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WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
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RM1.45 billion
1Azam project
for poor folks a
failure, says PAC
Putrajaya paid extra
RM109m for PM’s jet
Rafizi says amount derived from current market value of ACJ320
BY ELIZABE TH Z AC HARI AH
MoF maintains
Edra Energy
key to solving
1MDB’s
financial woes
KUALA LUMPUR: Putrajaya paid
an excess of RM109 million — for a
private jet for the prime minister’s
use — from Jet Premier One (M)
Sdn Bhd (JPO), a private company
that acquired the aircraft from Air
Luther AG, PKR secretary-general
Mohd Rafizi Ramli said yesterday.
Rafizi said the amount was derived
from the current market value of the
ACJ320 compared with the price the
Malaysian government paid to JPO.
“JPO sold the ACJ320 at a hire purchase price, causing Putrajaya to pay
a higher price than the cost it would
incur if it had bought the jet itself without JPO,” he said at a press conference
at the parliament lobby yesterday.
“Not only was the purchase of
the jet wasteful, it was also made
at a cost way higher than the maximum value of the aircraft. Based on
my calculation, the government of
Malaysia paid RM109 million more
than the actual price.”
Rafizi revealed last week that
Putrajaya ordered a new private aircraft for Prime Minister Datuk Seri
Najib Razak’s use, which was later
confirmed by the Prime Minister’s
Office, that said the ACJ320 was
purchased to replace the 16-yearold Boeing business jet.
Rafizi said last week that the new
purchase brings the tally to seven
aircraft owned by the government.
Sungai Petani member of parliament (MP) Datuk Johari Abdul said
yesterday that it was unacceptable
for the government to have bought
the jet at a marked-up price at a time
when the people were upset over the
increasing prices of goods and the
impending goods and services tax.
“This is like double jeopardy ...
when the people are suffering, they
buy a jet and on top of that, they buy
it at a marked-up price,” he added.
Rafizi said that he would reveal
the owner of JPO, the company that
bought the jet from Air Luther and
sold it to the government, at a press
conference today.
The Pandan MP revealed yesterday that Putrajaya spent US$8 million (RM29.44 million) to upgrade
the recently-purchased private jet
for the use of Najib and his family.
“The US$8 million was included
in the sale price — which was the
base of the hire purchase price of
RM465 million — that was borne
by the Malaysian government,” he
said. — The Malaysian Insider
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TPG’s Teoh offers olive branch
SYDNEY: TPG Telecom chief executive officer David Teoh insists
he is willing to meet iiNet founder
and former boss Michael Malone to
ease his concerns about the A$1.4
billion (RM4.04 billion) takeover of
the Perth-based Internet service
provider.
The Sydney Morning Herald reported that iiNet’s board had faced
harsh criticism from shareholders, with the loudest voice being
Malone, around the lack of communications the company has had
with them since TPG launched an
A$8.60 per share bid on March 13.
In a rare interview following TPG’s
financial results, Teoh said he was
more than happy to meet Malone,
who now holds just 2.5% of iiNet
shares, and talk through the issues he
had expressed over the last few days.
“I am very happy to speak to
him and have coffee; I do not have
any problem with that,” Teoh was
reported to have told BusinessDay.
Teoh acknowledged that iiNet’s success
was built on strong customer service.
Teoh acknowledged that iiNet’s
success was built on strong customer service and had a different
market segment to TPG.
“When you look at iiNet, its
strong branding is created by the
good people, the good team at iiNet
and we cannot destroy that. We
need that good team of people in
place,” Teoh said.
“The Cape Town call centre, they
have fabulous people. I think it
would be a good alternate site for
TPG as well.”
TPG was pipped, in 2010, at the
post in the race for Australian Associated Press Telecoms’ consumer arm when iiNet emerged as a
surprise late bidder to snare it for
A$60 million.
The Sydney Morning Herald
report said Malone on Monday
launched a scathing attack on
iiNet’s board for a lack of communication with shareholders
following the bid from TPG being made public. His anger was
directed largely at iiNet’s board
of directors and not the executive
team or TPG.
Malone initially supported the
offer, but after talking with his family and little communication from
iiNet he reversed his position.
IN BRIEF
Zahid takes oath, denies
knowing kingpin Phua
KUALA LUMPUR: Home Minister Datuk Seri Dr Ahmad Zahid
Hamidi took a religious oath
yesterday to stress that he does
not know the gambling kingpin
Paul Phua Wei Seng, nor had
he enjoyed any benefit from
him. Zahid, who is still being
severely criticised for writing a
support letter to the Federal Bureau of Investigation, vouched
for Phua, saying he never had
any contact with the former
Macau casino junket operator.
Phua is facing illegal sports betting charges in Las Vegas after
being arrested during last year’s
FIFA World Cup football tournament in Brazil. “As a Muslim,
Wallahi Wabillahi Watallahi, I
have never received a single sen
from the gambler. In fact, I was
never involved with the person
or any form of illegal money,”
he said in his wind-up speech
on the royal address in parliament. — The Malaysian Insider
Taiwan tops Asian tigers
in 2014 economic growth
TAIPEI: Taiwan’s economic
growth rate of 3.7% was the
highest among the Asian tigers last year, according to the
National Development Council (NDC) statement on Monday. The strong showing put the
country back at the head of the
group of four successful economies for the first time since
2000. South Korea, Singapore
and Hong Kong recorded rates
of 3.3%, 2.9% and 2.3%, respectively. “Taiwan’s economy has
been on a steady growth track
for the past three years, a trend
reflected by highly competitive
results in a variety of key indicators,” an NDC official said.
— Taiwan Today
Public hearing on
Ashram’s heritage status
KUALA LUMPUR: The Tourism
Ministry will soon conduct an
open hearing to formally receive
views and suggestions on conserving Vivekananda Ashram
as a heritage site. DAP national
vice-chairman M Kula Segaran said this was promised by
Tourism Minister Datuk Seri
Mohamed Nazri Abdul Aziz,
who stated the hearing was a
necessary measure for all parties. — The Malaysian Insider
Standard Life chairman: Leaving EU will harm Britain’s economy
BY HUW JO NE S
LONDON: Leaving the European
Union (EU) would be disastrous
for Britain and harm its economy,
Standard Life plc chairman Gerry
Grimstone said yesterday.
“It would be disastrous for London and the UK (United Kingdom)
if the UK were to leave the single
market,” Grimstone told a conference on how to maintain Britain’s
competitiveness as a financial centre. Standard Life is Britain’s fourth
biggest insurance company.
Prime Minister David Camer-
on has promised a referendum on
the Britain’s EU membership if his
Conservative Party wins national
elections in May.
But Robert Oxley, campaign
director of Business for Britain, a
Euro-sceptic business group, said
Grimstone was wrong to “join in
the scaremongering that life outside of the EU would be disastrous
for the UK.”
“To attribute the City [of London’s] success to EU membership
as some do is deeply disingenuous
and ignores the ongoing damage of
EU financial regulation,” Oxley said.
Grimstone, who also chairs TheCityUK, which promotes Britain as a
financial centre, said the EU’s desire
to make the single market more effective by creating a “capital markets
union” (CMU), would boost Britain.
CMU aims to make it easier for
companies to raise funds for growth
on markets and ease the bloc’s heavy
reliance on banks for money.
Britain’s financial services minister, Andrea Leadsom, said the
government backed EU plans for
CMU, but that it would “not be shy”
of standing up to any measures
from Brussels it did not agree with.
Britain successfully challenged
a policy from the European Central Bank which required clearing
houses that handled large amounts
of euro-denominated securities
to be based in the single currency
area. Unchallenged, it could have
forced clearers in Britain, such as
LCH.Clearnet, to shift operations
to continental Europe.
“I am very happy to say the European Court of Justice has agreed
with us. It’s the sort of stand the
government must continue to take
to protect the single market,” Leadsom said. — Reuters
4 HOME BUSINESS
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Najib: Claims that 1MDB
overpaid Goldman ‘baseless’
Rafizi: SRC
International
must return
RM4b loan
to KWAP
BY E L IZ A B E T H Z AC H A R IA H
Government has nothing to hide, says Ahmad Maslan
BY C Y NTHI A B L E M IN & YIM IE YONG
KUALA LUMPUR: Prime Minister
Datuk Seri Najib Razak has dismissed
as “baseless” claims that 1Malaysia Development Bhd (1MDB) paid
high interest rates to New York-based
Goldman Sachs Group Inc to manage its RM5 billion Islamic bonds.
“Goldman Sachs was chosen
to manage the RM5 billion Islamic
bonds because the company is one
of the very few banks in the United
States that has the capacity to monitor
such a sizeable bond issuance with
large amounts,” he said in a written
reply to Raub Member of Parliament
Datuk Mohd Ariff Sabri Abdul Aziz.
“Concerns on the 5.75% interest
rate charged for the Islamic bonds
[issued] back in 2009, with the perception that the interest rates are
particularly high, are baseless merely
because the Islamic bonds were the
first Islamic bonds issued in Malaysia
that had a 30-year tenure,” said Najib.
Mohd Ariff asked Najib, who is
the Finance Minister and chairman
of 1MDB’s advisory board, about the
criteria used to appoint Goldman
Sachs to manage the RM5 billion Islamic bonds at a 5.75% annual interest rate as compared with a Petroliam
Nasional Bhd (Petronas) bond that
paid an interest rate of 3.6% during a
a period when Goldman Sachs was
involved in the “sub-prime loans”
scandal in the US.
Mohd Ariff also raised concerns
on whether the interest rate was the
best rate for 1MDB.
To recap, 1MDB in a lengthy statement issued in October last year, said
it took the allegations about its bonds
and debt issuances, commissions,
debt levels and overpayment of assets “very seriously”, and intended
to present its own side of the story
to every claim.
It also noted that the issuance of
its bonds and debt had been “unfairly compared” to that of Petronas’ in
terms of the interest rate both companies first paid to investment firms.
In a separate event yesterday, Deputy Finance Minister Datuk Ahmad
Maslan said the government has
“nothing to hide” in relation to 1MDB.
He said this is why the prime minister was “brave enough” to engage
the Auditor-General (AG) to audit
the financials of the state investment
firm. On March 4, Najib instructed
the AG to independently verify the
1MDB accounts.
It is also why Barisan Nasional
(BN) will continue to be the ruling
party in the next general election
(GE), unshaken by the 1MDB issue,
said Ahmad Maslan.
He was responding to questions
raised by an Umno grassroots leader
at a luncheon talk on the impending
goods and services tax and current
issues organised by his ministry and
the Overseas Umno Club Alumni
yesterday.
The Umno leader had asked if BN
would still be able to rule the country
with the criticism and negativity that
it has to contend with now.
“We have nothing to hide on
Ahmad Maslan says this is why the
prime minister was ‘brave enough’ to
engage the AG to audit the fund.
Photo by Shahrin Yahya
1MDB,” said Ahmad Maslan.
He also said the initial public offering (IPO) of 1MDB’s energy arm,
Edra Global Energy Bhd, was delayed because the opposition has
been trying to portray a bad image
of the company.
He stressed that the cash flow
problems faced by 1MDB could be
resolved through the listing of Edra
Global Energy. He reiterated that
1MDB is an investment fund that
focuses on long-term profit rather
than short-term gains.
“As far as I know, the IPO will go
on,” he said. When pressed about
the timeline for the listing, he said,
“Hopefully sometime this year”.
Former prime minister Tun Dr
Mahathir Mohamad warned about
two weeks ago that if investigations
into 1MDB are not done properly,
the BN coalition could lose support
in the next GE in 2018.
Dr Mahathir also called for a forensic investigation by the police into
the allegations against those linked to
the controversial 1MDB, saying that a
mere audit “is not enough” to uncover the truth behind the debt-ridden
state investment vehicle.
His warning came after a show of
acceptance and support by Umno
division chiefs to Najib after the latter’s explanation on 1MDB.
Meanwhile, the Public Accounts
Committee (PAC) said it has yet to
receive any preliminary report from
the AG on the audit of 1MDB.
“It has been only a few weeks ...
we have not received any report,”
PAC chairman Datuk Nur Jazlan
Mohamed told a press conference
yesterday.
On the PAC’s plans to meet with
the AG this week to ensure there is
no overlap between its hearings on
1MDB and the AG’s audit, Nur Jazlan
said this has yet to take place.
“But I think the [AG] is coming to
the PAC to table the Auditor-General’s Report 2014 (Series 1) next Monday and we are hoping to discuss
with him on this,” said Nur Jazlan.
Last Tuesday, the PAC had announced that it would meet up with
the AG this week to ensure there was
no overlap in their investigations and
audit of 1MDB.
The PAC was then hoping to begin
its hearings “as soon as possible”, even
before the AG’s report is completed
due to public interest in 1MDB.
Singapore to help in probe into fund, says report
BY MEENA L A KSHANA
KUALA LUMPUR: Singapore authorities will support the probe into
troubled 1Malaysia Development
Bhd (1MDB) by providing assistance
within the full ambit of its laws, a
business daily reported yesterday.
The Business Times, quoting
a spokesman from the Monetary
Authority of Singapore (MAS), said
cooperation between authorities in
Singapore and Malaysia may have
already begun as the Singaporean
authorities are already in contact
with their Malaysian counterparts.
“The Singapore authorities are
in touch with their Malaysian counterparts. We are committed to assist
within the full ambit of our laws,” the
spokesman was quoted as saying.
The spokesman, however,
stopped short of revealing further
details, saying it would be inappropriate to ongoing investigations in
Malaysia.
The Business Times’ report stated that MAS has also been engaging
with relevant financial institutions
in Singapore and does not comment on its “supervisory dealings
with specific financial institutions”.
The spokesman also reportedly
said MAS was unable to comment
on individual banking relationships due to “confidentiality considerations”.
“Financial institutions here
are required to conduct rigorous
customer due diligence, regular
account reviews, and to monitor for and report any suspicious
transactions,” the business daily’s
report said.
Singapore’s financial regulator
was responding to queries from the
daily on whether the Malaysian
authorities had approached MAS
for assistance in the 1MDB probe.
This followed a revelation that a
Singapore branch of a Swiss wealth
manager, BSI Singapore, had custody of US$1.103 billion (RM4.059
billion) of 1MDB funds redeemed
from investments parked in the
Cayman Islands.
On Monday, Bank Negara Malaysia Governor Tan Sri Dr Zeti
Akhtar Aziz was reported as saying
that the central bank will “uphold
areas under its purview and legislation that it operates in” with regards to the audit and investigation
being carried out on 1MDB.
“As the central bank, we will uphold whatever that is under our purview under the legislation that we
operate, and this is important. We
are accountable for it,” she said in
an exclusive interview with CNBC.
On March 9, Inspector-General
of Police Tan Sri Khalid Abu Bakar
had confirmed that the police are
investigating the state-owned strategic investment company and had
formed a task force comprising the
Attorney-General’s Chambers, the
Malaysian Anti-Corruption Commission and the police.
Prime Minister and Finance
Minister Datuk Seri Najib Razak,
who chairs 1MDB’s advisory board,
had earlier called on Auditor-General (A-G) Tan Sri Ambrin Buang to
audit the debt-laden entity.
The audit by the A-G’s Department will be passed to Parliament’s
Public Accounts Committee (PAC)
for further inspection.
1MDB has come under scrutiny
over its financial management after racking up RM42 billion in debt
since 2009, raising fears of a downgrade in the sovereign rating should
it fail to repay its loans. On March
12, Second Finance Minister Datuk
Seri Ahmad Husni Hanadzlah formally acknowledged that 1MDB’s
financial position was “unsustainable” with a “cash flow problem
and a high net gearing of 17 times”.
The Finance Ministry had also
confirmed that the Cabinet approved a RM950 million standing
credit to 1MDB, which the opposition had deemed a bailout. Najib
had later confirmed that the government had also issued a “letter
of support” to IMDB Global Investments Ltd, a wholly-owned unit of
1MDB, to borrow US$3 billion to
repay its debt.
The prime minister had said the
letter of support meant that the government will repay the debt if 1MDB
Global Investments fails to do so.
KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak
has been urged to order SRC
International Sdn Bhd, a wholly-owned unit of the Ministry of Finance, to return the
RM4 billion it borrowed from
Kumpulan Wang Persaraan
(Diperbadankan) (KWAP) to
purchase a mining company
in Mongolia.
PKR secretary-general Rafizi Ramli said SRC, a company
that was “demerged” from the
government-linked strategic
development fund 1Malaysia
Development Bhd (1MDB)
three years ago, had made
losses of RM164.35 million
with zero revenue registered,
according to its financial statement for the financial year
ended March 2014.
“This means that the businesses of this company have
not generated any income despite it having a RM4 billion
loan which was borrowed from
KWAP,” he told a press conference at the parliament lobby
yesterday.
Rafizi, the Pandan Member of Parliament (MP), said
SRC’s situation is akin to the
modus operandi of other organisations that are linked
to 1MDB, which is to borrow
huge amounts of funds with
a guarantee from the government without stable business
activities.
“Najib should now order
SRC to return every single sen
of the RM4 billion that was
borrowed from KWAP, in the
interests of civil servants,” he
said.
Rafizi had previously said
he was in discussions with
lawyers, including Sepang MP
Hanipa Maidin, to initiate a
lawsuit against KWAP for approving the loan.
The “careless investment”,
he said, was done without due
diligence which puts pensioners’ interests at risk.
“We will proceed with legal
action in court against those
involved to protect the interests of pensioners and civil
servants.
“I am sure there will be a
lot of civil servants, among
them MPs, who will be willing
to file suit,” he said about two
weeks ago.
1MDB has come under fire
from Rafizi and other opposition politicians as well as
former prime minister Tun Dr
Mahathir Mohamad over its
heavy debts, its use of money
and its opaque operations.
There were concerns about
the firm’s debts estimated at
some RM42 billion, just five
years into its operations,
amid a softening of the ringgit against the US dollar. — The
Malaysian Insider
6 HOME BUSINESS
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Resolve issues
raised by IC, say
Tanjung minorities
EGM called off after Tan Kean Soon was redesignated
executive director
BY C H A RLOT TE CHONG
KUALA LUMPUR: A group of minority shareholders of Tanjung Offshore
Bhd has called on the directors of
the company to resolve issues that
have emerged from the findings of
its Independent Committee (IC),
after a three-month boardroom tussle appeared to be heading towards
a resolution following announcements made on Monday.
Michael Azizeu, representing
the group of 23 minorities who call
themselves Tanjung Offshore Minority Shareholders (TOMS), said the
company’s directors should resolve
the issues and “not to compromise
for the sake of comprising”.
“We hope the authorities will
continue their pursuit and investigate beyond what information is
available on the surface,” said Azizeu.
The 23 minorities collectively
hold more than 6% in Tanjung Offshore (fundamental: 1.85; valuation: 0.60).
“I am sure they are doing this just
to avoid the EGM [extraordinary
general meeting],” he said, referring to the slew of announcements
made on Monday, which included
the redesignation of Tan Sri Tan
Kean Soon as executive director
from non-independent non-executive director previously.
Azizeu acknowledged the new
appointments will bring about better
transparency to the board, however,
there is still a need to examine the
two deals the company had entered
into previously, over which questions have arisen.
“We understand that forensic auditors have been appointed, perhaps
under instruction from Bursa Malaysia, However, there are several issues
highlighted by TOMS that may not
be part of the IC findings,” he said.
“They never mentioned the scope
of this special auditor. They need to
be more forthcoming,” Azizeu told
The Edge Financial Daily.
Questions arising from past deals
in the company have not been answered, he said, adding that the
capabilities of the new board of directors have yet to be proven.
Azizeu had lodged a police report on March 12 on the irregularities in some of Tanjung Offshore’s
deals including the acquisition of
a Birmingham property in March
last year.
Its third largest shareholder, Tan
had called for the EGM to remove
George William Warren Jr, Datuk
Ab Wahab Ibrahim and Shahrizal
Hisham from the board.
However, the notice for the EGM
was withdrawn on Monday, the
same day Tan was redesignated as
executive director.
Tan replaced Muhammad Sabri
Ab Ghani, who resigned on Monday
for “personal reasons”. This was after
the company uplifted the suspension of Tan and two other officers
with immediate effect.
Alongside Tan, Tanjung Offshore
also appointed Datuk Mohd Hafarizam Harun as chairman and
three new independent non-executive directors.
Warren, Ab Wahab and Shahrizal
were members of the IC established
by Tanjung Offshore’s board on Jan
8 this year.
Warren resigned as independent
non-executive director on Monday
while the two others remained on
the board.
The IC, among others, was tasked
to review some of Tanjung Offshore’s
past deals and to engage professionals to perform an independent
valuation if necessary. The findings of the IC, released on
Jan 28 this year, pointed at possible
conflicts of interest and breaches of
fiduciary duty by Tan and Muhammad Sabri, and deficiencies in the
approval process where group adviser Datuk Harzani Azmi was concerned, according to a statement by
Tanjung Offshore. As a result, their executive and
advisory roles were suspended on
the same day.
The IC findings were submitted
to Bursa, the Securities Commission Malaysia and the police in late
January.
Meanwhile, Tanjung Offshore
said in an announcement yesterday
to Bursa that it has withdrawn a civil
suit, filed on March 12, against Tan
and five others.
Newly-appointed chief executive
officer Rahmandin Shamsudin told
The Edge Financial Daily it would
also drop a defamation suit filed
earlier this month against Tan and
several others.
“We have decided to call off the
EGM and will seek to solve the issues
arising from the IC findings,” he said.
“We will work together moving
forward and try to resolve any issues,” said Rahmandin.
With the appointment of Ferrier
Hodgson MH Sdn Bhd as the special
auditor on Monday, Rahmandin said
the review would shed light on the
issues arising from the IC findings.
Shares of Tanjung Offshore rose
6.25% or three sen to close at 51 sen
yesterday, translating to a market
capitalisation of RM191.4 million.
The Edge Research’s fundamental
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also based on historical numbers.
A score of 3 suggests strong fundamentals and attractive valuations.
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Cliq Energy to acquire RM433.4m
Kazakhstan oilfield
BY FAT IN R A SY IQA H MUS TA Z A
KUALA LUMPUR: Special purpose acquisition company (SPAC)
Cliq Energy Bhd has entered into
a conditional sale and purchase
agreement (SPA) with Kazakhstan-based Phystech Firm LLP
for the latter’s two producing onshore oilfield blocks for US$117.3
million (RM433.4 million).
The purchase will see the SPAC
acquiring a 51% controlling interest in a special purpose vehicle (SPV), in which the oil assets
will be parked by Phystech. The
SPV will then be listed on the Kazakhstan Stock Exchange (KASE).
The acquisition is to be satisfied
by a cash payment of US$90 million and a differed cash payment
of US$23 million at the end of the
third year from the completion
date of the SPA. Cliq will then
acquire the 51% stake in the SPV
which has yet to be named.
“Kazakhstan is a prolific oil and
gas region, the country has oil reserves of about 31 billion barrels
and produces about 1.7 million
barrels per day. This is a country
where there are active exploration
and production activities and it
may be proven in the sense that
there are a lot of international
players already operating in Kazakhstan,” the SPAC’s managing
director and chief executive officer
Ahmad Ziyad Elias told reporters
yesterday.
Details of the SPA show Cliq
(fundamental: 0.6; valuation: 0)
entering two agreements — a
business transfer agreement and
a subsurface use contract for the
production of hydrocarbons at
the two oil field blocks which are
situated in the North Karazhanbas
region in Kazakhstan.
The proposed acquisition represents a qualifying acquisition
(QA) for the company to graduate
from being a SPAC into becoming
a junior independent exploration
and production company. April
2016 is its deadline to acquire an
asset.
Meanwhile, Cliq’s executive
director and chief financial officer
Kamarul Baharin Albakri said the
company will finance the purchase with cash kept in the SPAC’s
trust account, which amounts to
about RM345.8 million, as well as
shareholders’ funding.
Ahmad Ziyad said there are a lot
of international players already
operating in Kazakhstan. Photo by
Kenny Yap
“We will use 90% of the trust
account and the balance of the
acquisition price will be funded by
shareholders’ funding. The shareholders will provide three years’
financing at a 6% interest rate,
compounded annually.
“There is an acquisition process
to acquire the asset and working
capital so that the company won’t
be starved for cash,” said Kamarul.
Note that Phystech, a company
incorporated in Kazakhstan, is the
sole operator of the Karazhanbas
Nothern Field and is principally
involved in the exploration and
production activities at the North
Karazhanbas deposit in the Mangystau region in the country.
In 2013, Phystech recognised
earnings before interest, taxation,
depreciation and amortisation
(Ebitda) of US$22.61 million.
Ziyad sees that Cliq will likely record the same quantum of
profit after the completion of the
acquisition.
“With the facilities intact, we
will be looking at these numbers.
We are looking to complete this
process in the next six months,”
said Ziyad, adding that the company will still have to wait for the
Securities Commission’s approval
for the deal and an extraordinary
general meeting to be conveyed
for a vote by minority shareholders before that.
Trading in Cliq shares were
suspended pending the QA announcement yesterday. Prior to
the suspension, it was trading at
67.5 sen. The counter will resume
trading today.
MAHB to sell stake in Delhi Airport operator for RM293m
BY C H ESTER TAY
KUALA LUMPUR: Malaysia Airports
Holdings Bhd (MAHB) intends to
sell its entire 10% stake in Delhi International Airport Pte Ltd (DIAL),
the operator of India’s Indira Gandhi
International Airport (Delhi Airport),
for US$79 million (RM292.6 million).
MAHB, in a filing with Bursa Malaysia yesterday, said it is selling the
stake because foreign ownership of
domestic companies in India is limited to 49%, thus it cannot exercise
any control over the management
of the company.
MAHB (fundamental: 1.15; valuation: 1.8) said its wholly-owned
subsidiary Malaysia Airports (Mauritius) Pte Ltd (MAM) had entered
into a conditional share sale agreement with GMR Airports Ltd, a unit
of India-listed GMR Infrastructure
Ltd, for the disposal.
MAHB said its original cost of
investment for the DIAL stake was
US$57.62 million.
Barring unforeseen circumstances and subject to all required
approvals being obtained, the proposed disposal is expected to be
completed in the second quarter
of 2015, said MAHB.
The group explained that this is
a strategic opportunity to crystallise its investment after realising
the investment value.
“MAHB has recently realigned
its investment objectives to focus
more on investments in companies
which it can exercise a significant
degree of control over operational
decision-making.
“As the existing shareholders’
agreement restricts foreign ownership in DIAL to not more 49%,
MAHB is of the opinion that it
would not be in a position to ex-
ert influence in DIAL,” it added.
Subsequent to the disposal,
MAHB plans to utilise 92.4% of
the proceeds as redemption of debentures within three months; 7.4%
as general working capital, and the
remainder 0.2% as expenses for
the exercise.
MAHB fell one sen or 0.14% to
close at RM7.04 yesterday, with a
market capitalisation of RM11.63
billion.
HOME BUSINESS 7
W E D N E SDAY MA RC H 2 5, 2015 • T HEED G E FINA NCIA L DAILY
NEWS IN BRIEF
MOST VIEWED STORIES ON
theedgemarkets.com
Govt won’t cancel 1MDBMitsui, Malakoff contracts
Nor impose penalty on the companies due to construction delay of power plants
BY CHEN SHAUA FUI
KUALA LUMPUR: The government does not plan to cancel the
concession contracts with 1Malaysia Development Bhd-Mitsui
& Co Ltd (1MDB-Mitsui) and
Malakoff Corp Bhd or impose any
penalty on the companies due to
the delay in the construction of
of the respective power plants.
Energy, Green Technology and
Water Minister Datuk Seri Dr
Maximus Ongkili said the government will not cancel the contracts because there is no delay
in the critical milestone.
“[A] power purchasing agreement ... signed between Tenaga Nasional Bhd (TNB) and [a]
developer to build a power plant
[is] so that TNB can purchase the
power from them ... a financial
penalty on the approved developer
[can be imposed] should there be
any violation of contract.
“The government can also cancel the awarded project to any developer if the specific critical milestone was not fulfilled or delayed
up to a certain period enshrined
in the agreement,” Ongkili said
in a written reply to Petaling Jaya
Utara MP Tony Pua.
Pua had asked whether the
ministry would take action against
1MDB and Malakoff which had
failed to commence their projects,
and whether their agreements allow the ministry to impose a fi-
nancial penalty or terminate the
contracts.
The Jimah East 2,000mw coalfired power plant had sought a
six-month extension, while the
Tanjung Bin 1,000mw power plant
had asked for a six- to 12-month
extension. The former is controlled
by 1MDB through its ownership of
a 75% stake in Jimah Energy Ventures Holdings Sdn Bhd.
Meanwhile, the Tanjung Bin
plant, the largest coal-fired power plant in Southeast Asia, was
undertaken by Malakoff which is
controlled by tycoon Tan Sri Syed
Mokhtar Al-Bukhary’s MMC Corp
Bhd.
Ongkili said the ministry has always ensured that the companies
awarded have financial capability
and were formally backed by financial institutions. However, he added, there are many challenges on
the field such as land ownership,
reclamation, and other issues that
may cause a delay in completing
the project and affect the implementability of the project.
“In this case, 1MDB-Mitsui and
Malakoff obtained written support from a financial institution
to support the projects which suggests the companies are capable
of investing and getting support
to build the projects.
“Furthermore, both developers
have shown that they have experience in power plant construction
projects,” he added.
Kuantan Flour Mills explains aborting RTO
BY MEENA L A KSHA NA
KUALA LUMPUR: Kuantan Flour
Mills Bhd’s (KFM) proposed reverse
takeover (RTO) of water filtrations
systems provider NEP Holdings (M)
Bhd (NEP) fell through after the company received a legal claim of approximately US$1.62 million (RM5.94
million) for trade finance facilities.
In a filing yesterday, KFM (fundamental: 0.8, valuation: 0.6) explained
that both it and NEP had agreed not
to extend the heads of agreement
(HoA) in view of, among others, a
writ of summons and statement
of claim filed by L H Asian Trade
Finance Fund Ltd for various trade
finance facilities granted to the flour
mill company.
“Following the mutual termination of the HoA, the parties will
not be pursuing or taking any legal
action against each other,” the filing read.
KFM said it will incur direct
expenses in connection with the
signing of the HoA and up to the
final date, but did not disclose the
amount.
Last week, KFM said its proposed
RTO of NEP had been terminated
as both parties were not able to execute the definitive agreement by
the agreed deadline.
Under the HoA between KFM
and NEP signed in January 2015,
both parties are obliged to execute
a definitive agreement no later than
two months from the date of the
HoA or such other date as the parties may agree in writing.
KFM said it had decided not to
seek an extension of time to execute
the definitive agreement and therefore terminated the HoA.
KFM shares closed one sen or
3.33% higher at 29 sen yesterday,
with a total market capitalisation
of RM19.79 million.
The Edge Research’s fundamental
score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers.
The valuation score determines if a
stock is attractively valued or not,
also based on historical numbers.
A score of 3 suggests strong fundamentals and attractive valuations.
Go to www.theedgemarkets.com for
more details on a company’s financial dashboard.
Integrax’s Amin urges Perak Corp board to reconsider its stance
BY C H ESTER TAY
KUALA LUMPUR: Integrax Bhd’s
co-founder Amin Halim Rasip has
urged Perak Corp Bhd’s board of
directors to reconsider its stance
to seek approval from shareholders
to vote in favour of disposing of its
15.74% stake in the port operator
to Tenaga Nasional Bhd (TNB).
In a statement yesterday, Amin,
who owns 24.6% of Integrax shares,
said Perak Corp’s (fundamental:
1.9; valuation: 1.2) position to accept TNB’s offer of RM3.25 per
share is “imprudent and lacking
care, diligence and judgement”.
“It is incumbent upon the board
of Perak Corp to seek alternative
offers, given the fact that the only
independent advice (by M&A Securities) evident in this matter on
the valuation of Integrax shares,
Amin had on March 18
offered to buy a 5% stake
in Integrax for RM3.50 per
share from Perak Corp.
Photo by Kenny Yap
values the Integrax share at RM3.66
per share,” he said.
Amin is of the view that Perak
Corp has arbitrarily concluded
TNB’s offer is “superior”, without
asking for alternative offers from
the open market.
“Such sale of Integrax by Perak
Corp will directly affect the strategic assets of Lekir Bulk Terminal,
and is not in the best interests of
Perak. It would be an abandonment of Perak Corp’s duty and
purpose to build the state and it
will have to bear responsibility for
to buy a 5% stake in Integrax for
RM3.50 per share from Perak Corp.
Perak Corp on Monday announced that its board had reaffirmed its position to seek shareholders’ approval to vote in favour
of TNB’s offer at its forthcoming
extraordinary general meeting on
Friday. TNB (fundamental: 1.3; valuation: 1.8) holds a 24.82% stake
in Integrax as at March 19.
Perak Corp shares closed unchanged at RM2.85 yesterday,
bringing a market capitalisation
of RM284 million, while Integrax’s (fundamental: 1.3; valuation: 1.8) share price was the same
at RM3.17, with a market cap of
RM935.55 million.
such inability to comprehend the
TNB’s share price, meanwhile,
gravity of Perak’s economic inter- rose 22 sen or 1.55% to close at
ests,” he said.
RM14.46. It has a market cap of
Amin had on March 18 offered RM81.61 billion.
Sime Darby to
compulsorily acquire
remaining NBPOL shares
KUALA LUMPUR: Sime Darby Bhd will compulsorily acquire the remaining shares in
the United Kingdom and Papua
New Guinea-listed New Britain
Palm Oil Ltd (NBPOL) under
the proposed privatisation of
the latter. In a filing with Bursa
Malaysia yesterday, Sime Darby
(fundamental: 1.00; valuation:
0.9), which had secured 98.8% of
NBPOL, said it would compulsorily acquire the remaining shares
from NBPOL shareholders who
had yet to accept the offer at
£7.15 (RM39) per share. Sime
Darby said its wholly-owned
subsidiary Sime Darby Plantation Sdn Bhd yesterday despatched the acquisition notice
to holders of the outstanding
NBPOL shares to acquire their
shares. “Following the completion of the compulsory acquisition, NBPOL will become an
indirect wholly-owned subsidiary of Sime Darby. In addition,
under the listing rules of the Port
Moresby Stock Exchange Ltd
(POMSoX), Sime Darby expects
NBPOL shares will be suspended from trading on March 31,
2015, and that NBPOL will be
automatically removed from
the official list of POMSoX at
the close of trading on April 7,
2015,” Sime Darby said. POMSoX is the principal stock exchange of Papua New Guinea.
— by Charlotte Chong
‘Malaysia plans to resolve
LME tax issue before April 1’
KUALA LUMPURL: Malaysia
plans to reach a solution with
the London Metal Exchange
(LME) over a new goods and
services tax on metals traded or
stored in the country’s bonded
zones before an April 1 deadline, Deputy Finance Minister
Chua Tee Yong said yesterday.
The LME said last week that it
might stop issuing warrants —
legal documents for stored metal
— for stocks in Malaysian warehouses from July if it does not
get clarification from the government over its planned tax
reforms, which are due to take
effect on April 1. “It would seem
that we have to work within this
one week,” Chua told Reuters after a meeting between LME and
government officials.— Reuters
Public Bank to buy BIDV’s
stake in Vietnam JV
HANOI: The State Bank of Vietnam (SBV) has allowed Public
Bank Bhd to acquire all stakes
owned by Vietnamese lender Bank for Investment and Development of Vietnam (BIDV) in
their US$62.6 million (RM229.6
million) joint venture (JV) VID
Public Bank, the SBV said yesterday. After the stake acquisition, the Malaysian bank would
turn the Vietnam-based venture into a 100% foreign-owned
bank in the country, the SBV said
in a statement on its website.
The SBV’s approval followed
an agreement between the two
banks last year, said BIDV. —
Reuters
8 HOME BUSINESS
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
SapuraKencana 4Q
net profit falls 61.7%
to RM129.13m
But full-year earnings grow 31.8% to RM1.43 billion
Shahril says the group
expects the market to
remain challenging due to
volatility in oil prices. The
Edge file photo
BY C H ON G JI N HUN
KUALA LUMPUR: SapuraKencana
Petroleum Bhd, the country’s largest oil and gas (O&G) services firm
by market value, saw its full-year net
profit grow 31.8% to RM1.43 billion.
But higher depreciation and foreign
exchange loss dragged down its net
profit for the fourth financial quarter ended Jan 31, 2015 (4QFY15) by
61.7% to RM129.13 million.
In a filing with Bursa Malaysia
yesterday, SapuraKencana (fundamental: 1.3; valuation: 1.8) said
provision for impaired receivables
and properties curbed profit growth
in 4QFY15 as the group contended
with lower crude oil prices.
“The global O&G industry is experiencing difficult times,” it said.
Net profit fell to RM129.13 million in 4QFY15 from RM337.23 million a year ago. Revenue, however,
rose 27% to RM2.39 billion against
RM1.88 billion.
For 4QFY15, SapuraKencana
said offshore construction and
subsea service revenue fell 10.6%
while the drilling and energy services division’s revenue rose 38.8%.
Income from fabrication, hook-up
and commissioning operations was
51.5% higher.
SapuraKencana’s income statement showed that depreciation
and amortisation were significantly
higher at RM476.27 million compared with RM182.78 million.
The group also reported a
RM54.94 million provision for
impaired O&G properties. There
was no provision for these assets
a year earlier.
For the full FY15, SapuraKencana saw its net profit rise 31.8% to
RM1.43 billion from RM1.09 billion in FY14. Revenue was higher
at RM9.94 billion against RM8.38
billion.
On prospects, SapuraKencana
said the environment for the O&G
industry remains challenging in
the short to medium term and the
group will see pressures on both
revenues and margins.
President and group chief executive officer Tan Sri Shahril Shamsuddin said the group expects the
market to remain challenging due
to volatility in oil prices.
“However, we have operated and
thrived in challenging markets. We
are confident with our continued
focus on operational effectiveness,
cost optimisation and our aggressive drive to win new businesses
worldwide,” he said in a statement
yesterday.
SapuraKencana’s order book
stood at RM26 billion, which will
keep the group busy for the next
three years.
The stock closed unchanged at
RM2.30 yesterday, bringing a market capitalisation of RM13.72 billion. The stock has fallen 1% this
year, underperforming the FBM
KLCI’s 3% rise.
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.
EITA Resources keen to bid for more MRT jobs
BY SHA L I N I KU MAR
KUA L A LU M P U R : L i f t a n d
busduct manufacturer EITA
Resources Bhd is keen to bid for
the next work package to supply
lifts and escalators for the Klang
Valley mass rapid transit (MRT)
project, said group managing
director Fu Wing Hoong.
“The MRT is a new infrastructure and we are thankful that
the government has given us a
chance, and of course when it
comes to the next phase, we will
work hard to deliver the job to the
satisfaction of the client,” he told
reporters after the group’s annual
general meeting yesterday.
“We would like to continue
bidding [for MRT jobs] as we have
the experience needed to undertake such a challenging job,”
he said.
EITA Resources (fundamental:
1.7; valuation: 1.2) has clinched
With a challenging economic environment,
the construction industry is expected to
slow down a little.
two MRT contracts to supply lifts
and escalators worth RM95 million in total.
On the outlook, Fu said with
a challenging economic environment, the construction industry
is expected to slow down a little.
“It doesn’t mean that there
will be no more construction activity, the business is still there.
Nevertheless, we have ongoing
projects,” he said.
“While we continue to bid [for
projects] in a more challenging
market over the next one to two
years, we have seen a significant
increase in our order book to tide
us over in the event the market
unexpectedly takes a bad turn,”
he said.
As at Dec 31 last year, EITA
Resources’ order book stood at
over RM210 million.
Fu also targets to grow the
group’s export business and the
manufacturing division to contribute 50% and 70% of revenue
respectively by 2020. Currently,
the export business contributes
about 23%.
EITA Resources shares closed
up 3.31% to RM1.25 yesterday,
bringing a market capitalisation
of RM158.6 million.
Valuecap to launch
RM500m Islamic ETFfocused IPO in May
BY G H O C H E E Y UA N
KUALA LUMPUR: Valuecap Sdn Bhd,
which is equally owned by Khazanah
Nasional Bhd, Permodalan Nasional
Bhd and Kumpulan Wang Persaraan
(Diperbadankan), plans to launch an
Islamic exchange traded fund (ETF)
with an initial public offering (IPO)
in May this year to raise up to RM500
million.
According to its draft prospectus
filed with the Securities Commission
Malaysia yesterday, MyETF MSCI
SEA Islamic Dividend will have a
fund size of 500 million units with
an initial issue price of RM1 per unit.
Valuecap said the fund will be
quoted and traded on Bursa Malaysia three days after the initial
subscription period is closed.
The initial subscription period
will open from April 8 to 22, though
it may be subject to postponement
by the manager and the fund’s principal adviser.
i-VCAP Management Sdn Bhd,
which is wholly owned by Valuecap,
is the manager of the fund. CIMB Investment Bank Bhd is the fund’s principal adviser and placement agent,
while CIMB Islamic Bank Bhd is the
syariah adviser.
ValueCap said the fund is designed
for investors seeking a medium- to
long-term investment. It said the fund
is also designed to cater for investors
who wish to invest in a liquid financial
instrument with an index-tracking
feature that focuses on high dividend
yielding syariah-compliant companies listed on the relevant exchanges.
“The fund is suitable for investors
seeking a medium- to long-term investment in the constituent compa-
nies of the benchmark index as well
as those looking for short-term arbitrage opportunities arising from the
discrepancy between the net asset
value per unit, and the trading prices of the units. Investors seeking to
add geographical diversity to their
investment portfolio may also invest
in the fund,” it said.
MyETF MSCI SEA Islamic Dividend is aimed at providing investment results that closely correspond
to the performance of the benchmark
index, the MSCI South East Asia IMI
Islamic High Dividend Yield 10/40
Index, the draft prospectus read.
“The benchmark index shall comprise up to 30 syariah-compliant companies listed on the stock exchanges in Southeast Asia countries with
dividend yields that are at least 30%
higher than the parent index yield
that is deemed both sustainable and
persistent by MSCI,” Valuecap said.
The parent index is the MSCI
South East Asia IMI Islamic Index, an
index provided by MSCI comprising
the universe of securities from which
the benchmark index is derived.
i-VCAP has obtained the commitment of the seeder, namely Valuecap,
to seed RM20 million, which has been
utilised to purchase the index securities constituting perfect baskets to
facilitate the initial in-kind creation
of 20 million units.
These perfect baskets will be made
available for subscription by investors
pursuant to the initial subscription.
Depending on the level of subscription by investors during the initial subscription period, any remaining units not subscribed by investors
during the period will be delivered
to the seeder.
Foreign and domestic investors
show strong interest in TRX
KUALA LUMPUR: The Tun Razak
Exchange (TRX), the upcoming international financial district in the
capital, is receiving strong interest
from foreign and domestic investors,
said 1MDB Real Estate chief executive officer (CEO) Datuk Azmar Talib.
“We have not seen any kind of
withdrawal of negotiations or discussions,” he said when asked if the
issues surrounding 1Malaysia Development Bhd (1MDB) have been
a deterrent for investors investing
in TRX. 1MDB Real Estate is a unit
of 1MDB.
In fact, foreign investors have
shown more interest since 1MDB
Real Estate sealed a partnership with
Lend Lease, a strong and reputable
international partner, for the development of the lifestyle quarters, he said.
Lend Lease, headquartered in
Australia, is an international property group offering fully integrated
services including investment management, development, construction and project management. It has
worked on notable projects in Malaysia including the iconic Petronas
Twin Towers, Setia City Mall and
most recently the Pinewood Iskandar Malaysia Studios.
The estimated total gross development value of TRX’s lifestyle quarters
is RM8 billion.
“There has been more excitement and people are knocking on
our doors. We have been negotiating
with both foreign and local parties
and we will be making some major
announcements soon,” Azmar told
Bernama. Foreign investors interested in investing in TRX come from seven countries, which is a strong signal
of the project’s sustainability, he said.
Lend Lease CEO for Asia, Rod
Leaver, said the firm is committed
to the project. “At some stage in the
future, we might bring in larger investors to invest alongside 1MDB
(Real Estate).”
Azmar said the firm is mindful of
selecting its partners as well as the
development of TRX. “We go through
certain rigorous processes ... and we
only develop based on demand,” he
said. “The aim is to make sure TRX
is able to do for Kuala Lumpur what
KLCC did 20 years ago,” he said. —
Bernama
W E D N E SDAY MA RC H 2 5, 2015 • T HEED G E FINA NCIA L DAILY
B R O K E R S’ C A L L 11
Perak Corp likely to sell
Integrax stake to TNB
Integrax Bhd
(March 24, RM3.17)
Maintain neutral with unchanged
target price of RM3.25. Perak
Corp Bhd announced in an exchange filing that it had examined
the terms of Amin Halim Rasip’s
offer of RM3.50 per share for 5%
of the company’s share in Integrax
with the remaining shares to be
held in a three-year moratorium
period.
Perak Corp’s board, however,
is of the view that Tenaga Nasional Bhd’s (TNB) RM3.25 offer for
its entire stake is superior. This is
because it would have been too
administratively cumbersome for
Perak Corp to hold its remaining
shares under the moratorium period should it take up Amin’s offer.
Furthermore, the proposed disposal is not expected to compromise on efforts to renegotiate the
operation and maintenance agreement, if pursued, between Lumut
Maritime Terminal and Lekir Bulk
Terminal.
to breach the 50% acceptance level
successfully.
As the March 17 deadline to raise
2013
2014
2015F
2016F
2017F
FYE DEC (RM MIL)
the
offer price has already passed,
Total turnover
93
100
88
94
116
we are of the view that TNB’s sucReported net profit
40.9
38.7
34.2
36.0
43.2
cess rate in meeting the 50% acRecurring net profit
40.9
38.0
34.2
36.0
43.2 ceptance level is very high.
Recurring net profit
As such, we continue to recom(1.9)
(7.0)
(10.1)
5.4
20.1 mend investors to accept its offer,
growth (%)
0.14
0.13
0.11
0.12
0.14 given that the RM3.25 per share
Recurring EPS (RM)
0.05
0.05
0.08
0.08
0.10 offer for Integrax is already at a
DPS (RM)
23.3
25.1
27.9
26.5
22.0 high premium to our fair value of
Recurring P/E (x)
only RM2.46.
1.54
1.48
1.46
1.43
1.40
P/BV (x)
In the event of a successful 50%
24.1
22.3
33.2
26.7
20.8 acceptance level, investors that
P/CF (x)
1.4
1.6
2.4
2.5
3.0 plan to reject the offer could poDividend yield (%)
15.1
13.1
15.8
14.8
11.8 tentially face the risk of the stock
EV/Ebitda (x)
6.8
6.1
5.3
5.5
6.4 being delisted.
ROAE (%)
This is because it is likely that
Net debt to equity (%) net cash net cash net cash net cash net cash
Integrax
will fail to meet the minOur vs consensus
imum free float requirement of
(49.5)
(46.8)
(36.1)
EPS (adjusted) (%)
25%.
Source: Company data, RHB
TNB has earlier notified in its
takeover notice that it has no inThis also applies to any renewal 27 extraordinary general meeting. tention to comply with the free
terms upon expiry of the existing
With Perak Corp being likely to float listing requirement. As such,
agreement. The final decision by accept TNB’s offer, we believe the this poses a delisting risk. — RHB
Perak Corp will be made at its March former’s takeover attempt is likely Research, March 24
Integrax Bhd
Healthcare firms
to face GST
margin pressure
Healthcare sector
Maintain neutral. The two
healthcare stocks under our coverage — KPJ Healthcare Bhd and
IHH Healthcare Bhd — reported
financial year 2014 (FY14) core
earnings that were within both
our and market expectations.
Both companies reported
earnings growth as well as margin improvements.
Both companies saw earnings
before interest, taxes, depreciation, and amortisation margin
improved by approximately two
percentage points each.
We believe the improved
margins could be attributed to
better operational efficiency,
continued ramp-up of beds and
price reversions.
While margins improved last
year, we foresee some pressure
in the coming quarters as the
goods and services tax (GST)
is rolled out in April. Both KPJ
and IHH expect input costs to
increase by 2% to 4% when the
GST is implemented but this will
be partially mitigated by price
reversions. With new hospitals
coming on stream and expanding capacity, we expect flattish
margin growth this year. — AmResearch, March 24
12 B R O K E R S’ C A L L / T E C H N I C A L S
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Bullish
momentum
expected to
continue
BY B ENN Y L EE
T
he FBM KLCI rebounded, as I had expected
last week, and rose
above the immediate resistance level
at 1,790 points. A rebound in crude oil prices and firm
ringgit helped the market to gain
some confidence. There are also
signs of foreign institutions picking
up local shares as the weak ringgit
made Malaysian stocks attractive.
The KLCI increased 1.4% to 1,814.04
points, the highest level in three
weeks. The index, however, is still
below the crucial resistance level at
1,820 points, which is the long-term
200-day moving average. The index
has been trying to break above this
average since the beginning of this
year but has failed.
Trading volume has declined
but trading value has increased
which indicates higher priced
stocks, which are normally traded by institutions, were the main
focus. Average daily trading volume
was 2.2 billion shares in the past
week compared with 2.7 billion
shares two weeks ago. The average
daily trading volume increased to
RM2.1 billion as compared with
RM2 billion in the previous week.
After weeks of selling, foreign institutions started to buy last week.
Net buying by foreign institutions
last week (Monday to Friday) was
RM565.5 million, while net buying
from local institutions was RM452.6
million. Local retail net selling was
RM112.9 million.
Only three out of the 30 companies in the KLCI fell. The three
decliners were Tenaga Nasional
Bhd (-1.5% from last week), SapuraKencana Petroleum Bhd (-0.4%)
and Malayan Banking Bhd (-0.1%).
The top three gainers were Petronas Chemicals Group Bhd (+9.9%),
IHH Healthcare Bhd (+7.5%) and
IOI Properties Group Bhd (+5.8%).
Markets in Asia continued their
bullish momentum last week. The
Shanghai Stock Exchange Composite Index continued to climb
to seven-year highs, rising 5.4% in
a week to 3,691.95 points. Japan’s
Nikkei 225 rose 1.4% to 19,713.45,
the highest level in 15 years. Hong
Kong’s Hang Seng Index increased
2.1% to 24,399.60 points. Singapore’s Straits Times Index rose 1.3%
to 3,413.26 points.
Markets in the West were also
bullish after the US Federal Re-
Daily FBM KLCI chart as at March 24, 2015.
serve indicated last week that it
may raise interest rates later rather
than sooner. Last Monday, the US
Dow Jones Industrial Average rose
0.8% in a week to 18,116.04 points.
London’s FTSE100 index increased
3.3% in a week to 7,027.26 points, a
record high. However, Germany’s
DAX Index fell 2.2% in a week to
11,895.84 points after rising to a
record high two weeks ago.
The US dollar weakened last
week on the Fed’s statement. The
US dollar index declined from
100.04 points to 97.30 points. The
ringgit slightly strengthened from
3.69 last week to a US dollar to
3.65. Gold rebounded on a weak
US dollar, increasing 3% in a week
to US$1,188.80 an ounce. Crude
oil (Brent Crude) rebounded and
rose 3.7% in a week to US$55.92 per
barrel. Crude palm oil futures on
Bursa Malaysia increased marginally to RM2,156 per tonne.
Gold and crude oil prices continued to be pressured by a strong
US dollar. Commodity Exchange
gold declined 1.1% in a week to
US$1,153.80 an ounce. Crude oil
Bonia sees weak local sales
but regional growth is positive
Bonia Corp Bhd
(March 24, RM1.01)
Maintain hold with unchanged target price of RM1.03. Based on earnings results for the second quarter
ended December 2014 of financial
year 2015 (2QFY15) and our recent
visit with management, we remain
cautious on the group as we believe
its core market, Malaysia, will be
weighed down by short-term weakness in consumer sentiment.
Although we expect its regional
stores to do well in the long term,
they might not be strong enough to
offset short-term weakness.
We believe that the downtrend in
Bonia’s first half FY15 sales in Malaysia will continue into 4QFY15, post
implementation of the goods and
services tax.
This could spill over into 1QFY16,
as sales may be dampened by consumers pulling back on expenditure,
particularly discretionary items.
Fortunately, the company’s overseas operations, particularly Indonesia and Vietnam, should progressively contribute to the top and bottom
lines, as these markets offer growth
opportunities in view of their growing economies, rising middle class
and increasing affluence compared
with Malaysia and Singapore, where
economic growth is expected to be
smaller.
We retain our earnings forecasts at
this juncture. We maintain our “hold”
call given the difficult retail environment in Malaysia, which we expect
to continue to weigh on earnings.
We see limited share price upside
in the short term and the stock’s lower-than-1% 2016 dividend yield does
not look compelling.
We believe this is appropriate,
as we expect the group’s overseas
expansion and improving product
mix to mitigate weakness in the domestic market and provide support
for longer-term margins.
Key downside risks to our view
include a regional slowdown in consumer spending and stiffer-than-expected competition should another
renowned leather retailer enter the
region.
Upside risks include stronger-than-expected consumer spending on discretionary products and
lower-than-expected operating
expenses. — Affin Hwang Capital,
March 24
(Brent Crude) declined 7.8% to
US$53.94 per barrel. Crude palm oil
futures in Bursa Malaysia fell 4.4%
in a week to RM2,140 per tonne on
weak demand and falling crude oil
and soy oil prices.
Technically, the KLCI trend is
bullish and is supported by strong
bullish market performances globally. The KLCI is above the shortterm 30-day moving average and
the Ichimoku Cloud indicator. However, the low crude oil price and
weak ringgit weighed down the
markets. The rebound in crude oil
and stronger ringgit last week may
be a catalyst for investors to start
building their confidence in Bursa
Malaysia, whose performance is
lagging behind other markets. The
lower prices may attract investors.
Momentum has started to build
up. The RSI and Momentum Oscillator indicators are above the
mid-levels and the MACD indicator is above its moving average. The
KLCI is also above the middle band
of the Bollinger Bands indicator.
However, the index needs to break
above the 200-day moving average
resistance level for the market to
build confidence.
The market is likely going to test
the 1,820-point resistance level, and
with the current market environment and technical indications,
there is a high possibility for the
index to break above the resistance
level and climb higher. With that
breakout, the index can even climb
to historical highs. However, if the
market environment changes negatively, the trend may not be able
to stay bullish. Henceforth, I am
expecting the KLCI to stay bullish
if it can stay above the immediate
support level of 1,774 points.
Benny Lee is chief market strategist
for Jupiter Securities Sdn Bhd. Jupiter Securities is a participating
broker in Bursa Malaysia. He can
be contacted at [email protected]
com. The views expressed in the article are the opinions of the writer
and should not be construed as investment advice. Please exercise your
own judgement or seek professional
advice for your investment decisions.
Most of SapuraKencana’s
negatives priced in
SapuraKencana Petroleum Bhd
(March 24, RM2.30)
Maintain buy with lower target
price of RM2.80 from RM3.80.
We cut our financial year 2016 ending January (FY16) core earnings
forecasts by 33% and by 35% for
FY17. We do not rule out SapuraKencana impairing its exploration
and production (E&P) assets in
its upcoming fourth quarter FY15
results due out on March 24, due
to the low oil price effect. However,
the impact is likely to be manageable, around RM100 million, and
non-cash flow-related.
SapuraKencana will have a challenging year in FY16. Low oil price
levels, production slowdown, rate
cuts and provisions and impairments are some of the expected
setbacks, resulting in lower yearon-year (y-o-y) earnings. Its energy and drilling operations will face
significant drag on earnings. Exone-offs, which would include impairments, we are forecasting 31%
y-o-y lower core net profit in FY16
based on our revised estimates.
Moreover, concerns over a possible
share overhang and the outlook for
Petróleo Brasileiro (Petrobras) and
Newfield have also served to cloud
fundamentals in the short term.
We opine that the signing of a
gas sales agreement, re-admittance
into the syariah list and instant
monetisation of its planned Vietnam E&P assets are key catalysts.
That said, we opine that downside risk to its share price is limited
as the negative developments are
largely priced in. SapuraKencana’s
long-term prospects remain intact.
Its order book visibility of
RM19.1 billion will be sufficient
to allow it to weather the subdued
operating environment, impacting its financial aspects over the
next two years. Monetising its gas
field assets and integrating its Vietnam E&P operations are its medium-term growth path, as this
would improve its oil reserves by
107% and gas by 128%. — Maybank
Investment Bank Bhd, March 24
14 H O M E
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
‘Impossible to enforce
hudud in Malaysia’
De facto law minister says Hadi’s bill would not be passed in Parliament
BY EL I ZA B ET H ZACHARIAH
KUALA LUMPUR: De facto law minister Nancy Shukri dismissed the possibility yesterday of hudud being implemented in Kelantan, saying the
private member’s bill on the issue
would not be passed as it would never
get a single vote from Sarawak lawmakers in Parliament. She agreed
with fellow minister Datuk Seri Nazri
Aziz that it is impossible to implement
the Islamic penal code in Malaysia,
as there are already provisions for
criminal offences in the Penal Code.
“We have the Federal Constitution. We have to look at the offences
under hudud. There might be double
jeopardy,” Nancy, the Batang Sadong
MP, told reporters in parliament yesterday. “A lot of provisions are already
under the Federal Constitution. There
needs to be another study if we were
to allow hudud to pass through,” she
said.
Nazri, the former law minister and
currently minister in the Prime Minister’s Department, said on Monday
that hudud is unsuitable for Malaysia
and those who discuss it are “fools”.
The first Umno minister to openly
dismiss the implementation of the
Islamic penal code, he said hudud
could only be implemented by
amending the Federal Constitution
and this would require two-thirds of
legislators in Parliament to support it.
“No need to discuss something
that will not happen. It is stupid for
anyone to even be discussing hudud,”
he told reporters in the parliament
lobby on Monday.
He was referring to the PAS-controlled Kelantan government’s effort
to implement hudud in the state, a
move which his own party has yet
to make an open stand on.
PAS president Datuk Seri Abdul
Hadi Awang had on March 18 made
known his intention to table a private
member’s bill to amend the Syariah Courts (Criminal Jurisdiction)
Act 1965 which governs the scope
of punishments meted out by the
syariah courts.
Nancy who is from Parti Pesaka
Bumiputera Bersatu (PBB), a Barisan
Nasional (BN) component party, said
Sarawak would not vote for the implementation of the hudud, believing
such laws have no place in Malaysia.
“I am in agreement with Datuk
Nazri. It is just not possible. In Sarawak, I don’t think they will get the
vote for hudud,” she said.
Umno, the lead Malay party in
the ruling Barisan Nasional (BN)
coalition, is being pressured by the
opposition Pakatan Rakyat to state
whether it supports Kelantan PAS’
plan to enforce hudud in the state.
Both Umno and PAS are arch-rivals
in vying for the Malay-Muslim vote.
Twelve of Umno’s state assemblymen in Kelantan last week voted in
support of the state’s Syariah Criminal
Code Enactment II 1993 (Amendment 2015), which the legislative assembly passed unanimously. So did
the lone PKR state assemblyman.
At the federal level, the party led
by Prime Minister Datuk Seri Najib
Razak has been silent on whether it
supports the move, and whether it
will back a private member’s bill in
Parliament to amend a federal law
to allow hudud to be implemented.
Umno’s partner, the multiracial
Gerakan party, is suing the Kelantan
state government over the code and
challenging its constitutionality. —
The Malaysian Insider
Jawi’s lawyer withdraws from Anwar suit
Anwar (centre) smiles as he leaves the
Syariah Appeal Court in Kuala Lumpur
yesterday. The court fixed April 27 for
decision on whether to accept Zainul
Rijal’s withdrawal from representing
Jamil Khir and two others cited in
Anwar’s suit. Photo by Najjua Zulkefli/
The Malaysian Insider
BY JAMILAH KAMARUDIN
KUALA LUMPUR: The Kuala Lumpur Syariah Court of Appeal has fixed
April 27 for a decision on whether to
accept lawyer Datuk Zainul Rijal Abu
Bakar’s withdrawal from representing
Datuk Seri Jamil Khir Baharom and
two others cited in Datuk Seri Anwar
Ibrahim’s qazaf (false accusation of
sodomy) suit. The lawyer voluntarily
recused himself from the case without informing Anwar’s lawyers, and
had only submitted a notice on the
matter yesterday morning.
Anwar is seeking to remove Zainul
Rijal, who is also representing the
Federal Territories Islamic Affairs
Department and its chief prosecutor,
from the case on the grounds that he
was allegedly unprofessional, dishonest and had ill intentions.
Anwar also said in his Aug 18, 2011
Investors in limbo over
scrapping of Kidex:
Fadillah
KUALA LUMPUR: The cancellation of the Kinrara-Damansara (Kidex) Highway
project will create a dilemma for private companies to
invest in the construction of
highways in Selangor. Works
Minister Datuk Seri Fadillah
Yusof said it would also undermine efforts by the federal
government to solve traffic
congestion in the Klang Valley. Fadillah said the implementation of the Kidex project
should be viewed holistically
as it is not only to reduce traffic congestion but the state
government and Malaysia
would also benefit immensely from the socio-economic
spillover effects. — Bernama
Water cut in Selangor, KL
due to plant shutdown
KUALA LUMPUR: The unscheduled disruption of water supply
in several areas in Selangor and
Kuala Lumpur from March 19
was due to the shutting down
of the Sungai Semenyih water
treatment plant (LRA). Syarikat
Bekalan Air Selangor Sdn Bhd
said in a statement the closure
of the LRA and pump house due
to contamination of raw water
disrupted supply in Petaling,
Hulu Langat, Kuala Langat and
Sepang. “As of 8am today (yesterday), only 32 areas (15,596
households) from 209 areas in
Hulu Langat were still in the water supply recovery process but
the situation is improving with
the level of recovery at 99.9%.
— Bernama
Sedition Act is invalid,
says counsel
application to recuse the lawyer that
there was a conflict of interest as the
latter was a member of the Federal
Territories Islamic Affairs Council,
which oversees the appointment of
syariah judges.
Yesterday, Syariah Court of Appeal
judge Datuk Muhammad Ibrahim,
who is leading the three-member
panel, ordered both the applicant,
Anwar, and the respondent, Zainul
Rijal, to appear in court on April 27.
“Datuk Seri, will you be free (this
April 27)?” Muhammad asked Anwar
in jest, prompting laughter from the
jailed opposition leader and others
present in court.
Anwar, who is now serving a fiveyear prison sentence, arrived in court
at 10.15am under heavy escort by
armed officers from the Prisons Department. Although the de facto PKR
chief appeared gaunt in his blue shirt,
he flashed a smile to the waiting re-
porters and spoke to his granddaughter, Raja Safiyah Raja Ahmad Shahrir,
before the court proceeding began.
Muhammad ordered the armed
Prisons Department personnel to
leave the courtroom after Anwar’s
lawyer, Mohd Rafie Mohd Shafie, said
the weapons they brought in were in
violation of courtroom ethics. The
other two judges on the panel are
Datuk Hussin Harun and Datuk Aidi
Mokhtar. — The Malaysian Insider
Mat Sabu calls for emergency Pakatan meet
KUALA LUMPUR: PAS deputy president Mohamad Sabu has called for
an emergency meeting of Pakatan
Rakyat following the DAP’s decision to
cut ties with the Islamist party’s president Datuk Seri Abdul Hadi Awang.
He said the DAP decision will have
a negative impact on the pact, The
Malaysian Insider reported.
“The best way is for the Pakatan
Rakyat leadership to meet immediately and find common ground to
stay together,” Mohd Sabu said in a
statement yesterday in the wake of
worsening relations between the DAP
and PAS over their differing stands
on hudud, the Islamic criminal code.
Ties among the Pakatan parties
IN BRIEF
were put under strain after the Kelantan state assembly passed amendments to the Syariah Criminal Code II
Enactment 1993 (Amendment 2015)
last week. They were dealt a further
blow when Hadi announced that
he would table a private member’s
bill in the current Parliament sitting
ending April 9 to amend the Syariah Courts (Criminal Jurisdiction)
Act 1965 which governs the scope
of punishments meted out by the
syariah courts.
The DAP central executive committee met on Monday night to discuss its future with Pakatan, then
announced yesterday its decision
concerning Hadi. Although it af-
firmed its commitment to the opposition pact, DAP said it could no
longer work with Hadi, who was “dishonest and dishonourable” for breaking promises and violating Pakatan’s
common policy framework as well as
decisions made collectively by the
Pakatan leadership council.
DAP secretary-general Lim Guan
Eng told Hadi to table the bill in his
personal capacity as a federal lawmaker instead of under the “false
pretence” of representing the opposition pact. Guan Eng’s statement drew
strong reactions from PAS leaders.
PAS secretary-general Datuk
Mustafa Ali described the DAP’s
stand on Hadi as childish and im-
mature, while PAS vice-president
Salahuddin Ayub said he could not
accept DAP’s decision to cut ties with
Hadi, yet wish to work with PAS and
remain in Pakatan.
PAS information chief Datuk Mahfuz Omar said DAP should behave
like a statesman as befits its seniority
and experience. He said that as senior
politicians with wide political experience, the secular, Chinese-majority
party should be more open-minded.
PKR deputy president Mohamed
Azmin Ali sought to cool temperatures. “Let’s discuss ... the strength of
Pakatan is based on our discussions
and consensus. We must be fair to
Hadi and let him explain.”
PUTRAJAYA: The Sedition
Act 1948 is an invalid law because it was not enacted by
Parliament, the Federal Court
heard yesterday. Counsel Datuk Malik Imtiaz Sarwar submitted that the Sedition Act,
a pre-Merdeka law, originally
known as the Sedition Ordinance 1948, was enacted by
the Legislative Council. He
said only Parliament is empowered to enact laws which
restrict freedom of expression
as it is vested with the exclusive right to do so by the Federal Constitution. — Bernama
Service charge to be
renamed
KUALA LUMPUR: The government has proposed to rename
the service charge imposed by
restaurants and hotels to restaurant or hotel charge, said
Deputy Finance Minister Datuk Ahmad Maslan. This is to
avoid the impression that the
5%, 6% or 10% service charge
is being channelled to the government. “The service charge
has nothing to do with the
6% goods and services tax.
It refers to the tips given to
restaurant and hotel workers.” — Bernama
H O M E 15
W E D N E SDAY MA RC H 2 5, 2015 • T HEED G E FINA NCIA L DAILY
Two MPs among
29 in remand for
anti-GST protest
Mohd Hatta and Jeyakumar detained after sit-in protest
outside Customs Department
BY LOW HA N SHAU N
PETALING JAYA: Dr Mohd Hatta
Ramli of PAS and Dr Michael Jeyakumar Devaraj of Parti Sosialis Malaysia (PSM) are among the 29 detained and remanded for two days
after protesting against the goods
and services tax (GST) on Monday.
Mohd Hatta, the Kuala Krai Member of Parliament (MP), and Jeyakumar, the Sungai Siput MP, were
detained when they and more than
a hundred others staged a sit-in protest outside the Customs Department
building in Kelana Jaya, Petaling Jaya
on Monday. PSM secretary-general
S Arutchelvan was also among those
detained and remanded. A total of
80 people were arrested at the sitin, and three more were hauled up
on Monday night at a vigil outside
the Kelana Jaya police station for
the detained.
Lawyer Dinesh Muthal, who confirmed that the two MPs were being
held in remand, said that the detainees were denied access to legal
counsel until yesterday afternoon,
and lawyers did not have enough
time to talk to their clients before the
remand hearing was held yesterday.
“It is not fair for the people who
were detained yesterday (Monday)
to be denied meeting their lawyers.
The police should have let us have
a chance to discuss with them first
before the remand hearing,” he said.
Police obtained the two-day remand orders for the 29 yesterday at
the Shah Alam police station, where
the remand hearing was held in two
sessions.
Two of the 29 detainees, who sustained injuries, will be allowed to
seek medical attention and lodge
police reports during the remand
period, said another lawyer Muhammad Zaki Sukero from PAS’ legal and
human rights bureau. Of the 29, 26
were detained at the Customs Department office in Kelana Jaya during the sit-in, while three others were
detained at a vigil held outside the
Mohd Hatta (left) and Jeyakumar were detained and remanded for two days.
Kelana Jaya police station on Monday night. Those in remand will be
investigated under the Penal Code
and the Peaceful Assembly Act, lawyers said.
The anti-GST protest on Monday
was organised by PSM and Gabungan Bantah GST, a coalition of activists opposed to the consumption
tax.The goal of the sit-in was to get
the Customs Department to answer
some 100 questions on the GST. Putrajaya is facing stiff criticism over
the 6% tax that will kick in on April
1, especially over the lack of clarity
on the system’s implementation and
fears of profiteering traders who will
take advantage of the confusion to
raise prices indiscriminately.
The arrest of anti-GST protesters
on Monday has been criticised by
opposition parties and civil society
groups, and PSM activist Sivarajan
Arumugam said earlier yesterday it
was wrong for the Inspector-General
of Police to say that demonstrators
had “trespassed” into the Customs
office as the counters set up there
to handle public enquiries on GST
were for public use.
“How can we have been trespassing into a government building when
we were visiting the public information GST counter available on the
ground floor of the building?” — The
Malaysian Insider
16 H O M E
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
A wife’s painful
journey forward a
year after MH370
Danica did not attend beach candlelight vigil, saying it
was too confronting
BY PT SI NGA M
PERTH: The absence of Danica
Weeks at a candlelight vigil for
MH370 victims at a Perth beach
on Sunday was conspicuous.
The 38-year-old mother of two
is the wife of Paul Weeks, a New
Zealander who was one of the 239
people on board the Kuala Lumpur-Beijing Malaysia Airlines flight
370 that disappeared over the South
China Sea more than a year ago.
Danica said she did not attend
the candlelight vigil because it
would have been too confronting.
“Since my husband vanished
with MH370 on March 8 last year,
I have been experiencing many
highs and lows, and right now I
am going through the lows,” she
said. “I am not strong enough to
handle such an event as it will be
too confronting for me and I am
not sure I could hold it together.”
Danica also wrote to the vigil organisers, the Association of
Malaysians in Western Australia,
saying: “It is amazing to see people
stand beside us remembering our
loved ones.”
In an exclusive interview with
The Malaysian Insider, Danica
spoke of her pain and frustration
as she battled to bring up her two
children, Lincoln, 4, and Jack, almost 1 year old, in the face of “constant stonewalling by the Malaysian
A screengrab of Paul Weeks, the New
Zealander who was on board Malaysia
Airlines flight MH370. Photo by The
Malaysian Insider
authorities, including their lack of
transparency and failure to communicate properly with us, the suffering families”.
“I am not coping. I am just existing looking after my two children as Paul would have wanted.
I go through routines. I try not to
be alone but it’s getting harder, I
go through sadness, desperation
… depression. I am tired and exhausted.
“And I have not even started
grieving yet. There is nothing there,
no evidence, no memorial. We haven’t even got a piece of the plane.
What do I tell my two children?
“It is so surreal, like you are living
a movie, that this (disappearance
of the plane) could happen in this
day and age is unreal. We are here,
more than a year has passed, and
we know nothing more than we
knew at the start.”
Danica said as the mystery over
MH370 deepened and the search in
the Indian Ocean 1,600km south of
Perth failed to deliver any answers,
she was beginning to lean towards
conspiracy and cover-up theories.
“They are saying it is the greatest
aviation mystery. I think it is the
greatest aviation cover-up. What the
cover-up is I don’t know. It may be
something simple … I don’t know.”
Danica fondly recalls the visit
of Datin Seri Rosmah Mansor, the
wife of Prime Minister Datuk Seri
Najib Razak, to her Perth home a
month after the disappearance of
MH370. A year on, she doesn’t think
Rosmah was putting on a show for
the cameras.
“She is a lovely lady. She is a
wife, a mother. She understands
the impact of all this on us and all
the other families.
“As time goes on, I see it is her
husband (Najib) and everyone else
in government who are making the
decisions. Actions speak louder
than words. And how they have
done this is diabolical and disgusting. I couldn’t even imagine that
human beings could treat other
human beings like that, regardless
of culture.” — The Malaysian Insider
George Town a city again
BY LO O I S UE C H E R N
GEORGE TOWN: The lost city status of George Town was restored
this month after more than 40 years following the upgrade of the
Penang Municipal Council (MPPP) to a city council, said Penang
Chief Minister Lim Guan Eng.
He said the Yang Di-Pertuan Agong had consented to the upgrade of the MPPP to City Council (MBPP) effective Jan 1 this year.
Guan Eng said the consent was given on March 10.
“This is historical. Finally George Town is able to regain its city
status,” he told a press conference at his Komtar office yesterday.
Previously, George Town was granted city status by way of a
Royal Charter by Queen Elizabeth II on Jan 1, 1957.
However, it lost the status in 1974 when the then George Town
city council was merged with the Penang rural district council to
form a local government management board.
Two years later, when the Local Government Act 1976 was enforced, this board turned into the Penang Municipal Council.
In November last year, the cabinet approved the elevation of
Penang’s status from a municipality to a city.
Lim said the new city council would be covering a larger area
than the municipal council — from 297 sq km to 305.773 sq km.
The chief minister said the number of personnel in the city council would also increase by 388 from the current 3,576 employed by
the municipal council. “There will also be four new departments set
up by the city council dealing with landscaping, heritage, enforcement, and solid waste and public cleaning management,” he said.
Guan Eng also announced the first mayor of the city council,
Datuk Patahiyah Ismail, who is the current MPPP president.
Patahiyah will be the first woman mayor in Penang, just as she
was the first woman to be appointed council president in 2010. She
will receive her appointment letter on March 31 at Seri Mutiara, the
official residence of the Yang Di-Pertua Negeri Tun Abdul Rahman
Abbas, where she will also be sworn in. — The Malaysian Insider
1Azam project a failure, says PAC
BY MD FA R H A N DA R W IS
KUALA LUMPUR: A poverty eradication project run by the Women,
Family and Community Development Ministry has been found to
be a failure, said Public Accounts Committee (PAC) chairman Datuk
Nur Jazlan Mohamed.
Nur Jazlan said the 1Azam programme did not follow the standard
operating procedure (SOP) prescribed for it and had violated procurement regulations when buying equipment for its participants.
He said some participants were not from the target group the
programme was aimed at.
“Some of the participants in the programme could not be found
either,” he said at the Parliament lobby yesterday after hearing the
submission by the ministry.
The 1Azam programme is aimed at helping participants to become entrepreneurs.
Participants are equipped to set up small businesses and take up
opportunities in the services sector and agriculture industry.
Nur Jazlan said the programme had also failed to conduct research
on the needs of possible participants and the backgrounds of potential participants were not properly checked. — The Malaysian Insider
Sultan Ibrahim crowned fifth Sultan of modern Johor
JOHOR BARU: Sultan Ibrahim Sultan
Iskandar was crowned as the fifth
Sultan of modern Johor on Monday
in a ceremony filled with pomp and
pageantry at the Istana Besar here.
Raja Zarith Sofiah Sultan Idris
Shah was also crowned at the ceremony as the Permaisuri of Johor, a
title used for the first time in the state.
The ceremony, which was aired
live over TV and beamed to a large
screen at Dataran Bandaraya, was
witnessed by thousands of people
in Johor and the rest of the country.
The ceremony was also witnessed
by Sultan Ibrahim’s mother, Enche’
Besar Hajah Khalsom Abdullah; the
Sultan’s elder sister, the Tunku Puteri of Johor Tunku Kamariah Sultan
Iskandar, and the Sultan’s younger
sister, Tunku Besar Zabedah Sultan
Iskandar.
The Tunku Mahkota of Johor,
Tunku Ismail Sultan Ibrahim, and
Che’ Puan Khaleeda Bustamam as
well as the other children of Sultan
Ibrahim were at the historic ceremony.
The Sultan of Brunei Darussalam,
Sultan Hassanal Bolkiah, his wife
Paduka Seri Baginda Raja Isteri Pengiran Anak Hajah Saleha, and the
Malay Rulers witnessed the coronation held at the Throne Room of
the palace.
Prime Minister Datuk Seri Najib Razak and his wife, Datin Seri
Rosmah Mansor, as well as Deputy
Prime Minister Tan Sri Muhyiddin
Yassin and his wife Puan Sri Noorainee Abdul Rahman also attended
the ceremony.
Sultan Ibrahim was attired in a
dark blue uniform complete with
decorations, and Raja Zarith Sofiah,
was attired in a Johor baju kurung
of similar colour.
The ceremony began at 10am
with the playing of the Johor state
anthem, followed by Johor Menteri
Sultan Ibrahim and
Raja Zarith Sofiah
in prayer during the
coronation ceremony.
Photo by Bernama
Besar Datuk Seri Mohamed Khaled
Nordin reading out the proclamation
of coronation.
The president of the Johor Council
of the Royal Court, Datuk Abdul Rahim Ramli, then sought the consent
for the coronation of Sultan Ibrahim
and Raja Zarith Sofiah.
Sultan Ibrahim read out the
pledge and a verse from the Quran.
Johor deputy mufti Datuk Yahya Ahmad read out the sermon.
Johor mufti Datuk Mohd Tahrir
Samsudin then placed the crown on
the head of Sultan Ibrahim and the
diadem on the head of Raja Zarith
Sofiah.
The coronation was followed
by the firing of a 21-gun salute by
the Malaysian Armed Forces. The
Johor state anthem was played
and deputy mufti Yahya recited
the doa selamat.
Tunku Ismail and Che’ Puan
Khaleeda paid homage, followed
by the other children of Sultan Ibrahim; Tunku Aris Bendahara Tunku
Abdul Majid Sultan Iskandar and his
wife Tunku Teh Mazni Yusuf, who
represented the royalty; Mohamed
Khaled on behalf of the state government; and Abdul Rahim, who
represented the Johor Council of
the Royal Court.
The Johor state anthem was
played again, after which Sultan
Ibrahim and Raja Zarith Sofiah proceeded to a section of the palace to
observe a fly-past. — Bernama
COMMENT 17
W E D N E SDAY MA RC H 2 5, 2015 • T HEED G E FINA NCIA L DAILY
China wants to buy Europe
Its acquisition targets are getting increasingly high-profile
BY L EONI D B ERSHI DSKY
C
hinese investors have a
powerful attraction to
companies in the European Union (EU),
and their targets are increasingly high-profile.
In recent days, they’ve shown interest in an 18-building compound
on Berlin’s Potsdamer Platz and in
the Italian tyre maker Pirelli. For
some unfathomable reason, Europe
considers Chinese investors, even
state-owned ones, more benign than,
say, Russian ones.
Until 2011, China was mostly a
receiver of European investment, but
then the debt crisis drove down asset
prices. Some governments became
desperate to privatise, and venerable corporations got less picky about
potential investors.
Chinese buyers acquired Volvo
in Sweden, a large stake in Peugeot
Citroen and fashion house Sonya
Rykiel in France, the Piraeus Port in
Greece, Pizza Express restaurants and
the upscale clothing maker Aquascutum in the UK. Chinese investment
increased exponentially.
Last year — when the Peugeot
and Pizza Express deals were made
— Chinese merger and acquisition
activity in Europe set a new record.
Although Chinese investment in the
US has also grown, outstripping US
flows into China, Europe has proved
more welcoming (data in millions of
US dollars).
China holds only about 1% of the
European foreign direct investment
stock — not enough to worry about.
But this doesn’t include local booms
in private Chinese investment, like
those in Portuguese or Latvian real
estate under those countries “golden
visa” programmes. Europe is relatively cheap; it’s open, and it’s got things
that Chinese companies are after:
technology and household names.
The Pirelli deal is about the latter.
The bidder, China National Tire &
Rubber Company, part of the stateowned giant ChemChina, sells 20
million tires a year, but no one has
ever heard of its brands, Rubber Six
and Aeolus.
It doesn’t have Pirelli’s glorious
racing history or its famous calendar. The Italian company seems
overvalued — trading at 23 times
earnings, compared with 16 for
Michelin and 11 for Korea’s Kumho.
Yet it has the fifth most valuable
tire brand in the world, and the other
two European brands in the top five,
Michelin and Continental, belong to
much bigger companies that make
unwieldy targets for acquisition.
For an ambitious buyer with plenty of money and production capacity,
Pirelli is the perfect deal. Its market
cap is only US$7.5 billion (RM27.6
billion) (tiny compared with ChemChina’s revenue last year of almost
US$40 billion), and its name can
propel the Chinese tire giant to international prominence.
It’s a bit like when the Chinese
company Geely bought Volvo — not
just for its technology but for its in-
ternational recognition. Although
the market has already overshot
ChemChina’s initial offer price,
premium and all, it would need
to go much higher before Pirelli
becomes too expensive for what is
essentially an arm of the Chinese
government.
Therein lies a problem. Most Chinese investment in Europe goes into
existing, established firms. There
are almost no greenfield projects.
There’s nothing wrong with private
companies — such as Pizza Express
buyer Hony Capital, potential Potsdamer Platz investors Fosun International and Ping An Insurance, or
Volvo savior Geely — buying into
European firms.
Cross-border business is common
these days. But when old European
brands fall into the hands of Chinese
state companies, it becomes geopolitics, too: European countries are, in
effect, lending part of their heritage to
the octopus that is the Chinese government so it can expand its global
influence.
“For the moment, Chinese investment seems like money falling
from the sky, but it could turn ... into
a Trojan horse introducing Chinese
politics and values into the heart of
Europe,” Princeton University’s Sophie Meunier wrote in a 2014 paper.
European investors in China are
required to set up joint ventures with
Chinese partners, and other restrictions apply in specific industries. The
EU is trying to negotiate for more
openness, but Europe remains at a
disadvantage.
This isn’t just about reciprocity,
however. Openness to investment by
Chinese state entities means support
for a regime that is not necessarily
Europe’s friend and that certainly
doesn’t share its values.
It’s no better than throwing European markets open to state-owned
Russian energy giants such as Rosneft and Gazprom. They would gladly
buy up everything they could, if only
to strengthen Moscow’s negotiating
position with the EU.
These days, European governments are wary of Russian investments, even the private kind. The
UK is forcing billionaire Mikhail Fridman’s company LetterOne to sell off
the North Sea oil production facilities
it acquired with the German energy
company Dea. It’s not clear what
makes state-owned Dongfeng Motor or ChemChina more acceptable.
Europe needs a coherent policy
for dealing with foreign direct investment, setting out clear guidelines for
what’s permissible, which investors
are welcome and which are not. Why
not require state-owned companies
to put money into greenfield projects only?
There is a clear rationale for such
deals, including the investment of
Chinese nuclear companies in the
Hinkley power plant project in the
UK. It would also make sense to require foreign state-owned companies
to work with local partners and take
only non-controlling stakes, while
allowing more freedom for private
players.
In China, of course, even private
companies can serve as instruments
of government policy. But at least
they are, first and foremost, market
agents that deserve equal opportunity to compete. — Bloomberg View
Leonid Bershidsky is a Bloomberg
View columnist.
18 F E AT U R E
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
By denying the past, Abe risks the future
His whitewashing of wartime history hurts Japan’s standing in regional and international community
BY KI M HOO RA N
L
ast month, US State Department undersecretary for political affairs
Wendy Sherman chided
South Korea and China
for not improving ties
with Japan, saying that “to move
ahead, we have to see beyond what
was to envision what might be”.
Of course, the South Koreans
would like to envision the future
possibilities. But how do two nations — one a former colony and
the other a brutal coloniser — begin
to think about the future together
when there is no reconciliation?
South Korea-Japan relations have
never been smooth, the degree of
warmth — or rather, chilliness —
varying depending on who happens
to be in power in the two countries.
President Park Geun Hye
clashed head-on with Japanese
Prime Minister Shinzo Abe, maintaining there would be no improvement in relations unless the issue
of wartime Japanese military sexual
slavery was resolved.
Meanwhile, Abe seeks to “revise”
Japan’s wartime history, including a
denial of the Japanese government’s
involvement in the operation of the
military brothel system. Needless
to say, bilateral relations are icy.
In January 2013, Abe told Parliament that as a prime minister, he
would refrain from making further
remarks on the issue of reviewing
the Kono Statement of 1993, which
officially acknowledged that women were forced into sexual slavery
for the Japanese military.
He also said he would stand by
the official stances of his predecessors on the issue. But the Abe
administration commissioned a
panel to review the Kono Statement.
In February last year, Japan’s
Chief Cabinet Secretary Yoshihide
Suga said Japan was considering
revising its apology to former military sex slaves, which led to a strong
protest from Park.
The next month, under US pressure, Abe changed his mind yet
again, saying that there would be
no review of the Kono Statement.
In June last year, the Kono Statement review panel said the facts used
to draw up the statement were correct
and there were no plans to change
it. But it also said the statement was
a by-product of diplomatic negotiations, drafted under pressure from
South Korea. It is yet another thinly
veiled attempt to deny the existence
of Japanese military sex slaves, 53 of
whom survive in South Korea.
The denial of wartime military
sexual slavery is part of Abe’s broad-
Abe’s vacillations on the issue of
apology over military sex slavery and
aggression will only backfire on his
country. Photo by Reuters
er attempt to revise history. In April
2013, he told the Diet that he does
not uphold the Murayama Statement of 1995, arguing that there
could be different definitions of
the term “aggression”.
The landmark statement admitted that Japan “caused tremendous
damage and suffering ... through
its colonial rule and aggression”.
Under heavy criticism, he claimed
the administration upholds the
Murayama statement in general.
Looking at just some of Japan’s
vacillations on the issue of apology
over military sex slavery and wartime aggression, is it any wonder
South Koreans find Japan’s apologies less than credible?
For a lesson on apology, Japan
could look to Germany. Chancellor
Willy Brandt knelt before the Ghetto uprising memorial in 1970. And
this was neither the first nor the last
expression of apology and acceptance of responsibility by Germany
for its role in World War II.
Soon after the war’s end, Germany set about to reconcile with its
neighbours, apologise to the Holocaust victims and make restitutions,
and vigorously hunt down war criminals, all of which continue to this day.
During a lecture in Tokyo last
week, German Chancellor Angela Merkel reminded Japan to look
squarely at history. “Without big
gestures by our neighbours”, she
said, reconciliation would not have
been possible. At a news conference,
she said settling wartime history is
“a prerequisite for reconciliation”.
In a meeting with the head of
Japan’s main opposition party, she
urged Japan to resolve the military
sex slave issue properly. Her comments, coming ahead of Abe’s statement marking the 70th anniversary
of the end of World War II to be is-
sued in August, ought to remind Japan of what needs to be done before
there can be any talk of the future.
The Abe administration’s attempts to whitewash history will
undermine Japan’s standing in the
international community. At a time
when the military sex slavery issue
is seen as a human rights issue and
the global trend is to recognise and
condemn past human rights abuses,
trying to deny the violations of the
rights of former military sex slaves
invites international condemnation.
See related story on Page 27
Abe’s attempts to revise Japan’s
wartime history are clearly not in Japan’s national interests. The choice
is entirely his — whether to settle
the past and move on, or rob Japan
of the possibility of the future by
denying history.
In his August speech, he has a
chance to issue a definitive, unequivocal apology that could start
the long overdue process of reconciliation in the region.
A positive note was sounded last
week when the deputy chief of the
panel advising Abe on his statement
told a symposium, “I want Mr Abe
to say, ‘Japan committed aggression
[against China].’” The world awaits
Abe’s choice. — The Korea Herald
Despite quarrels, business in Asia is brisk
BY MI C H A EL I VA NOV ITCH
A STATE of heightened hostilities
stemming from contested territorial
claims and clashing strategic visions
has not prevented China and Japan
from raising the volume of their bilateral trade by 7.5% in the course
of last year. The coming months
could be even better: Japan’s sales
to China soared 20.8% in January
from the same month of 2014.
That is a remarkable and a very
encouraging signal. It shows that
purely economic factors — such
as China’s sustained growth of domestic demand, the two economies’
broad complementarities and the
yen’s 16% depreciation against the
yuan in the last 12 months — have
prevailed over serious security problems and the countries’ increasingly
competitive diplomacy with respect
to regional and global issues.
Even more interesting is to note
that similar tensions have not negatively affected trade relations
between Japan and South Korea.
Last year, their two-way trade was
roughly unchanged from 2013, and
the trade flows between these two
countries continued to grow in January of this year.
That is somewhat unexpected because, in addition to strained political
ties, the Japanese and South Korean
economies are directly competitive
in all their major industries: automobiles, electronics, shipbuilding,
steel and even consumer products.
At the moment, the advantage is
clearly on the Japanese side: South
Korea’s 3.4% economic growth last
year and the yen’s 11% depreciation
against the won in the last 12 months
have driven an 11% increase of Japanese exports to South Korea in 2014.
So, if you think that this is a good
time to leave East Asia for other investment destinations, think again.
The region’s three main economies,
accounting for 25% of global output, are showing that they know
how to separate business from the
legacy of political difficulties they
will most probably solve in a patient
and peaceful manner.
Also, Japan’s quick-fix export
boosts are falling short, but China
and South Korea are determined
to support growth, employment
and price stability.
Those of you who might be inclined to dismiss China’s key economic policy options announced
last week could gain useful insights by focusing on indicators
of economic activity and structural
changes designed to strengthen the
forces of demand and supply in this
closely managed mixed economy.
But if you want a shortcut, watch
what Volkswagen’s boss Martin
Winterkorn had to say about China
on this network on March 13. VW’s
soaring sales in China contributed
30% of its last year’s record operating profits and made it the No 1 car
manufacturer in the world.
And after more than 30 years of
doing business in China, Winterkorn sounds like he is just warming up: VW’s 20 factories in China
are expected to raise their annual
production to five million vehicles
over the next few years, just shy of
half of the company’s total output
in 2014.
Volkswagen’s success clearly
means that South Korean car companies will have a tough competitor
in China and beyond, partly because they are facing a significant
price disadvantage of an appreciating currency.
It, therefore, seems that last week’s
25-basis-point rate cut by the South
Korean monetary authorities will be
followed by additional credit easing.
The purpose of such measures is not
just a question of adjusting the won’s
exchange rate. The economy needs
help; it weakened markedly during
the fourth quarter of last year, industrial production fell 0.4% in the
three months to January, and the
unemployment rate continued to rise.
With nearly balanced government
accounts and a relatively low public sector debt (36.7% of the gross
domestic product [GDP]), South
Korea’s policy mix definitely calls
for an easier monetary stance. The
real short-term rate of 1.25%, and the
won’s 5.5% appreciation against the
US dollar over the last 12 months,
indicate the degree of policy tightness that is manifestly inappropriate
for a weakening economic activity.
That, of course, does not mean
that Seoul should immediately
jump on the quantitative easing
(QE) bandwagon, but a few more
rate cuts might be in order.
In fact, the Koreans may wish
to take Japan’s unbridled QEs as a
cautionary tale. In spite of a monetary tsunami of the last two years,
the Japanese economy sank 1.1%
in the second half of last year. The
interest-sensitive components of
aggregate demand — household
consumption and residential investments (64.4% of GDP) — accelerated
their decline by 2.6% and 14% respectively in the last two quarters of 2014.
Exports (16.2% of GDP) were the
only major segment of the economy to register a strong 9.2% growth
during that period as a result of the
yen’s trade-weighted depreciation
of 6% over the last 12 months, and
Japan’s weak domestic demand
pushing the businesses to export
in order to survive.
In spite of these disappointing
results of an overly aggressive mon-
etary easing, Tokyo seems ready to
continue the same policy in the
months ahead. Japan’s trading partners suspect this is to strengthen
the country’s traditional export-led
economic activity by means of a
sharply depreciating currency.
The problem is that this oldstyle, free-riding quick fix is not the
way out. The country’s leaders seem
to have realised that their long-neglected structural problems are affecting Japan’s place in the world.
If, for example, they started to
tackle these problems with strong
and sustained efforts to stop and
reverse the declining population
growth, they would find out that the
economic and social infrastructure
of a serious family policy would
do wonders for household spending and residential investments —
nearly two-thirds of their economy.
China, Japan and South Korea
are the true engines of East Asia’s
economic growth. In spite of strong
political and economic differences,
seemingly irreconcilable territorial
claims and contested views of their
recent history, these countries continue to maintain open and active
channels of trade and investments
among themselves. Investors might
wish to keep that in mind when
considering their global portfolio
preferences. — CNBC
For more, visit www.cnbc.com
F E AT U R E 1 9
W E D N E SDAY MA RC H 2 5, 2015 • T HEED G E FINA NCIA L DAILY
Can the Swiss make a
smarter watch than Apple?
Singapore
retains spot as
world’s most
expensive city
for second year
BY N YS H K A C H A N D R A N
Horologists beginning to introduce new products after their competitors jump in first
BY L EONI D B ERSHI DSKY
S
wiss watchmakers seem to
be scrambling to respond
to the challenge posed by
smartwatch producers after ignoring them for years.
The perceived slowness to
embrace the wearable revolution
isn’t ignorance or hubris. It’s marketing wisdom.
Swatch’s smartwatch project and
TAG Heuer’s plan to join with Google
and Intel to make a wearable computer are often billed as alternatives
to the much-hyped Apple Watch.
The truth, however, is that even
before Apple unveiled its product,
Deloitte reported that 44% of Swiss
watch executives considered smartwatches “the next big thing” for their
industry.
The finding is somewhat puzzling
in light of how the industry makes
most of its money: Last year, twothirds of export revenue came from
watches costing more than 3,000
francs (RM11,377).
Existing smartwatches fall into
the lower two price segments, whose
combined contribution to Swiss horology exports is a mere 13%. Apple’s
basic offering, at US$350 (RM1,284),
is more expensive than the others
but still in the same range.
Sure, Apple is making a foray
into more expensive territory with
gold watches priced at more than
US$10,000, but that’s not really a
threat to traditional watchmakers.
According to Deloitte, Swiss
watchmakers described the “watch
of 2015” as a classic steel chronograph priced at about 5,000 francs.
Over the past few years, customers
have favoured steel over gold. When
it comes to the top-price segment
then, Apple will be catering to yesterday’s tastes.
Why, then, is the industry so
acutely interested? The answer is
that it wants to hang on to current
sales volume as well as revenue.
Last year, Switzerland made four
times more money exporting 8.1
million mechanical watches than
it did from exporting 20.6 million
electronic timepieces.
Yet most of the industry’s roughly
60,000 workers are engaged in making the cheaper electronic products.
Electronic-watch sales, however,
are in decline: In 2000, exports of
quartz watches reached 27.2 million
units, almost a third more than last
year. Many people no longer use a
watch for its primary function — to
tell time. A mobile phone is perfectly
good for that, and people naturally
apply Occam’s razor to the number
of gadgets they carry around.
Though Swiss watchmakers are
flexible about hiring and laying off
workers — they shed 9% of 53,300
workers between 2008 and 2010 —
job losses would be heavier if smartwatches superseded quartz timepieces.
That’s what Swatch co-inventor
Elmar Mock fears if, as he predicts,
Apple succeeds in selling 20 million
to 30 million watches, a comparable
number to the entire Swiss industry’s
28.6 million watches in 2014.
The problem, however, isn’t limited to potential layoffs and losses for
the cheaper watch brands. Swiss horology uses quartz timepieces to lure
first-time customers. If you wore an
entry-level Swiss watch as a student
or a young professional, chances
are you’ll buy a more expensive one
when your income allows it.
If the industry loses its stepping
stone to Apple, Samsung and other
wearable-tech makers, sales of Swiss
masterpieces will eventually decline.
More than half of Swatch’s sales come
from inexpensive watches; the loss
of that market would be catastrophic
for the company.
High-end timepieces bring in
another 30% of sales, so that part
of its business could also be undermined by Apple. Swatch is interested
in making its offerings “smarter” for
both reasons.
TAG Heuer, a luxury brand, is
also seeking a new entry-level product, perhaps because the cheaper
brands haven’t advanced much in the
smartwatch world (though a number of such offerings were seen at
last week’s Baselworld exhibition).
New-generation quartz watches
boast activity-tracking functions and
will soon have payment technology.
Swiss watchmakers haven’t really slept through the wearable-tech
revolution. They’ve been watching
as others did their market research
for them. They can afford to wait:
Export sales of high-end watches
last year totalled 13.8 billion Swiss
francs compared with just 3.1 billion
francs in 2000.
The industry has time to ponder
strategies, play with designs and selectively choose from the new functions the Silicon Valley giants develop.
In other words, Swiss horologists
are well positioned to out-Apple Apple. They are beginning to introduce
new products after their competitors
jumped in first. Swiss attention to detail can only be good for the emerging
wearable industry, which, even with
Apple on board, is still flying by the
seat of its pants. — Bloomberg View
THE Southeast Asian city-state of
Singapore retained its title as the
world’s most expensive city for the
second consecutive year, the Economist Intelligence Unit (EIU) said in
a new survey.
In fact, the top five priciest cities ranked in this year’s Worldwide
Cost of Living Survey remained unchanged from 2014: Paris ranked
second followed by Oslo, Zurich
and Sydney.
“This façade of relative stability
is deceptive, however, and it is extremely rare for an identical top five
to be achieved in ranking the global
cost of living,” the EIU said.
Melbourne ranked sixth, with
Geveva, Copenhagen, Hong Kong
and Seoul rounding out the top 10.
2015 marks the debut of South Korea’s
capital on the list as its cost of living
now matches that of Hong Kong.
The EIU notes that the Swiss franc’s
recent unpegging from the euro means
that Zurich and Geneva would actually
be the world’s most expensive cities at
current exchange rates.
Noticeably, major Japanese cities like Tokyo and Osaka — usually
among the world’s most expensive
during the past two decades — were
missing from the EIU’s list due to
weak inflation and the yen’s devaluation.
Leonid Bershidsky is a Bloomberg
View columnist.
The lucrative and controversial Blair Inc
BY QU ENTI N WEB B
TONY Blair has made a small fortune
after stepping down as UK prime
minister, advising illiberal leaders
from Kuwait to Kazakhstan. A timely
new book details his awkward juggling of paid and non-profit work.
Blair is an extreme example of a wider challenge to politics.
Politics has a problem in the era of
the global billionaire. The challenge
is illustrated by the business empire
of Tony Blair — dubbed “Blair Inc”
— in a timely new book by veteran reporters Francis Beckett, David
Hencke and Nick Kochan.
Blair has kept busy since stepping
down as UK prime minister in 2007.
He apparently charges US$200,000
(RM736,000) a speech, advises JPMorgan, and saved Glencore’s takeover of Xstrata. His mini-McKinsey,
Tony Blair Associates, has worked
for Abu Dhabi, Kazakhstan and Kuwait. And like a true Davos delegate,
Blair leavens entrepreneurship with
non-profit work, including his Tony
Blair Faith Foundation and the Africa
Governance Initiative.
He has also dabbled in diplomacy as Middle East peace envoy
for the “quartet” of the United Nations, Brussels, Washington and
A ‘quartet’ representative to the Middle East and Blair (right) visiting a United Nationsrun school sheltering Palestinians, whose houses were destroyed during the Israeli
shelling in Gaza City on Feb 15. Blair has made a small fortune after stepping down as UK
prime minister, advising illiberal leaders from Kuwait to Kazakhstan. Photo by Reuters
Moscow. He was supposed to help
strengthen the Palestinian economy, but critics charge he’s aloof,
too close to Israel and tarnished by
his government’s participation in
the 2003 American-led invasion of
Iraq. The Financial Times reported recently he has recognised this
role is untenable, and is preparing
to step back.
Many in Britain have serious
problems with Blair’s whole portfolio career. “Blair Inc” lays out the
charges. He wears “too many hats,”
the authors say, so it’s not always
clear whether he’s doing good or
winning business. A personal fortune they estimate at £60 million
(RM328.7 million), plus a 36-property family portfolio, is unseemly,
as it was largely built thanks to the
contacts and gravitas acquired in
public service.
The authors find his consultancy for illiberal regimes distasteful,
although it’s not clear if they think
he’s being naïve or cynical. Intense
secrecy — opaque corporate structures, secret donors, keeping the
press at bay — is a final insult. UK
partnership rules and the fact he is
no longer in parliament limit his
disclosure requirements.
Much of this rings true. But “Blair
Inc” is hardly the final word. The
set-up cries out for careful forensic analysis. This book offers much
less. It is hyperbolic, vindictive and
marred by errors, inconsistencies
and poor editing.
A few examples: the book contradicts itself on fees paid by JPMorgan
and Kazakhstan, and on who hired
former chief of staff Jonathan Powell. A telling quotation from donor
Haim Saban appears four times.
More broadly, direct sources are
limited and some lack authority.
There will almost certainly be
more Politicians Incorporated. That’s
worrying. Democracy will suffer if
public office becomes little more
than an audition for a second truly
lucrative career. — Reuters
The bi-annual survey ranks cities
based on price comparisons across
a basket of goods, including food,
drink, clothing, home rents, transport, utility bills, private schools, domestic help and recreational costs.
Singapore remains the costliest metropolises to buy clothes, the report said,
with price premiums in Singapore’s
principal shopping hub, Orchard Road,
over 50% higher than New York.
The Southeast Asian city state also
boasts transportation costs which are
triple those of New York, largely due
to its complex fee system to obtain
a certificate of entitlement (COE)
— the 10-year licence that must be
purchased to use a vehicle.
Asian cities were also the priciest
locations for grocery shopping, with
Seoul holding the highest price tags for
everyday food items. For example, 1kg
of dried pasta costs US$4 (RM14.72) on
the website of popular Korean supermarket Homeplus, double the price on
American retailer Walmart.
Indian cities dominated the list
of the world’s 10 cheapest cities: Karachi ranked first, followed by Bangalore, Caracas, Mumbai, Chennai
and New Delhi. — CNBC
For more, visit www.cnbc.com
20 FO CU S
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
WE
PHOTOS BY BRYAN TAY/THE EDGE SINGAPORE
The model of the 797-unit
Botanique at Bartley.
B
Carving out compact
living spaces in condos
In an era of tightened purse strings and muted home sales, property
developers are offering homeowners greater flexibility to customise their units
BY C EC I L I A C H OW
L
iam Wee Sing, UOL Group’s president of property, is confident of
Bartley’s potential as an up-andcoming city-fringe location. “It’s
like Tiong Bahru 10 years ago,” he
says. “Everyone laughed at us when
we first bought en bloc sale sites there because
they thought it was an area with an ageing population. But, given its city-fringe location, it has
been gentrified and has now become a hip area.”
UOL had changed the perception of Tiong
Bahru as an area for retirees a decade ago with
the launch of a series of freehold private condominiums such as the 234-unit Twin Regency in 2004, the 84-unit Regency Suites in 2005
and the 158-unit The Regency at Tiong Bahru
a year later. That brought a new generation
of young families, singles and couples to the
neighbourhood.
When most people think of the Bartley area,
they tend to associate it with the Mount Vernon
crematorium and the Bidadari cemetery. The
crematorium closed in 2004, and the corpses
at the Bidadari cemetery were exhumed in
2002. The area will be turned into the Bidadari
Estate, with 10,000 public flats and 1,000 private homes, under the URA Master Plan. And
people’s perception of the area is starting to
change, notes Liam. UOL Group’s introduction
of dual-key flexi units at Botanique at Bartley
could make the area an attractive residential
zone for people of all ages. The dual-key flexi
units are likely to appeal to both investors and
multi-generational families.
The showflats of Botanique at Bartley feature
prototype two- and three-bedroom dual-key
flexi units. A departure from the typical dual-key
units that share a common main entrance, the
three-bedroom flexi unit with dual-key option
is designed with two separate main entrances to
an interconnected unit, explains Liam. Typical
three-bedroom flexi units at Botanique at Bartley
are 1,130 to 1,356 sq ft, while the two-bedroom
flexi units are 732 to 956 sq ft.
Flexi units
“The flexi units will give homeowners some
flexibility to customise their interior spaces
according to their lifestyle needs at different
stages of their lives,” says Liam. “The dual-key
option will appeal to both owner-occupiers
and investors.” Multi-generational families can
live under one roof without compromising on
privacy, while investors can live in their unit
and lease out space at the same time, he adds.
Dual-key units have taken various forms over
the past decade. They first surfaced as units for
multi-generational living in November 2006,
when the 382-unit The Metropolitan, located
next to the Redhill MRT station, was launched
by CapitaLand and Lippo Group. Frasers Centrepoint championed the dual-key concept
at two of its projects launched in 2009 — the
712-unit The Caspian at Lakeside and the 330unit [email protected] at Potong Pasir. In 2012,
the developer created a brand for its dual-key
units called Trio. At North Park Residences, its
920-unit condo located within an integrated
development in Yishun, Frasers Centrepoint
introduced Trio loft units.
Some developers have offered homebuyers
some form of customisation at their upscale
condos. For example, Far East Organization
introduced its “white plan” concept under its
Inessence brand at its luxury condo developments such as the 28-unit Boulevard Vue in 2007
and the 50-unit Alba at Cairnhill Rise in 2009.
The developer introduced “white SOHOs” at
The Seawind in Telok Kurau. They are basically loft units with high ceilings and platforms to
provide homeowners with additional storage
or usage space.
Mainland Chinese developer Qingjian Realty
pioneered CoSpace for its Ecopolitan executive
condo (EC) project in 2013. The CoSpace was
reintroduced at the launch of its two other EC
projects late last year — the 561-unit Bellewoods in Woodlands and 651-unit Bellewaters
on Anchorvale Crescent in Sengkang — giving
homebuyers flexibility in turning the additional
space into an expanded walk-in wardrobe or
en suite study. Early last month, Qingjian also
introduced its CoSpace Flexi, which offers
homebuyers bare units that they can customise to suit their needs. The move also translates
into savings of S$30,000 (RM80,470) to S$45,000
for each unit.
‘Good to have’
Dual-key and flexi units may come in different
shapes and sizes, but what is clear is that an increasing number of developers are providing
homebuyers with more options for space customisation. “In the current market scenario, it’s
a good option to have,” says Alvin Tan, senior
director of Savills Singapore. Savills, Huttons
and Knight Frank are the joint marketing agents
of UOL’s Botanique at Bartley.
With sentiment cautious as a result of worries
about falling prices and rents, fears of oversupply, and buying restrictions from the introduction of the additional buyer’s stamp duty (ABSD)
and total debt servicing ratio, homebuyers have
become very discerning and price-sensitive.
“With all the measures in place, they feel like
they have only one shot at buying a home today, and they want to make sure that they buy
the right one,” notes Savills’ Tan.
“When homebuyers look at a new launch,
they will consider the demand-supply dynamics in the particular location, whether there is a
growth story that can enhance the future value
of their property and accessibility in terms of
public transport, amenities and schools,” says
Liam. “Once all these boxes are checked, they
will then zoom in on the layout and efficiency
of the units, the design specifications and the
reputation of the developer.”
Even though Botanique at Bartley is a midtier project, UOL is offering purchasers luxury
specifications and finishing: full marble flooring
for the living and dining room, American oak
timber flooring for the bedrooms and SMEG
kitchen appliances. The specifications for the
development are on a par with those of UOL’s
Thomson Three in District 20, an established
residential estate in Upper Thomson Road,
and Seventy St Patrick’s in prime district 15
in the east.
As at end-February, only eight units remained unsold at the 445-unit Thomson Three,
a joint-venture project between UOL and its
sister company, Singapore Land. The latest median price achieved was S$1,383 per sq ft (psf).
At Seventy St Patrick’s, which is also by UOL,
close to 80% of the 186-unit freehold project
has been sold, with only 38 units remaining
as at end-February. The latest median price
achieved was S$1,699 psf, according to URA.
— The Edge Singapore
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FO CU S 21
WE D N E SDAY MA RC H 2 5, 2015 • T HEED G E FINA NCIA L DA ILY
PORE
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Pricing and location
UOL intends to price the 797-unit Botanique
at Bartley at an average price of S$1,300 psf.
Based on the indicative price, about 70%
of the units will cost less than S$1 million.
“That does not mean that all the units are
shoebox apartments,” Liam says. Typical
one-bedroom units start from 495 sq ft, while
two-bedroom units are from 657 sq ft and
three-bedroom units, from 1,033 sq ft. The
three-bedroom premium units can go up to
1,270 sq ft. All the bedrooms in each unit of
the project can fit a queen-sized bed with the
exception of the helper’s bedroom, which
fits a single bed, according to Liam. At least
70% of the units will have a view of either the
landscaped gardens or water features, and
there will even be one-bedroom units with
a wide frontage to maximise views.
The preview of Botanique at Bartley started on the weekend of March 21 and 22, with
the official launch scheduled for a fortnight
later. It will be the third residential project
to be launched in the Bartley area.
According to property agents, Botanique
at Bartley has been seeing “healthy interest”
among potential homebuyers. It is located
within a three-minute walk of the Bartley
MRT station and in the vicinity of top school
Maris Stella High School.
The first private condo project to be
launched in the Bartley area was the 702unit Bartley Residences in 2012. The 99-year
leasehold project by listed property group
City Developments Ltd (CDL) and its privately held parent company Hong Leong Group
was fully sold within a year of its launch, at
an average price of S$1,200 psf.
The second project was the 868-unit Bart-
01. The showflat of a 732 sq
ft, two-bedroom dualkey flexi unit.
02. One of the bedrooms in
the two-bedroom flexi
unit has been converted
into a workspace.
03. The master bedroom of
the two-bedroom flexi
unit. Every bedroom in
the project except for the
helper’s room can fit a
queen-sized bed.
04. The kitchen of a threebedroom premium unit
is equipped with SMEG
kitchen appliances,
including a coffee-making
machine and wine chiller.
05. The master bathroom of
a showflat is fitted with
Italian accessories.
ley Ridge, a 99-year leasehold project jointly
developed by CDL, Hong Leong and TID Pte
Ltd (a joint venture between Hong Leong and
Mitsui Fudosan). Launched in March 2013, only
25 units remained unsold as at end-February.
Transactions from December to February
ranged from S$1,084 to S$1,215 psf, according
to caveats lodged with URA Realis.
“The Bartley area has gained acceptance,
given the success of the two earlier projects
that were launched, one of which [Bartley
Residences] is fully sold and the other [Bartley Ridge] is 97% sold,” says Liam. “And in
terms of future supply, there is only one
other small site located opposite ours. So,
there isn’t much supply downstream, and
whatever has been launched upstream is
already substantially sold.”
UOL had purchased the Botanique at
Bartley site in January 2014 for S$648 psf
per plot ratio (ppr). Analysts estimate the
breakeven price for the project to be around
S$1,100 psf. UOL’s purchase price psf for the
site was 4.3% higher than the S$621 psf ppr
paid by CDL and Hong Leong for the Bartley
Residences site in 2011. CDL, Hong Leong
and TID paid a more cautious S$498 psf ppr
for the Bartley Ridge site in January 2012, a
month after the ABSD was rolled out.
What’s next?
Another 99-year leasehold residential project
in the pipeline for launch this year is UOL’s
663-unit condo on Prince Charles Crescent.
UOL and the privately held Kheng Leong
Group paid S$463.1 million, or S$821 psf ppr,
for the site, which was purchased in April
last year. It is about 14.5% lower in terms of
price psf ppr compared with the S$960 psf
ppr paid for an adjacent 99-year leasehold
site in September 2012 by the consortium
comprising Wing Tai Holdings, Metro Holdings and UE E&C. That site has since been
launched as The Crest. The 469-unit project
opened for sale last October, and 66 units
were sold as at end-February, with the latest
median price at S$1,640 psf.
“Our project on Prince Charles Crescent
will be launched later this year, and it’s an
exciting site,” says Liam. About 80% of the
294,712.5 sq ft, 99-year leasehold parcel will
be open space. It fronts the Alexandra Canal
and the Alexandra park connector on one
side, and on the other sides, it overlooks the
Good Class Bungalow area of Jervois Road,
Mount Echo Park and Bishopsgate.
Last year, UOL made its maiden foray into
London, buying the Heron Plaza site from
UK developer Gerald Ronson of Heron International. UOL paid £97 million (RM531
million) for the site located on Bishopsgate
in the City of London. The Heron Plaza site
has already obtained planning approval
for the development of a 43-storey tower
with 562,000 sq ft of gross floor area. It can
be developed into a 190-room hotel with
109 residential units sitting on the higher
floors. There are conservation shophouses on the site that will be turned into retail
space. However, UOL is seeking approval
to intensify the use of the space and to add
more hotel rooms and residential units. The
hotel block will be Pan Pacific’s flagship
hotel in the United Kingdom and Europe.
The new residential development in London will be launched in 2016. It could be
showcased in Singapore, says Liam. “We
saw a clear value proposition for the site,
as it is located just 200m from the Liverpool
Street station and the future Crossrail station and will be a game changer when it is
completed in 2018.”
The residential market in Singapore is expected to remain challenging this year with
the property cooling measures still in place,
says Liam. “Volatility is the new norm, so it’s
a matter of how we navigate despite such
volatility.” — The Edge Singapore
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22 W O R L D B U S I N E S S
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Soros says Greece is
now ‘lose-lose game’
Country was mishandled from the beginning by all parties
BY TOM B EA RD SWORTH
& FRA NC I N E L ACQUA
LONDON: The chances of Greece
leaving the euro area are now 50-50
and the country could go “down the
drain,” billionaire investor George
Soros said.
“It’s now a lose-lose game and
the best that can happen is actually
muddling through,” Soros, 84, said
in a Bloomberg Television interview
due to air yesterday. “Greece is a
long-festering problem that was
mishandled from the beginning
by all parties.”
Greek Prime Minister Alexis Tsipras’ government needs to
persuade its creditors to sign off
on a package of economic measures to free up long-withheld aid
payments that will keep the country afloat. Since his January election victory, the leader has tried to
shape an alternative to the austerity
programme set out in the nation’s
bailout agreement.
The negotiations between Tsip-
ras’ Syriza government and the
institutions helping finance the
Greek economy — the European Commission, European Central Bank (ECB) and International
Monetary Fund — could result in a
“breakdown,” leading to the country leaving the common currency
area, Soros said in the interview at
his London home.
“You can keep on pushing it back
indefinitely,” making interest payments without writing down debt, Soros said. “But in the meantime there
will be no primary surplus because
Greece is going down the drain.”
“Right now we are at the cusp
and I can see both possibilities,”
he said.
The start of quantitative easing
by the ECB at a time when the US
Federal Reserve is considering raising interest rates “creates currency
fluctuations,” said Soros.
“That probably creates some
great opportunities for hedge funds
but I’m no longer in that business,”
he said. — Bloomberg
Merkel points Tsipras toward creditors’ deal
BY PAT RI C K DONAHUE, JONATHAN
STEA RN S & A NTHONY CZUCZKA
BERLIN: German Chancellor Angela Merkel encouraged Prime Minister Alexis Tsipras to follow the path
set out by Greece’s creditors, saying
his country belongs in Europe and
she wants its economy to succeed.
Merkel gave Tsipras a red-carpet
reception at the Chancellery in Berlin on Monday without giving any
signal that the emergency aid the
Greek government is urgently seeking would be unlocked. Instead,
she talked at their joint briefing of
how she wanted to build trust with
her Greek counterpart.
“We want Greece to be economically strong, we want Greece to have
growth,” Merkel said. “And I think
we share the view that this requires
structural reforms, solid finances
and a functioning administration.”
Meeting the chancellor for the
second time in five days in an ef-
fort to build bridges between their
governments after weeks of sniping, Tsipras echoed her tone, while
resisting the embrace of the policy
prescriptions that she has shaped
for the past five years.
“The Greek bailout programme
was an unprecedented adjustment
effort but in our view it wasn’t a success story,” he said. “We’re trying
to find common ground to reach
an agreement soon on the reforms
that the Greek economy needs and
for the disbursement of the funds
that it also needs.”
The two countries have often
been at loggerheads since Tsipras’s January election victory as
the Greek leader tries to shape an
alternative to the austerity programme set out in the country’s
bailout agreement. Merkel insists
Greece must stick to the broad
terms of that deal, though holding out the prospect of some flexibility. — Bloomberg
BY U NA GA L A NI
Deutsche Bank faces new
Libor probe in US — source
HONG KONG: A soon-to-be-launched Malaysian carrier is the latest
cloud in Southeast Asia’s overcrowded skies. Flymojo has placed a
tentative order for 20 aircraft from Canada’s Bombardier worth US$1.5
billion (RM5.52 billion) based on current list prices. More competition
is the last thing the recovering sector needs. It’s a reminder that in aviation, uncertainty and financial losses are always just around the corner.
Airlines in the region are only just beginning to mend their finances
after two years of intense growth led to overcapacity and cut-throat
pricing. Loss-making flag carrier Malaysia Airlines, which was nationalised in December, is still in the early stages of a big restructuring. AirAsia’s local operation last year reported its slowest growth
in passengers since its launch in 2000, according to CAPA-Centre
for Aviation, an independent aviation consultancy. The company’s
long-haul affiliate AirAsia X announced a rights issue in January
and its shares are trading at their lowest level since the carrier was
listed two years ago.
That makes it a particularly odd time to launch a new airline,
even if it claims to offer something different. Airlines in the region
are increasingly looking for ways to set themselves apart from the
competition. Flymojo is pitching itself as a full-service airline that
will operate on under-served routes. Air travel to, from, and within
Southeast Asia is projected to grow at an average 6.6% annual rate for
the next 20 years, Boeing reckons. Full-service carriers have grown at
a more measured pace than their low-cost rivals in recent years but
the distinction between the two is increasingly blurry. The worry is
that the new airline will simply overlap with existing ones or force
them to compete on unprofitable routes.
In a region brimming with status-conscious tycoons, the glamour associated with owning an airline almost guarantees that any
recovery will be short-lived or at best bumpy. Many airlines are still
expected to lose money this year despite low oil prices, restructuring
efforts, and early signs of more rational behaviour by some operators.
The lack of transparency around flymojo’s finances has led some to
speculate that it may be another start-up that never takes off. Airline
investors will be hoping that’s the case. — Reuters
NEW YORK: Deutsche Bank is under investigation in New York state
for rigging the Libor interest rate,
a person familiar with the probe
said on Monday.
Germany’s largest bank is suspected of having participated with
other banks in a “vast manipulation
of Libor,” said the person. The probe
is led by Benjamin Lawsky, superintendent of financial services in
New York state.
The information about Lawsky’s
probe was first reported by the Financial Times earlier on Monday.
The Lawsky probe comes amid a
long-running crackdown by regulators investigating rigging by large
banks of the London InterBank
Offered Rate, an interbank average
rate used to peg millions of interest
rate-sensitive contracts and loans
around the world.
“We continue to work with the
authorities that are reviewing inter-bank offered rates matters,” a
Deutsche Bank spokesman said in
an email to AFP, without providing
further details.
Lawsky, who has regulatory
oversight of foreign banks that operate in New York state, had previously launched probes of Deutsche
Bank over alleged manipulation of
Asian airlines need right kind of mojo
Filepic of the haeadquarters of Deutsche
Bank in Frankfurt. The German bank was
one of just two banks among 31 reviewed
whose capital plan was rejected by the
Fed earlier this month. Photo by Reuters
foreign exchange rates and transactions with clients in countries
under US sanctions.
Deutsche Bank has also come
under fire from the US Federal Reserve. The German bank was one of
just two banks among 31 reviewed
whose capital plan was rejected by
the Fed earlier this month.
The Fed pointed to “widespread
and substantial weaknesses across”
capital planning, and said it saw
problems in governance, internal controls and risk assessment,
among other issues. — AFP
IN BRIEF
GIC and Exeter Property
to invest in logistics
properties in Europe
SINGAPORE: Sovereign wealth
fund GIC has established a
partnership with Exeter Property Group, an industrial real
estate investment management
specialist, The Straits Times
reported. The €300 million
(RM1.2 billion) partnership will
invest in logistics properties
in key European distribution
hubs. These will offer easy access to motorways, water ports,
airports and rail nodes. “Over
the long term, there will be an
increasing demand for logistics
space in these locations due to
the growing trend of e-commerce, supply chain reorganisation and the increased use of
third-party logistics providers,”
they said in a joint statement.
The partnership will build a
portfolio by targeting value-add
opportunities in core locations.
Key Singapore interest
rate Sibor at highest level
in more than six years
SINGAPORE: A benchmark local interest rate, to which many
mortgages here are pegged, has
surged to a level not seen since
December 2008, The Straits
Times reported. The threemonth Singapore interbank
offered rate, or Sibor — the
rate at which banks lend money to one another — surged to
1.00129% yesterday, although
it is still fairly low by historical
standards. That marked a rise of
more than 23% since March 6,
after a stronger-than-expected
American jobs report stoked expectations that the Federal Reserve could raise interest rates
sooner than previously thought.
Noble shares down 1%,
continue to battle accuser
SINGAPORE: Noble Group
shares resumed their price
drop yesterday amid the ongoing war of words between
the commodity firm and its
critic Iceberg Research, The
Straits Times reported. Shares
in the commodity giant had
lost one cent or 1.1% to 90
cents as just after 1pm yesterday, erasing some of yesterday’s 4% gain. The rebound
on Monday came as Noble
launched legal actions at the
Hong Kong High Court against
Iceberg, which has so far released three reports claiming Noble is using accounting
loopholes to exaggerate profit
and asset value in order to
hide losses and debts.
HSBC to issue US$2.25b
of convertible bonds
LONDON: HSBC Holdings will
issue US$2.25 billion (RM8.28
billion) of bonds that would
convert into shares if the bank’s
capital strength falls below a
certain level, it said yesterday.
HSBC said the so-called contingent convertible bonds, or
“CoCos”, would pay annual interest of 6.375%. The bonds will
convert into shares if HSBC’s
core equity Tier 1 capital ratio
falls below 7%. — Reuters
W O R L D B U S I N E S S 23
W E D N E SDAY MA RC H 2 5, 2015 • T HEED G E FINA NCIA L DAILY
‘China’s growth cooling,
Developing Asia steady’
Regional economies should take advantage of current low oil price, says ADB
MANILA: Developing Asia is expected to post steady growth this year and
the next, but a likely return to an upward cycle in US rates later this year
may merit policy action to counter
a reversal of capital flows, the Asian
Development Bank (ADB) said.
Developing Asia, which groups 45
countries in the Asia-Pacific, is set
to grow 6.3% this year and the next,
the same pace as in 2014. India and
most Southeast Asian economies
will lead the way, offsetting slowing
growth in China, the Manila-based
Macau looks
beyond casinos,
slashes gambling
revenue
BY ST EPH A NI E WONG & FOX HU
HONG KONG: Macau slashed its
monthly gambling revenue forecast 27%, as the city’s chief executive Fernando Chui pledged
a five-year plan to make the
world’s largest gaming hub less
dependent on casinos.
The city expects average gross
monthly gaming revenue of 20
billion patacas (RM9.18 billion)
this year, down from an earlier
estimate of 27.5 billion patacas,
Chui said on Monday.
Macau has entered an “adjustment” period of slower
growth and needed to develop
a broader range of attractions to
draw tourists from around the
world, he said.
“We think this is pretty pessimistic, though it may be better
for an official to slash things so
much that they can then eventually get into positive revision
mode from a low base,” said
Tim Craighead, head of Asian
research at Bloomberg Intelligence. “If they use this as a base
assumption, it emphasises the
need to diversify the economy,
which is already in the plans.”
Chinese President Xi Jinping
has called on Macau to move beyond gambling as his corruption
crackdown and a slowing national economy keep high rollers
and middle-class patrons alike
away from the tables. Gaming
revenue is expected to fall for a
second year, battering the local
economy and the share prices of
casino operators such as Sands
China Ltd and Galaxy Entertainment Group Ltd.
Chui’s tourism panel would
draft a five-year plan for stable
casino growth while expanding
the city’s tourist offerings, the
chief executive said. — Bloomberg
bank said in its latest Asian Development Outlook report.The region
accounts for nearly three-fifths of
the world’s annual gross domestic
product growth since the global financial crisis of 2009, it said.
“Soft commodity prices and
recovery in the major industrial
economies generally aid the region’s growth momentum. The
expected pickup in India and in
most members of the Association
of Southeast Asian Nations could
help balance gradual deceleration
in the region’s largest economy, the
People’s Republic of China (PRC),”
the ADB said.
Growth in China is poised to cool
from 7.4% last year to 7.2% this year
and 7% next year, the bank said, as
authorities in the region’s biggest
economy make reforms in the face
of a property downturn, factory
overcapacity and rising local debt.
“If the PRC falters as it adjusts to
its new normal, or if India reforms
less decisively than anticipated,
their slower growth could spill over
to others in developing Asia,” the
bank said in its report.
Lower global oil prices were feeding global growth, particularly in
developing Asia, but a sudden sharp
reversal would have a stronger impact in the region than elsewhere,
the ADB said. Economies in the region should take advantage of the
current low oil price regime to pursue
structural reforms such as eliminating fuel subsidies or raising fuel taxes
to ease the burden on their public
finances, the bank said. — Reuters
HSBC: China manufacturing
activity contracts at fastest rate
BEIJING: China’s manufacturing
activity contracted in March at its
fastest rate in almost a year, HSBC
said yesterday, suggesting worsening conditions in the world’s second-largest economy and putting
pressure on leaders to further ease
monetary policy.
The British bank’s preliminary
purchasing managers index (PMI)
came in at 49.2, it said in a statement,
below the breakeven point of 50 and
the weakest reading since last April,
when it hit 48.1. It also slumped from
a final reading of 50.7 in February
and was far below the median estimate of 50.5 in a Bloomberg survey
of economists.
The index, compiled by information services provider Markit Ltd,
tracks activity in China’s factories
and workshops and is regarded as a
barometer of the health of the Asian
economic giant.
The sluggish reading “signalled
a slight deterioration in the health
of China’s manufacturing sector in
March”, said Markit economist Annabel Fiddes in the statement. “A
renewed fall in total new business
contributed to a weaker expansion of
output, while companies continued
to trim their workforce numbers,” she
said, adding that “relatively muted
client demand” had led producers
to cut prices.
Liang Hong, an economist with
investment bank China International
Capital Corp Ltd, noted the sub-index
for employment — a key consideration for macroeconomic officials
— fell to its lowest level in six years.
“The pressure on the government
to stabilise growth and support employment has increased,” Liang said
in a report. — AFP
MILAN: The takeover of tyre maker
Pirelli by a Chinese firm sparked
feelings of bitterness and resignation in Italy on Monday, as the cashstrapped country prepared to relinquish an iconic part of its industrial
heritage.
Pirelli’s largest shareholder Camfin SpA said on Sunday that it had
signed a deal with China National
Chemical Corp (ChemChina) under which the state-owned chemical giant will buy into the world’s
fifth-biggest tyre manufacturer in a
€7.4 billion (RM29.62 billion) deal.
It calls for ChemChina to eventually hold a controlling stake of at
least 50.1% of the company renowned
for its Formula One equipment and
racy calendars.
Under the proposed terms, the
company’s headquarters and re-
search centre would remain in Italy
with current chief executive officer
Marco Tronchetti still in charge.
Pirelli would eventually be split into
two companies, one dedicated to
high-end tyres, the other to industrial ones.
Tronchetti told employees in
an internal note on Monday that
the takeover was “a growth process
which will take time, but in which I
strongly believe and will engage in
as both manager and shareholder.”
ChemChina’s bid “will allow us
to take our growth strategy further
with greater vigour,” he said.
His optimism failed to rub off on
Italy’s main business leaders, most
of whom appeared to accept that
the eurozone’s third largest economy, gasping for investment after the
economic crisis, had little choice but
to put up and shut up.
“Yesterday, one of the rare big
S&P 500 firms post record
shareholder payouts in
2014
NEW YORK: Shareholder payouts from S&P 500 companies
hit unprecedented levels in
2014, thanks to record cash
levels, according to a report on
Monday from S&P Dow Jones
Indices. Total payouts for the
500 large-cap companies listed on the S&P 500 Index hit a
new record high of US$903.7
billion (RM3.31 trillion)) last
year, up from US$787.4 billion in 2013, the report said.
About 61% of the payouts were
in share buybacks, with the
remainder in dividends. The
payouts in dividends were at
an all-time high of US$350.4
billion in 2014, but the total in
buy-backs, at US$553.3 billion,
was slightly below the record
set in 2007. — AFP
New partnerships extend
Microsoft’s reach into
Android
WASHINGTON: Microsoft Corp
on Monday unveiled partnerships with Samsung and other
manufacturers to install its services including Word and Skype
on devices powered by the rival
Google Android system. Microsoft said it was expanding
a deal with Samsung — which
had already agreed on pre-installing Microsoft services on
its high-end smartphones — to
include some tablets. The deal
will provide Microsoft Word,
Excel, PowerPoint, OneNote,
OneDrive and Skype on “select
Samsung Android tablets,” a
statement from the Redmond,
Washington, group said.— AFP
Top Indian phone maker
plans to raise funds to
fend off Samsung
Takeover of Pirelli met with resignation in Italy
BY AM ELIE HERE NS TE I N
IN BRIEF
Italian businesses changed owner,”
former centre-left premier Romani
Prodi said.
“Today, industrial policy is made
in Beijing .... [but] we’re happy because before this even the Chinese
didn’t come to invest in the country,”
he said, calling on Italy to snap out
of it and recover its own “strategic
industrial policy.”
While Prime Minister Matteo Renzi did not comment on the ChemChina deal, Labor Minister Giuliano
Poletti applauded Pirelli for being
open to change and drawing in
much-needed foreign funds.
But Gian Maria Gros Pietro, chairman of the management board of
Intesa Sanpaolo Bank — an indirect shareholder in Pirelli — was
less impressed, saying the deal was
“not ideal, but where in Italy will
we find someone to challenge this
takeover?” — AFP
NEW DELHI: Micromax Informatics Ltd, the Indian smartphone maker threatening Samsung Electronics Co Ltd’s lead
in the world’s second-largest
market, plans to raise more capital to help it break away from
foreign rivals. The company
is considering outside investment to develop locally focused
software to complement mobile phones already available
in 21 local languages, chief executive officer Vineet Taneja
said. Micromax expects to hit
US$2 billion (RM7.34 billion)
in sales in the fiscal year that
ends this month, Taneja said.
— Bloomberg
Chevrolet ordered to pay
French dealers nearly €8m
PARIS: Carmaker Chevrolet
was ordered to pay its French
dealers nearly €8 million (RM32
million) in compensation by a
Paris court on Monday for the
“brutal” withdrawal of its brand
from Europe. Seventeen dealers had sued the company, part
of the US General Motors Co
(GM) giant, for not respecting
a notice period it was obliged to
give them after GM announced
in December 2013 that it was
withdrawing Chevrolets from
sale in 2015 due to poor sales.
— AFP
24 W O R L D B U S I N E S S
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Jokowi stakes can-do image
on overdue power plant
Tells Tokyo businessmen construction could start next month
BY CHRIS BRUMMITT
& TSU YOSH I I N A JIM A
TOKYO: Indonesian President Joko
Widodo (Jokowi) has staked his cando reputation on the progress of a
long-delayed US$4 billion (RM14.72
billion) power plant, telling businessmen in Tokyo he’s aiming for
the project to start within weeks.
Construction of the Batang coalfired station, which is being developed by Japan’s Electric Power Development Co, Itochu Corp
and Indonesia’s PT Adaro Energy,
could start in April, Jokowi said at a
business forum in Tokyo yesterday.
“I have been handling this issue
directly for four months because I
want to show that every problem
can be solved,” said Jokowi, a for- Jokowi (centre) greeting participants as he arrived at the Indonesia business forum in
mer furniture exporter known for Tokyo yesterday. Photo by Reuters
his hands-on approach when he
was Jakarta governor. “The problems at the Batang power plant month the project can start.”
by local opposition, environmental
project stretching back four years,
Building of the 2,000mw project assessments and the unwillingness
which seemed never-ending, have in central Java was supposed to be- of villagers to sell land. Improving
now been solved and we hope next gin in 2012 and has been held up infrastructure in Southeast Asia’s
European banks
seen offloading
£100b of bad
debt in 2015
LONDON: European banks will
offload €100 billion (RM402.21
billion) of unwanted loans this
year to cut costs and restructure
their balance sheets, according
to a report by PricewaterhouseCoopers LLP (PwC). Banks will
jettison bad debts and loans
that no longer fit with their
business strategies, PwC said.
That’s up from €91 billion last
year and will be the biggest annual tally since Europe’s banks
started downsizing after the financial crisis, said about 60%
of more than 60 hedge funds,
banks and private equity firms
surveyed by PwC for the report.
Loan disposals by banks have
grown every year since 2010 as
scrutiny by the European Central
Bank and pressure from regulators to shore up balance sheets
prompted lenders to restructure
and downscale their operations.
That’s provided a growing supply
of assets for US investment firms
including Lone Star Funds, Apollo Global Management and Oaktree Capital Group LLC, which
invest in distressed assets.
Said Richard Thompson,
a partner at PwC in London,
“There is significant competition
between the numerous investor
groups looking to acquire assets
... making it much more attractive
for banks to sell.” — Bloomberg
largest economy is key for the president’s plans to boost annual growth
to 7% during his five-year term,
from 5.02% in 2014.
Electric Power Development,
known as J-Power, and Itochu haven’t been notified that land acquisition has been completed, officials
at the two Japanese companies said
yesterday. Some 87% of the land
needed for the project has been
acquired and Itochu will keep monitoring progress, said a company
official who asked not to be identified because of internal policy.
J-Power spokesman Masao Kitakaze
declined to comment on when the
remaining land may be acquired.
Jokowi also told the businessmen that he was “guaranteeing”
political stability in Indonesia.
The president’s first few months
in office have been marred by a
stand-off between the police and
the anti-corruption agency, which
resulted in the leader withdrawing
his original candidate for police
chief. — Bloomberg
Faeces contains gold worth
millions — study
WASHINGTON: Human faeces
contains gold and other precious
metals that could be worth hundreds of millions of dollars, experts
say. Now the trick is how to retrieve
them — a potential windfall that
could also help save the planet.
“The gold we found was at the
level of a minimal mineral deposit,” said Kathleen Smith, of the US
Geological Survey, after her team
discovered metals such as platinum, silver and gold in treated
waste. A recent study by another
group of experts in the field found
that waste from one million Americans could contain as much as
US$13 million (RM47.97 million)
worth of metals.
Finding a way to extract the
metals could help the environment by cutting down on the need
for mining and reducing unwanted release of metals into the environment.
“If you can get rid of some of the
nuisance metals that currently limit how much of these biosolids we
can use on fields and forests, and
at the same time recover valuable
metals and other elements, that’s
a win-win,” said Smith. “There are
metals everywhere — in your haircare products, detergents, even
nanoparticles that are put in socks
to prevent bad odours.”
More than seven million tonnes
of biosolids come out of US wastewater facilities each year: about
half is used as fertiliser on fields
and in forests and the other half
is incinerated or sent to landfills.
Smith and her team are on a
mission to find out exactly what
is in our waste.
The findings were presented at
the 249th National Meeting & Exposition of the American Chemical
Society, the world’s largest scientific society, taking place in Denver
till tomorrow. — AFP
Japan minister: AIIB should work with ADB
TOKYO: Japanese Finance Minister Taro Aso said yesterday it would
be desirable if the China-backed
Asian Infrastructure Investment
Bank (AIIB) could work with the
Asian Development Bank (ADB) in
meeting growing demand for infrastructure financing in Asia. However,
Aso, who last week gave cautious approval of the institution that Washington has warned against, said Japan is not ready to decide to join the
Beijing-based bank by a March 31
deadline, citing lack of transparency
in the bank’s management.
At least 35 countries will join the
AIIB by the March 31 deadline, the
bank’s interim chief announced on
Sunday. It has been seen as a challenge to the World Bank and ADB,
institutions Washington helped
found and over which it exerts considerable influence.
“As demand for an absolute quantity of [infrastructure] financing is
growing ... it’s not a zero-sum” game
between the AIIB and ADB, Aso told
reporters after a cabinet meeting.
The problems is “that the AIIB is not
transparent and nothing has been decided as to who is [involved], where to
decide an executive board and who
will examine” loans for each project.
“It would be the most desirable
that it will work together with the
ADB to develop infrastructure in
Asia, but it is hard to see it happen
as rules are totally different.”
Aso reiterated Japan’s concerns
over the AIIB’s ability to sustain
debt and respond to the environmental and social impacts of infrastructure development, which
could affect existing loans by ADB,
the World Bank and other lenders.
“I don’t know how my previous
remarks were taken but Japan has
been cautious all along.” — Reuters
IN BRIEF
Developer Sunac says
Kaisa can’t survive if
takeover deal fails
HONG KONG: The chairman of
developer Sunac China urged
creditors of its takeover target,
struggling property firm Kaisa
Group Holdings, yesterday to
accept a debt restructuring proposal or risk the company running out of cash by end-April.
Sunac chairman and chief executive officer Hongbin Sun
was speaking a few days after
a group of Kaisa offshore bondholders rejected the company’s proposal to restructure its
US$2.5 billion (RM9.22 billion)
debt. Sunac said the possible
takeover was conditional upon
Kaisa resolving its debt issues
and it would walk away from
the deal if bondholders do not
cooperate. — Reuters
China Overseas issues
HK$42.8b shares to
buy parent assets
HONG KONG: China Overseas Land & Investment Ltd
will purchase HK$42.8 billion
(RM20.29 billion)) in property
from its parent, consolidating
the group’s real estate assets under a single company as China
seeks to reform its inefficient
state-owned sector. The company will issue 1.7 billion shares at
HK$25.38 each to state-owned
China Overseas Holdings Ltd
for property projects in prime
cities including Beijing, Shanghai and London, it said in a filing
yesterday. That represents an
11% premium to the last closing
price. — Bloomberg
Qantas, China Eastern
joint venture hits hurdle
SYDNEY: The Australian Competition and Consumer Commission said yesterday it plans to
reject a proposal by airlines Qantas and China Eastern to more
closely coordinate their operations, saying it will harm competition. The airlines already have a
code-sharing agreement and last
year proposed a joint venture to
better coordinate scheduling
and pricing. But with the two
carriers accounting for more
than 80% of capacity on the key
Sydney-Shanghai route, which
makes up nearly a quarter of all
direct Australia to China flights,
the regulator said it is not in favour. — AFP
Kingfisher casts doubt
on Mr Bricolage deal
LONDON: Kingfisher’s €275
million (RM1.1 billion) takeover of do-it-yourself retailer Mr Bricolage was thrown
into doubt yesterday, after it
emerged board members and a
major shareholder of its smaller
French rival had reservations
about the deal. Kingfisher, Europe’s No 1 home improvement
retailer with chains such as
B&Q in Britain and Castorama
in France, said in a statement it
had yet to receive clarification
of the positions of the majority
of the board of Mr Bricolage and
the ANPF, a group of franchisees
which is a major investor in the
company. — Reuters
W O R L D 25
W E D N E SDAY MA RC H 2 5, 2015 • T HEED G E FINA NCIA L DAILY
Myanmar police reject
lawsuit over monk burns
Victims violently suppressed by authorities
YANGON: Police in Myanmar have
rejected a lawsuit by monks who
suffered phosphorus burns at the
hands of officers when they protested against a controversial copper mine in 2012, a lawyer said
yesterday.
Two monks have been trying to
sue the country’s police chief and
home minister after demonstrations against the China-backed
Letpadaung mine near the central
town of Monywa were violently
suppressed by authorities.
Tug of war
between China,
Turkey over
Uighurs
They were among scores of protesters who received painful burns
during the violence. Some needed
medical treatment abroad.
A parliamentary report later
found officers deployed white phosphorus — an incendiary material
commonly used on battlefields to
create smoke cover — against the
monks and civilians.
“Police informed us yesterday
(Monday) that they would not accept the case because it goes against
procedures,” Aung Thein, a lawyer
who is working on the case alongside human rights group the Justice
Trust, told AFP.
The monks filed their claim earlier this month, he said, accusing
police of using illegal tactics.
“We want the government to
know that they cannot hide or make
this case disappear,” he added.
Myanmar, ruled for decades by
a brutal junta until a quasi-civilian reformist government was installed in 2011, has seen waves of
protests against land-grabbing as
disgruntled rural people test the
new administration’s commitment
to freedom of expression.
The Letpadaung mine — part
of a joint venture between Chinese firm Wanbao and military
conglomerate Myanmar Economic Holdings — has been a regular
source of unrest.
Dogged also by complaints of
environmental damage and brutal police crackdowns, it is widely
seen as a throwback to junta-era
tactics. — AFP
Germanwings Airbus crashes in
French Alps, 150 feared dead
BY A MY SAWI T TA LEF EV R E
BY JEAN-FR ANCO I S RO S NO BLE T
BANGKOK: A group of suspected Uighur Muslims has become
the focus of a diplomatic tug
of war in Thailand between
China and Turkey, with both
countries wanting to repatriate
them and hundreds of other
suspected Uighurs detained in
Thailand as illegal immigrants.
The group of 17, all from the
same family, was detained by
Thai police in March last year
after illegally entering overland from Cambodia, said their
lawyer Worasit Piriyawiboon.
Two of the family’s 13 children were born in custody.
The family — who uses the
name Teklimakan — has spent
most of the past year in the
main police immigration detention centre in Bangkok.
The group claimed to be
Turkish and, while still in detention, was issued with passports by the Turkish embassy
and granted permission to travel to Turkey.
China insists the 17 detainees are Chinese Uighurs
who should be returned to the
northwest Chinese region of
Xinjiang, according to court
documents seen by Reuters.
Hundreds of people were
killed in unrest in Xinjiang in
the past two years, prompting
a crackdown by Chinese authorities and small numbers
of Uighurs to try and flee the
country.
Hundreds, possibly thousands, have travelled clandestinely through Southeast Asia
en route to Turkey.
Thai National Security Council secretary-general Anusit
Kunakorn told Reuters that
China and Turkey have asked
Thailand for help in repatriating those detained. — Reuters
SEYNE-LES-ALPES (France): An
Airbus operated by Lufthansa’s Germanwings budget airline crashed in
a remote snowy area of the French
Alps yesterday and all 150 on board
were feared dead.
French President Francois Hollande said he believed none of those
on board the A320 had survived,
while the head of Lufthansa spoke
of a dark day for the German airline.
Germanwings confirmed its
flight 4U9525 from Barcelona to
Duesseldorf crashed in the French
Alps with 144 passengers and six
crew members on board.
Hollande said: “The conditions
of the accident, which have not yet
been clarified, lead us to think there
are no survivors.”
Officials said the plane issued a
distress call at 0947 GMT, about 52
minutes after take-off.
Unofficial website tracking data
suggested the aircraft made a sharp
descent from its cruising height of
35,000 feet but that it did not appear
to have plummeted as quickly as
aircraft known to have lost complete control.
However, safety experts warned
against reading too much into the
third-party data, especially over
An Airbus 320 operated by Lufthansa’s Germanwings budget airline.
remote areas, and said black boxes holding the probable answers
to the crash were expected to be
retrieved quickly.
Hollande said there were likely
to be significant numbers of Germans on the flight. Spain’s deputy
prime minister said 45 passengers
had Spanish names.
It was the first crash of a large
passenger jet on French soil since
the Concorde disaster just outside
Paris nearly 15 years ago.
Lufthansa chief executive
Carsten Spohr, who planned to
go to the crash site, spoke of a “dark
day” for the airline.
“We do not yet know what has
happened to flight 4U9525. My
deepest sympathy goes to the families and friends of our passengers
and crew,” Lufthansa said on Twitter, citing Spohr.
A spokesman for France’s DGAC
aviation authority said the airliner
crashed near the town of Barcelonnette about 100km north of the
French Riviera city of Nice.
Airbus said it was aware of reports of the crash. The crashed A320
is 24 years old — at the upper end
of useful life of an aircraft in firsttier airlines — and has been with
the parent Lufthansa group since
1991, according to online database
airfleets.net — Reuters
US envoy sees hope for Yemen crisis
BY ANDREA SHALAL
WASHINGTON: The top US diplomat in Yemen on Monday said
Washington and its allies need to
make decisions quickly to preserve
the possibility of a political solution
to the crisis in Yemen.
Ambassador Matthew Tueller
said he was optimistic that rival
Yemeni factions could reach a po-
litical power-sharing agreement if
a broad group of representatives
could meet outside the country
and without the influence of outside parties such as Iran.
“We recognise that we’ve got to
make some decisions quickly,” Tueller told Reuters after a meeting of
the National US-Arab Chamber of
Commerce, citing rapid advances
by the Iranian-allied Houthi militia
towards the southern port of Aden,
where Yemeni President Abd-Rabbu Mansour Hadi fled.
“Political dialogue won’t work
if Hadi is overrun and captured
— and Aden falls — which could
happen very quickly,” Tueller said,
citing the large number of Houthi
forces throughout the country.
Tueller gave no details on possible US actions. — AFP
IN BRIEF
Britain says to ‘beef up’
defence of disputed
Falkland Islands
LONDON: Britain plans to “beef
up” its defences of the disputed
Falkland Islands to ensure they
are properly protected, Defence
Secretary Michael Fallon said
yesterday, in comments likely to irk Argentina which still
lays claim to the archipelago.
Tensions over the Falklands still
crackle more than 30 years after
Argentine forces seized them and
Britain sent a task force to retake
them in a brief war which saw
more than 600 Argentine and 255
British servicemen killed. “I’m
going to be announcing to parliament later today (yesterday)
how we are going to beef up the
defences there,” Fallon, who was
due to make a statement on the
subject at 1230 GMT, told Sky
News. — Reuters
Scientists find remains
of big salamander-like
creature
WASHINGTON: Scientists in
Portugal have uncovered the
fossils of a previously unknown
crocodile-like creature that was
among the Earth’s top predators more than 200 million
years ago. The remains found
on the site of an ancient lake
suggest the creature was like
a giant salamander, according
to a study released on Monday. The primitive amphibians
grew up to 2m in length and
lived in lakes and rivers during
the late Triassic period. They
lived much like today’s crocodiles and fed mainly on fish,
researchers from the University of Edinburgh said. — AFP
Majority winner
Netanyahu apologises
to Arab-Israelis
JERUSALEM: Prime Minister
Benjamin Netanyahu, who won
majority support on Monday
from newly-elected members
of parliament to form Israel’s
next government, apologised
for saying Arabs were voting
in “droves” in comments that
drew US condemnation. The
leader of the right-wing Likud
Party is expected to be tasked
this week with forming a new
coalition government. “I know
that my statements last week
offended some Israeli citizens
and members of the Arab Israeli community. That was never
my intention. I apologise for
that,” he said. — AFP
Dutch wholesaler
goes on trial over
horsemeat scandal
DEN BOSCH (Netherlands):
Dutch meat wholesaler Willy
Selten went on trial yesterday
accused of mixing hundreds of
tonnes of horse into products
labelled as pure beef during
Europe’s massive horsemeat
scandal two years ago. Dutch
prosecutors accused Selten,
suspected of being a key player in the food scare, of forging
numerous invoices and labels
for batches of meat leaving his
business in the southern Dutch
city of Oss. — AFP
26 WORLD
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Nobel laureate ordered
to pay US$1.5m in taxes
‘Move against micro-credit pioneer Muhammad Yunus politically motivated’
DHAKA: Bangladesh officials have
summoned Nobel laureate Muhammad Yunus over US$1.51 million
(RM5.55 million) in allegedly unpaid
taxes, an official said yesterday, in
what analysts saw as the latest politically motivated move against the
micro-credit pioneer.
The National Board of Revenue
has asked Yunus to resolve the “dispute through discussions” at its office
on March 29 in the capital after the
economist lodged a court appeal
against the unpaid bill.
“Professor Yunus is a very good
and compliant taxpayer. But his total
tax dues now stand at 117.7 million
taka (RM5.55 million),” tax commissioner Meftha Uddin Khan told AFP.
“We’ve asked him to settle the dispute through discussions,” Khan said.
Yunus, 74, has been at odds with
Prime Minister Sheikh Hasina since
2007 when he made a brief foray into
the country’s violent and polarised
politics dominated by her family and
arch-rival Khaleda Zia.
Yunus was removed in 2011 as
head of the micro-lender Grameen
Bank that he founded,a move wide-
ly seen as orchestrated by Hasina.
Khan said taxes must be paid on
financial “gifts” from Yunus in the
last three years to three trusts set
up for his family members and for
charitable purposes.
But Mahbubur Rahman, a tax
adviser to Yunus, said that money
should be exempt because they
were gifts and a ruling on the matter was pending in the High Court.
“We think the gift that Professor Yunus has made through his
trusts should be exempted from
... tax. He has made an appeal to
the High Court against the claim,”
Rahman told AFP.
Yunus set up Grameen Bank
in 1983 to make collateral-free
micro-loans to rural and mostly
women entrepreneurs. Its record in
helping to reduce poverty earned
him global fame and a Nobel Peace
Prize.
But Hasina has accused Yunus
of “sucking blood” from the poor
and in 2013, he faced a state-backed
hate campaign seeking to paint
him as un-Islamic and a spreader
of homosexuality. — AFP
Jolie’s ovaries removed over cancer fears
WASHINGTON: Hollywood megastar
Angelina Jolie announced yesterday
that she has had her ovaries and fallopian tubes removed over fears of a
hereditary form of cancer, following
her double mastectomy two years ago.
The actress, who has lost her
mother, grandmother and aunt to
the disease, said she had the procedure last week after results from a
blood test raised fears that she may
be in the early stages of cancer.
Although later tests showed that
wasn’t the case, Jolie said she chose
to go ahead with the surgery because of her family history and because she carries a gene mutation
that had given her a 50% risk of developing ovarian cancer, the same
mutation that put her at 87% risk of
developing breast cancer.
“I did not do this solely because I
carry the BRCA1 gene mutation, and
I want other women to hear this,”
Jolie wrote in The New York Times,
the same way she announced her
double mastectomy two years ago.
“A positive BRCA test does not
mean a leap to surgery,” said Jolie,
who is married to fellow Hollywood
heavyweight Brad Pitt.
“In my case, the Eastern and West-
Filepic of
‘Unbroken’
director Angelina
Jolie arriving at
the 20th Annual
Critics’ Choice
Movie Awards
in Los Angeles,
California on
Jan 15. Photo by
Reuters
ern doctors I met agreed that surgery
to remove my tubes and ovaries was
the best option, because on top of the
BRCA gene, three women in my family have died from cancer,” she wrote.
Her doctors said that she should
have the preventive surgery about a
decade before the earliest onset of
cancer in her female relatives.
“My mother’s ovarian cancer was
diagnosed when she was 49. I’m 39.”
Jolie said that she had been preparing for the possibility of ovary removal ever since her double
mastectomy.
But two weeks ago, she said, she
got a call from a doctor who said her
blood test results had “a number of
inflammatory markers that are elevated, and taken together they could
be a sign of early cancer.”
She was told to see a surgeon immediately.
“I went through what I imagine
thousands of other women have felt. I
told myself to stay calm, to be strong,
and that I had no reason to think I
wouldn’t live to see my children grow
up and to meet my grandchildren,”
Jolie wrote.
“I called my husband in France,
who was on a plane within hours.
The beautiful thing about such moments in life is that there is so much
clarity. You know what you live for
and what matters. It is polarising,
and it is peaceful.”
She went to see a surgeon, the
same one who had treated her mother and whom she last saw on the day
that her mother died.
The examination and ultrasound
were regular, so she waited for five
days, saying she tried to stay calm
and focused as she attended her children’s soccer game and went about
her daily life. Then scan results came
back clean.
“To my relief, I still had the option
of removing my ovaries and fallopian
tubes and I chose to do it,” she said.
The surgery has put the mother
of six into menopause.
“I will not be able to have any more
children, and I expect some physical changes. But I feel at ease with
whatever will come, not because I
am strong but because this is a part
of life. It is nothing to be feared.
“It is not easy to make these decisions. But it is possible to take control and tackle head-on any health
issue. You can seek advice, learn
about the options and make choices
that are right for you. Knowledge is
power.” — AFP
India’s top court strikes down ban on ‘offensive’ online comment
NEW DELHI: India’s top court yesterday struck down a controversial
law that made posting “offensive”
comments online a crime punishable by jail, a ruling which free speech
campaigners hailed as a victory.
The Supreme Court said the 2009
amendment to India’s Information
Technology Act, known as Section
66A and widely criticised as a draconian limit on freedom of speech,
was unconstitutional.
“Section 66A is unconstitutional
and we have no hesitation in striking
it down,” said Justice R F Nariman,
reading out the judgement.
“The public’s right to know is di-
rectly affected by Section 66A.”
The Supreme Court had been
asked to examine the legality of the
amendment, which makes sending
information of “grossly offensive or
menacing character” punishable
by up to three years in jail.
In 2012, two young women were
arrested under the act over a Facebook post criticising the shutdown
of financial hub Mumbai after the
death of a local hardline politician.
The charges were later quashed
by a Mumbai court, but the case
sparked outrage and fierce debate
about online censorship in India.
Law student Shreya Singhal, who
filed a petition in the Supreme Court
challenging the amendment after
the two women were arrested, welcomed yesterday’s ruling as a “big
victory”.
“The Internet is so far-reaching
and so many people use it that it is
very important for us to protect this
right today, now,” she said.
“Governments have their own
political agenda. A law has to be for
the people.”
Farooq Dadha, father of one of the
young women, Shaheen Dadha, also
welcomed the ruling against what he
called a “black law”.
The government had issued
guidelines on enforcing the law, and
argued in court that it could not be
declared unconstitutional because
of the possibility of abuse.
But the two judges hearing the
case said the amendment could not
be “saved by the assurances of the
government that it will not be misused”.
Dozens of people have been arrested under the law since its introduction in 2009, although no one
has been convicted.
Communications and IT Minister Ravi Shankar Prasad said the
government would respond after
reading the judgement in full— AFP
IN BRIEF
US base row worsens over
Tokyo-Okinawa dispute
TOKYO: A row over a controversial US military base on the
Japanese island chain of Okinawa worsened yesterday as Tokyo dug in its heels against the
local governor’s order to halt
construction. The central government insisted work was carrying on as usual at the sparsely
populated coastal site chosen
as the replacement for the Futenma Air Station, which sits
in a crowded urban area, and
the defence ministry filed an
appeal against the stoppage order. “We do not believe there is
any reason to stop the work at
this point,” said top government
spokesman Yoshihide Suga.
“The government will continue
the drilling survey as planned,
while paying full attention to
the environment.” — AFP
India, China agree to foster
peace on disputed border
NEW DELHI: India and China agreed yesterday to foster
peace along their Himalayan
border after wrapping up two
days of talks designed to resolve
a long-festering boundary dispute. In comments issued after
the round of talks in the Indian capital, the governments of
both countries stressed their
common desire to maintain
calm and to press ahead with
further negotiations. “Both
sides agreed to take necessary
steps to maintain peace and
tranquility in the border areas, which is a pre-requisite for
continued growth of bilateral
relations,” the Indian foreign
ministry said. — AFP
IS recruited 400
children since January
BEIRUT: Islamic State (IS) has
recruited at least 400 children in
Syria in the past three months
and given these so-called “Cubs
of the Caliphate” military training and hardline indoctrination,
a monitoring group said yesterday. The Syrian Observatory for
Human Rights said the children,
all aged under 18, were recruited near schools, mosques and
in public areas where IS carries
out killings and brutal punishments on local people. One such
young boy appeared in a video
early this month shooting dead
an Israeli Arab accused by IS of
being a spy. — Reuters
Afghans protest at
lynching of woman
KABUL: Hundreds of protesters shouting “Down with ignorance!” urged the Afghan government yesterday to bring to
justice the killers of a woman
lynched by a mob for allegedly
burning the Quran. Farkhunda, 27, was beaten with sticks
and stones, thrown from a roof
and run over by a car outside
a mosque in Kabul last Thursday. The mob then set her body
ablaze and dumped it in the
Kabul river while several police
officers looked on. Demonstrators gathered in the rain outside
the supreme court in Kabul, demanding justice. — AFP
W O R L D 27
W E D N E SDAY MA RC H 2 5, 2015 • T HEED G E FINA NCIA L DAILY
China ‘confirms’ Japan
invite for war memorial
Ties have deteriorated sharply in last two years due to dispute over uninhabited islets
BEIJING: China’s Foreign Ministry
confirmed, in a roundabout way,
yesterday that it had issued an invitation to wartime enemy Japan to
attend events in China to mark the
70th anniversary of the end of World
War II later this year.
Sino-Japan relations have long
been poisoned by what China sees
as Japan’s failure to atone for its occupation of parts of the country before and during the war, and it rarely
misses an opportunity to remind its
people and the world of this.
In the last two years, ties have
also deteriorated sharply because
of a dispute over a chain of uninhabited islets in the East China Sea,
though Chinese and Japanese leaders met last year in Beijing to try to
reset relations.
Beijing’s commemorations, likely
to be held in September, will include
a military parade, but the govern-
Gunmen
kidnap, kill
two Indonesian
soldiers in Aceh
Wang speaking in a
news conference at
the annual session
of China’s National
People’s Congress,
the country’s
parliament, in
Beijing on March 8.
He said the Chinese
government would
welcome all national
leaders to the war
events, as long
as they came in
sincerity. Photo by
Reuters
ment has been coy about exactly
who it has invited, though Russian
President Vladimir Putin for one is
expected to turn up.
“As to which countries’ leaders
have been invited, we have said this
Japanese PM’s advisers split
over WWII ‘aggression’
BY KYOKO HAS EG AWA
BANDA ACEH: Two Indonesian intelligence officers were
found shot dead yesterday, a
day after being kidnapped by
gunmen in the former separatist rebel heartland of Aceh in
the country’s west, a military
spokesman said.
The bodies of the two soldiers were found face down
and half naked in a remote
area in northern Aceh, said
spokesman Machfud. The
hands of one soldier had been
bound behind his back.
“Authorities found the bodies this morning in a jungle
close to the location where
they were kidnapped,” Machfud, who like many Indonesians goes by one name, told
AFP.
Police had yet to determine
a motive for the killings, or
the identities of the gunmen.
Witnesses said a group of
gunmen ambushed the soldiers as they returned from
questioning residents about
former rebels considered active in the east and north of
the province on Sumatra island’s northernmost tip. Their
car was found abandoned a
short time later.
Machfud denied the military was questioning local
residents, saying its presence
in the province was limited
to “social work such as helping farmers in paddy fields”.
— AFP
many times: China has already issued invites to all relevant countries’
leaders and international organisations,” Foreign Ministry spokeswoman Hua Chunying told a daily
news briefing.
Pressed on whether this included
Japan, she said: “I’ve just said that
China has already issued invites to
all relevant countries’ leaders and
international organisations. Do you
think that Japan has a connection to
World War II and the Chinese People’s War of Resistance Against Japanese Aggression, or not?”
She did not elaborate, and the
government has so far released few
details about the events.
Chinese Foreign Minister Wang
Yi earlier this month said the government would welcome all national
leaders to the war events, as long as
they came in sincerity.
While China has continued to remind Japan it expects it to face up to
its wartime past, the foreign ministers of South Korea, Japan and China
agreed on Saturday that a summit
meeting of their leaders should be
held soon to mend ties. — Reuters
TOKYO: An expert panel advising Japan’s nationalist prime minister on
a highly sensitive statement about
World War II has run into disagreement over how to describe Tokyo’s
wartime military action.
The latest tussle in the ideological
battle between Japan’s nationalist
right-wing and its liberal mainstream
saw the committee of academics,
journalists and business leaders split
on the use of the word “aggression”,
according to minutes released on
Monday.
For Tokyo’s neighbours — its wartime adversaries — the term is a crucial marker of Japan’s acceptance of
its wrongdoing in the 1930s and 1940s
as it marched across Asia, leaving
millions dead in its wake.
While many Japanese accept the
global narrative that their country
was an aggressor in the conflict,
right-wingers insist Tokyo’s war was
largely defensive and intended to liberate Asia from Western colonialists.
Japanese Prime Minister Shinzo
Abe is expected to make his statement later this year on the 70th
anniversary of the end of World
War II. His language is being closely watched by China and South
Korea for any signs of backsliding
by Japan.
Beijing and Seoul vociferously
argue that Tokyo has not properly
atoned for its actions in the 1930s
and 1940s, and does not fully accept
its guilt, insisting that a landmark
1995 statement expressing remorse
must stand. In the panel’s March 13
meeting, acting chairman Shinichi
Kitaoka, president of the International University of Japan, said the
displacement of European powers
was an unintended consequence
of Tokyo’s invasion of China and
other nations.
“As a result of Japan’s war in the
1930s through to 1945, many Asian
countries became independent ... but
I think it is wrong to say that Japan
fought the war for the emancipation
of Asian countries,” he said, according
to the minutes.
But a panel member said it was
wrong to retrospectively apply values
and definitions, citing a 1974 United
Nations ruling on the meaning of the
word “aggression” in the international
context.— AFP
Beijing executes three for Kunming attack — court
BEIJING: China executed three people yesterday for a mass stabbing in
Kunming that killed 31 people last
year, the country’s top court said,
with authorities blaming the attack
on separatists from mainly Muslim
Xinjiang.
Iskandar Ehet, Turgun Tohtunyaz and Hasayn Muhammad were
put to death for “leading a terrorist
organisation and intentional homicide”, the Supreme People’s Court
said in a microblog post.
China uses both lethal injection
and shooting for executions, but
the method used this time was
not specified.
The bloodshed in Kunming, in the
southwestern province of Yunnan,
saw more than 140 people wounded
and was dubbed “China’s 9/11” by
state-run media. Beijing blamed it on
“separatists” from the resource-rich
far western Xinjiang region, where
at least 200 have died in attacks and
clashes between locals and security
forces over the last year.
Incidents have grown in scale and
sophistication and spread beyond
the restive region, with the Kunming
mass knifing the biggest such attack
against civilians outside Xinjiang. A
female attacker, Patigul Tohti, was
pregnant at the time of her arrest
and was sentenced to life in prison.
Campaign groups accuse China’s
government of cultural and religious
repression which they say fuels unrest in Xinjiang. The remote autonomous region, which borders Central
Asia, is home to the mostly Muslim
Uighur minority.
“China is using the death penalty
for political means in order to avoid
the root cause of the problem,” Dilxat Raxit, a spokesman for the Munich-based World Uyghur Congress,
said in a statement. — AFP
IN BRIEF
China province says graft
probes leaves 300 jobs empty
BEIJING: A sweeping graft probe
in the northern Chinese province of Shanxi has left the government with almost 300 jobs
to fill, including several senior positions, state media said
yesterday, giving details of the
practical impact of the investigations. Coal-rich Shanxi has
emerged as one of the front lines
in President Xi Jinping’s battle
against deep-seated graft, with
vice-premier Ma Kai earlier this
month describing the problem
there as “like a cancer”. Shanxi’s
top official, Communist Party boss Wang Rulin, said there
were nearly 300 vacancies in
the provincial government, including three city party chiefs,
16 county party chiefs and 13
county heads, state news agency
Xinhua said. — Reuters
Utah becomes only US state
to restore firing squad
LOS ANGELES: Utah became
the only US state to restore the
firing squad as a method of execution on Monday, as its governor Gary Herbert signed a bill
on the emotive issue into law.
The legislation, approved by the
western US state’s senate earlier
this month, allows for a firing
squad if drugs used for executions are unavailable, as has recently been the case in a number
of US states. Critics of the bill
claim it is barbaric, but Herbert’s
spokesman said: “Those who
voiced opposition to this bill are
primarily arguing against capital
punishment in general, but that
decision has already been made
in our state. — AFP
Security concerns delay reopening of Tunisia’s museum
TUNIS: Tunisia’s national museum yesterday delayed a planned
reopening after last week’s attack on foreign tourists due to
security concerns, its head of
communications Hanene Srarfi
told AFP. “We have been surprised at the last minute, but
the interior ministry says that for
security reasons we cannot receive a large number of visitors,”
she said, adding that an official
ceremony marking the reopening of the museum would still
go ahead. Officials at the Bardo
Museum had planned to allow
the public back in yesterday, six
days after an attack claimed by
the jihadist Islamic State group
killed 21 people. — AFP
‘Gunmen kill 13 bus passengers in Afghanistan’
KABUL: Gunmen killed 13 passengers travelling on a bus in
Afghanistan yesterday, underlining the country’s fragile security situation as President Ashraf
Ghani holds talks with the United States in Washington. The attack in Wardak province, which
lies close to Kabul, is the latest
to hit civilians in Afghanistan’s
still-bloody conflict. Ghani was
due to meet US President Barack Obama yesterday to discuss
the pace of the American troop
withdrawal after more than a
decade. — AFP
28
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WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
WE
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Personal
ASSISTANT
An oriental touch:
The Magnum
Red Velvet served
with goji berries
and crushed
pistachios .
COMPI L ED BY HANNAH M ER ICAN
WORK. LIFE. BALANCE
d
o
s
s
“
p
e
TREAT yourself to a yummy Korean lunch or
dinner today at BBQ Chicken. The restaurant
chain has just launched a new menu that
will definitely satisfy your tastebuds. The
new menu includes kimchi bokkeumbap
which is barbecued kimchi fried rice with
egg and marinated grilled chicken, Korean
charbroiled salad, hot drums chicken and
golden tender chicken strips. BBQ Chicken
currently has outlets in KL Festival City,
Wangsa Walk Mall, Bangsar Trade Centre,
Berjaya Times Square, 1 Utama, the Curve
and One City Subang. For more information,
please visit www.bbqchicken.com.my.
i
a
t
c
n
c
a
c
M
e
i
t
Th
M
t
W
e
BE enlightened by the exhibition entitled
Unpack-Repack: Archiving & Staging
Ismail Hashim. Curated by Wong Hoy
Cheong, Unpack-Repack remembers
the late Ismail Hashim by showcasing
his photos. The second round of this
exhibition features new content and ideas
with 1,000 objects on display including
the many cameras Ismail owned. Excerpts
of recordings in interviews and negatives
will also be on display, as well as Emily
Dickinson’s poetry which Ismail had hand
copied into scrapbooks. The exhibition will
be on until March 31. It is being held at the
National Visual Arts Gallery, Balai Seni
Visual Negara, 2 Jalan Temerloh, off Jalan
Tun Razak, Kuala Lumpur. Admission is
free. The gallery is open from 10am to
6pm daily. For more information, visit
www.artgallery.gov.my
a
s
s
c
e
Ice cream
FEVER
Malaysians’ mania for ‘Make My Magnum’
BY M AE C HAN
TAKE your little one to see The Snail & The
Whale at PJ Live Arts today. This winsome
musical follows a tiny snail who longs to see
the world, so she hitches a lift on the tail of
a humpback whale. Both animals go on an
exciting journey, encountering sharks and
penguins, icebergs and volcanoes. However
when the whale gets beached, how will the
tiny snail save him? Expect lots of laughs in
this stage adaptation of Julia Donaldson’s
picture book for young children. The Snail
& The Whale will be playing until March 29.
Today’s show will start at 10am. PJ Live Arts
is at Jaya One, Jalan Universiti, Petaling Jaya.
Tickets are priced at RM50, RM65 and RM80.
Tickets can be purchased at www.tix.my.
I
t was only 7.45am in what should
be a deserted Mid Valley Megamall
last Nov 14. An unprecedented
queue, however, had already begun to stretch across the length of
the mall’s third floor in anticipation of the opening of the mall’s newest
tenant at 10am.
It wasn’t a special opening sale nor
were there goodies up for grabs. The
tenant was neither a major international
fashion retailer nor a celebrity chef restaurant. Instead, Malaysians had queued
up for hours for boasting rights as the
first few to enjoy a customised Magnum
ice cream.
It marked the start of a persistent
queue at the Magnum Kuala Lumpur
ice cream café for the past few months,
sparking a craze that had urbanites talking about and posting pictures of their
“Make My Magnum” (MMM) customised
ice cream sticks on social media.
Shawn Tan, category head (ice cream)
at Unilever (M) Holdings, said he was surprised at the instantaneous interest and
crowd. “We didn’t do a big PR campaign
for the opening — just a small countdown
on social media five days before,” he said.
Caught by surprise, Tan and restaurant manager Liew Yuet Mae admitted
that the unexpectedly huge interest presented a series of hiccups for them. “We
were not prepared for it at the beginning,”
says Liew. “The biggest problem was with
operations. We had to bring in more staff,
especially at the Pleasure Makers Booth,
and bring in more ice cream and freezers.”
The Pleasure Makers Booth is the moniker for its ice cream customising service,
which is the main attraction at the café.
Tan said there were so many customers
at the beginning that Magnum Kuala
Lumpur broke the world record for number of Magnum ice creams sold in a day.
“We sold 2, 200 ice creams that day.
The initial average in the first two months
was about 1,500 to 1,600 during peak periods on weekends,” he said. The average
number of ice creams sold are now 1,000
per day, which are priced at RM9.90 each.
Being caught off-guard also meant
that the staff at Magnum Kuala Lumpur
struggled to guide the crowd adequately. The long queues and inability to cope
with the volume of trade, Magnum Kuala
Lumpur’s initial reviews were scathing
on social media. A recent check revealed
a four-star rating on Facebook, though
the negative reviews are still displayed.
Four months on, weekends are still
busy at the two-storey café, with queues
both at the MMM parlour downstairs and
a dine-in section upstairs that serves hot
food and speciality Magnum desserts.
On why there was such a strong interest from the start, Tan said there were a
few likely factors: “First of all, Magnum
is not new in the market, we have been
advertising for quite a few years. Secondly, I think people travel quite a lot these
peage
000
ch.
ant
pur
teope
ala
ing
led
ugh
ed.
till
ues
and
hot
s.
erea
um
een
ndese
live it! 29
WE D N E SDAY MA RC H 2 5, 2015 • T HEED G E FINA NCIA L DA ILY
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
days. So they’ve experienced Magnum café’s
overseas and probably wanted to come and
see what it’s like here.”
He also credits social media for helping
spread the word, or in this case, pictures:
“The first thing people do now is to take a
picture and upload it. So, we are just leveraging on that to our advantage.”
At the heart of it though, Tan said that it
is always about engagement. While buying
a Magnum stick at the store is a one-way
thing, he said the Magnum Kuala Lumpur
café offers customers a two-way communication.
“You can interact with the brand, you
can share experiences about coming in
and ‘hashtagging’ it. There’s something
cool about having my own customised
Magnum,” said Tan.
Liew agreed: “From the ambience to the
experience, we want them to be engaged in
it.” She quipped that staff are expected and
trained to take photos for the customers.
This is why, despite impatient customers,
Magnum insists on not rushing the customising experience.
“[It’s] about two minutes per customer.
We can’t do it any quicker as we want that
engagement to take place,” said Liew.
This is part of Magnum’s aim to bring
an aspirational factor to ice cream. Tan
said the brand has always tried to push
something different and unique to their
customers. Even the toppings for the MMM
experience are divided into three catego-
ries — classic, experimental and special.
“The chilli flakes and potato chip options
have been well received,” he said.
Not denying that the interest may wane
as the trend fizzles out, Tan confidently
stated that the challenge for the brand is
then to continue to innovate and bring a
sense of excitement.
“I think that’s the difference between
us and other restaurants, it’s not just about
food,” says Tan.
Still, being too experimental can be a
mistake. For example, the Magnum Fries
that come with a spicy chocolate dip has
now been swapped for normal fries after
customers consistently requested for ketchup or chilli sauce instead.
“Next month, we will introduce some
food which we think the market will like,
like the Rendang pasta, Carbonara and
Bolognese, and Caesar salad,” said Liew,
which she referred to as comfort food familiar to Malaysians.
Amazed at Malaysians’ love for ice
cream, Tan said for now, Magnum will
keep to its two locations in the capital city
— there’s another café in IOI City Mall,
Putrajaya — while looking out for strategic spots in other states such as Melaka,
Johor or Penang.
Observing how people would come in
early in the morning just for ice cream, Tan
half-jokingly said: “Maybe we should introduce a breakfast menu with ice cream.” We
might just queue for that.
Tan (left) with chef Chin.
PICK OF THE DAY
ADIDAS have teamed up with superstar Pharrell Williams to unveil the Original Supercolor range which offers a wide spectrum
of colours like never before. Seen as a shoe that transcends trends,
the adidas Supercolor will always be in style. This new range of
hues represent diversity and with 50 colours to choose from online, it will be easy to find something that connects especially with
you. The sneakers, priced at RM350 a pair, are made of premium
leather and are available in 11 colours at adidas Original concept
stores nationwide. There are more colour choices available to view
online at shop.adidas.com.my.
Fusion appetiser: The bite-sized Unagi Beignets and marinated cappellini
was the best dish of the day.
CHOCOHOLIC’S DELIGHT
TRUE to its “excitement-driven” motto, Magnum Kuala Lumpur has created a four-course meal featuring its main ingredient, the Belgian chocolate.
Titled “Best of Belgian Indulgence”, the specially crafted menu is created
by group executive chef, Steven Chin, who has had more than 10 years of experience in creating dishes for different types of cuisines and desserts. His
culinary background includes training in Switzerland and stints at Equatorial
Kuala Lumpur, The Regent Kuala Lumpur and two years at Lafite, ShangriLa Hotel Kuala Lumpur.
Live It! was invited to a special preview of the menu last week. Things got
off to an intriguing start when the Spice Butternut Squash soup was presented
in a red coffee cup complete with foam and a sprinkle of shaved bitter dark
chocolate and cinnamon. A stir revealed a golden, rich soup, and its savoury
flavour enhanced by the hint of cinnamon and chocolate.
The winner of the day was the appetiser — a combination of marinated capellini,
crisp Unagi beignet fried with a combination of salted choc emulsion, soy reduction and crisp ginger. Some ulam-ulaman added a refreshing local touch. The bitesized Unagi beignets were addictive, pairing well with the chilled and light pasta.
A Pan-Seared Butterfish in White Chocolate “beurre blanc” Sauce with
sautéed baby spinach was the finishing touch to the savoury dishes.The main
highlight was a customised Magnum ice cream bar for dessert.
Priced at RM78.90, the special menu is available until June. A pair of
diners have the option to swap the ice cream for Magnum Kuala Lumpur’s
newly introduced Death by Chocolate molten lava cake with its chocolate
brownies ice cream.
For more information, visit www.facebook.com/MagnumMalaysia
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Zen TODAY
The evil that is in the world almost always comes of ignorance,
and good intentions may do as much harm as malevolence if
they lack understanding. — Albert Camus
France’s cocktail
OF THE
SUMMER
T
o combat declining sales
on their home turf, a few
French winemakers are doing the unthinkable: marketing signature cocktails
featuring their vintages.
The latest example, the So Perrier, combines sparkling water with So Sauternes,
a lighter version of the sweet white wine
from the Bordeaux region.
In France, “cutting” wine with water
is generally frowned upon, if not considered outright heresy. And yet, as wine
consumption continues to fall in the
country, some producers are willing to
look the other way, or even to promote
the mixing of wine with other beverages,
if it means converting more consumers
to the fruit of the vine. To get in on the action, French sparkling water brand Perrier decided to
team with So Sauternes, a beverage that
meets the same mandatory production
specifications as any other sweet white
wine sold under the Sauternes AOC.
Since it is made with the first grapes
harvested from the youngest vines, however, So Sauternes is said to be lighter
and more refreshing than the typical
Sauternes.
Produced by Château Bastor-Lamontagne and two other domains, which
have chosen to remain anonymous,
So Sauternes was created specifically
for mixing with sparkling water. The
goal is clear: to refresh the reputation
of a wine that has fallen out of favour
with consumers, most of whom know
it only as an accompaniment to foie
gras or dessert. Mixology comes to France
The So Perrier (So Sauternes and Perrier on the rocks with a twist) made its
official debut at a hip Parisian bar with
a launch party last week. The cocktail is
just one example of how French brands
are attempting to push the mixology
trend, a hard sell in a land where mixing is often seen as synonymous with
adulteration.
Many a cognac aficionado, for example, would baulk at the prospect of combining the venerated spirit with other
ingredients. But the BNIC, the French
organisation of cognac professionals,
recently launched its Cognac Cocktail
Connection, an operation which encourages Parisian bartenders to combine the spirit with crushed raspberries
or mint leaves.
Of course, veteran wine and spirits
enthusiasts aren’t the ones targeted by
these initiatives, which are aimed first
The So Perrier (So Sauternes and Perrier on the rocks with a twist) made its official debut at a hip
Parisian bar with a launch party last week.
and foremost at younger consumers in
trendy nightclubs and bars. Another
strategy for selling wine to this generation of French consumers, and one
that has had some success over the past
few years, involves artificially flavoured
wines, such as grapefruit rosés and even
a cola-flavoured red. — AFP
S P O RT S 3 1
W E D N E SDAY MA RC H 2 5, 2015 • T HEED G E FINA NCIA L DAILY
Elliott dedicates win to
long-suffering fans
His undefeated 84 steers Black Caps into first World Cup final
AUCKLAND: Johannesburg-born
Grant Elliott dedicated New Zealand’s thrilling four-wicket win to
long-suffering Kiwi fans after his
undefeated 84 steered the Black
Caps into a first World Cup final
after six previous semi-final losses.
Elliott, who turned 36 at the
weekend, hit a six off the penultimate ball to take New Zealand into
Sunday’s final in Melbourne where
they will face either Australia or
defending champions India.
“It is great. I don’t think this win
is for myself or the team — it is for
everyone here. The support has
been amazing,” said Elliott, who
smashed Dale Steyn into the stands
for the match-clinching six.
“We just wanted to take it as
deep as we could. Corey Anderson
(58) batted well and we timed the
innings to perfection.
New rule could
bar S Korea’s
Park from
Rio Games
SEOUL: The 18-month suspension handed to South Korea’s
four-time Olympic swimming
medallist Park Tae-Hwan for
failing a dope test could see
him miss the 2016 Olympic
Games, even though the ban
ends before the Rio event.
A Korean Olympic Committee (KOC) official confirmed
yesterday that Park, a national icon in South Korea, could
fall foul of a new rule barring
any athlete suspended for doping from competing with the
national team for a period of
three years.
“Should the rule be applied
as it is, Park will be unable to
take part in next year’s Olympic Games,” the official, who
declined to be identified, told
AFP.
The rule, instituted by the
KOC last July, states that the
three-year ban on representing
South Korea in competition
begins on the date the doping
suspension expires.
Park’s 18-month ban was
handed down by world swimming body Fina on Monday.
In a statement released by
his agency, Park expressed a
“sincere” apology for causing
public concern and promised
to give a full explanation when
he returns home.
The 25-year-old swimmer
is known as “Marine Boy” in
South Korea. — AFP
“When you have 40,000 fans
screaming at your every ball, it is
an absolute pleasure playing at the
Eden Park, in front of the home
crowd.
“We had a good run; this is the
first final we are in and we will approach it as any other match.”
Skipper Brendon McCullum
made a 26-ball 59 to also help the
Black Caps to their rain-adjusted target of 298 after South Africa
made 281 for five batting first in a
match reduced to 43 overs per side.
For South Africa, Faf du Plessis
made 82, captain AB de Villiers
was not out 65, while David Miller
smashed an 18-ball 49.
However, the rain came at the
worst possible time as they were
well set at 216 for three in the 38th
over when play was halted for two
hours. — AFP
SYDNEY: India still bear scars of the
mauling they suffered at the hands
of Australia at the start of their Down
Under tour and Steve Smith thinks
it could be a factor when the countries meet in tomorrow’s World Cup
semi-final.
The world champions have
stormed back to imperious form
in the World Cup and are unbeaten,
going into the last-four showdown at
the Sydney Cricket Ground (SCG),
where they will be out to end Aus-
De Villiers tumbling over the stumps during a failed run-out attempt on Anderson in
their Cricket World Cup semi-final match in Auckland yesterday. Photo by Reuters
tralia’s bid for a fifth world crown.
From the start of December to
early February, however, Australia
simply dominated India, winning
two and drawing two tests and then
beating them comfortably in a tri-series match and World Cup warm-up.
“I think we’ll have a little edge
over them with a few scars from
matches throughout the summer
— they hadn’t beat us once,” Smith
told reporters at the SCG yesterday.
“So, I think that’s going to be playing on their mind a little bit.
“They’ve been here for a long
time now; they’ve been able to get
accustomed to the conditions, the
bounce we’ve got here compared
to back in India.
“Other than that, I think we just
need to do what we can do well to
control that. If we do, I’ve no doubt
it’s going to be a competitive game
for us.”
Smith’s own spectacular form
with the bat played a large part in
Australia’s supremacy in the test arena. The 25-year-old scored centuries
in all four matches and 769 runs in
total. — Reuters
Mayweather-Pacquiao revenue over US$400m
LAS VEGAS: Record-shattering revenue for Manny Pacquiao’s upcoming
boxing showdown with unbeaten
Floyd Mayweather could surpass
US$400 million (RM1.47 billion),
promoter Bob Arum told ESPN in
a report on Monday on the sports
network’s website.
The welterweight-title unification
fight on May 2 in Las Vegas will generate US$74 million from just over
15,000 tickets to the MGM Grand
Garden Arena, Arum told ESPN, flattening the old mark of just over US$20
million for Mayweather’s 2013 fight
with Saul “Canelo” Alvarez at the
same venue.
Promoters first aimed for US$40
million, then boosted the ticket prices from US$1,000 to US$1,500 at the
low end and US$5,000 to US$7,500 for
the best seats due to huge demand
for the ducats, Arum said.
Mexico’s lucha libre in
shock over wrestler death
MEXICO CITY: The flamboyant world of Mexican wrestling
reelled in shock on Monday as
the tragic death of a star fighter
sparked a debate about safety in
the beloved national pastime.
Pedro Aguayo Ramirez, known
as “Hijo del Perro Aguayo” (Son
of the Dog Aguayo), collapsed
and hung over the middle rope
late last Friday after receiving
a flying double-kick to the upper body from Oscar Gutierrez,
known as “Rey Misterio Jr”, in
the lucha libre bout. It took almost two minutes for the fight
to stop and for Aguayo, 35, to
get medical attention at the
arena in the northwestern border city of Tijuana. Medics said
they were treating three other
people in the dressing room. He
was taken to a hospital where
doctors tried to revive him, but
he died early on Saturday with
a neck trauma. — AFP
HK’s Fong joins Lotus as
F1 development driver
India still bear scars of Summer
mauling, says Smith
BY NICK M ULV E NNE Y
IN BRIEF
Mayweather (left) and Pacquiao. Photo
by Reuters
However, organisers have now
shuffled the number of seats in various price ranges and boosted top
seats to US$10,000 to raise the live
gate total from US$50 million to
US$74 million.
“It’s crazy, but it is what it is,” Arum
told ESPN. “It’s amazing.”
Few, if any, seats will be available for public sale, with promoters,
telecasters HBO and Showtime, the
fighters and the venue host each taking a share of the tickets.
“We’ll probably have a handful
of tickets that will go on sale to the
public next week,” Arum said. “It’s
mania.”
There will be only about 1,100
seats at US$10,000, none of them for
public sale, according to the report.
Boxing’s record for pay-per-view
purchases is the 2.4 million buys from
Mayweather’s 2007 split-decision victory over Oscar de la Hoya, but with
Mayweather-Pacquiao having taken
more than five years to come together with the planet’s top pound-forpound fighters, expectation of three
million pay-per-view buys at about
US$100 each could bring US$300
million in sales for United States,
Puerto Rican and Canadian markets
alone. — AFP
LONDON: Hong Kong’s Adderly Fong has joined Lotus
as a development driver, the
Formula One team said yesterday. The team, who already
has Spaniard Carmen Jorda
signed up for a similar role,
added that the 25-year-old will
undergo a development programme while taking part in
the GP3 and GT Asia series.
“I’ll be able to learn how an
F1 team operates during race
weekends as an integral part of
the team and these invaluable
experiences are going to lay the
foundations of my future development as an F1 driver,” said
Fong in a statement. — Reuters
Nadal’s ankle looks OK
after shortened practice
MIAMI: Rafael Nadal’s bid to
win the ATP Miami Open title
for the first time suffered a setback on Monday when he failed
to finish a workout after an ankle injury scare. A spokesman
for the Spanish star tweeted:
“Rafael Nadal felt earlier today
[Monday] and didn’t finish the
practice. It looks like his ankle
is OK. However, we will see how
things evolve.” Second-seeded Nadal, a four-time Miami
runner-up, is coming off a run
to the quarter-finals in Indian
Wells, where he lost to Canada’s
Milos Raonic. — AFP
Ex-NFL star Sharper
jailed over rape cases
LOS ANGELES: Former National
Football League safety Darren
Sharper was jailed for nine years
on Monday as part of a deal to
resolve sexual assault charges
against him in four US states.
Sharper was accused of drugging
and raping women in Arizona,
California, Louisiana and Nevada. On Monday, he pleaded
guilty in Arizona and Nevada,
and was sentenced to nine years
and eight years respectively, with
the sentences to run concurrently. In Los Angeles, Sharper
pleaded no contest in exchange
for a jail term of 20 years. — AFP
3 2 S P O RT S
WEDN ESDAY M ARC H 2 5 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
Sturridge, Lallana pull out
of England duty
In-form Tottenham striker Harry Kane may have his first cap
LONDON: England manager Roy
Hodgson suffered a double injury
blow on Monday as the Football
Association confirmed Liverpool
duo Daniel Sturridge and Adam
Lallana had withdrawn from his
squad for the forthcoming matches
against Lithuania and Italy.
Sturridge was forced to return to
Liverpool after scans showed the
striker wouldn’t be fit to feature
in this Friday’s Euro 2016 qualifier against Lithuania at Wembley
and next week’s friendly against
Italy in Turin.
The 25-year-old was reported to
have sustained a hip problem during
Liverpool’s 2-1 defeat against Manchester United at Anfield on Sunday.
With Sturridge, who scored in
the United match, already having
been ruled out for several months
after suffering a thigh injury while
training with England earlier this
season, Hodgson and his medical
team were understandably keen
not to take any risks with the player’s fitness.
“Liverpool striker Daniel Sturridge has left the England squad
and returned home to his club on
Monday evening,” an FA statement
confirmed.
Liverpool’s Skrtel
charged over
de Gea clash
LONDON: Liverpool defender Martin Skrtel was charged
with violent conduct by the
Football Association on Monday following his clash with
Manchester United goalkeeper
David de Gea.
Skrtel stepped on de Gea’s
right leg as he challenged aggressively for the ball in the final seconds of stoppage-time
during United’s 2-1 win at Anfield on Sunday.
The FA said in a statement
the incident was not seen by
the officials, but was caught
on video.
The Slovakia centre-back
has until 1800 GMT on Tuesday to respond to the charge.
If he were found guilty Skrtel
would face a three-match ban,
ruling him out of the Premier
League matches against Arsenal and Newcastle and the
FA Cup quarter-final replay at
Blackburn.
The Reds will already have to
cope without Steven Gerrard,
who was sent off less than a minute after coming on as a halftime substitute for a stamp on
United’s Ander Herrera. — AFP
Liverpool duo Lallana (left) and Sturridge are out of England’s game against Lithuania
and Italy due to injuries. Photos by Reuters
“This follows a scan on an injury
that he sustained during Liverpool’s
game against Manchester United
on Sunday.
“The England medical team took
the decision on Monday evening
having assessed Daniel following
the squad’s arrival at St George’s
Park on Monday afternoon.”
Sturridge’s absence could mean
a first cap for in-form Tottenham
striker Harry Kane, who took his goal
tally for the season to 29 with a hattrick against Leicester on Saturday.
Kane is in the senior England
squad for the first time and will be
competing with Arsenal’s Danny
Welbeck for the job of partnering
captain Wayne Rooney in Hodgson’s forward line against Lithuania.
To add to Hodgson’s misfortune,
Liverpool midfielder Lallana also
withdrew from the squad after suffering a groin injury against United that
forced him to come off at half-time.
Lallana was replaced by Tottenham’s emerging young midfielder
Ryan Mason, who was called up
for the first time.
The 23-year-old, who has en-
joyed a breakthrough season in
central midfield for Tottenham,
will also provide cover for Aston
Villa midfielder Fabian Delph, who
is suffering from a stomach bug.
Mason was loaned to third tier
club Swindon last season, but he
has played 29 times for Tottenham
under new boss Mauricio Pochettino this term.
His last appearance in an England
shirt came in 2011 when he played
for the Under-20s against France.
“Tottenham Hotspur midfielder
Ryan Mason has been drafted into
Roy Hodgson’s England squad,” an
FA statement read.
“The inclusion of the 23-year-old
follows the withdrawal of Liverpool’s Adam Lallana through injury.
“Mason, a regular for Spurs
this season, has previously represented the Three Lions at U19
and U20 level.
“Lallana wasn’t the only absentee
as the senior squad gathered at St
George’s Park on Monday afternoon
in preparation for the forthcoming
fixtures against Lithuania and Italy.
“Aston Villa’s Fabian Delph remained at home with a sickness
bug but is expected to link up with
the team later this week.” — AFP
Mata urges MU to remain focused
LONDON: Anfield match-winner
Juan Mata warned his Manchester
United team-mates on Monday
that they still have a long way to
go in the Premier League race for
Champions League qualification.
Mata scored a superb brace on
Sunday as United won 2-1 at Liverpool to move five points clear of
their rivals in the battle for a topfour finish.
Southampton and Tottenham
Hotspur are both two points further back, but with games against
Manchester City, Chelsea and Arsenal still to come, Mata says that
United must maintain their focus.
“Beating Liverpool at Anfield,
being lucky to score two nice goals
and feeling [the fans’] gratitude is
something I will never forget,” the
Spaniard wrote on his weekly blog.
“But we must be cautious: these
are just three points in the race to
our goal.”
Mata has been slow to earn manager Louis van Gaal’s trust and had
not started consecutive Premier
League games in over two months
prior to Sunday’s match at Anfield.
But he will hope that his performance proves a breakthrough, having opened the scoring with a neat
14th-minute finish before doubling
his tally in the second half with a
spectacular scissors kick.
“This Sunday has been one of
the happiest days of my career,”
Mata said.
“When you start playing football as a kid on muddy pitches, for
something so simple and wonderful as having fun, you dream about
becoming a footballer one day to be
in a game like the one in Anfield.”
Discussing his second goal, an
acrobatic volley after a one-two with
Angel di Maria, he added: “Many of
you are asking me about the second
goal and the truth is I don’t know
very well how to explain it.” — AFP
Platini warns of new ‘dark days’ of hooliganism
BY TIM W ITC HE R
VIENNA: UEFA president Michel
Platini yesterday warned of a return
to the “dark days” of hooliganism
in Europe fired by a rise in nationalism and extremism.
Platini, who was reelected unopposed to a third term leading
Europe’s governing body, said governments had to stop a return to
the 1980s when “hooligans and
all manner of fanatics called the
shots” in many European stadiums.
Platini highlighted the 30th anniversary of the 1985 Heysel stadium disaster in Brussels, when
39 people died. Platini played for
Juventus against Liverpool in the
European Cup final.
“Europe is seeing a rise in nationalism and extremism the like of which
we have not witnessed for a very long
time,” Platini told UEFA’s annual congress here. “This insidious trend can
also be observed in our stadiums, as
football is a reflection of society. Given
its popularity, our sport is a barome-
ter for the ills of our continent. And
that barometer is pointing to some
worrying developments.”
Crowd troubles and racist abuse
have mounted in stadiums across
Europe in the past two years, but
particularly in recent months.
Platini called for tougher and
European wide bans on known
troublemakers in stadiums.
“We need tougher stadium bans
at European level and the creation
of a European sports police force,”
he said. — AFP
IN BRIEF
Goal-king Klose
plans coaching
career
BERLIN: Germany’s record
World Cup goal-scorer Miroslav
Klose plans to become a coach,
as he contemplates retiring, and
harbours dreams of working in
the Bundesliga again. “The Bundesliga will be my goal, because
I can’t imagine that I’ll always be
a youth team coach,” Klose, who
retired from international footballer after the World Cup, told
German magazine Kicker. “When
I work towards my coaching licence I will really go for it, just like
most things I do. “Coaching at
the German Football Association
(DFB) is one possibility. “Hansi
Flick (the DFB’s sports director)
and I will certainly sit down and
talk. I have seen many of Germany’s national youth teams play
and it would be exciting to work
with them.” — AFP
Mancini reignites
row over non-Italian
born players
MILAN: A debate over the eligibility of players born to Italians
living outside the country has
been reignited after criticism of
coach Antonio Conte’s decision
to draft South American-born
players into the national side.
Palermo’s Argentinian-born
midfielder Franco Vazquez and
Brazil-born Sampdoria striker Eder were among three new
faces named by Conte in a 26man squad for upcoming games
against Bulgaria, and England.
But the choices did not sit well
with everyone. Inter Milan coach
Mancini told reporters in Rome
on Monday: “If you play for Italy
you should be Italian.” — AFP
Lithuania says ‘no
big pressure’ before
England game
VILNIUS: Lithuania’s international defender Marius Zaliukas
said on Monday his team felt
“no big pressure” ahead of a
landmark Euro 2016 qualifier
with England, as the Baltic state’s
squad was announced. This Friday’s game at Wembley will be
the first match against England
for Lithuania since they returned
to international football after five
decades of Soviet occupation
ended in 1991. “Everybody understands who the favourites are
for this game. I don’t think that
we’ll feel any big pressure,” Zaliukas told AFP. “England needs a
victory at any cost,” the 31-yearold added. — AFP
French builder Vinci
denies claims of forced
labour in Qatar
PARIS: French construction
giant Vinci yesterday denied
claims of using forced labour on
building projects for the 2022
World Cup in Qatar. It follows
a complaint lodged in a French
court by the Sherpa NGO accusing Vinci, which also operates motorways and airports,
of abusing migrant workers in
the Gulf state. Contacted by
AFP, a Vinci spokesman said
the company “totally denies
Sherpa’s allegations”. — AFP