
with a last-gasp 2-1 victory over
their local rivals, Aston Villa host
West Bromwich Albion in their second all-Premier League quarter-final tomorrow.
Christian Benteke’s penalty
handed Tim Sherwood his first win
as Aston Villa manager and ended
their worst run for 52 years.
Liverpool meet second-tier
Blackburn Rovers at Anfield on
Sunday on the back of a run of form
which has seen Brendan Rodgers’
side lose just once in their last 21
games in all competitions.
While Liverpool’s main focus is
securing a Champions league place
for the next season, they will be
confident of reaching the semi-finals against a Rovers side anchored
in mid-table in the Championship.
— Reuters
Familiar tale at Milan as Inzaghi
battles for survival
MILAN: Filippo Inzaghi’s future as
AC Milan coach has been thrown
into doubt and tomorrow’s match
at home to Verona is being billed
as his last chance to keep his first
senior coaching job.
In what has become a familiar
routine, once-mighty Milan’s season has turned into a story of crises, false dawns, injuries and new
signings who have failed to settle
in, with the coach left to pick up the
tab for the club’s failings.
Fernando Torres came and went,
scoring one goal in four months,
and forwards Alessio Cerci and
Mattia Destro have managed one
goal between them since joining
in the January transfer window.
Adriano Galliani, the club’s veteran chief executive and president
Silvio Berlusconi’s right-hand man,
twice visited the Milanello training
ground this week, a sure-fire sign
for Italian media that another crisis is brewing.
Gazzetto dello Sport said that
Galliani was particularly worried
about the number of injuries, which
have been a recurring feature at the
seven-times European champions
over the past three seasons.
Midfielders Nigel de Jong and
Riccardo Montolivo, both ruled
out of tomorrow’s game, were the
latest to join the injured list which
already includes Adil Rami, Cristian Zapata, Ignazio Abate, Mattia
De Sciglio, Pablo Armero and Cristian Zaccardo.
Even if Inzaghi survives tomorrow, Italian media are already speculating on who may replace him
at the end of the season and the
names of Borussia Dortmund coach
Juergen Klopp and Fiorentina’s Vincenzo Montella have been thrown
into the mix. — Reuters
Japan has to toughen up, says J-League boss
BY ALASTAIR H I M M E R
TOKYO: Japan must kick its obsession with “style over substance” to
avoid being left behind by other
countries, J-League boss Mitsuru
Murai told AFP before the weekend start of the domestic season.
Gamba Osaka will be the team
to beat when the J-League kicks off
tomorrow after winning the treble
last year and flexing their muscles
by beating fierce rivals Urawa Reds
2-0 in the curtain-raising Super Cup
last weekend.
But as Japan’s national side
lurches from one crisis to the next,
Murai acknowledged that world
football had developed at a staggering pace over the past 20 years
and called on clubs to “toughen
up” for the benefit of the Blue
Samurai.
“Japan has reached five straight
World Cups and the J-League has
played a big role in raising the level
of the game,” Murai said in an interview. “Japan had never qualified
before the J-League arrived.”
“But at last year’s World Cup in
Brazil and again with Japan coming
up short at the Asian Cup, we’ve
seen how the world game has improved at an incredible rate.
“I hope to see the J-League become tougher, quicker and more
aggressive to help raise the level
of the Japan national team.”
Holders Japan were ambushed
by the United Arab Emirates at the
Asian Cup in January, crashing out
on penalties in the quarter-finals
before sacking coach Javier Aguirre over his alleged involvement
in a match-fixing scandal. — AFP
WASHINGTON: Major League
Soccer (MLS) has averted a
players’ strike, ensuring the
2015 season will kick off this
weekend after agreeing on a
new five-year collective bargaining agreement. “We are
pleased to finalise the framework for a new collective bargaining agreement with our
players,” MLS commissioner
Don Garber said. “We now
enter our 20th season with
enormous momentum with
our new television partnerships, dynamic star players
from the United States, Canada and abroad, and two new
expansion teams in New York
City and Orlando that will debut in front of more than 60,000
fans on Sunday in the Citrus
Bowl.” — AFP
Sunderland’s Poyet
charged over Hull bust-up
LONDON: Sunderland manager Gus Poyet has been charged
with improper conduct following a touchline altercation with
his Hull City counterpart Steve Bruce, the Football Association (FA) announced yesterday. Poyet was sent to the
stands during Tuesday’s Premier League game at the KC
Stadium for kicking a drinks
bucket after Jack Rodwell was
booked for diving and reacted
by walking over to remonstrate
with Bruce. Bruce, a former
Sunderland manager, responded angrily and had to be restrained by one of the assistant
referees, but he has avoided
a charge, with the FA instead
reminding him of his responsibilities. — AFP
Swansea’s Gomis ‘well’
after on-pitch collapse
LONDON: Gomis moved to
reassure concerned onlookers
that he was “feeling well” after
collapsing during his side’s 3-2
Premier League defeat at Tottenham Hotspur on Wednesday. “I
wanted to reassure you concerning my health; it actually looks
much more scary than physically
dangerous and I am feeling well
now,” Gomis wrote on Twitter
after the match at White Hart
Lane. — AFP
3 2 S P O RT S
FR I DAY M ARC H 6 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
Former No 1s overshadow
Ko in Singapore
Defending champion Creamer suffers a day to forget
BY JOHN O’ B RI EN
SINGAPORE: Lydia Ko’s meteoric rise to the top of women’s golf
has shown little sign of slowing
down but the New Zealand teen
was forced to take a back seat to a
pair of former No 1s at the HSBC
Women’s Champions yesterday.
The 17-year-old phenomenon
arrived in Singapore fresh from
her Australian and New Zealand
Open victories and an opening
round four-under 68 at the testing Serapong Course put her well
in contention for a hat-trick just
two shots off the lead.
Ashwin mulls
‘one-sided’ ploy
against big
hitters
PERTH: Restricting scoring to
any one side of the wicket could
be an effective ploy to tame
big-hitting batsmen like Chris
Gayle and AB de Villiers at the
World Cup, Indian off-spinner Ravichandran Ashwin said
yesterday.
Three 400-plus totals have
already been registered in the
14-team tournament and West
Indies opener Chris Gayle has
struck World Cup’s first double
century against Zimbabwe.
Batsmen such as South Africa captain de Villiers and Australian Glenn Maxwell have
capitalised on field restrictions
and made a mockery of field
settings with 360° strokeplay
in a skewed contest between
the bat and ball.
Ashwin, however, is looking forward to the challenge
of bowling to Gayle in today’s
Pool B match at Perth.
“You’ve got to restrict hitting to one side of the ground
... and try to see how much you
can restrict the hitting to that
side,” Ashwin told reporters at
the WACA Ground. “It’s pretty
much about boundaries and
wickets, and you can restrict
the hitting to one side and see
if you can get a wicket or two,”
said India’s most successful
bowler in the tournament so
far with eight wickets.
West Indies captain Jason
Holder would naturally like to
see Gayle punish India today
but as a bowler he too has suffered at de Villiers’ hand, bleeding 104 runs in his 10 overs in
the 257-run defeat last week.
— Reuters
“I’m tired. A little bit jet-lagged
because of the long flight but I’ve
been trying to pace myself, go nine
holes and do the least amount of
practice,” Ko told reporters
Ko’s predecessor at the top of
the rankings, Park In-bee, made
the most of cooler early conditions
to fire a bogey-free six-under 66 to
claim a tie for first place along with
Taiwan’s Yani Tseng, who is showing glimpses of a return to form
after a two-year slump.
American Angela Stanford, who
won the restricted field US$1.4 million (RM5.11 million) event in 2012,
sits alone in third place on five-un-
der, with Ko lurking in a group of
five players two off the pace on a
day of low scoring at the Sentosa
Golf Club.
Fellow American Lexi Thompson
had the shot of the day, an ace on
the par-three 14th, to sit in another
group of five players on three-under for the tournament.
Park claimed she was keen to
regain the world No 1 ranking
when Ko usurped her at the start
of February and her play yesterday indicated the South Korean
was motivated by that desire to
get back to the top.
After parring the first eight
holes on the trickier front nine,
Park kick-started her round with
a birdie on the ninth and soared
to the top of the leaderboard with
five more birdies on the back nine.
Tseng enjoyed a faster start than
Park and offset a bogey on the parfour fifth with three birdies on her
front nine before going bogey-free
down the stretch with four more
birdies to join the Korean ahead
of the chasing pack.
Defending champion Paula
Creamer had a day to forget, the
American shooting a two-over 74
to sit tied for 51st in the 63-player
field. — Reuters
WTA expands Future Stars
‘Road to Singapore’
BY T V IGNE S H
KUALA LUMPUR: The Women’s
Tennis Association (WTA) have expanded its WTA Future Stars “Road
to Singapore” invitations to 18 countries across Asia-Pacific, allowing top
ranked Under-14 and Under-16 girls
a once in a lifetime opportunity to
represent their home countries at the
BNP Paribas WTA Finals in Singapore.
WTA tournament director Melissa
Pine said the WTA Future Stars initiative had a phenomenal kick-off
in 2014, with a fantastic turnout of
young and talented girls.
“This year we expect the turnout to be better than last year. This
expansion across 18 countries in
Asia-Pacific shows our commitment to give back to the community through tennis and present the
stars of tomorrow on a global stage.
“We are excited to be able to showcase the passion and talents of these
young athletes through the WTA
Future Stars programme,” said Pine.
Malaysia is the latest country to
accept the invitation for this year’s
WTA Future Stars.
“We are happy to have Malaysia
MILAN: Mercedes pair Lewis Hamilton and Nico Rosberg are joint favourites for the Formula One world
title as well as the season opening
Grand Prix in Melbourne, according to Ferrari star Sebastian Vettel.
And the 27-year-old German —
who admitted he began talking with
Ferrari as early as 2008 about a future move to the Italian super team
— said fans may have to wait until
Marussia look at young
talent to complete lineup
LONDON: The revived Manor
Marussia Formula One team
have indicated they are more
likely to sign a promising young
rookie than an established name
to complete their driver line-up.
The remaining seat at Marussia,
who came out of administration formally last Friday, is the
only one still to be filled and time
is running out with the season
starting in Australia next week.
“We are in discussion ... with
some very quick young guys,”
chief executive officer Graeme
Lowdon told Reuters. The team,
who are hoping to get two cars
on the Melbourne starting grid,
have already announced Briton
Will Stevens as their other driver
although that is subject to the
23-year-old securing his super
licence. — Reuters
Boy racer Verstappen is
driven to succeed
LONDON: Max Verstappen is a
boy racer with a difference. Formula One’s hottest new sensation
does not own a car, appears to
be in no hurry to get one and
would not be allowed to drive
it unsupervised anyway. Billed
by one magazine as the most
controversial driver ever to enter
the sport’s elite, the 17-year-old
Dutchman makes his debut in
Australia next week as Formula One’s youngest participant.
When he was handed the Toro
Rosso drive, Verstappen was still
only 16 — and had to be driven
by former F1 racer father Jos to
Belgium’s Spa-Francorchamps
circuit to meet the media. He still
is driven around, or uses other
means of transport. — Reuters
Sainz eager to be in the
picture
Pine (left) with the children during the coaching clinic at the Royal Selangor Golf Club
in Kuala Lumpur on Wednesday.
on board and the WTA believes that
there many young girls here who have
the talent and passion to play tennis.
“We are working closely with the
Lawn Tennis Association of Malaysia
and they have been very cooperative
and keen on working with us for the
WTA Future Stars,” said Pine.
Besides Malaysia, the other countries which will be participating in the
WTA Future Stars include Australia,
New Zealand, South Korea, Cambo-
dia, Brunei, Myanmar, Singapore,
Indonesia, Thailand, the Philippines,
Vietnam, Laos, China, Japan, India,
Taiwan and Hong Kong.
Each participating federation is
required to host a “Junior Road to
Singapore” qualifying event in two
categories — Under-14 and Under-16 girls — likely from June to
August to decide on who goes to
Singapore for the WTA Future Stars
tournament.
Vettel tips Hamilton, Rosberg for 2015 success
BY JUSTIN DAV I S
IN BRIEF
2016 before ending Ferrari’s eightyear wait for the world driver’s title.
Four-time world champion Vettel makes his official Ferrari debut
as the 20-race season kicks off at
Melbourne’s Albert Park circuit
on March 15. Ferrari are hoping to
end years of mediocrity with Vettel
and Finnish 2007 world champion
Kimi Raikkonen, but the German
believes Mercedes aces Hamilton
and Rosberg are “the ones to beat”.
“It’s 50:50 between them,” Vettel
told La Gazzetta dello Sport yesterday when asked who would be
crowned world champion in 2015.
“Last year I didn’t expect Rosberg to be so strong, especially in
qualifying. Then in the races he was
always really close to Hamilton. For
me they will be the ones to beat.”
Asked who would win in Melbourne on March 15, Vettel added: “There are two favourites, the
Mercedes drivers Hamilton and
Rosberg.” — AFP
LONDON: Carlos Sainz will be
as disappointed as any Formula
One fan that Fernando Alonso
will be absent from next week’s
Australian season opener. The
20-year-old Spaniard, whose
double world rally champion
father has the same name, has
a treasured photograph from a
decade ago of himself as a wideeyed kid alongside the smiling
Alonso. Both men had planned
to take another, more significant
one, in Melbourne — of them
ready to race as rivals. Alonso ,
who will now have to wait until
Malaysia to get started, promised
last August that they would be
together on the starting grid in
Australia. — Reuters
England, Japan to host
US Open qualifiers
NEW YORK: England’s Walton
Heath and Japan’s Kinojo Golf
Club were named by the US Golf
Association on Wednesday as
sectional qualifying sites for this
year’s US Open at Chambers Bay.
Walton Heath will host qualifying for the 11th consecutive year.
The Asian sectional qualifier will
be in Japan for the 11th year in
a row. The European and Asian
qualifiers will be played on May
25 while US qualifying will be
conducted at 10 sites on June
8. — AFP