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TUESDAY NOVEMBER 25, 2014 ISSUE 1846/2014 FINANCIAL MAKE BETTER Deutsche Bank ‘temporarily DAILY DECISIONS suspends’ MOL Global rating 4 HOME BUSINESS www.theedgemarkets.com 2 PKA lawsuit to be settled on Dec 2

8 HOME BUSINESS EPF 3Q investment income up 2.1% to RM10.32b

9 HOME BUSINESS Axiata net profi t drops 12% to RM631m

15 HOME Azmin shows politics need not be a zero sum game

2021 FOCUS Th ailand’s harvest of despair 2 TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY

For breaking news updates go to www.theedgemarkets.com

ON EDGE TV IN BRIEF www.theedgemarkets.com Hagel resigns as US defense Lawyer: PKA secretary, offi cial says WASHINGTON: Defense Secre- tary Chuck Hagel has resigned, US offi cials said yesterday, ending nearly two years in the Pen- lawsuit to be settled tagon’s top job after a bruising mid-term election that under- October mined President Barack Oba- infl ation ma’s Democrats in Congress. slower than Former transport minister’s acquittal impacts case Hagel, who had struggled to improve his ties with Congress expected after a contentious 2013 confi r- BY SHANKAR GANESH PKA contended that mistakes mation hearing, submitted his and fraud were involved in the resignation letter after lengthy KUALA LUMPUR: Th e RM720 mil- agreement and that the value of discussions with Obama that lion Port Klang Authority (PKA) the land should be RM21 per sq began in October, offi cials said. lawsuit against Kuala Dimensi ft (psf) and not RM25 psf. It also Obama accepted his resigna- Sdn Bhd (KDSB) is expected to be claimed that the purchase price tion, offi cials said. — Reuters settled when both parties appear was inclusive of interest as stated before the Shah Alam High Court in the agreement and that it would French, British banks Large number on Dec 2. be paid over 15 years. press EU to revise plans of Malaysia’s PKA counsel Lim Chee Wee from PKA’s decision to withdraw PARIS: French and British legal fi rm Skrine & Co, said it would comes just two months after Tan banks are urging the Europe- elderly only be proper to make a statement Sri Kong Cho Ha was appointed an Commission to reconsid- fi nancially on the purported withdrawal of the chairman. PKA is under the pur- er plans to isolate high-risk unprepared suit after this date. view of the transport ministry and trading activities at big banks, However, he said in a statement Kong is a former transport minister. warning the move could dis- for retirement to Th e Edge Financial Daily that the Sources said the PKA board’s courage lending to struggling Ling was acquitted of three charges of evidence produced and fi ndings of decision came after lawyers Skrine economies. Th e European Un- cheating the federal government. The fact made by the High Court judge & Co had issued a letter saying the ion (EU)’s executive arm pub- Edge fi le photo in the criminal trial against Tun Dr case was weak. It is learnt that the lished a draft law in January Ling Liong Sik have a material im- PKA subsequently wrote to the At- that would ban banks consid- pact on the civil suit. directors were present. It was also torney-General and the ministry ered “too big to fail” from pro- Ling was acquitted of three decided that PKA would initiate for their advice.Th e PKFZ is built prietary trading — making bets The Edge Communications Sdn Bhd (266980-X) charges of cheating the federal gov- negotiations with KDSB for it to on land valued at RM1.88 billion. on stocks, bonds and commod- Level 3, Menara KLK, No 1 Jalan PJU 7/6, ernment regarding the Port Klang withdraw its suit against PKA. Th e Edge Financial Daily also ities for their own accounts. Mutiara Damansara, 47810 Petaling Jaya, Free Zone (PKFZ) land deal. PKA had fi led suit against KDSB reported that the advice to with- — Reuters Selangor, Malaysia Th e Edge Financial Daily report- on Sept 25, 2009, seeking rectifi ca- draw was because of implications ed yesterday that PKA had decided tion of the agreement signed on Nov from the case of former transport China corruption Publisher and Group CEO Ho Kay Tat to withdraw its RM720 million suit 12, 2002, for the land worth RM1.88 minister Ling. It is learnt that some watchdog eyes Sinopec Editorial against turnkey contractor KDSB billion. It sought a declaration that of the witnesses in this suit were BEIJING: China’s corruption For News Tips/Press Releases over the PKFZ fi asco. It is learnt that it should not be charged interest of the same and the acquittal had se- watchdog has launched a se- Tel: 03-7721 8219 Fax: 03-7721 8038 the PKA board had unanimously RM720 million on the balance pur- riously impacted on the decision. ries of inspections into state- Email: [email protected] agreed to discontinue the suit in a chase price of the land under the Th e board is also said to have owned enterprises and govern- Senior Managing Editor Azam Aris special meeting in Putrajaya last agreement and sought a refund of weighed the cost of continuing the ment bodies including China Executive Editors Kathy Fong, Friday, where seven of the nine the interest paid to KDSB. lawsuit and losing the case. Petrochemical Corp (Sinopec Jenny Ng, Siow Chen Ming, Group), Asia’s largest oil refi n- Surinder Jessy, Ooi Inn Leong Associate Editors R B Bhattacharjee, er, state media said yesterday. Joyce Goh, Jose Barrock, Th e inspectors, part of China’s Vasantha Ganesan Central Commission for Disci- Editor, Features Llew-Ann Phang pline Inspection, will focus on Deputy Editors Cindy Yeap, Ringgit advances for second day Kang Siew Li senior fi gures within Sinopec Assistant Editors Adeline Paul Raj, who may be promoted to lead- Tan Choe Choe ership roles. — Reuters Chief Copy Editor Halim Yaacob on plan to scrap fuel subsidy Senior Copy Editors Marica Van Wynen, Lam Seng Fatt, Cost-cutting Joko slashes Melanie Proctor KUALA LUMPUR: The ringgit the likely stabilisation of oil prices revenue. Consumer prices gained travel funds Copy Editors Evelyn Chan, gained for a second day on opti- are ringgit-positive,” said Sim Moh 2.8% in October from a year earlier, JAKARTA: Days after flying Veronica Poopathy mism the government’s plan to Siong, a currency strategist at Bank compared with 2.6% in the previ- economy class to his son’s grad- Art Director Sharon Khoh Design Team Cheryl Loh, abolish energy subsidies will help of Singapore Ltd. “We expect the ous month, offi cial data released uation in Singapore, Indone- Valerie Chin, Aaron Boudville, shore up public fi nances. Th e cur- ringgit to strengthen further in the last Friday showed. Th at was less sia’s president said yesterday he Aminullah Abdul Karim, rency completed the biggest two- near term.” than the median 3% estimated by will slash the travel budget for Yong Yik Sheng day advance in a month after it was Th e ringgit climbed 0.1% to 3.3520 economists in a Bloomberg survey. his cabinet to free up funds for Asst Manager-Editorial Services Madeline Tan announced last Friday that fuel sub- per US dollar yesterday, data com- Ten-year government bonds desperately needed reforms in sidies will be removed from Dec 1. piled by Bloomberg show. It strength- rose, with the yield on the 4.181% Southeast Asia’s biggest econ- Corporate Th e ringgit also rose on specu- ened 0.4% in the past two days. notes maturing in July 2024 falling omy. Th e move is the latest in a Managing Director Au Foong Yee lation Malaysia, a net oil exporter, Brent crude gained 1.2% last one basis point, or 0.01 percent- series of cost-cutting measures Deputy Managing Director Lim Shiew Yuin will benefi t from a rebound in crude week, curbing this quarter’s de- age point, to 3.89%, according to that President Joko Widodo has prices from a four-year low. cline to 15%. Oil-related industries data compiled by Bloomberg. — implemented in his fi rst month Advertising & Marketing “Abolition of fuel subsidies and account for 30% of government Bloomberg as president. — Reuters To advertise contact GL: (03) 7721 8000 Fax: (03) 7721 8288 Chief Marketing Offi cer Sharon Teh (012) 313 9056 Senior Sales Managers Recharge your phone in 30 seconds? Israeli fi rm says it can Geetha Perumal (016) 250 8640 Fong Lai Kuan (012) 386 2831 Shereen Wong (016) 233 7388 Acting Senior Sales Manager BY ORI LEWIS & RINAT HARASH oped a battery that can store a much said Doron Myersdorf, the found- Th e company has raised US$48 Gregory Thu (012) 376 0614 higher charge more quickly, in eff ect er and chief executive of StoreDot, million (RM160.3 million) from two Ad-Traffi c Manager Vigneswary Krishnan (03) 7721 8005 TEL AVIV: An Israeli company says acting like a super-dense sponge to whose investors include Russian rounds of funding, including back- Ad Traffi c Asst Manager it has developed technology that soak up power and retain it. While billionaire and Chelsea soccer club ing from a leading mobile phone Roger Lee (03) 7721 8004 can charge a mobile phone in a few the prototype is currently far too owner Roman Abramovich. maker. Myersdorf declined to name Executive Ad-Traffi c seconds and an electric car in min- bulky for a mobile phone, the com- Th e innovation is based around the company, but said it was Asian. Norma Jasma (03) 7721 8006 Email: [email protected] utes, advances that could transform pany believes it will be ready by 2016 the creation of “nanodots”, which With the number of smartphone two of the world’s most dynamic to market a slim battery that can StoreDot describes as bio-organic users forecast to reach 1.75 billion Operations consumer industries. absorb and deliver a day’s power peptide molecules. Nanodots alter this year, StoreDot sees a big mar- To order copy Using nano-technology to syn- for a smartphone in just 30 seconds. the way a battery behaves to allow ket, and some experts think that — Tel: 03-7721 8034 / 8033 Fax: 03-7721 8282 thesise artifi cial molecules, Tel Aviv- “Th ese are new materials, they the rapid absorption and, critically, with more work — it could be on to Email: [email protected] based StoreDot says it has devel- have never been developed before,” the retention of power. a winner. — Reuters

4 HOME BUSINESS TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY

Felda buys 10% in Barakah Syed Mokhtar in talks to Oﬀ shore Petroleum buy stake in NCB Holdings BY CHONG JIN HUN

Tycoon wants a foothold in Northport

BY CYNTHIA BLEMIN southern Johor and Penang Port September this year. under his belt. Based on yesterday’s closing KUALA LUMPUR: MMC Corp Bhd PTP is a joint venture between price of RM2.33, MISC’s 73.99 is believed to be in talks with MISC MMC (70%) and APM Terminals million shares in NCB are worth Bhd to buy the latter’s 15.73% eq- (30%). RM184.8 million. Syed Mokhtar uity stake in loss-making NCB NCB’s main assets are Northport may not have to pay much premi- Holdings Bhd. Th e negotiation is (M) Bhd and ailing haulage com- um for the prized asset. already at advanced level, accord- pany Kontena Nasional Bhd (KNB). Some months back, NCB ap- ing to sources familiar with the It is understood that NCB’s larg- pointed auditors Pricewaterhouse matter, and a deal is expected to est shareholder, Permodalan Na- Coopers (PwC) to conduct a spe- be sealed soon. sional Bhd (PNB), isn’t keen to cial review to identify why it was “MISC wants to exit [the port see Syed Mokhtar in NCB as this making losses at KNB and found business], while tycoon Tan Sri may result in the asset manage- that revenue was being infl ated, Syed Mokhtar Albukhary (through men fi rm losing its grip on the port while operating expenditure was MMC) wants a foothold in North- operator. Th e tycoon holds some being suppressed. KNB’s adjust- port,” a source said. 51.76% of MMC. ments amounted to RM56.6 mil- Th e divestment is part of MISC’s Once Syed Mokhtar injects his lion, out of which RM32 million strategy to hive off non-core and port assets into NCB, PNB’s inter- was accrual of costs while an ad- non-performing assets. Already the est in NCB would be diluted, said a ditional RM24.6 million was over shipping giant has disposed of its source. PNB holds a 47.71% stake recognition of revenue spanning business in late 2011 and its logis- in NCB. Among other substantial Buying into NCB would allow the from 2010 to 2013. tic operation in March this year. shareholders in NCB are Kumpulan ﬂ agship company of Syed Mokhtar For its nine months ended Sep- Buying into NCB would allow Wang Persaraan (Diperbadankan) (above) to expand its port business. The tember, NCB posted net profits the flagship company of Syed holding 9.18% and Port Klang Au- Edge File Photo of RM5.27 million on revenue of Mokhtar to expand its port busi- thority 5.32%. RM610.91 million amid eff ects of ness. A source noted that NCB NCB’s share price has taken a year to a four-year-low of RM2.33 the accounting glitch still eating might be used as a listed vehicle beating partly due to the account- yesterday. into profi ts. For the corresponding for the backdoor listing of Syed ing irregularities in KNB. Th e stock In contrast to its battered down period a year ago, NCB registered Mokhtar’s port business. He has has been on a downhill trend from share price, NCB’s net asset per net profi ts of RM56.53 million on Port of Tanjung Pelepas (PTP) in its peak of RM4.80 in August last share stood at RM2.96 as at end RM690.94 million in revenue. Deutsche ‘temporarily suspends’ MOL rating IHH unit awards BY WEI LYNN TANG last month, had just initiated cov- US$4.77 or 53.84% to US$4.09 last in the developing markets; however, RM1.07b for HK erage on the company with a “buy” Friday, from the previous day’s clos- it views that the sudden announce- KUALA LUMPUR: Deutsche Bank rating and target price of US$12 ing of US$8.86, wiping out almost ment as “potentially ominous”, lack- hospital job has temporarily suspended its rating (RM40.32) last Th ursday. On the very US$322 million in market capitali- ing further detail and it is concerned and estimates on newly Nasdaq-list- next day, it issued a caution note to sation in just a day. with what factors that might have BY AHMAD NAQIB IDRIS ed MOL Global Inc, an online pay- clients on news of the delay and the Th e plunge came after MOL Glob- driven both of these “material de- ment fi rm majority owned by Tan CFO’s resignation. al’s announcement that it would velopments”. KUALA LUMPUR: IHH Health- Sri Vincent Tan. In a note released late yesterday, postpone its planned 3Q results call The research note pointed out care Bhd, via its indirect Th e suspension came shortly after Deutsche Bank said: “We temporarily from 9pm Hong Kong time on Nov that as a result of MOL Global’s ag- 60%-owned subsidiary GHK the investment bank raised the red suspend our rating and estimates on 21 to 9pm Hong Kong time on Dec gressive investment programme, it Hospital Ltd, has awarded the fl ag to advise its clients to be cautious MOL Global until further clarity can 3, as well as the resignation of Al- might theoretically face increased main contract for superstruc- on MOL Global last Friday when the be provided regarding the company’s lan Wong, the CFO who had joined risk of delayed or erroneous report- ture works on a private hospi- company announced it delayed the announcement last Friday. MOL Global in August this year due ing from affi liates and subsidiaries, tal to Hip Hing-Chun Wo Joint release of its third quarter (3Q) fi - “We expect these details to be to “personal reasons”. unforeseen and adverse actions tak- Venture (HHCW) for HK$2.48 nancial results and the resignation available on Dec 3, which is the re- In last Friday’s research note, en by local authorities in other ju- billion (RM1.07 billion). of MOL Global’s chief fi nancial of- vised results release date,” the re- Deutsche said that although it main- risdictions. Since 2009 MOL Global In a fi ling with Bursa Malay- fi cer (CFO). port said. tained a long term positive view and has undertaken no less than 10 in- sia yesterday, IHH said HHCW Deutsche Bank, one of the three MOL Global, in which Johor ‘buy’ on MOL Global given the signif- vestments and acquisitions in fi ve is 60%-owned by NWS Hold- joint book runners in MOL’s listing Sultan also holds a stake, stumbled icant growth potential of payments countries, Deutsche noted. ings Ltd, which in turn indirectly owns the remaining 40% stake in GHK. Under the contract, HHCW will carry out the superstruc- Sona to get SC approval for Salamander Th ai assets ture works comprising the design, completion and main- KUALA LUMPUR: Sona Petroleum ing last year, agreed in June to buy doesn’t sell the Thai assets. Thai assets to Sona. Owners of a tenance of the main contract Bhd, a company with no assets or 40% of London-based Salaman- Saw Choo Boon, vice-president 25.9% stake in Salamander have works for the development of track record, won approval from der Energy plc’s assets in the Gulf of business development at Sona, agreed to accept the Ophir offer a private hospital at Aberdeen the Securities Commission (SC) of Thailand for US$281 million declined to comment when con- and reject the Sona deal, accord- Inland in Hong Kong. Th e con- to buy a stake in two Thai oil and (RM941.35 million). tacted by phone yesterday. SC head ing to yesterday’s filing. tract is for 24 months. gas blocks, a person with knowl- The Salamander assets would of corporate affairs Jaya Menon Sona is trying to buy a stake in “HHCW has the necessary edge of the matter said. be the first for Sona since its list- could not be immediately reached the Bualuang oilfield, which has experience and capability to The so-called blank check ing, and paves the way for the for comment when contacted on been operating since 2008 and undertake the contract. It sub- company targets to complete the Kuala Lumpur-based company her mobile and at the offi ce. is expected to produce an aver- mitted a technically acceptable deal by the end of this year after to become an independent up- Ophir said in an exchange fil- age of 11,000 to 14,000 barrels of and viable tender and the low- getting shareholder approvals, stream oil and gas company. To ing yesterday that Salamander ac- oil daily this year, according to est tender off er,” said IHH. the person said, asking not to be complete the purchase, it will cepted its all-stock offer to buy the Salamander’s website. It would IHH shares climbed five identified as the details aren’t yet need to overcome African explorer company. One of the conditions also gain an interest in a near- sen to close at RM4.96, bring- public. Sona, which raised RM550 Ophir Energy plc’s offer to acquire of Ophir’s offer is that Salamander by exploration concession. — ing its market capitalisation to million in an initial public offer- Salamander on the condition it shareholders reject the sale of the Bloomberg RM40.57 billion.

6 HOME BUSINESS TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY

EA Technique eyes JVs in Selangor’s RM2.42b budget risk sharing for 2015 the largest contracts BY JEFFREY TAN Nearly half has been allocated for development KUALA LUMPUR: EA Technique (M) Bhd, enroute to list on the Main Market of Bursa Malaysia on Dec 11, is BY GHO CHEE YUAN Mohamed Azmin says he is government will not use reserves to seeking joint ventures (JV) to diversi- focusing on development by balance the defi cit budget. fy into risk sharing contracts post-list- SHAH ALAM: Th e Pakatan Rakyat-led cutting down management On the budget being the fi rst defi - ing. Th e company is principally in- Selangor government yesterday ta- expenditure. Pic courtesy of cit one for Selangor under Pakatan, volved in marine transport, off shore bled the largest budget since it took the Menteri Besar’s Oﬃ ce Mohamed Azmin said it was drafted storage of oil and gas (O&G) and the over the state in 2008 — a whopping according to the actual expenditure provision of port marine services. RM2.42 billion, of which 46.81% or million for land acquisition, RM33.8 of the state to avoid having to table a Managing director Datuk Abdul RM1.13 billion has been earmarked million for general administration, Supplementary Supply Bill next year Hak said the JV partners should for development, the highest alloca- and RM9.25 million for Malay cus- to enlarge the allocation. possess technology and fi nancial tion since 2008. toms, heritage and tourism. “I choose to face it (our spending) capabilities as well as experience. Tabling Budget 2015 at the state “A total of RM1.29 billion or honestly,” he said, adding that the “We hope we will venture into assembly sitting yesterday, Menteri 53.19% of the budget will be allo- state, under his predecessor Tan Sri that. Th is is our vision after listing,” Besar Mohamed Azmin Ali proposed cated for management expendi- Khalid Ibrahim, had actually been he told a media briefi ng at the launch to allocate RM200,000 annually to ture,” said Mohamed Azmin. Th is having defi cit budgets since 2008 as of the prospectus yesterday. all opposition representatives in the includes expenditure for services, Supplementary Supply Bills have He said the move to provide mar- state, who were previously given supplies, emoluments and assets. been tabled yearly for additional ginal fi eld solutions for extraction of nothing, as part of the state’s move Th e state government tabled a funds. oil is a future plan for the fi rm and not to improve local representative ser- (24.5%) will be used for the state budget totalling RM1.8 billion last “In contrast, I am focusing more an immediate plan. vices to the people through Program welfare programme called Merakyat- year, with 34.7% or RM624.91 mil- on development by cutting down EA Technique plans to raise up Mesra Rakyat (people-friendly pro- kan Ekonomi Selangor, followed by lion earmarked for development. management expenditure. I believe to RM74.1 million in an initial pub- grammes). RM106.6 million (9.4%) for social ser- Th e state has also projected that it will spur the economic growth of lic off ering by selling 114 million Th is comes with a proposal to vices, including rural development, revenue for 2015 will increase 6.49% the state and bring in more income,” new shares for 65 sen apiece. It raise the annual allocation for Pa- urbanisation and entrepreneurship. to RM1.97 billion from the RM1.85 he said, adding that he will not seek also includes an off er for sale of katan representatives to RM700,000 The development expendi- billion forecast for 2014. Th is marks additional allocations, unless there 15 million existing shares. from RM600,000, while state-ap- ture will also cover, among others, the state’s fi rst defi cit budget under are any “disasters”. Th e 65.4% indirectly-owned fi rm pointed parliament coordinators RM100.2 million for social develop- the Pakatan government since 2008. Mohamed Azmin said Selangor’s of Kulim (M) Bhd will use a major will get RM100,000 annually. ment, including education, housing, As at Nov 19, 2014, the state’s civil servants will get a 1½-month portion of the proceeds to repay Of the RM1.13 billion allocat- youth empowerment and sports de- consolidated fund had expanded bonus this year. One month was paid bank borrowings, for capital ex- ed for development in 2015, Mo- velopment, RM48.9 million for the 13.78% to RM3.31 billion against in July and the remaining half month penditure and working capital. hamed Azmin said RM277.3 million state’s special development, RM44.7 RM2.91 billion last year, but the state will be paid on Dec 18. When asked if the time is right to go public, Abdul Hak said that time is “not a factor”. “I know you are referring to de- clining oil prices, but we believe that Malaysia to be growth laggard of the region our business is well insulated,” he said. “We do not only depend on the O&G business, but also port services BY SHALINI KUMAR ket Summit yesterday. Petroliam Nasional Bhd’s refi nery defi cit as average crude oil price and shipyard. So we are quite cov- This is a drop from the 5.8% and petrochemical integrated de- from January to October stood at ered in terms of our core businesses.” KUALA LUMPUR: Malaysia will growth originally predicted for the velopment project. US$108 per barrel — close to the generate the lowest economic full year. Th e economy expanded “Our market valuations are also government’s budgeted price of growth in the region next year, said by 5.6% in the third quarter of this still reasonable, with corporate US$110 per barrel. Etiqa Insurance and Takaful head of year, from 5% a year ago, but lower earnings between the high single On the outlook for the sukuk WCT 3Q net research and head of products and than the 6.5% recorded in the sec- digits and low teens,” he said. market, CIMB Islamic Bank Bhd alternative investments, Chris Eng. ond quarter. “Th e bad news is that with the chief executive offi cer Badlisyah profi t drops He said Singapore, Thailand, “Equities may rally in the fi rst goods and services tax being imple- Abdul Ghani said while it would be Indonesia and the Philippines are quarter of next year, but thereafter mented next year, infl ation should mostly business as usual in Malay- expected to see growth in gross do- upside may be constrained and may rise above 4%. Also, if there is con- sia, one of the biggest challenges to 37% y-o-y mestic product in 2015. trend downwards in the second half tinued downward pressure on oil the industry is knowledge. “Every other country is expected of 2015. It could be a challenging prices, government revenue will “Although we are a leader in the KUALA LUMPUR: WCT Holdings to rebound, particularly Th ailand, year for investments,” said Eng. come under pressure,” he said. sukuk space, the Malaysian mar- Bhd’s net profi t dropped 37% to only Malaysia would be the laggard Nevertheless, Eng pointed out Earlier, Deputy Finance Min- ket still relies on a select number RM25.8 million in the third quar- next year with consensus forecast- that there are still positives for Ma- ister II Datuk Chua Tee Yong said of people who have an in-depth ter of fi nancial year 2014 ending ing growth at 5.1% to 5.2%,” he said laysia’s growth, particularly in the he does not expect falling oil pric- knowledge of sukuk and sukuk December (3QFY14), from RM41.3 at the 19th Malaysian Capital Mar- Mass Rapid Transit project and es to increase the country’s fi scal transactions,” he said. million a year earlier, translating to a decline in its earnings per share to 2.37 sen from 3.78 sen. Group revenue improved by 13% to RM471.1 million in 3QFY14 from RM418.5 Affi n 3Q net profi t down 16.6%, declares 15 sen dividend million in 3QFY13. For the nine months to September, net profi t BY GHO CHEE YUAN Affi n also declared an interim cient to off set the increase in over- the group’s aim of providing dedicat- fell 29% to RM100.2 million from dividend of 15 sen per share for head expenses, allowance for loan ed one stop fi nancial solutions to a RM141.2 million in the year be- KUALA LUMPUR: Affi n Holdings FY14, payable on Dec 30. impairment and finance cost of wide spectrum of clients. fore, while revenue declined 4% to Bhd saw its net profi t for the third For the nine-month period of RM217.7 million, RM59 million and “Th e commercial banking seg- RM1.34 billion from RM1.39 billion. quarter of fi nancial year 2014 end- FY14 (9MFY14), Affi n’s net profi t RM19 million respectively, as well ment is optimistic that it will be able “Th e decrease in both revenue ing December (3QFY14) decline was down 16.8% to RM402.1 million as the reduction in loan recovery of to maintain its earnings momentum and net profi t are mainly due to lower 16.6% to RM144.3 million from from RM483.11 million, while rev- RM11.4 million,” it said in a fi ling with for the rest of 2014 with a focus on property development billings and RM172.97 million a year ago. Th is enue climbed 13% to RM2.6 billion Bursa Malaysia yesterday. small and medium enterprises and lower project margins,” said WCT in is due to increased overhead ex- from RM2.3 billion in 9MFY13. EPS Affi n said its annualised after contract fi nancing as well as explor- a statement to the exchange. It said penses, allowance for loan impair- for 9MFY14 was 24.18 sen com- tax return on equity and after tax ing untapped avenues in the retail its civil engineering and construction ment and fi nance cost, as well as a pared with 32.32 sen. return on assets were 7.3% and 0.9% market while also leveraging syner- segment, and property and invest- reduction in loan recovery. “For 9MFY14, the other operating respectively for 9MFY14. gies within Lembaga Tabung Angka- ment segments, had posted lower Revenue, however, expanded income, net interest income and Is- Going forward, Affi n said all its tan Tentera and Boustead Group,” it profi ts for the cumulative period. 22.65% to RM937.17 million from lamic banking income were higher business segments will leverage syn- said, adding that the insurance seg- Th e counter closed at RM1.91, RM764.04 million in 3QFY13. Earn- by RM177 million, RM13.9 million ergistic growth to boost the group’s ment is expected to register moderate down two sen or 1.04%, translating ings per share (EPS) shrank to 7.36 and RM11.3 million respectively. position as a major player in the na- growth in an increasingly challeng- to a market capitalisation of RM2.09 sen from 11.57 sen a year ago. “However, these were not suffi - tion as well as the region, in line with ing and competitive environment. billion. — by Ahmad Naqib Idris

8 HOME BUSINESS TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY

TSR Capital to submit detailed plan for airbase project

BY JEFFREY TAN ernment so that they can give the near mainland Penang. rated joint venture (JV) company to obtain the DO by year-end. letter of agreement,” he told report- Mohamad Noor said getting ap- LTP Wibawa Sdn Bhd, which it will “Moving forward, we are going KUALA LUMPUR: Property devel- ers after the group’s extraordinary proval for the land-swap deal is not hold a controlling stake of 51%, to to develop another parcel of land oper and builder TSR Capital Bhd, general meeting yesterday. easy as TSR is required to build a undertake the mixed-use project. in Bandar Enstek. We see potential which in February this year received “After that [submission], we will new fully operational base for the LTAT and Pembinaan Bukit Timah in the land as it is located near an approval in principle from the federal get the approval. Th en, we will an- RMAF, which is capital intensive. will hold 30% and 19% stakes re- education hub,” said Ng, noting government to enter into negotiations nounce [accordingly],” he added. Th e airbase will be relocated to spectively in the JV fi rm. there are currently 10 education with the latter to redevelop the Royal Under the proposal, TSR plans to Ara Kuda in Tasek Gelugor, which Apart from the Butterworth air- institutes there. Malaysian Air Force (RMAF) base in work together with Lembaga Tabung the RMAF and the Department of base project, TSR is looking to grow He said the area provides an op- Butterworth, Penang via a land swap, Angkatan Tentera (LTAT) and bu- Civil Aviation, Malaysia have agreed its property development segment, portunity for TSR to build a com- will be submitting a detailed plan to miputera-owned Pembinaan Bukit to in principle. via a new RM600 million mixed mercial hub with residential units the RMAF and the Defence Ministry. Timah Sdn Bhd to redevelop the ex- He added that the fi rm also has development on a parcel of land in to cater to the student population. TSR chairman Tan Sri Mohamad isting 1,007 acre (407.52ha) air force to get approval from the Penang Bandar Enstek, Negeri Sembilan. Th e group targets the property Noor Abdul Rahim said the detailed base in Butterworth into an integrated government. Mohamad Noor de- Construction on phase 1 of the pro- segment to contribute 40% to total plan will include fi nancial models as mixed-use project with a potential clined to provide a timeline for the ject is expected to commence next revenue within two years, with 50% well as terms and agreements. gross development value of more necessary approvals, saying the year, with completion in fi ve years. and 10% of revenue contribution “Th e next stage is to put up a than RM10 billion. Th e three com- process is “now a bit slow”. Th e group recently submitted coming from its construction and detailed study with all the models panies will also develop a new RM3 TSR group accountant Ng Kim its development order (DO) for the investment holding segments re- and everything [else], to the gov- billion air force base for the RMAF Keong said the group has incorpo- 20-acre freehold land and expects spectively.

Zeti: Managed ﬂ oat mechanism EPF 3Q investment income won’t cause inﬂ ation up 2.1% to RM10.32b BY SUPRIYA SURENDRAN KUALA LUM- PUR: Th e government’s de- Driven mainly by equities which contributed 61% cision to use a managed fl oat mechanism to BY WEI LYNN TANG uity portfolio continued to deliver income in 3QFY14. in bonds and the remaining in real determine the a strong performance for two con- Loans’ and bonds’ income stood assets and private equity. pump price of KUALA LUMPUR: Th e Employees secutive quarters. 24.7% lower at RM1.71 billion in “As the custodian of retirement RON95 petrol Provident Fund’s (EPF) investment However, he noted that both 3QFY14, compared with RM2.27 savings for 14 million members, and diesel will not bring about income for the third quarter of fi - the domestic and global equi- billion in 3QFY13, which the EPF the EPF aims to provide at least a any infl ationary consequenc- nancial year 2014 ended Sept 30 ty markets have started to show attributed to “reinvesting of matur- return of 2% above infl ation over es, said Bank Negara Malaysia (3QFY14) rose 2.1% to RM10.32 signs of greater volatility, particu- ing assets at the current low interest a three-year rolling period in line (BNM) governor Tan Sri Dr Zeti billion from RM10.11 billion a year larly with the FBM KLCI reaching rate environment.” with the fund”s objectives to pre- Akhtar Aziz (pic). ago, driven mainly by equity in- its current year low, below the Meanwhile, Malaysian Govern- serve and add value to members’ “[Oil] prices are now soften- vestments which contributed 61% 1,800-point level in October. ment Securities and equivalents savings,” it said. ing and therefore this is good of the total. Th is contribution was “The International Monetary recorded a 4.1% increase in income Shahril also said from next year for consumers because they will up from 56.5% in 3QFY13. Fund has also downgraded its to RM1.62 billion, from RM1.56 onwards, the EPF will be adopting benefi t from the lower prices. Investment income from eq- 2015 outlook for global economic billion in 3QFY13. the environmental, social and gov- Th is also helps the government uities for 3QFY14 amounted to growth, which is refl ective of the Money market instruments’ in- ernance principles starting with in terms of the burden of subsi- RM6.34 billion — equally contrib- more diffi cult conditions surround- come also rose 35.7% to RM197 mil- fi xed income instruments, and fol- dies in the budget. Th is is a pos- uted by both domestic and global ing markets in the current fourth lion from RM145.23 million while lowed by other asset classes in line itive development that will not portfolios, compared with RM5.71 quarter for 2014,” Shahril said. real estate and infrastructure’s in- with its ethical, responsible and have infl ationary consequences,” billion in 3QFY13. “We foresee challenges in the come rose marginally 2.1% y-o-y to diversifi ed long-term investment said Dr Zeti. “Apart from the steady stream fi nancial years ahead and we will RM439.09 million in 3QFY14. strategy. Commenting on the recent of dividend income received in continue to uphold our long-term Th e EPF’s total investment assets He emphasised that the EPF ad- announcement by Domestic 3Q14, both [the domestic and glob- investment strategy focusing on grew 9.7% to RM622.78 billion — of hered strictly to the strategic asset Trade Cooperative and Consum- al] portfolios also benefi ted from the fund’s objective of ensuring which equities accounted for 43% — allocation, which is designed ac- erism Minister Datuk Hasan Mal- the better market conditions, al- sustainable and stable real returns from RM568.04 billion in 3QFY13. cording to the fund’s risk-return ek that there will be no more sub- lowing fund managers to realise for our members,” he added. Geographically, the EPF said its profi le and more importantly, the sidy for RON95 and diesel from higher trading income,” EPF said Within the EPF’s investment total overseas exposure in over 30 EPF adopted ethical investment Dec 1, Dr Zeti said the subsidy in a statement yesterday. portfolio, loans and bonds were countries constituted 23% of its to- practices in all of its investments removal will not change BNM’s EPF chief executive offi cer Datuk the only asset class that saw a year- tal investment assets, of which 18% to ensure consistent returns over views on monetary policy. Shahril Ridza Ridzuan said the eq- on-year (y-o-y) drop in investment were invested in global equities, 3% the long term. Dr Zeti, who was speaking to reporters after offi ciating at the launch of the Society for World- wide Interbank Financial Tele- UEM Sunrise still on track to meet RM2b sales target communication’s Kuala Lumpur Corporate Service Centre yesterday, also said there will be tre- BY YEN NE FOO Anwar Syahrin said Aurora Mel- Aurora Melbourne Central appeal- mendous cost savings from the bourne Central has helped the fi rm ing were factors such as record low enhancement of the electronic KUALA LUMPUR: UEM Sunrise Bhd, rake in an estimated RM1.1 billion in interest rates, attractive yields and the payment (e-payment) infrastruc- the property development arm of sales, although the exact fi gure has favourable exchange rate against the ture in the country. UEM Group, remains confi dent of yet to be determined. Australian dollar. Nevertheless, he “These are cost savings to meeting its RM2 billion sales target for Th ere was concern earlier that said UEM Sunrise will not be resting businesses and to the govern- 2014, after receiving a good initial re- the 66.1%-owned subsidiary of on its laurels as it will continue to ac- ment. [Th ere will be] an instan- sponse to its fi rst venture in Australia. Khazanah Nasional Bhd would not tively look for opportunities in Aus- taneous impact on your fi nancial “It (achieving 2014’s sales target) meet its sales target for the year af- tralia and does not rule out working position and gains on effi ciency,” should be OK. We still have one ter registering about RM560 million with other property developers for she said. Anwar Syahrin said what made Aurora more month to go for the year,” UEM as at end-August 2014. UEM Sun- future development projects there. On the amount of cost savings Melbourne Central appealing were Sunrise newly-appointed managing rise saw 95% of the 941 residential Construction on Aurora Mel- achieved so far through the use factors such as record low interest rates, director and chief executive offi cer units in the 92-storey skyscraper in bourne Central is targeted to start in of e-payments, Dr Zeti said the attractive yields and the favourable Anwar Syahrin Abdul Ajib told a Melbourne’s central business dis- the second quarter of 2015 (2Q15) and central bank will be coming up exchange rate against the Australian press conference on the Australian trict taken up over two weeks in a due to be completed in 2019. UEM with a calculation of the amount dollar. Photo by Mohd Izwan Mohd development dubbed “Aurora Mel- worldwide preview launch. Sunrise will also be launching a new soon, but reiterated that the sav- Nazam bourne Central” yesterday. Anwar Syahrin said what made development in Melbourne in 2Q15. ings amount will be tremendous. TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY HOME BUSINESS 9

Sedania Innovator going Axiata 3Q net profi t drops public to raise capex to fund 12% to RM631m growth

BY LEVINA LIM Registers weaker fi nancials at its Malaysia and Indonesia operations KUALA LUMPUR: Sedania In- novator Bhd, which wholly owns BY CHESTER TAY period, Axiata registered a lower IDOTTV Sdn Bhd, is seeking to raise Data remains a net profit of RM1.75 billion, down funds through a listing on the ACE KUALA LUMPUR: Axiata Group 11% from RM1.97 billion a year Market of Bursa Malaysia, which Bhd posted a 12% decline in priority, given the ago. This came on the back of will be used for capital expenditure third- quarter net profit from a speed of growth, and higher revenue at RM13.9 billion (capex) to fund growth. According year earlier, as the mobile tele- is expected to grow versus RM13.86 billion. to a draft prospectus on Securities communication network provid- Axiata president and group Commission Malaysia website, Se- er registered weaker financials faster across Axiata chief executive officer Datuk Seri dania said it is proposing to issue at its Malaysia and Indonesia markets, facilitated Jamaludin Ibrahim (pic) said in 51.47 million new shares at an issue operations. by higher smartphone a statement that he is confident price yet to be determined. In a statement to Bursa Ma- of seeing a “turnaround” in per- Out of the total shares, nine mil- laysia yesterday, Axiata said net adoption. formance in the final quarter of lion will be available for application profit fell to RM631.03 million the year. Jamaludin said Axia- by the Malaysian public, one mil- for the third quarter ended Sep- ta expects to regain customers’ lion will be available for its direc- tember (3QFY14) from RM715.05 and dealers’ confidence with the tors and eligible employees, while million a year ago. Revenue fell to (Ebitda) and higher taxation in group’s enhanced ability to ex- the remaining 41.47 million will be RM4.65 billion from RM4.75 bil- 3QFY14,” Axiata said. pedite the launch of new prod- allocated by way of private place- lion in 3QFY13, mainly dragged In Indonesia, Axiata noted for- ucts and deliver better customer ment. “A total of 22.2% of the pro- down by its Malaysia and Indo- eign exchange (forex) losses from service. ceeds from the initial public off er- nesia units’ lower revenue con- its unit, PT XL Axiata Tbk, was a “Moving forward, I am pleased ing (IPO) will be utilised for capex tributions. crucial factor that drove group to note that the two-year IT trans- and 22.8% as marketing expenses. “Malaysia’s gross revenue de- bottom line lower. The forex loss- formation project at Celcom has Some 13.9% has been allocated for clined by 4.3% in 3QFY14, driven es were due to a weaker rupiah. now been completed with the is- research and development (R&D) by a decline in voice and SMS rev- “Gross revenue of Indonesia lower Ebitda and higher depre- sues resolved. Data remains a pri- expenses, 28.9% for working cap- enue by 6.9% and 30.6% respec- decreased by 4.5%, mainly due ciation and amortisation driven ority, given the speed of growth, ital, and the remaining 12.2% for tively. Net profit declined by 31% to translation impact of a weaker by Axis consolidation and weaker and is expected to grow faster listing expenses.” to RM409.6 million, due to lower rupiah against the ringgit. Indo- rupiah against the ringgit,” Axi- across Axiata markets, facilitated Sedania is a mobile solutions earnings before interest, taxes, nesia recorded loss after tax of ata said. by higher smartphone adoption,” services provider, and through depreciation, and amortisation RM128.4 million, mainly due to In the cumulative nine-month Jamaludin noted. IDOTTV provides ancillary services to mobile subscribers by partner- ing service providers such as mobile network operators and utility companies for their infrastructure Brooke venture Year-to-date outfl ows surpass and gateway. Its principle product is “ATS Solutions”, a mobile shar- to invest US$1b ing solution for the transfer of air- in biofuel plant RM3.89b, says MIDF Research time credit from either prepaid or post-paid mobile subscribers to LONDON: Brooke Renewables other prepaid subscribers with- agreed to invest as much as BY SURIN MURUGIAH our bourse,” he said. Syed Mu- Syed Muhammed said in the in the same network at any time US$1 billion (RM3.36 billion) hammed said this was followed by retail market, the average daily and place. over fi ve years in Malaysia to KUALA LUMPUR: Foreign inves- the emergence of RM102 million gross purchase and sale declined “At present, our airtime shar- build a facility that converts tors have sold RM3.89 billion of net buying interest last Tuesday. from RM789 million to RM742 ing (ATS) Solutions are available inedible crops into clean fuel. Malaysian equity year-to-date “However, it was net selling million. in Malaysia on Celcom (Celcom Brooke Renewables, a ven- (YTD), according to MIDF Re- all the way for the remainder of “In spite of the lower participa- Airtime Transfer and Celcom Air- ture between Hock Lee Group, search. In his weekly fund flow the week. Fund outflows stood at tion rate, local retailers were the time Request) and Maxis (Maxis 2 Brooke Asia Ltd and Biochemtex report yesterday, MIDF Research RM51 million [last] Wednesday net buyers for last week. Local in- Transfer) networks,” Sedania said in Agro Srl, is investing to build a head of equity Syed Muhammed before ebbing slightly to RM94 stitutions’ participation rate more the draft prospectus, adding that its second-generation bio-ethanol Kifni Syed Kamaruddin said for- million [last] Thursday and rising than halved to RM1.8 billion from ATS Solutions are also available in and bio-chemical plant in Sar- eigners sold a net total of RM141.6 again to negative RM58 million RM2.1 billion earlier in the week. Bangladesh with Robi Axiata, under awak, according to Agensi Ino- million worth of Malaysian eq- [last] Friday,” he said. Furthermore, they continued to the product name “Quickshare”. vasi Malaysia, set up by the gov- uity last week, compared with Syed Muhammed said that on be net sellers for the fourth week Celcom subscribers are current- ernment to facilitate innovation. the RM27.3 million outflow the a cumulative basis, foreign in- in a row,” he said. ly the major revenue contributor to Th e Sarawak biomass hub week before. vestors remained net sellers of Commenting on the region, Sedania, which has provided its ser- will be the fi rst commercial fa- He said global funds’ aversion Malaysian stocks in 2014. He said Syed Muhammed said the flow vices using Celcom’s infrastructure cility in Southeast Asia to pro- to Malaysian equity is attested to the net outflow as at last Friday into Asian equity continued last and gateway since 2004, a contract duce second-generation bio- by the gradual but persistent out- had increased to RM3.89 billion. week as global funds made a gen- that will expire on Oct 7, 2015. fuel made from inedible crops. flows of late. The local bourse has In 2013, Malaysia reported a net eral return for the fifth week in Azti Dian Fitriyanti Azmi is Seda- “Th is is not only a huge pro- received only two weeks of foreign inflow of RM3.03 billion. a row. nia’s chief executive offi cer; Rizaizin ject but also one which has fund inflows thus far in the fourth He said the foreign participa- More encouragingly, he said Hashim Mohammed is chief fi nan- multiple and continuous ben- quarter of this year, he said. tion rate nonetheless rose slightly the rate of net inflow for the week cial offi cer and Datuk Noor Azrin efi ts [for] the state and national Syed Muhammed said foreign last week. surpassed US$2 billion (RM6.68 Mohd Noor is managing director. economy,” said Mark Rozario, investors were net sellers on each “Daily average gross purchase billion) mainly attributable to a “We also intend to aggressively chief executive offi cer of the day except for Tuesday last week. and sale increased to RM777 mil- resurgent South Korea. promote our ATS Solutions in the AIM agency. “We saw the selling intensity lion from RM724 million record- “Asian stock markets were gen- new markets. Our group is explor- It may involve as much as from the previous week spill over ed in the prior week. In contrast, erally higher last week as investors ing various channels to market our RM20 billion in additional into Monday trading as RM86 we saw lower local participation cheered news of an interest rate services to users, while meeting the gross national income for the million net foreign funds exited rates,” he said. cut in China,” he said. regulations set by the local author- state, RM21 billion in invest- ities,” it said. ment and more than 10,000 For the financial year ended new green jobs created by 2023, Dec 31, 2013, Sedania posted a net he said in a statement. Daewoo wins orders from RMN profi t of RM6.91 million on reve- First-generation biofuel nue of RM9.93 million. Profi t after made from edible crops has SEOUL:Daewoo Shipbuilding naval patrol vessels, for the Royal from January 2018 and the rest tax margin stood at 69.6% ,while its been blamed for helping push & Marine Engineering Co Ltd Malaysian Navy (RMN). will be assembled in Malaysia earnings before interest, taxes, de- up food prices. — Bloomberg said in a statement it has won Three vessels will be deliv- with Daewoo’s cooperation. — preciation and amortisation margin an order to build six Corvettes, ered from South Korea starting Reuters stood at 74.3%. 10 STOCKS WITH MOMENTUM TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY

Privasia Technology Bhd PRIVASIA is an information technology prove since 2011 to 9.8% in 2013. Borrowings player specialising in consultancy, sys- were reduced to RM15.7 million in 2013 from tems integration services, IT outsourcing, RM24.1 million a year ago. Th e company paid E-bidding and E-procurement for the port out a 0.3 sen dividend per share in 2013 which and logistics industry. Th e company also translates into a yield of 1.7%. provides wireless and satellite-based com- Valuations for the stock are higher than the munication solutions business. broader market, but relatively lower compared Over the last fi ve years, Privasia has seen to other technology stocks, especially those its revenue double from RM27.2 million to that are actively involved in GST software and RM58.5 million, while net profi t rose from have received a recent price and earnings RM1 million to RM5.4 million. In 2013, rev- boost ahead of its April 2015 implementation. enue dropped by 3.6% to RM58.5 million Privasia is currently trading at 1.3 times but net profit increased by 8.5% to RM5.4 book, with a trailing 12-month P/E ratio of million. For 1H2014, revenue declined 6.6% 20.8 times. By comparison, technology stocks to RM27.5 million while net profi t fell 28.9% such as IFCA MSC Bhd is trading at 6.5 times to RM2.3 million, due to slower billings and book and a trailing 12-month P/E ratio of 32.5 higher operating costs. times while Censof Holdings Bhd is trading Interestingly, Privasia has a total order book at 2.53 times book and trailing 12-month P/E of RM130.9 million in mid-2014, which is higher ratio of 332.6 times. than the combined revenue for 2012 and 2013. Edge Research rates this company a 1.4 Privasia has a very modestly geared bal- out of 3 on fundamentals and 0.6 out of 3 in ance sheet. Its gearing ratio started to im- terms of valuation attractiveness.

*Valuation factor — Composite measure of historical return & valuation **Fundamental factor — Composite measure of balance sheet strength & proﬁ tability Note: A score of 3.0 is the best to have and 0.0 is the worst to have

Masterskill Education Group Bhd

AMID weak sentiment for the broader market, provider of nursing and allied health education Masterskill Education Group Bhd (MEGB) is in Malaysia. Th e education provider operates back in the spotlight with both trading volume two associate institutions, namely Asia Met- and share price registering sharp spikes. Th e ropolitan University (AMU) and Masterskill stock attracted an Unusual Market Activity Global College. (UMA) query from Bursa Malaysia. MEGB’s fundamentals have deteriorated Earlier this month, SMRT Holdings part- signifi cantly since its IPO (which was priced nered private equity fi rm, Creador II LLC, to at RM3.80). Turnover slumped from RM315.7 make a buyout off er for MEGB at 60 sen per million in 2010 to RM47.8 million in 2013. Th e share — subject to a 30-day period due dili- company fell into the red in 2012 with pre- gence. MEGB’s current single largest share- tax loss of RM26.1 million, which worsened holder, Siva Kumar, has committed to sell his to RM125.0 million in 2013, including RM127 32.9% stake. million assets impairment. Creador, founded by Brahmal Vasude- Its balance sheet deteriorated from net van (who is known to be a shrewd investor) cash of RM99.4 million to net debt of RM2.3 already has a 19.3% stake in MEGB. He also million while shareholders’ equity more than owns 6.18% of SMRT. Added to Siva Kumar’s halved to RM254.2 million from 2010 to 2013. holdings, this will trigger a mandatory gen- Given that the stock is now trading 24% eral off er for the remaining shares in MEGB. above the buyout off er, there appears high SMRT and Creador intend to maintain the expectation for a successful turnaround. In- listing status of MEGB. vestors should bear in mind though that it Primarily involved in the provision of high- may take some time to turn around the ail- er education and training, MEGB is a leading ing business.

INSIDER ASIA’S STOCK OF THE DAY Apollo Food Holdings Bhd APOLLO Food Holdings Bhd is a leading manu- Th e company is majority owned by its facturer of compound chocolate confectionary managing director, Singaporean Liang products and layer cakes. For FY April 2013, Chiang Heng, with a 51% stake, followed some 56% of its sales were sold locally and the by Amanah Saham Bumiputera (ASB) with balance of 44% exported, mostly to the Asia a 20% stake. Pacifi c region. Historically, Apollo appears to have de- Apollo has a solid cash-rich balance sheet. fensive earnings. During the fi nancial crisis As at 1Q2015, net cash stood at RM86.6 million of 2008-2009, it managed to maintain pre-tax or RM1.08 per share, amounting to 21% of its profi t at RM 20.9 million in FY2009, although current share price of RM5.10. Th e company sales declined 3.2%. However, the company pays consistently high dividends. From FY2009 has recently been hit by rising cocoa prices – to FY2013, dividends per share averaged 20 which surged over 50% in the last 18 months sen, increasing to 25 sen in FY2014. — and falling demand. From FY2010 to FY2014, Apollo’s sales grew For 1Q2015, sales fell by 10.2% y-o-y to by a compounded annual growth rate (CAGR) RM51.6 million, while pre-tax profi t slumped of 8.4% to RM220.7 million while pre-tax prof- by 40.5% y-o-y to RM 8.3 million. Despite the it grew by a CAGR of 7.8% to RM43.6 million. weaker quarter, valuations are still undemand- During the same period, shareholders’ equity ing – especially for a consumer stock — with increased by a CAGR of only 4.3%, implying trailing 12-month trailing P/E ratio of 14.3 a large portion of earnings are returned to times, a price-to-book ratio of 1.6 times and shareholders. with a 4.9% dividend yield.

TONG’S MOMENTUM PORTFOLIO

THE local bourse started the week strongly, rebounding from last week’s losses. The positive sentiment was aided by regional markets which closed higher overnight. Market breadth was positive with gainers outperforming decliners by 1.7 to 1. China surprised investors by cutting rates, causing share prices to rally, while European shares extended a two month high following ECB president Mario Draghi’s call to revive inflation through further stimulus programmes to help boost the economy. On the local front, the announcement that all petrol subsidies will be removed eff ective 1 Dec 2014 is positive for the government’s fi nances, which will be hit by the slide in crude oil prices. The FBM KLCI rose 1.36% to close at 1,833.8 points. My portfolio increased in line with the FBM KLCI, with returns increasing by 0.24% to RM 103,627.40. Th e portfolio started on 8 July 2014 with a capital of RM100,000. Since then, it has outperformed the FBM KLCI by 6.7%, and has registered an annualised return of 9.5%. Total profi ts currently stand at RM 3,627. After selling a large portion of my portfolio last Wednesday, I am now 36.2% invested and hold only two stocks, namely Willow- glen and Crescendo. Both were up 1.2% and 0.4% respectively, yesterday.

TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY BROKERS’ CALL 13

High interest expense to impact IOI Properties’ earnings Platinum Sentral IOI Properties Group Bhd internal restructuring exercise). (Nov 24, RM2.48) However, 1Q core earnings Maintain reduce with target fell by 9.1% y-o-y to RM101 mil- price (TP) of RM2.34: Although lion, on higher interest expens- IOI Properties Group Bhd’s core es as well as lower contribution to be 89% of Quill’s earnings for the first quarter from its associates (Singapore of financial year 2015 ending operations). IOI Properties’s to- June (1QFY15) of RM101 mil- tal borrowings stood at RM3.2 lion (+18% year-on-year [y-o-y] billion as at end-September this only accounted for 16% of our year (+36% y-o-y). current asset base full-year forecast and 18% of We maintain our earnings street estimates, we deem it to forecast as we expect earn- be within our expectation as ings to improve on the back of we expect earnings to come in higher income from its invest- Quill Capita Trust stronger in subsequent quarters ment property segment, with (Nov 24, RM1.18) on higher income contribution the opening of IOI City Mall. Downgrade from “buy” to “hold” from its investment property We make no change to our re- with a target price (TP) of RM1.25: segment and associates. As ex- duce rating and TP of RM2.34 Th e injection of Platinum Sentral pected, no dividend was de- (ex-all, based on 40% discount offi ce building in Kuala Lumpur is clared during the quarter. to revalued net asset value). Our expected to be completed by late Revenue in 1Q grew by a cautious view is on the back of 2014 or early 2015. At RM740 million, commendable 34% y-o-y on the group’s high exposure to the property will account for 89% of higher contribution from: (i) China and Singapore’s prop- Quill Capita’s current asset base of its property development seg- erty market as well as long ges- RM828 million. It will also see the ment (+28%) on progress bill- tation period for investment entry of Malaysian Resources Corp ings; (ii) property investment properties. Bhd (MRCB) as a major shareholder (+19% y-o-y) on additional Key upside risks to our neg- with an approximately 31% stake. rental income post internal re- ative view include: (i) strong- Th e injection involves the issue structuring and (iii) more than er-than-expected recovery in of a substantial number of new double revenue contribution Malaysia, Singapore and Chi- units to MRCB, new placements from its leisure and hospitality na property market sentiment; and borrowings. Although the earn- operations from additional in- and (ii) stronger-than-expected ings base will expand, we estimate come generated from Putrajaya earnings contribution from its earnings per unit will be diluted by Marriott Hotel and Palm Gar- investment properties. — Affin- about 3%. Dividend per unit (DPU) THE EDGE FILE PHOTO den Hotel (acquired from the Hwang Capital, Nov 24 should remain fi rm thanks to ac- commodative payout ratios and cash fl ow; but near-term organic DPU growth may be capped. Th e outlook for offi ce space rental in Kuala Lumpur, the Klang Val- ley and Cyberjaya (where the real estate investment trust [REIT] has exposure) remains challenging due to excess supply. Th e REIT is unlikely to see strong reversions, and occupancy levels could drop. About 20% of tenancies in the REIT’s current portfolio are expiring in 2015. The REIT still has earnings growth opportunities in the vacant QB10 (RM68,000 sq ft net 45% will be a dampener on further on the dividend discount model lettable area, Petaling Jaya) and acquisitions/injections in the near valuation and assuming an 8% cost the half-vacant retail portion of term, although the REIT will obtain of equity and a 1% terminal growth. Platinum Sentral, but the overall rights of fi rst refusal to MRCB’s in- Th e stock will be supported by a growth outlook is relatively muted. vestment properties. 7.2% forward yield. — AllianceDBS Post-injection gearing of almost We trimmed TP to RM1.25 based Research, Nov 24 Lafarge’s pricing pressure should normalise by 2015

Lafarge Malaysia Bhd compared with FY14. Moreover, sumption, the price war inten- (Nov 24, RM9.90) it has locked in a larger amount sifies; and steep rise in energy Upgrade from “hold” to “buy” with and a higher proportion at the prices, in particular, coal and a target price (TP) of RM10.72: fi xed rate compared with FY14. electricity. To recap, Lafarge Malaysia Bhd’s Price volatility is expected to Despite the disappoint- third quarter of fi nancial year 2014 continue and the industry cement ing 3QFY14, our TP is raised to (3QFY14) net profit declined by demand will continue to sustain RM10.72 based on 22.5 times 2016 54% year-on-year (y-o-y) and into next year, with a projected earnings per share of 47.7 sen. We 29.1% quarter-on-quarter (q-o-q) mid single-digit demand growth have raised our price-earnings ra- to RM54.8 million. of 3% to 5% in 2015, with a similar tio (PER) on the stock from 19.5 We understand that this was due pace for 2014. We slashed FY14 times to 22.5 times, one stand- to higher input cost and pricing by 6.1% to impute the weak nine ard deviation above its one-year pressures from the market aris- months of FY14 (9MFY14) results. forward average PER of the last ing from Lafarge’s stance to regain However, we have revised upwards three years, in line with a positive and reposition itself as the market our FY15 to FY16 earnings by 7.4% outlook for the construction due leader. and 11.6% due to: i) lower coal to the increase in development Energy and fuel costs now con- price; and ii) higher domestic net expenditure for 2015 (nominal sist of 50% of total cost and the only selling prices. construction output growth is 81% strategy to mitigate the rising price We believe the pricing pressure correlated to development expend- of electricity and fuel is by being that Lafarge is currently facing is iture) and new mega projects being more effi cient. Th e company has temporary and should normalise announced during Budget 2015. recently fi nalised the terms for the by next year. Th e catalysts would tainable demand from property Risks are delays in the imple- Coupled with the recent price supply of coal for next year and be a timely implementation of development projects; and high- mentation of projects under the weakness, we upgrade our rating has hinted that the prices for next the Economic Transformation er-than-expected gross domestic ETP, resulting in lower-than-ex- from “hold” to “buy”. — HLIB Re- year would be marginally lower Programme (ETP) projects; sus- product. pected demand for cement con- search, Nov 24 14 BROKERS’ CALL TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY

Coastal contracts Genting Malaysia’s all right for 3Q

Coastal Contracts Bhd (Nov 24, RM3.55) 9MFY14 earnings Maintain outperform with a target price (TP) of RM4.67: Coastal Con- tract’s net profi t for the third quarter of fi nancial year 2014 ending December (3QFY14) of RM54.3 million brought below expectations net profi t for the first nine months (9M) to RM151.7 million, which is within both our (RM198.2million) Genting Malaysia Bhd and consensus (RM194 million) full- (Nov 24, RM4.19) year forecasts, at 76.5% and 78.2%. Maintain neutral with a target No dividend was declared. Quar- price (TP) of RM4.21: Genting Ma- ter-on-quarter (q-o-q), net profi t in- laysia’s revenue for the fi rst nine creased by 12.6% to RM54.3 million, months of fi nancial year 2014 end- despite the drop in revenue (4.1% ing December (9MFY14) shed 0.6% q-o-q). Th e increase in net profi t was year-on-year (y-o-y) to RM6.17 bil- mainly due to better product mix lion, dragged down by lower VIP (shipbuilding segment profi t before win rates at its Malaysia operations. tax [PBT] margin fi rmed up to 23.5% Earnings before interest, taxes de- in 3QFY14 against 20.5% in 2Q). preciation and amortisation (Ebit- Year-on-year, (y-o-y), net prof- da) slid 10.2% y-o-y to RM1.64 bil- it was higher (37.4% y-o-y), mainly lion with overall margin at 26.6% due to better product mix as men- (against 29.5% in 9MFY13), eroded tioned above (shipbuilding segment by higher payroll costs at its New PBT margin fi rmed up to 23.5% in York casino, while its Bimini ca- 3QFY14 against 20.3% in 3QFY13). sino registered an Ebitda loss of Year-to-date (YTD), net profi t surged RM116.1 million. All in, 9MFY14 by 47.8% backed by a 38.1% increase Southeast Asia expiring from mid- core earnings of RM950.5 million in revenue mainly due to: i) higher 2013 to 2015. Moreover, there could (-26.6% y-o-y, partly due to a be- vessel sales (14 in 9MFY14 against be cross-selling opportunities with low-average effective tax rate in 13 in 9MFY13); and ii) again on bet- its entry into Mexico. 9MFY13) fell short of expectations, ter product mix as mentioned above We maintain our “outperform” rat- making up 66.9% of our and 67.6% (shipbuilding segment’s PBT margin ing. We are cognizant of the sector’s of consensus full-year forecasts. We also reduce our FY15 to FY16 strengthened to 22.1% in 9MFY14 derating given the current sluggish Ebitda margin at its Malaysian EPS by 7.1% to 9.2% to take into ac- against 19.8% in 9MFY13). crude oil prices; as such we are reduc- operation for 9MFY14 would have count the implementation of the 6% Coastal’s order book stands at ing our price-earnings ratio (PER) on been 37.0% vis-à-vis 34.6% current- goods and services tax (GST) come RM2.5 billion (RM1.3 billion for ship- the stock to 11 times (from 14 times). ly, had its VIP luck factor held up April 2015. Key risks include fl uc- building and RM1.2 billion for the gas Our ascribed PER is 10% above the in the third quarter (3Q) of FY14. tuations in luck factor, prolonged compression service unit in Mexico 10 times historical -1 standard de- We estimate that this would trans- losses at Resorts World Bimini, and which will kick-start in FY15). Coast- viation for oil and gas stocks, as we late into 9MFY14 core earnings of a potential hike in casino taxes. al is awaiting two high-specifi cation believe the stock should be credited RM1.02 billion to RM1.13 billion. We tweak our sum-of-parts- jack-up rigs due in fi rst and second a premium as it is moving into asset Visitor arrivals in 3Q continued the based TP downwards to RM4.21 half of 2015. Both these rigs have yet ownership business model. Post our downtrend, dropping 3% y-o-y as (from RM4.40) following our earn- to secure any contracts. However, we PER cuts, TP is now RM4.67 (from foreign tourist visitation slipped ings revision and after adjusting for understand management is working RM5.94 previously). 14% y-o-y. Its proposed RM5 billion the current market value of its list- very hard to close some contract deals Risks to our call are: i) low- Genting Integrated Tourism Plan ed associate in the 17.8%-owned soon. Th is asset will spearhead the er-than-expected margins and remains largely on track. Of note, existing hotel rooms is ongoing. Genting Hong Kong Ltd as well as company’s move into an asset-own- vessel sales; ii) inability to secure 500 new rooms will be available by We cut our FY14 earnings per its latest net cash balance. ership model as opposed to the pre- contracts for its maiden jack-up end-2014 with another 800 to come share (EPS) by 5.6% to factor in Given the limited upside, we vious build-and-sell model. Accord- rig; and iii) delay or cancellation online by mid-2015. Management its subpar luck factor year-to-date maintain our “neutral” call. — RHB ing to our channel checks, there are of its jack-up rig gas compression also noted that renovation of its (YTD). Research Institute, Nov 24 more than 40 jack-up rig contracts in unit. — Kenanga Research, Nov 24

7-Eleven growing but below expectations

7-Eleven Malaysia Holdings Bhd results are better y-o-y, growth is (Nov 24, RM 1.64) slower than expected, mainly due Maintain hold with a target price to lower-than-expected commission (TP) of RM1.78: 7-Eleven’s revenue income, other operating income for the first nine months of finan- and margin expansion. We think cial year 2014 ending December 7-Eleven may not be able to achieve (9MFY14) increased by 12.9%, while its new openings target. In view of net profi t increased by 34.3% year-on- its weaker-than-expected 9MFY14 year (y-o-y). Th e stronger revenue was results and the slower consumer driven by same-store-sales growth spending, we think it is unlikely of 4.5% and growth in the number to achieve our previous forecast of of stores from 1,557 in 2013 to 1,677 three-year earnings per share com- in 9MFY14, still 80 stores away from pound annual growth rate of 29%. its target of 200 new stores per year. We cut our FY14 to FY16 earnings While gross profi t improved by 0.5 forecasts and TP, which is based on percentage point (ppts) y-o-y due to a lower target price-earnings ratio higher selling prices, higher econ- (PER) of 23.6 times 2016 (2015 pre- omies of scale and better product viously, 20% premium over its peers’ mix, earnings before interest, taxes, average) or in line with the lower av- depreciation and amortisation (Ebit- erage peer PER. Its growth remains da) margin improved more at 0.8 ppts above the sector’s average. We main- y-o-y, driven by the higher operating tain our “hold” call. For exposure to income (excluding interest income). terms of the third quarter (3Q) of FY14 jumped 109% y-o-y, mainly due to the: tising and promotion (A&P) cost for the local consumer sector, we prefer Th is off set the higher selling and dis- against 3QFY13, revenue increased by i) higher other operating income; ii) its Hello Kitty promotional campaign Berjaya Food Bhd that trades at a tribution expenses due to expansion 11.7% y-o-y due to the opening of new substantially lower administrative and in August 2013; and iii) much lower more attractive valuation but comes and lower net interest income, re- stores, better product mix and con- other operating expenses (32% y-o-y) eff ective tax rate. with much stronger earnings growth. sulting in higher net profi t y-o-y. In sumer promotion activity. Net profi t as the group incurred higher adver- Although 7-Eleven’s 9MFY14 — CIMB Research, Nov 23 TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY HOME 15

Selangor raises poverty DAP rep: Nomination threshold to RM1,500

SHAH ALAM: Selangor has raised ‘healthy competition’ its poverty income threshold to RM1,500, about RM700 more than the national level, to refl ect more realistically the high cost of living in Maybe a silent protest against PAS for its role in the Selangor MB crisis the country’s most developed state. Menteri Besar Mohamed Az- min Ali said the new rate was “re- SHAH ALAM: Th e surprise nomi- “Maybe this is a silent protest Mohd Shafi e was later appointed sacked from his own party. sponsible” and part of his admin- nation of DAP’s Ng Suee Lim for the against PAS for its role in the crisis. deputy speaker. Th e Port Klang assemblyman istration’s aims to raise incomes Selangor deputy speaker post was It could also be a form of protest Ng was philosophical over his finally stepped down as MB af- and broaden the middle class in most likely a form of silent protest for Abdul Hadi’s absence in Paka- loss, saying that he knew his chanc- ter the Pakatan presidential coun- Selangor. After the revision, about by his party against ally PAS for its tan Rakyat’s meetings,” he said, in es were slim. However, he was hap- cil decided on Aug 17 to endorse 30% of Selangor’s fi ve million res- role in the state’s menteri besar reference to PAS president Datuk py that all of his party colleagues PKR president Datuk Seri Dr Wan idents will be classifi ed as poor. (MB) crisis. Abdul Hadi Awang’s no-shows at voted for him. Azizah Wan Ismail for the top post “As the country’s most devel- Despite knowing that MB Mo- the coalition’s leadership council “I know it is not easy for me to in the state. oped state, Selangor cannot use hamed Azmin Ali had reserved meetings although the Marang MP win, but I tried,” he added. But the MB impasse dragged the same poverty income thresh- the deputy speaker post for PAS, had explained he was in ill health. PKR had triggered the MB cri- on after Abdul Hadi overruled his old as Putrajaya. Th erefore Sel- the state DAP had a meeting last Ng was nominated for the post sis in January, when it engineered party’s decision and said he did not angor has set a threshold that is month and decided that Ng should by party comrade Ean Yong Hian the Kajang Move to replace former agree with Wan Azizah’s candida- realistic and responsible, which is go for the post. Wah (DAP-Seri Kembangan) and MB Tan Sri Abdul Khalid Ibrahim cy. Breaking ranks with the party’s RM1,500. According to this crite- When asked, the Sekinchan as- seconded by Ng Sze Han (DAP-Kin- with its de facto leader Datuk Seri allies, he submitted three diff erent ria, about 30% of Selangor’s resi- semblyman did not discount the rara). Anwar Ibrahim. names to the sultan. dents would fall below the poverty possibility that his nomination He received 14 votes — presum- Abdul Khalid, with the backing Th roughout the crisis, DAP had line,” said Mohamed Azmin while was because his party was upset ably from all the 14 DAP represent- of PAS, had refused to step down stood by PKR’s decision to replace tabling the state’s Budget 2015 at with the Islamist party, although atives in the state assembly — in a for several months, and sacked all Abdul Khalid with Wan Azizah, and the Selangor assembly. he stressed that the nomination secret balloting process yesterday DAP and PKR executive council was attacked by several PAS lead- Mohamed Azmin said the state was part of a new political culture while PAS Bangi representative members from the government ers over its role in the issue.— Th e government would increase funds to promote healthy competition. Mohd Shafi e Ngah got 28 votes. on Aug 13, two days after he was Malaysian Insider for its two micro-credit schemes, Program Mikrokredit Miskin Ban- dar (Mimbar — for the urban poor) and Skim Mikrokredit Selangor COMMENT (Skimsel — for the rural poor), to encourage more of the poor to become entrepreneurs. Th e total amount of funds for Skimsel has Azmin shows politics need not be zero sum game been increased to RM60 million while Mimbar will receive a total of RM40 million. IT might not seem much, but Selan- “All these programmes will be gor Menteri Besar (MB) Mohamed What Mohamed Azmin is part of our hijrah initiative, to help Azmin Ali broke new ground yester- doing for his Budget 2015 the poor graduate to the middle day when he proposed a RM200,000 proposals for Selangor class,” Mohamed Azmin said.— allocation each for people-friend- — be it a car for the state Th e Malaysian Insider ly programmes in opposition-held opposition leader or the seats in the country’s wealthiest state. proposed allocations for all His own Pakatan Rakyat assem- lawmakers — is a step that Khalid leaves blymen will each get RM700,000 for must be praised. similar activities under the “Pro- assembly sitting gram Mesra Rakyat” as part of the move to improve local represent- before Azmin ative services to the people. “I hope the federal govern- tables budget ment will get a clear message from Penang and Selangor that we re- BY EILEEN NG spect the role of opposition members in the assemblies. Th ey should SHAH ALAM: Former menteri be- reciprocate and respect the roles of sar Tan Sri Abdul Khalid Ibrahim MPs at the federal level,” Mohamed raised eyebrows at the Selangor Azmin said after tabling the state’s assembly sitting yesterday with his Budget 2015 proposals. abrupt exit before his successor, Aside from Selangor, Penang also Mohamed Azmin Ali, tabled the provides allocations of RM40,000 to state’s Budget 2015. Abdul Khalid, each of its opposition assemblymen who came under scrutiny over the for small-scale development projects. RM2.5 million in severance pay- It really is not the amount that outs for his aides, left the building matters. It is the fact that a govern- here at 11am, halfway through ment realises that even their political of a Pakatan candidate despite the through the years rather than just are public funds, and not his gov- question time. foes represent the people and pub- plethora of BN projects from roads during election campaigns. ernment’s money. The Malaysian Insider had lic funds are for all and not just for and hospitals to schools and other What Mohamed Azmin is doing Putrajaya can learn something reported that RM2.27 million in those who vote in the government. infrastructure. for his Budget 2015 proposals for from Mohamed Azmin and Guan compensation and RM376,000 in For too long, Malaysians have What does it say then that BN Selangor — be it a car for the state Eng, that it takes more than just lieu of three months’ notice was been used to seeing a federal gov- appears to punish those who vote opposition leader or the proposed slapping a label on a project to re- allegedly paid to Abdul Khalid’s ernment that only allocates funds in their foes while politicians such allocations for all lawmakers — is mind people which government is eight members of staff . Th e highest for its MPs while others get help as Mohamed Azmin and Penang a step that must be praised. doing the job or that they should amount of RM695,400 was alleg- through a “federal offi ce”. Chief Minister Lim Guan Eng have Th e election campaign is over be grateful for the project. edly paid to Faekah Husin, former And public projects using public taken the high road and provide and he has whatever remains of Fact is, it is the government that chief executive officer of state- funds are labelled as a Barisan Na- some funds for their respective Pakatan’s mandate to run the state should be grateful it is elected to owned Menteri Besar Incorpo- sional (BN) project — considering state’s opposition BN lawmakers? and provide for the people of Sel- run a state or a country, and not rated (MBI). the fact that it is the only government New politics? Populism? angor, no matter whether they are the people. Mohamed Azmin had admit- known to most Malaysians through- Or, really, a government that Pakatan or BN supporters. Kudos to Mohamed Azmin, for ted elements of wrongdoing in the out their lives since Merdeka. realises the people should not suf- Because his government is a showing that politics is not a ze- matter and said MBI would discuss What does it say then that in the fer for the choice they have made. government of the people, by the ro-sum game and that the people’s the next steps to be taken after its past two elections, more Malaysians Th at the electorate will evaluate people and for the people of Selan- interests always come fi rst. — Th e new management is sworn in next rejected the BN candidate in favour politicians by how sincere they are gor. And all the funds he allocates Malaysian Insider month. — Th e Malaysian Insider 16 HOME TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY

Adenan: Sarawak’s ‘Internet should not be resources being used to stoke tension’ plundered BY ROBERT KENNETH

KUCHING: The rampant illegal PM says it has at times been used to spread half-truths and even outright lies logging and smuggling of natural resources are fuelled by rogue enforcement offi cers engaging in an KUALA LUMPUR: Datuk Seri Na- Najib says viral and take on a life on their unholy alliance with a syndicate jib Razak has reminded the people legitimate own, the people should be re- of illegal loggers. Th is, in essence, that the Internet should not be- criticism should sponsible and think about the sums up Chief Minister Tan Sri come a medium for stoking racial be encouraged. content they share in the heat Adenan Satem’s sentiments about and religious tension in a plural Photo by of the moment, said the prime illegal logging. society like Malaysia’s. The prime Bernama minister. Adenan, who recently declared minister noted that at times, the “The public needs to be dis- an all-out war on illegal logging, Internet has been used to spread cerning and understand that alle- said he is unhappy with those de- half-truths and even outright lies. gations on the Internet should not partment heads who claim not to “For example, during the last be accepted as the absolute truth. have suffi cient manpower to tackle general election, a host of unsub- The claims need to be questioned the issues. stantiated allegations were prop- and evidence must be assessed. “We have [suffi cient manpow- agated online. It was said that the Education could play a role but it er] but we are not using it to the government was orchestrating is very difficult. There is no perfect maximum, and so I don’t want to blackouts at polling stations to solution to this,” he said. hear that as an excuse, anymore,” change the ballot boxes and fly- He added that legitimate criti- he said in his speech yesterday at ing in 40,000 people across the cism should be encouraged, and the Civil Service Day 2014. nation to vote. that it is a part of healthy demo- He urged Sarawak Forest De- “These claims were all proven tation,” he said. In Nation Building”, held in con- cratic debate although the con- partment enforcement offi cers to be to be baseless lies, but not before Najib said this on Monday in junction with the 2014 Umno Gen- tent may at times cross the line, committed and competent in their they had been swallowed hook, his keynote address at the Umno eral Assembly at the Putra World intrude on personal privacy, break jobs as they would be equipped line and sinker by many, and were International Forum titled “A Hy- Trade Centre. domestic laws or invoke physical with extra vehicles and also be doing real damage to our reputu- perconnected World: Challenges As such Internet stories can go harm. — Bernama armed while on duty. Adenan said he had recently addressed the issue of illegal loggers who infi ltrated two national parks in Sarawak, one of which is the state’s largest protect- Muhyiddin on Camerons recovery plan ed peat swamp forest. “Th is is a very serious issue as it involves Sarawak’s priceless natu- CAMERON HIGHLANDS: Deputy Rural and Urban Planning Depart- up to RM2 billion in value. Now, ral heritage. How did this happen Prime Minister Tan Sri Muhyid- ment has been asked to review the however, something is happening, right under our noses?” he asked. din Yassin (pic) has outlined the local plan that was approved pre- I am still unable to control them,” He also wanted to know what action plan to rehabilitate Cam- viously to enable it to be improved he told reporters. action has been taken by the au- eron Highlands as the country’s and adapted to the current times. Palanivel said the Vegetable thorities, as well as what action is leading resort. “For example, for property de- Farmers’ Association from the Chi- going to be taken to combat ille- Muhyiddin said the short- and velopment that is being submitted, nese community had also com- gal logging and the smuggling of long-term plans include supervi- the state government can consider plained to him about certain parties the state’s natural resources. — sion of development projects, ag- or limit the area usage to be devel- who are destroying the hills. Bernama ricultural activities and the prob- oped,” he said. “Th ey always complain to me lem of illegal immigrants in the Meanwhile, Natural Resources that the hill is being disturbed, the highlands. and Environment Minister Datuk only thing is, ‘something is behind “Th is eff ort is not only to con- Seri G Palanivel said he knows of the something’, which I cannot reveal serve the environment but also to existence of a mastermind behind too much. I have a few photographs, No plans to bring back the golden age of Cam- the illegal land clearing in Camer- but I cannot talk too much about it. eron Highlands as a well-known on Highlands which led to the fl ash Th ey are doing some illegal works, bring back resort and tourism centre with pris- fl oods and landslides there. this happened [over] the last 10, tine surroundings and natural for- While admitting the person’s ex- fi ve years,” he said. mini-buses ests,” he told reporters after chairing istence, coupled with photographic Palanivel also said he would the special meeting of the Cameron evidence, the Cameron Highlands ago, Cameron Highlands was a pre- send a letter to the Sultan of Pa- Highlands Flash Floods and Land- member of parliament said he “can- served area. Th ere was no illegal hang, Sultan Ahmad Shah, to re- KUALA LUMPUR: Th ere are no plans slides Committee yesterday. not say much” or disclose more land clearing ... the farmers did very quest an audience to clarify the to bring mini-buses back into the To supervise development in about the matter. good farming, they were exporting situation in Cameron Highlands. Klang Valley. Minister in the Prime Cameron Highlands, he said the “Earlier, maybe about 20 years to Singapore and other countries — Bernama Minister’s Department Nancy Shukri said the government has instead introduced Bus Rapid Transit (BRT) to improve bus connectivity with mass rapid transport systems. ‘Float system profi ts oil companies at the expense of the people’ “BRT has been introduced to the Klang Valley for a start, the BRT Sun- way alignment is now being devel- KUALA LUMPUR: Th e scrapping of port, distribution, marketing and In Malaysia, the cost of petrol and practised here since the 1980s, with oped and is expected to be opera- the fuel subsidy to base the prices of operations and also protects them diesel is based on MOPS with the ad- the only diff erence now being the tional next year, and there are plans RON95 petrol and diesel on a man- from global price fl uctuations. He dition of costs that amount to 30 sen removal of subsidies for the rakyat. to extend the service up to Klang,” she aged fl oat system from next month said other countries have an open per litre. As such, Rafi zi questioned He said that under the APM, while said in reply to a question from Fong means that the rakyat will have to market system, in which the costs Umno youth chief Khairy Jamalud- the margins of oil companies and Kui Lun (DAP-Bukit Bintang) in the bear the extra burden of guarantee- are pegged to the Means of Platts din’s defence of the managed fl oat petrol dealers were guaranteed, sub- Dewan Rakyat yesterday. ing the profi ts of oil companies and Singapore or MOPS. system, asking if he is now advocating sidies for the public were in place, On June 9, 2012, Prime Minister petrol dealers, a PKR lawmaker said. Rafi zi said MOPS is the price of the protection of big corporations at which made it a fair system. As such, Datuk Seri Najib Razak launched the Party secretary-general Rafizi petrol and diesel which is refi ned and the expense of the rakyat. he urged Khairy to clarify his defence BRT-Sunway Line which will give Ramli said under Malaysia’s version traded through Singapore, adding Rafi zi said that if Putrajaya is going of the managed fl oat system. seamless bus-LRT connectivity for of the managed fl oat system, about that this is usually the base price tak- to expose the people to fl uctuations of “When he goes around town and 500,000 residents in Bandar Sunway 30 sen is added into the cost per litre en while the rest is left to the market crude oil prices on the world market, defends the managed fl oat system, and Subang. Costing an estimated of petrol and diesel for profi ts guar- to determine. “Th erefore in an open it should also remove protection for does he mean he prefers to protect RM300 million, the project involvies anteed to oil and gas companies and market, oil companies use MOPS the oil companies. He said the man- the interests of corporations and not government-linked company Syarikat petrol dealers. only, so it is up to them to undercut aged fl oat system is the same as the the rakyat?” he said. — Th e Malay- Prasarana Negara Bhd (Prasarana) Th is covers their costs of trans- their competition and sell cheaper.” automatic pricing mechanism (APM) sian Insider and Sunway Bhd. — Bernama TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY HOME 17

GST unfair to residents Zahid: We don’t arrest in gated communities, anyone without solid proof says MP KUALA LUMPUR: Residents staying in landed properties with gated and guarded facilities will Govt accused of using the Sedition Act to come down on the opposition be subject to 6% goods and services tax (GST) on their maintenance fees, says Cheras MP Tan KUALA LUMPUR: “Th e government government because the people out any element deemed to be dis- the government is not and would Kok Wai. Th e DAP politician said is no hooligan. We do not simply ap- are well aware of the danger posed astrous to nation building. not be biased, as the government although the rule only applies prehend anybody without concrete by these groups. He said each and every Malay- will not compromise anything when to security companies that earn proof and tangible evidence,” said Speaking at the Umno Interna- sian must observe the law, rules it comes to national security and more than RM500,000, it is still Home Minister Datuk Seri Ahmad tional Forum 2014, Ahmad Zahid and regulations that prevent him stability. unfair as residents mainly choose Zahid Hamidi. said Malaysia is under threat by or her from making provocative Ahmad Zaid also stressed that to live in gated communities for That was his reaction to the those who use the Internet to spew and racist statements as the con- although the government agreed to safety reasons. accusation that the government lies, slander and hate speech. sequences would be unbearable repeal the Sedition Act and intro- He urged Putrajaya not to is using the Sedition Act 1948 to He said unlike other countries, for everyone to take. duce a new act, some provisions of make the people pay addition- silence its critics, and that the Malaysia is not a single-race coun- “We have learnt from the the Sedition Act must be retained in al tax for a service as basic as government is coming down hard try, and being a multiracial and 1969 racial riots, and we have order to make the new act stricter security. “Some may say it is a on the opposition in order to stay multi-religious nation, the gov- also learnt from several incidents as a deterrence to those who try to lifestyle choice to live in a guard- in power. ernment has to monitor Internet involving communal and reli- cross the line. ed environment, but it is not, it He said that despite all the criti- activities and check such hateful gious extremists. All these had “In doing so, the government has become a real necessity due cism against the arrests and action deeds. summoned us to enact stringent will take into account feedback to the rising crime rate ... As it is, taken against those who spread Ahmad Zahid, the Umno laws to [prevent] the house from and proposals from all sections we already pay taxes which go hate speeches, lies and slander, vice-president, said the govern- collapsing,” he said. of the community, including the towards the salaries of the po- Malaysians at large support the ment has to be strict in stamping He said that in enforcing the law, opposition,” he said. — Bernama lice, but we still have to engage security services to guard our neigbourhoods because we don’t feel secure or safe. Now, this is a third form of payment,” Tan said Look beyond yesterday. He said that rather Putrajaya looking into extraditing than paying a security fi rm, many 2020 for would rather save the money if sustainable there is an option. secessionists from UK Lim pointed out that many growth people came to know they need KUALA LUMPUR: Putrajaya will to pay GST on their maintenance only look into the possibility of ex- and security fees only about four KUALA LUMPUR: Malaysia, which traditing Malaysians living abroad, months ago. “[Surely] Th ere are is almost certain to attain devel- who are fuelling secession talk many other items and services oped nation status by 2020, should between Peninsular Malaysia and Wan Junaidi: We must that are bound to be taxed which now focus on the new generation Sabah and Sarawak, said Deputy fi rst ensure that what is the people don’t know about and being productive, innovative and Home Minister Datuk Seri Wan considered an off ence here this will further burden them in effi cient, says AirAsia X Bhd chair Junaidi Tuanku Jaafar. is also considered an off ence view of the rising cost of living.” Tan Sri Rafi dah Aziz (pic). Rafi dah He told the Dewan Rakyat yes- there. Tan echoed Seputeh MP Te- said that looking at the population terday that very few police reports resa Kok’s (DAP) pledge earlier structure today, those below 30 have been made against such yesterday that the DAP will con- years of age make up almost 56% groups, and he urged the public not being fulfilled. tinue to pressure Putrajaya to re- of the population and fall within to lodge more reports. Chong asked if Putrajaya would think its decision to charge GST the Gen-Y category. “Based on the reports made, look into engaging and discussing on maintenance fees. Kok was in “As such, productivity, innova- the police have investigated and with the groups that feel unhappy Kuchai Lama with more than 15 tiveness and effi ciency in the work- sent the investigation papers to with the state of aff airs instead of management corporation (MC) force as well as consumption must the Attorney-General, but the A-G suppressing them. heads representing over 30,000 focus and bear in mind Gen-Y traits. is still looking at it based on facts Wan Junaidi said a small num- apartment and condominium “Th e public and private sectors and provisions in law. ber support the secession talk, dwellers opposed to the idea that and academia must continue to “Only after that can we talk adding that it is not possible to they would need to pay GST on emphasise these areas so the ap- about extradition, and although engage these people if they “are their monthly management and proach taken would be in line with we have good relations with the running off to England”. maintenance fees. the requirements and needs of the authorities in England, we must As such, he said the approach Similar to gated and guarded generation and the market. fi rst ensure that what is considered taken by the federal government communities, apartment and “Th e three parties should collab- an off ence here is also considered is correct. condominium dwellers will have orate to forge a strong innovative an off ence there,” he said. by Putrajaya, especially Umno. Wan Junaidi also expressed to pay GST if their MC collects culture,” Rafi dah told reporters on His reply prompted Chong He said Sabahans and Sarawa- confi dence that Sabah and Sawar- more than RM500,000 in main- the sidelines of the Annual Produc- Chien Jen (DAP-Bandar Kuch- kians feel left out of the wave of ak would see exponential devel- tenance fees. A notice to that tivity and Innovation Conference ing) to say that the majority in development and that the con- opment over the next few years, eff ect was sent by the Ministry and Exposition yesterday. Rafi dah Sabah and Sarawak feel they are ditions set when Sabah and Sar- as experienced in Peninsular Ma- of Finance to the residents of advised public sector enablers to being treated as the “stepchild” awak joined the federation are laysia. — Th e Malaysian Insider Kuchai Brem Park. Th e letter, dat- be innovative in their approach- ed Oct 29,said only low-cost and es in legislative procedures and in low-medium cost apartments their decision-making, and not be would be exempted from paying a hindrance to a challenging global the GST. In a letter dated Nov business environment. — Bernama Minimum Wage Order review by early 2015 17, pursuant to an appeal by the Brem Park residents, the Finance KUALA LUMPUR: The Human situation as well as the impact of account employers, workers, the Ministry said the principle of GST Resources Ministry will table the the implementaion on employ- World Bank and the International does not diff erentiate whether findings of the review of the im- ers, especially small companies. Labour Organisation. the activity is for profi t or oth- plementation of the 2012 Mini- “The process of this review is He said the implementation erwise, and activities conducted mum Wage Order by early next provided for under the 2011 Na- of the minimum wages scheme, by non-profi t organisations are year, the Dewan Rakyat was told tional Wages Consultative Coun- which could provide benefits to subject to GST regulations. yesterday. cil Act,” he said in reply to Nas- about 13.5 million private sec- Th e ministry noted that there Deputy Human Resources rudin Hassan (PAS-Temerloh) on tor workers in the country, was is no diff erentiation between an Minister Datuk Ismail Abdul Mut- the status of the review. gazetted on July 16, 2012, but a MC and a joint management talib said the review is taking into Ismail said the Act had provid- large number of employers were body of a residential condomin- consideration various issues, in- ed for a review of the scheme at not ready to implement it. — ium and a commercial condo. cluding the current economic least once in two years, taking into Bernama — Th e Malaysian Insider 18 COMMENT TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY Islamic fi nance set to tackle repos

Developing syariah-compliant substitutes would help manage liquidity

BY BERNARDO VIZCAINO & said last month as it released draft a purchase contract. Th is is combin- in Bahrain’s capital Manama last AL-ZAQUAN AMER HAMZAH guidance on liquidity risk man- ing two types of contracts,” he said. week. He did not specify when the agement. Also, Islamic fi nance specifi es standard might be ready. eparate but converging Early this month another Is- that actual ownership of collater- Meanwhile, some regulators efforts are underway in lamic standard-setting body, the al be transferred, a requirement see short-term, US dollar-de- Islamic finance to help Bahrain-based Accounting and which has limited the international nominated Islamic bonds (sukuk) develop globally accept- Auditing Organization for Islamic approval of some solutions. issued by the Malaysia-based ed alternatives to con- Financial Institutions (AAOIFI), For example, Malaysia’s ap- International Islamic Liquidi- ventional repurchase said it was developing a syariah proach uses a sale and buy-back ty Management Corp (IILM) as Sagreements (repos), as the indus- standard for repurchase agree- contract known as inah, but the collateral that might be used for try tries to crack one of its greatest ments. practice has been shunned by Gulf- syariah-compliant repos. structural limitations. And on Sunday, the Bah- based Islamic banks which argue Nigeria’s central bank has issued In the last several years Islamic rain-based International Islamic that transfer of ownership of assets guidelines for asset-backed securi- banks have grown faster than con- Financial Market (IIFM) released is not clearly executed. ties that can employ IILM sukuk as ventional ones, partly because of a contract template for collater- Th e IIFM’s collateralised mu- collateral, while regulators in Indo- economic booms in the core re- alised murabaha transactions, a rabaha format tries to avoid con- nesia are discussing ways to allow gions for Islamic fi nance, the Gulf cost-plus-profit structure which troversy by having the financier IILM sukuk to be used as guaran- and Southeast Asia. But the banks might serve as an alternative to buy the asset at market value and tees in money market transactions. have largely lacked the collateral- conventional repos. immediately sell the asset to the “We are studying whether we ised money market tools which So far, Bahrain and Malaysia customer for a mark-up on a de- can accept IILM to be traded as many bankers believe are essential have been at the forefront of creat- ferred payment basis. short-term sukuk securities within for the industry’s long-term health ing such tools but more eff orts are But in practice, such transac- Indonesia’s Islamic money market,” and viability. needed, Jeddah-based Mohamed tions need more clarity to gain said Halim Alamsyah, deputy gov- Developing syariah-compliant Ali Elgari, an industry expert who wider acceptance, said IIFM chief ernor of Bank Indonesia. substitutes for repos would help Is- sits on over 80 syariah boards executive Ijlal Ahmed Alvi (pic). Islamic banks are largely buy- lamic banks manage their liquidity around the world, told Reuters. “Th ere is still a lot of work and and-hold investors of sukuk; col- more cheaply and fl exibly, allowing slow because of a lack of consen- “Any successful structure has to deliberation needed such as fi xing lateralised transactions could en- them to cope better during times sus among bankers, regulators and satisfy the requirements of syariah, of forward leg between two coun- ergise sukuk secondary markets by of market stress. scholars on what structures would and the requirements of regulators, terparties, the legal entity which encouraging banks to make better Islamic banks are now consid- be both religiously permissible and and the requirements of risk man- can act as the third party and take use of those assets. ered systemically important in fi nancially eff ective. agers. To combine all these three risk, and so on.” “Institutions of all sizes will be countries including Kuwait, Sau- But this is now changing. Pres- factors, it’s very diffi cult.” For its own standard on repur- equally comfortable to transact and di Arabia, Qatar, Malaysia and the sure on regulators to agree on Is- Conventional repos allow insti- chase agreements, AAOIFI will better utilise their Islamic securities United Arab Emirates, according to lamic repo structures has increased; tutions to lend out assets for short conduct extensive consultations portfolios, particularly sukuk,” said the Kuala Lumpur-based Islamic Basel III banking standards, now periods to generate liquidity. Th is with scholars on all aspects of the Khalid Hamad, executive director Financial Services Board (IFSB). being phased in around the world, is problematic in Islamic fi nance transactions, said secretary-general of banking supervision at Bahrain’s Until now, progress in devel- make banks’ need to manage short- because it entails charging interest. Hamed Hassan Merah on the side- central bank and IIFM chairman. oping “Islamic repos” has been term funding more acute, the IFSB “Repurchase is not permitted in lines of AAOIFI’s annual conference — Reuters Stimulus with Chinese characteristics

BY THE EDITORS struggling with heavy debts, will see a slightly bigger cut in rates than de- CHINA’s central bank startled inves- positors. Th at combination should tors last week with an unexpected increase consumption modestly. cut in its benchmark interest rates. Th e test for the government and Th e markets, as usual, overreacted. its offi cials at the central bank is to Nonetheless, the cut draws atten- take this adjustment further and tion to a genuinely diffi cult prob- support growth while acting to re- lem for the global economy: what dress the imbalance. to do about China’s fading and un- Renewed reliance on debt-fi - balanced expansion. nanced investments with no eco- Th e People’s Bank of China cut nomic merit would only make the the one-year lending rate last from economy more fragile and risk turn- 6% to 5.6%, and the one-year de- ing the slowdown into a collapse. posit rate from 3% to 2.75%. The trouble is, supporting It was the fi rst such stimulus in growth in ways that don’t run that China since 2012, and shares and risk is a new experience for Chi- commodity prices rallied all over na’s leaders. China’s slowdown is the world. serious by its own standards — but Th e announcement does mark not, as yet, alarming. a change of approach by the cen- Figures released earlier this tral bank. Up to now, it has aimed month show that factory output to support growth by providing li- rose 7.7% in the year to October — quidity industry by industry, rath- the slowest in fi ve years but still an er than by cutting economy-wide expansion that other economies interest rates. would be grateful for. Normally when China departs Infl ation is low, so there’s scope from this approach and cuts rates, China’s central bank’s announcement that banks would be given a bit more freedom to set their own deposit rates was notable, too. both for further interest-rate easing it signifi es a sharp change in policy. It ﬁ ts with the leadership’s promise last year to give market forces a bigger role in the ﬁ nancial system. and for additional moves to liber- Last Friday’s cautiously calibrated alise the fi nancial system. change wasn’t that. Last week’s move, modest as Th e cut was too modest to make Th e central bank’s announce- role in the fi nancial system. it cheaper for fi rms to borrow). it was, confi rms that China’s pol- much diff erence. Now that policy- ment that banks would be given a For years, China has capped Th e result has been a pattern of icymakers are willing to innovate, makers have signalled that interest bit more freedom to set their own bank-deposit rates, which tends unbalanced growth, increasing- albeit cautiously. rates are again at their disposal, deposit rates was notable, too. It fi ts to hold down consumption (by ly tied to investments of dubious Th at’s good. Engineering a soft however, there may be more cuts with the leadership’s promise last giving savers less money to spend) value. Last Friday’s changes, taken landing for China is in everybody’s to come. year to give market forces a bigger and infl ate investment (by making together, suggest that borrowers, interests. — Bloomberg TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY FEATURE 19 Congo’s woes run deeper than oil

Political instability and foreign meddling inhibit the development of state institutions

BY KATE DUGUID tarily obscured by a stack of cash poorest countries in the world is lake Soco wants to explore is the cial devastation for workers for proff ered by an M23 conduit who also one of the most resource-rich. primary water source for surround- whom there are no other jobs. It ave the gorillas and save believes he’s just bought Soco a Wild political instability and for- ing communities. has also failed to stem the fl ow of the Democratic Republic double agent. eign meddling have inhibited the Th e fi lm has been launched along- capital to militias. While data from of Congo, urges “Virun- Soco, whose operations man- development of robust state insti- side a reinvigoration of a campaign Enough Project documenting their ga”, a new documenta- ager for east Congo has since been tutions following independence to pressure Soco shareholders to di- impact show that mining profi ts ry from Netflix and envi- fi red, denies any involvement with from Belgium in 1960 (a historical vest, started by the World Wildlife overall have decreased, there has ro-mensches Leonardo M23. But the fi lm’s portrayal of the montage reminds the audience of Fund for Nature in 2013. However, been an increase in the percent- SDiCaprio and Howard Buffett. The measures taken by Soco to defend the Central Intelligence Agency’s the filmmakers acknowledge that age of those profi ts going to ille- film chronicles the machinations of its Congo project underlines the role in the execution of Congo’s fi rst many companies on the target list gal miners. British oil firm Soco International extent to which the world’s private democratically elected president.) are passive investors like pension Along with other divestment plc’s exploratory venture in Congo’s energy fi rms are willing to go to ndfi As such, the only real benefi - funds and global banks which can- projects, Virunga could serve to Virunga National Park, while park new reserves. ciaries of Congo’s immense natural not threaten divestment, even if they expand the United States boycott rangers struggle to thwart them. Virunga is a Unesco World Her- wealth have been foreigners, and take sustainability issues seriously. overseas and further Congo’s eco- Th e fi lm is pitched as an exposé itage Site and protected from drill- militias. As Virunga tries to show, Th e fi lm’s bigger aim, it seems, is to nomic isolation. Boycotting con- of Soco collusion with rebel group ing under international law. It has the former may need to depend draw attention to the relationship be- flict minerals and safeguarding M23 to seize control of the park, been the site of international and on the latter to access that wealth. tween resource extraction in Congo a national park won’t dismantle which is one of two remaining sanc- civil confl ict for 20 years. Th e fi lm Virunga is an unalloyed advoca- and human rights abuses. the structural barriers to peace tuaries for the 800 mountain goril- posits that greed explains Soco’s cy documentary. Th e pitch: Virunga A campaign by non-profits like and stability. Unethical exploita- las left on the planet. Th e investi- willingness to confront such risks. National Park can promise sustain- Enough Project fomented suf- tion is symptomatic of a nation gation drives the fi lm’s narrative, Footage of an alleged Soco subcon- able development for east Congo ficient concern that American whose institutions are too weak whose most controversial footage tractor saying Congo’s only hope is if the rangers can keep Soco out. businesses were financing war- to assure the stability needed to claims to show Soco affi liates con- recolonisation suggests as much. An alternative conservation pro- lords to warrant a provision in the nurture economic progress. By spiring with a militia accused of But the lengths to which global ject could yield tourism revenue Dodd-Frank Act requiring public overstating the responsibility of war crimes by the United Nations companies now go to replenish oil and thousands of jobs, as Rwanda’s companies to disclose their use of Soco for these problems, Virun- and Human Rights Watch. supplies imply its animus is des- Volcanoes National Park has done. minerals from Congo and other ga lays power for change in the Tension peaks as the camera peration. Th is case is convincing, as Virunga African nations. hands of foreign companies, rath- on park ranger Rodrigue Muga- It’s an old chestnut, rehashed supports one of the most diverse Th e de facto boycott produced er than of the Congolese people. ruka Katembo’s shirt is momen- in this fi lm, to note that one of the biospheres on earth. Further, the by the provision has meant fi nan- — Reuters Tenom producing successful farmers and breeders

BY SITI ZUBAIDAH ABDULLAH 01. Ten years ago Tham started idmatan Haiwan dan Perusahaan a farming business that is Ternak” in conjunction with the TEN years have passed since Th am worth RM2 million today. 2011 state level celebration of “Hari Yan Siong, 48, started a farming Photo by Bernama Peladang, Penternak dan Nelayan”. business that is today worth RM2 million. 02. Chung (left) and Voo are Other success stories In 2004, the Tenom-born decid- among the farmers who have Besides Th am, Chung Fui Lan, 69, ed to use the money he had saved successfully marketed their and her husband Voo Tan Vun, 73, up for the downpayment of a new produce overseas. are also among the farmers who car to buy six goats. At the time, Photo by Bernama have successfully marketed their he had just returned to Tenom af- produce overseas. ter staying overseas for nearly two After 15 years in the fi eld, the decades. couple now owns a collection Today, Tham is rearing goats centre under the Agriculture and and farming fruits at the Tenom Farming and rearing training Agro-based Industry Ministry’s Agro Paradise integrated farm in Th am employs six workers to care High Impact Programme as well Ladang Batu 10, Jalan Kemabong. for his Jamnapari and Boer goats, as a myGAP (Malaysian Good Ag- Besides a block dedicated for as well as crossbreeds between ricultural Practices) certifi cation goat-rearing, the 16ha farm also 01 the two. He is hoping to expand from the ministry. grows fruit crops and oil palm, pro- his goat-rearing business to meet “I initially only planted fi ve gua- cesses organic fertiliser and runs a overseas demand in the future, as va trees for my own consumption. “Farm Stay” programme. well as make agro-tourism one of Upon the advice of friends, I joined the district’s tourism products. courses and seminars on large- State support To achieve this, he is availing his scale farming before venturing into Th e former accountant did not re- farm for the state to open a training the fi eld,” Chung said, when met at gret going into farming in Tenom, centre so that interested breeders, her farm in Kampung Enubai, here. a land regarded as an agricultur- especially among the younger gen- Chung said guava trees thrived al gold mine for many. Today, he eration, could come and learn the in the sub-climate of Tenom, and owns over 300 Jamnapari and Boer methods of goat-rearing. were hardy enough to withstand breed of goats, which he bought “If the government can provide droughts and infertile soil. from Australia. us a grant to build the centre, I can Her farm grows seedless and “I am proud of my success in become the facilitator and help seeded guavas, which are ready for goat-rearing on this farm. It was produce more successful breed- harvest around nine months after a hard-won success, filled with ers,” he said. planting. Some 10 tonnes of guava sweat and tears,” he told Berna- Now, Th am sells 12 to 15 live are harvested annually, bringing in ma when met at his farm here, goats a month at a price of between an income of between RM20,000 recently. RM600 and RM800 a goat. and RM30,000 for the period. Th am received encouragement Besides rearing goats, he also Chung has been recognised to venture into the fi eld from Ten- 02 produces organic fertiliser from as “Usahawan Tani” in 2009 and om MP, Datuk Raimee Unggi and a their manure. He also grows oil won second place in The Best contribution of 200 goats from the and breeders to become entre- comprises the sub-districts of palm and fruits like pomelo. Farming Practices and Harvest Tenom Agricultural Development preneurs. Kemabong and Melalap, had the Th am has won several awards, Competition during the state level Council. Th am’s gross income nowadays promising potential of being de- including “Usahawan Penternak Ru- “Hari Peladang, Penternak dan The council acts as a catalyst is about RM20,000 a month. veloped into an area growing the minan Jaya” and “Anugerah Sub-Se- Nelayan” celebration in 2005. to encourage small-time farmers He believed that Tenom, which country’s agricultural needs. ktor Penternakan Jabatan Perkh- — Bernama 20 FOCUS TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY TUE

01 Harvest of despair

Th ai junta discovers that pleasing rice farmers is a ruinously expensive business

BY MARWAAN MACAN-MARKAR But the delay in the promised vealed widespread corruption once cash subsidy is not the only factor the paddy left farmers’ hands. Th e he power of rice to rattle shaping this mood. Equally chal- outstanding bill for the Yingluck gov- D governments is a staple lenging are the market forces farmers ernment’s rice policy is 519 billion 02 across Asia. Even mil- must contend with to sell their main baht, says the Ministry of Finance. itary regimes are not crop for the year. Th e current price of It is the largest slice of 682 billion IN immune, as Thailand 9,000 baht per tonne of paddy barely baht in losses governments have the is currently proving. covers production costs that include racked up since 2004 subsidising 15 nor TSix months after their coup in expensive fertilisers. harvests. Th e fi nance ministry plans cro May, the ruling generals are deter- “Many farmers will be in debt to issue a 30-year bond to raise the ric mined to keep more than three mil- because of fertiliser,” says Sa-ngiam, money. are lion farming households happy with counting his own costs on his thick, Trenchant critics of rice subsi- — their own brand of pro-poor policies. calloused fi ngers. “Th e government dies greet these fi gures with some trin Th e state-owned Bank for Agricul- will realise this in two months when smugness. Th ey reserve their harsh- cot ture and Agriculture Cooperatives farmers count their sales.” est barbs for the Shinawatras, Th ai- is o (BAAC) is the giver of a new round Th e looming air of despair in Th ailand’s most infl uential political clan of largesse, costing 40 billion baht land’s rural heartland is a contrast who have consistently won the rural eve (RM4.08 billion). to the atmosphere during harvests vote since 2000 on the back of their tha Rice farmers such as Sa-ngiam under Yingluck’s government. Under pro-poor policies. peo Khampakda, a weather-beaten a lavish pro-poor policy, it pledged Th is anti-subsidy lobby are devo- hav 71-year-old, are ones the junta hopes to buy “every grain of rice” from the tees of the free market and cheered dlin to please. Under their scheme, rice October 2011 harvest onwards at Th ailand’s steady run as the world’s 03 tim farmers would receive cash handouts prices 40% to 50% above the market largest rice exporter from the mid- buy based on the area under paddy culti- price. Th e farmers naturally rejoiced. 1960s till 2011. 01. Farmers dumping rice outside Thailand’s ﬁ nance ministry in Bangkok vation, instead of the harvest-linked But the party could not last. It But a subsidy of some sort may on March 13 during a rally demanding that the Yingluck administration the subsidy promised by former prime ended because of the other half of the be unavoidable. Farmers represent resolve delays in payment from the rice-pledge scheme. Photos by Reuters buy minister Yingluck Shinawatra’s gov- Yingluck administration’s rice-pledge the largest political constituency, tisi ernment toppled by the coup. scheme: the government controlling accounting for nearly one-third of 02. Soldiers checking rice stocks at a warehouse in Ayutthaya province, north of Ph But by mid-November — the rice stocks with the aim of manipu- voters. Moreover, rice farmers often Bangkok, on July 3. The military checked warehouses nationwide to work out las deadline for the BAAC to complete lating the global rice trade. fi gure at the bottom of the national how much grain was stockpiled by the government it ousted in May and look in its fi rst tranche of payments — the International scrutiny of the mas- income pile. at rice quality amid alleged corruption during the time the policy was run by see promised funds had barely begun sively expensive policy, from the in- But redesigning the subsidy former prime minister Yingluck Shinawatra. Kh to trickle down. Finance Minister fl uential Moody’s Investor Service scheme may not solve a bigger mess tom Sommai Phasee has admitted to a among others, exposed the scheme’s the junta has to grapple with, one 03. Farmers gesturing during a rally, demanding that the Yingluck administration subpar performance of only 10% failings by the second harvest cycle, that is politically charged and that resolve delays in payment from the rice-pledge scheme, outside Thailand’s ma payments made, well short of the in mid-2013. By then, a crippling 600 could seriously weaken its grip on ﬁ nance ministry in Bangkok on March 13. Ho 30% earmarked. billion baht had been spent buying the country if handled without care all Th is has created a climate of un- 41 million tonnes of unmilled rice. for the farmers. slu certainty across the northeastern Rice mountains rose up as ware- Th e question it faces is what to It is a difficult situation, Dep- naturally taking a keen interest in en rice-bowl provinces, where farmers houses were fi lled to the roof with the do with the 19.2 million tonnes of uty Prime Minister Pridiyathorn the outcome. tha have begun harvesting their mon- grain that Th ailand couldn’t fl og on milled rice currently piled up in ware- Devakula has conceded in public. Pos soon crop — including Sa-ngiam the international market. houses? Dealing with this glut in a Th e junta is in a corner and faces in his typical farming village of Baan It is this mess that the junta has rush would only depress the price of the painful prospect of fi ghting its This article first appeared in this Th Non Somboon in Khon Kaen prov- inherited, along with a massive bill, rice now being harvested, delivering way out. week’s edition of Th e Edge Review slu ince. as anti-graft investigations have re- farmers a third blow this season. The farmers of Khon Kaen are at http://www.theedgereview.com dra TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY FOCUS 21

01 Down on the farm 02

IN the villages around Khon Kaen, stay of the north-eastern economies. government infrastructure spend- the largest city in Th ailand’s rural Th e importance of rural coming and exports. northeast, the farmers’ markets are merce for Thailand’s economy Consumer spending was crowded. Buyers and sellers are from comes into sharp focus at times knocked by a controversial ruling rice-growing households. On off er such as these. Th e ousted govern- by the Elections Commission, a are fresh produce, delicacies of Isaan ment’s lavish rice subsidy boosted supposedly independent watch- — as the region is known — and farmers’ incomes by 115 billion baht dog agency. After the Pheu Th ai trinkets and clothes run up by local (RM11.72 billion) a year, amount- government dissolved parliament cottage industries. Th e impression ing to 1% of gross domestic product in December 2013 and called a is of a vibrant grassroots economy. (GDP). Much of that contributed to general election in the wake of an- To local political observers, how- consumer spending, a key driver ti-government street protests, the ever, it is anything but. Th ey note of the economy, according to the commission declared that the in- 04 that expansion of markets close to World Bank. terim caretaker government had people’s homes is a sign that they Unsurprisingly, supporters of no authority to borrow from Th ai have less cash to spend from dwin- the Pheu Th ai government’s rice banks to pay a million farmers the dling agriculture incomes. In such subsidy scheme use the consum- 130 billion baht due to them from 01. A farmer working in his rice fi eld in Nakhonsawan province. Thailand has 03 times, the habit is to stay local and er-spending numbers to justify it. the 2013 monsoon harvest. off ered two million tonnes of rice and 200,000 tonnes of rubber to China buy cheap. Farming communities, they say, Th e farmers had to wait till the as the government attempts to sell off stockpiles that are hanging over “Farming households, who are are heavy spenders, buying local coup to receive the payment, and global markets and pushing down prices. Photos by Reuters the majority in this area, have less products, and contribute substan- when it fi nally came it was hailed ters buying power,” says Cherdchai Tan- tially to money circulation. as a timely boost for consumer 02. A worker spreading rice grains to dry in the sun using a tractor at a mill in tisirin, a former legislator from the Depriving farmers of such state spending. Suphan Buri province, about 105km north of Bangkok. An audit of Thailand’s Pheu Th ai Party, which headed the subsidies has an immediate eco- In fact, it disappeared as farm- massive stockpiles of rice has found about 70% is deteriorating and another last elected government ousted nomic impact, as the ruling junta ing households used it to pay their fi fth is inedible, leaving only one tenth of standard export quality. The fi ndings in May’s military coup. “You can is rapidly learning. mounting household debts. Th e ru- in the state inspection will ramp up pressure on the generals running Thailand see it in the department stores in Th is week, the National Econom- ral economy is a major contributor as they battle to offl oad grain from around 18 million tonnes in national Khon Kaen, which have less cus- ic and Social Development Board, to national household debt being stocks, likely pushing them to speed up sales before the bulk of it rots. That tomers now.” a government agency, revealed that at an alarmingly high 84% of GDP. could drag down global prices, hurting farmers in the world’s No 2 exporter of n In some stores, this slowdown is Th ailand’s GDP would only grow by Th e junta can ill aff ord to get it the crop, where the large rural population is a key infl uence on politics. marked. Th e home products chain 1% for the current year, a marked wrong again. A visit to Khon Kaen HomePro confirms that sales in slump from last year’s forecast of this week by General Prayuth Chan- 03. Farmers clearing their rice fi eld with a motorised plough, instead of the all its northeastern branches have 4.7% growth. ocha, the self-appointed prime traditional slash-and-burn method, in Suphan Buri province. slumped — “the fi rst dip since it But this downturn was expected minister, may have off ered some t in entered the Isaan market more among those who had crunched the glimpses of rural economic life on 04. Rice farmers operating their machinery in Phatum Thani. The new harvest will than 10 years ago”, the Bangkok numbers on rural spending and the which to refl ect. put pressure on the country’s military government, which is struggling to sell Post reported. macroeconomy. Th ere were already massive stockpiles of the grain that accumulated during a generous subsidy Company president Khunawut signs of trouble at the beginning of scheme under the administration toppled by the military in a coup in May. his Thumpomkul partly blames this the year as uncertainty raged over This article first appeared in this ew slump in consumer spending on a the fate of the three main drivers of week’s edition of Th e Edge Review m drag in the farming sector, the main- the economy: consumer spending, at http://www.theedgereview.com 22 WORLD BUSINESS TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY

IN BRIEF

Hyundai, Kia lift 2014 Ready to cut rates again global sales target SEOUL: Hyundai Motor and Kia Motors yesterday raised their target for 2014 global sales to China leadership, central bank concerned over defl ation — sources at least eight million vehicles, anticipating record-high China sales to off set slowing growth in BY KEVIN YAO A crane transporting a roll the United States and Europe. of steel sheet at a factory Th e South Korean automakers, BEIJING: China’s leadership and in Handan, Hebei province which together rank fi fth in glob- central bank are ready to cut interest in China. Producer prices, al vehicles sales, said in a state- rates again and also loosen lending which have been falling ment the new sales target would restrictions, concerned that falling for almost three years, represent an almost 6% increase prices could trigger a surge in debt are piling pressure on from last year. Sales this year will defaults, business failures and job manufacturers. Photo by also be boosted by higher num- losses, said sources involved in pol- Reuters bers from India, Russia and Bra- icymaking. zil, the automakers added. New Last Friday’s surprise cut in rates, launches and more local manu- the fi rst in more than two years, re- Index opened up 0.8%. facturing will help Hyundai and fl ects a change of course by Beijing Top Chinese leaders had been Kia sell more cars in China, the and the central bank, which had per- resisting a rate cut, fearing it could world’s biggest auto market, this sisted with modest stimulus meas- fuel debt and property bubbles and year, said Suh Sung-moon, an ures before fi nally deciding last week dent their reformist credentials, but analyst at Korea Investment & that a bold monetary policy step was were eventually swayed by signs of Securities. — Reuters required to stabilise the world’s sec- deteriorating growth as the property ond-largest economy. sector cooled. Oﬀ er price for Forterra Economic growth has slowed to Until then, they had persisted Trust raised to S$2.25 7.3% in the third quarter and policy- with targeted policy steps, such as SINGAPORE: Hong Kong prop- makers feared it was on the verge of cuts in reserve ratios for selected erty developer Nan Fung Inter- dipping below 7% — a rate not seen broad-based stimulus and was open economist said. banks and liquidity injections into national Holdings said yester- since the global fi nancial crisis. to more rate cuts as well as a cut to Last Friday’s move, which cut one- the banking system. But these failed day it has raised its cash off er Producer prices, charged at the the banking industry’s reserve re- year benchmark lending rates by 40 to bring down borrowing costs for for Singapore-listed Forterra factory gate, have been falling for quirement ratio (RRR), which eff ec- basis points to 5.6%, also arose from the corporate sector. Trust from S$1.85 (RM4.76) to almost three years, piling pressure tively restricts the amount of capital concerns that local governments are Many Chinese economists had a fi nal off er price of S$2.25 per on manufacturers, and consumer available to fund loans. struggling to manage high debt bur- been calling for bolder policy actions, unit, Th e Straits Times report- infl ation is also weak. China cut the RRR for some banks dens amidst reforms to their fund- as recent data showed the econo- ed. This followed Nan Fung’s “Top leaders have changed their this year but has not announced a ing arrangements, the sources said. my losing more steam in the fourth purchase of an additional 53.9 views,” said a senior economist at a banking-wide reduction in the ratio Th e cut helped send Asian shares quarter and consumer price infl a- million units by way of a number government think-tank involved in since May 2012. broadly higher yesterday. Th e CSI300 tion falling. of married trades on the Singa- internal policy discussions. “Further interest rate cuts should Index of the largest companies listed Full-year growth is on track to pore Exchange at S$2.25 each. Th e economist, who declined to be in the pipeline as we have en- in Shanghai and Shenzhen opened undershoot the government’s 7.5% Th e new off er price translates be named, said the People’s Bank of tered into a rate-cut cycle and RRR up 1.2% at its highest level since June target and mark the weakest expan- into a 32.4% premium to the last China had shifted its focus toward cuts are also likely,” the think-tank’s 2013, while the Shanghai Composite sion in 24 years. — Reuters traded price per unit on Nov 3, and a 50.6% premium to the volume-weighted average price of shares for the one-month period China eases up to and including Nov 3. repatriation of CGN Power seeks US$3.2b Over S$3b worth of projects inked IPO proceeds in Hong Kong listing SINGAPORE: Fifteen project agreements worth over S$3 bil- BY FOX HU AND BILLY CHAN lion (RM7.71 billion) were signed BY ELZIO BARRETO would be the second largest in the ly be reached for comment. According at the 10th Singapore-Zhejiang SHANGHAI: Chinese companies region so far this year after a US$4.9 to the term sheet, its IPO is expected economic and trade council no longer need approval from the HONG KONG: CGN Power Co Ltd, billion IPO by state-owned health to be priced on Dec 3, with a debut meeting held in Singapore yes- nation’s foreign-exchange regu- China’s largest nuclear power pro- insurer Medibank Private Ltd in Aus- on the Hong Kong stock exchange terday, the highest number of lator to repatriate money raised ducer, has launched an initial public tralia. It comes ahead of an expect- slated for Dec 10. such signings since the event’s in overseas share sales. China off ering (IPO) in Hong Kong worth ed US$6 billion Hong Kong listing Th e fi rm aims to use the funds to inception in 2003, The Straits scrapped a number of approvals up to US$3.2 billion (RM10.69 bil- by shopping mall developer Dalian expand installed capacity with nine Times reported. IE Singapore by government agencies, accord- lion), the fi rst of several big listings Wanda Commercial Properties Co new power-generating units. It also said the signings attest to the ing to a State Council statement set to make for a busy end to 2014 in Ltd, and a US$2 billion sale in Th ai- plans to increase its stake in a nuclear ongoing, strengthening ties be- dated Oct 23 posted on the central Asia-Pacifi c equity capital markets. land by broadband infrastructure fi rm power station controlled by its parent, tween Singapore and Zhejiang, government website yesterday. In a plan to raise funds to expand Jasmine International Pcl. China General Nuclear Power Corp. an eastern coastal province of Making it easier for companies its generating capacity, CGN Power is Companies have raised US$51.2 ABC International, Bank of Amer- China. Th e projects span edu- to send proceeds back home may off ering 8.82 billion new shares in an billion in IPOs so far in 2014, accord- ica Merrill Lynch and China Inter- cation, environmental services, encourage more overseas listings, indicative range of HK$2.43 (RM1.05) ing to Th omson Reuters data. Th at national Capital Corp are hired as fi nancial services, marine econ- easing the backlog of applications to HK$2.78 each, according to a term represents a 42% surge from the same sponsors of the IPO, with BNP Par- omy development and social for domestic initial public off er- sheet of the deal seen by Reuters yes- period last year, because of increased ibas, CLSA, Goldman Sachs, ICBC management. ings (IPOs). Th e China Securities terday. Th at would value the IPO at activity in Australia and as new listings International and Morgan Stanley Regulatory Commission (CSRC) up to HK$24.52 billion. resumed in mainland China. also acting as joint global coordina- S Korea to start yuan/ has yet to process 603 companies’ At the top of its range, the deal CGN Power could not immediate- tors. — Reuters won trading on Dec 1 applications, more than fi ve times SEOUL: South Korea plans to the number of completed deals start direct yuan/won trading on this year, according to data from Dec 1, sources with direct knowl- the regulator’s website. S Korea holds winning hand as Japan bill dies edge of the matter told Reuters “China is taking another step yesterday. Dec 1 will be slightly to simplify its administrative pro- ahead of an earlier plan, as South cess,” said Ronald Wan, chief China BY RITSUKO ANDO AND JOYCE LEE Prime Minister Shinzo Abe dissolved legislation would even pass next year Korea strives to emerge as an adviser at Asian Capital Holdings parliament last Friday to call a snap because the budget and defence are international hub for growing Ltd in Hong Kong. “In the past, it TOKYO/SEOUL: South Korea looks election. Th at means lawmakers can- likely to dominate parliamentary de- yuan business. “Th e direct trad- wasn’t easy for many companies to like the consolation prize as Japan’s not pass regulatory legislation next bate. “It’s challenging but not im- ing is scheduled to begin on Dec transfer capital raised in the Hong US$15 billion (RM50.1 billion) casino year, making it highly unlikely any possible,” said pro-casino lobbyist 1 after successful preparation Kong market to the mainland.” dream fades, a setback for compa- casinos will be ready in time to profi t Satoshi Okabe, head of ad agency work including mock trading,” Th e backlog for domestic IPOs nies such as Las Vegas Sands Corp from tourists arriving for Japan’s 2020 Dentsu’s integrated resorts and tour- a person knowledgeable about includes 262 companies applying that envisioned a new gaming hub summer Olympics. ism business. Others were less opti- the plans said. Another source to list in Shanghai and 341 aiming rivalling Las Vegas in 2020. Sources involved in helping ne- mistic about a bill passing next year, confi rmed it. Finance ministry for the Shenzhen bourse, the CSRC A bill that would have legalised gotiate the bill’s passage through saying it may not even make it to offi cials declined to confi rm the data show. — Bloomberg casino gambling died when Japanese parliament said it was unclear if the debate for a while. — Reuters schedule. — Reuters

24 WORLD BUSINESS TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY

IN BRIEF

Global warming may Aviva to merge with hinder poverty ﬁ ght WASHINGTON: Climate change could undermine efforts to defeat extreme poverty around the globe, the World Friends Life for £5.6b Bank warned on Sunday. In a new report on the impact of global warming, the bank said sharp temperature rises Move to consolidate and cut costs in UK insurance industry would cut deeply into crop yields and water supplies in many areas, and possibly set BY CAROLYN COHN Pedestrians walking past Aviva’s back efforts to bring popula- & SIMON JESSOP head oﬃ ce in London. Insurers are tions out of poverty. “Without having to rethink the way they do strong, early action, warming LONDON: Aviva’s potential £5.6 bil- business after the UK government could exceed 1.5°C to 2°C and lion (RM29.48 billion) purchase of changed rules, causing a slide in the resulting impacts could Friends Life refl ects a need to con- annuity sales. Photo by Reuters significantly worsen intra- solidate and cut costs in the United and intergenerational poverty Kingdom’s insurance industry, fund in multiple regions across the managers said. Th e deal aims to strengthen the globe,” the report said. The Th e two companies said last Fri- balance sheet of Aviva, UK’s sec- bank said it is already like- day they had agreed to terms of a ond-largest listed insurer by mar- ly that average temperatures possible all-share deal at a 15% pre- ket capitalisation, as well as boost- will rise 1.5°C from pre-in- mium to Friends Life’s closing price, ing assets under management and dustrial levels, based on the off ering Friends Life shareholders cutting costs. built-in impact of past and a 26% stake in the new company. Friends Life outsources most of current greenhouse gas emis- Th e proposed transaction shows its £100 billion of assets under man- sions. That means extreme how insurers are having to rethink agement, and while not all of that heat events, sea-level rises the way they do business after the may come back in-house, it could and more frequent tropical UK government changed rules cov- add to Aviva’s existing £230 billion cyclones may now be una- ering annuities, which provide re- in assets under management. voidable. — AFP tirement income, causing a slide in insurance is not a surprise and is where they would want to be yet, Aviva, which has general insur- annuity sales. necessary,” said David Moss, head of and are in the middle of restruc- ance as well as pensions and life CP Group eyes Tesco’s Some investors were surprised European equities at F&C, which has turing programmes of their own.” products, expects to more than dou- Thai operations at the timing of the deal given both Aviva shares, according to Th omson Moss said the pricing did not ble its corporate pension book, due BANGKOK: Charoen Pokphand companies are in turnaround mode. Reuters data. “Th e surprise is per- look overly generous, but the merger to Friends Life’s strength there. — (CP) Group, Th ailand’s larg- “Consolidation per se in UK life haps that both businesses are not could provide benefi ts. Reuters est agribusiness conglomer- ate, is keen to buy Tesco plc’s operations in Th ailand if the British retailer decided to sell, Iran may seek the group’s chairman said yes- BHP outlines plans to cut costs terday. “We are keen to buy if Opec cut of one Tesco decides to sell,” Dhanin Chearavanont told reporters. million barrels SYDNEY: BHP Billiton yesterday kenzie said the proposed spin-off complexity and lower costs with- Dhanin, the country’s sec- outlined plans to cut costs further of some poorer performing assets, out losing the benefi ts of scale and ond-richest man, sold the lo- BY ANTHONY DIPAOLA as the world’s biggest miner battles including aluminium, manganese, diversity. cal supermarket chain to Tes- falling commodity prices, pointing silver and selected coal and nickel “Put simply, we can organise a co more than 15 years ago. CP DUBAI: Iran may propose that the to its planned demerger as helping operations, would allow BHP to company that operates 12 large, Group was in talks to buy a Organization of the Petroleum to drive productivity gains. better organise operations. core assets diff erently to one with stake in LH Bank Pcl, which is Exporting Countries (Opec) cut Th e Anglo-Australian resourc- “By signifi cantly simplifying the 30 operated assets of varying siz- owned by LH Financial Group, its output target by as much as es group is aiming to simplify and portfolio the proposed demerger es across a broader range of com- but no deal was reached, he one million barrels a day to halt strengthen its business, and said will allow us to redesign BHP Bil- modities.” also said. — Reuters the slide in crude prices when the it is looking to save US$4 billion liton and create an organisation A vote on the demerger is ex- country’s oil minister consults (RM13.4 billion) a year in running that supports better productivity,” pected in May. Bakrie Telecom’s debt with his Saudi counterpart be- costs, US$500 million more than he said in an investor presentation. Th e company also plans to cut restructuring plan fore the group gathers this week. previously fl agged, by the end of “The group’s core assets gen- exploration costs from US$14.8 JAKARTA: Indonesia’s PT Iran’s Bijan Namdar Zan- the 2017 fi nancial year (FY17). erated more than 96% of operat- billion to US$13 billion by FY16 Bakrie Telecom Tbk has pro- ganeh and Saudi Arabia’s Ali Chief executive Andrew Mac- ing profi t in [FY14], so we can cut “with no impact on growth”. — AFP posed a debt restructuring Al-Naimi will talk on the side- plan that off ers creditors cash lines of the Opec meeting in Vi- instalments and debt-to-equi- enna, seeking to defi ne a com- ty swaps, after a Jakarta court mon view among its 12 members ordered the company to nego- for supporting prices, Iran’s state- 400 jobs at sake at Australian public broadcaster tiate a debt restructuring with run Mehr news agency reported. its creditors by Dec 9. “The Opec, supplier of about 40% SYDNEY: More than 400 jobs could Foreign bureaux will be re- given the funding cuts, and were liability settlement scheme of the world’s oil, will meet on be lost at the Australian Broadcast- structured and a new Beirut post designed to position the organi- through steady cash payments Th ursday to assess its collective ing Corporation (ABC), the head opened. sation for the future. will be divided among several output amid a supply glut and a of the organisation said yesterday, Scott also flagged a renewed He said the ABC “cannot stand groups [of creditors] according 27% drop in prices this year. Half after the government cut funding. emphasis on digital services, with still and run the risk of becoming to the size of the obligations,” the analysts in a Bloomberg sur- Canberra last week announced a A$20 million investment fund less relevant and compelling to this the company said in a stock vey last week forecast that Opec the public broadcaster’s budget established in the area and the cre- and future generations”. exchange fi ling yesterday. — would cut production to shore up would be cut by A$254 million ation of a new ABC digital network Th e government currently pro- Reuters prices, while the other half said (RM740.35 million) over the next division in 2015. vides the ABC and ethnic broad- they didn’t see it deviating from fi ve years, prompting thousands to Th e ABC board said it supported caster SBS some A$1.4 billion in Daewoo to build naval an offi cial production target of protest in Sydney and Melbourne the revamp, with chairman James funding each year. vessels for Malaysia 30 million barrels a day. at the weekend. Spigelman saying the initiatives In announcing the cutbacks SEOUL: Daewoo Shipbuilding Th e drop in Brent crude, with ABC managing director Mark were a careful response to the “twin last week, Communications Min- & Marine Engineering Co Ltd the global benchmark trading Scott said yesterday the cuts meant challenges of technological change ister Malcolm Turnbull said the said in a statement it had won at less than US$80 (RM268) a hundreds of jobs could be lost, and reduced funding”. ABC should be able to fund the an order to build naval patrol barrel last week, has prompted while television sports broadcasts “Th ey provide funds to invest in less than 5% cuts through effi- vessels and six corvettes for the speculation of an Opec cut. Of- would be scaled back. essential new online and mobile ciencies and without sacrificing Royal Malaysian Navy. Th ree fi cials from oil-producing coun- Scott said the ABC would also strategies that better connect the programming. vessels will be delivered from tries stepped up diplomatic vis- review its property holdings, with ABC with its audiences,” Spigel- Australian media companies, South Korea starting from Jan- its before the group’s meeting, one Sydney site to be sold. An Ad- man said. like their foreign counterparts, have uary 2018, and the rest will be discussing how to react to the elaide television production stu- Scott said he believed the chang- endured hundreds of job losses assembled in Malaysia with plunge in prices to a four-year dio and fi ve regional radio stations es were in the best interests of the in recent years amid the diffi cult Daewoo’s cooperation. — Reu- low. — Bloomberg could also face closure. ABC and its many stakeholders transition to digital media. — AFP ters TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY WORLD 25

IN BRIEF

China blasts Washington’s Philippines reviews blacklisting of HK journalists MANILA: Th e Philippines will review its entry ban on nine comments on island project Hong Kong journalists who shouted questions at Presi- dent Benigno Aquino during a summit in Indonesia last US criticism of construction on disputed Spratly Islands deemed ‘irresponsible’ year, Foreign Affairs Secre- tary Albert del Rosario said yesterday. The move came BEIJING: Beijing yesterday dis- international obligations and re- after journalists’ groups ex- missed as “irresponsible” US sponsibilities in search and res- pressed concern over the criticism of its construction of cue,” she added. blacklisting, which threat- an artificial island reportedly A report last week by IHS Jane’s ens to sour ties that the two large enough for an airstrip in Defence revealed new details of a nations have been trying to a disputed section of the South land reclamation project China is repair after eight Hong Kong China Sea. undertaking on Fiery Cross Reef, tourists were killed in Manila The statement by China’s for- known as Yongshu in Chinese. in 2010. “Th e journalists’ issue eign ministry came after a US Beijing claims nearly all of will be reviewed,” del Rosa- military spokesman urged Bei- the resource-rich South China rio told AFP, when asked if jing to stop what it described as Sea, while Brunei, Malaysia, the Manila would reconsider the a vast land reclamation project Philippines, Taiwan and Vietnam ban on the journalists. Th e re- on the Spratly Islands. have their own claims, several of porters had their credentials The island chain, which the them also building structures on withdrawn after they shouted Chinese call Nansha, is also reefs or occupying islands. questions at the Philippine claimed in whole or part by the A harbour has been dug out on leader during an Apec summit Philippines, Malaysia, Vietnam, the east side of the reef that appears in Indonesia last year. — AFP Taiwan and Brunei. large enough for tankers and naval “External forces have no right warships, the report said. Exploding excrement to make irresponsible remarks,” US military spokesman Lieu- topples building in China foreign ministry spokeswoman tenant Colonel Jeffrey Pool called BEIJING: A cesspool fi lled with Hua Chunying said at a regular on China and other governments excrement exploded in cen- briefing when asked about Wash- to cease such construction. tral China, injuring 15 people ington’s comments. Outspoken People’s Liberation and knocking down a building, “The construction activities Army Major General Luo Yuan state-run media reported. Th e China is undertaking are for also defended the project, which blast was sparked by a local the improvement of the work- he called “completely legitimate man burning waste close to ing and living conditions of the and justifiable” in an interview the cesspool, igniting meth- island-stationed personnel, so with the state-run Global Times ane gas which was emanating that they can better fulfil their newspaper. — AFP from the pit, the Xinhua news agency said late on Sunday. The incident in Zhangjiajie city, in the central province of Hunan, caused a residential Ex-Bangladesh building to collapse and three Tibetan dam begins operation of the injured had to be hospi- offi cial to be talised, Xinhua said. China’s BEIJING: China has begun generating urban infrastructure has often hanged electricity from Tibet’s biggest ever been hastily built with little re- hydropower project, state-run media gard for safety. — AFP DHAKA: Bangladesh’s war crimes reported, the latest dam development court yesterday sentenced a former on Himalayan rivers that has prompt- Volleyball bombing ruling party offi cial to hang for mass ed concern in neighbouring India. toll rises to 57 murder, the 14th person convicted Th e fi rst generating unit of the KABUL: Survivors of a horrifi c of atrocities during the 1971 inde- 9.6 billion yuan (RM5.36 billion) suicide attack which killed 57 pendence struggle against Pakistan, Zangmu Hydropower Station, which people at a volleyball game in a prosecutor said. stands more than 3,300m above sea eastern Afghanistan said yes- Mobarak Hossain, who was ex- level, went into operation on Sun- terday how the blast ripped pelled from the Awami League after day, China’s offi cial Xinhua news through a crowd of spectators he was charged with war crimes in agency said. enjoying the fi nal moments of 2012, was found guilty of heading a Th e dam on the Yarlung Zangbo the match. Th e bomber deto- militia that rounded up and killed river, known as the Brahmaputra in nated his explosives on Sunday scores during the nine-month confl ict. India, where it is a major waterway, as hundreds of young men and “He was sentenced to death for the will be 116m high when completed boys attended a tournament murder of 33 people and given a life next year. It will have a total generat- featuring three local teams in term for the abduction and murder ing capacity of 510,000KW, making the volatile province of Pakti- of another person,” prosecutor Sha- it the largest dam ever built on the ka. Paktika provincial spokes- hidur Rahman told AFP. Tibetan plateau. man Mukhlis Afghan said in Th e 64-year-old Hossain is the fi rst “Th e hydropower station will solve concern about damming the Brah- urged China “to ensure that the in- a statement 15 people died of person connected with the ruling Tibet’s power shortage, especially in maputra, one of the largest Hima- terests of downstream states are not their injuries overnight. — AFP party to be given the death penalty the winter,” Xinhua quoted an offi - layan rivers and a lifeline to some harmed by any activities in upstream by the controversial tribunal, which cial from the Tibet Electric Power of India’s remote, farm-dependent areas” of the river, after state media Taiwan, Germany raise has mostly focused on trials of offi - Co as saying. northeastern states. reports that China planned several quota for programme cials of the country’s largest Islamist India has previously expressed India’s foreign ministry last year more dams there. — AFP TAIPEI: Taiwan and Germany party, Jamaat-e-Islami. have increased the quota for After Bangladesh gained inde- their reciprocal working hol- pendence, Jamaat was banned for iday programme to 300 peo- some years. Jamaat’s leader and its British banker’s murder trial adjourned ple per year from each side, top lieutenants were sentenced to Taiwan’s Ministry of Foreign death last year for their roles in the Aff airs said yesterday. Th e new war, triggering the country’s deadliest HONG KONG: A court in Hong at Bank of America Corp in Hong two weeks but his lawyer, Michael quota has been made eff ective political violence. Kong yesterday adjourned the tri- Kong, was charged earlier this Vidler, would not comment on the retroactive to Oct 11, based on Th e main opposition Bangladesh al of a 29-year-old British banker month after police found the bod- fi ndings, saying he had not had an agreement reached by the Nationalist Party has called the court’s charged with killing two women ies of the women in his apartment. time to review the reports. two sides on Nov 13, the min- trials politically motivated and aimed until July because of the length One was put inside a suitcase on Bank of America has previously istry said. Germany is the fi rst at eliminating opposition leaders rath- of time needed for prosecutors to his balcony, authorities have said. said Jutting was an employee until European country to enter into er than rendering justice. — AFP prepare their case. Jutting had undergone a psy- recently, but it has not said why he a working holiday agreement Rurik Jutting, who had worked chiatric assessment over the past left the bank. — Reuters with Taiwan. — CNA 26 WORLD TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY

IN BRIEF

US: World powers, Iran Philippines fi nes Chinese discuss extending nuclear deal deadline VIENNA: Iran and world powers are now discussing a possible extension of their deadline fi shermen US$102,000 each for a nuclear deal, a senior US State Department offi cial said on Sunday for the fi rst time. “Our focus remains on tak- China says the nine were detained in their country’s territorial waters ing steps forward toward an agreement, but it is only natural that just over 24 hours from PUERTO PRINCESA (Philip- fi shermen and seized their boat off in Philippine waters and of illegal laws,” Foreign Secretary Albert del the deadline we are discussing pines): A Philippine court yes- Half Moon Shoal, a disputed terri- possession of endangered green Rosario told reporters. “We tried to a range of options both inter- terday fined nine Chinese fish- tory in the Spratly Islands within sea turtles. look for ways to be lenient. I think nally and with our P5+1 part- ermen US$102,000 (RM340,680) the Philippines’ 200-mile exclu- It was not immediately clear they will credit whatever time has ners,” the offi cial said. “An ex- each after they were caught with sive economic zone, in May. Two how the fi shermen would ndfi the been served already.” tension is one of those options. hundreds of sea turtles in a dis- of the fi shermen were sent home funds to pay the fi nes, but they face China protested against the ar- It should come as no surprise puted shoal in the South China because they were minors. six months’ jail if they fail to pay rests and does not recognise the that we are also engaged in a Sea amid a festering territorial After three months of trial, up, time already served, suggest- trial, saying the nine were detained discussion of the options with stand-off between the two sides. Judge Ambrosio de Luna found ing they could even be released. in China’s territorial waters. — the Iranians,” added the offi - Philippine police arrested the the fi shermen guilty of poaching “We’re merely imposing our Reuters cial. — AFP Kiev military: Three more Ukrainian soldiers killed US police shoot KIEV: Three Ukrainian ser- Taiwanese witness to testify vicemen have been killed in dead boy, 12, the past 24 hours in fi ghting with pro-Russian separatists in holding toy gun against Philippine offi cials in court the east despite a ceasefi re in place since early September, a WASHINGTON: Police in the US Ukrainian military spokesman city of Cleveland shot and killed a BY EMERSON LIM, LIU SHIH-YI, said yesterday. Ukraine lost 12-year-old African-American boy TANG PEI-CHUN & S C CHANG four other serviceman on Sat- waving around what turned out to urday, and the death toll among be a toy gun at a playground, offi - TAIPEI: Th e son of a Taiwanese Ukrainian soldiers since the cials and reports said on Sunday. fi sherman was to appear in a Phil- ceasefi re came into force now Th e shooting in Ohio comes ippine court yesterday to testi- stands at about 150, according amid high racial tensions in the fy against eight Philippine Coast to Kiev’s military. There has United States, with a grand jury Guard offi cers charged with killing been continued shelling from set to announce whether a white his father in May 2013, Ministry of both sides, even after a peace policeman will be indicted for Justice offi cials said on Sunday. deal signed by Ukraine, Rus- the fatal shooting in August of Th e offi cials said Hung Yu-chih, sia and separatist leaders on an unarmed black teenager in skipper of the Kuang Ta Hsing No Sept 5 under the auspices of the St Louis suburb of Ferguson 28 fishing boat at the centre of the Organization for Security in Missouri. a diplomatic row between Tai- and Cooperation in Europe. Ohio was also the scene of an- wan and the Philippines in 2013, — Reuters other fatal shooting in August, has word from the Philippine au- when police responding to a 911 thorities that his safety will be French city bans street call shot and killed a black man, ensured even though he will be advertising John Crawford, in a Walmart store testifying against Philippine of- LYON: Commercial street ad- while he was carrying a toy gun fi cials at a hearing of the Batanes vertising will be banned in Gre- sold there. district court. noble to make way for trees In this latest incident, offi cers His father, Hung Shih-cheng, and community noticeboards, called to the scene on Saturday was killed by bullets fi red from the the eastern French city’s new fi red at the boy twice, hitting him Philipppine Coast Guard vessel Green mayor announced on at least once in the stomach, af- chasing the Pingtung-based fi sh- Sunday. “The municipality ter reports that he was pointing ing boat in an area where the eco- is taking the choice of free- a gun at people. nomic zones of the two countries ing public space in Grenoble The boy, identified by the overlap on May 9, 2013. Hung Yu-chih (right) in Batanes, the Philippines, for the court hearing. Photo by CNA from advertising to develop county medical examiner’s of- Investigations in both countries areas for public expression,” fi ce as Tamir Rice, died on ear- have concluded that the Philippine the offi ce of Eric Piolle, of the ly Sunday, local newspaper Th e personnel’s fi ring had caused the day. Th ey fl ew to Batanes on Sunday issued arrest warrants for Coast French Greens, said. Between Plain Dealer reported. senior Hung’s death. Th e junior for the court hearing scheduled for Guard Commanding Offi cer Ar- January and April, 326 adver- One of the police offi cers was Hung was onboard the boat at the yesterday and today, offi cials of the nold dela Cruz and seven of his tising signs, including 64 bill- in his fi rst year in the force, it said. time of the incident. Ministry of Foreign Aff fairs said. subordinates charged with homi- boards, will be taken down and Audio released of a 911 call Yu-chih had arrived in Manila at On April 22, the Basco, Batanes cide in the shooting death of Shih- the city’s outdoor advertising made to police records the call- the company of his lawyer last Fri- Regional Trial Court Branch 13 cheng. — CNA contract will be cancelled. In er saying the gun was “probably place of the hoardings, “about fake.” 50 young trees will be planted Both officers have been before spring”, the mayor’s of- placed on administrative leave fi ce said. — AFP pending an investigation, Cleve- Nasa: Soyuz spacecraft docks with ISS land police said in a statement. Commander: 20 Iraq Kurd “Upon arrival on scene, of- MOSCOW: A Russian Soyuz space- Cristoforetti, Virts and Shkapler- quoted as saying by Russian press ﬁ ghters killed in Diyala fi cers located the suspect and craft carrying Italy’s fi rst female as- ov docked just under six hours after agency TASS. DIYALA (Iraq): Twenty Iraqi advised him to raise his hands,” tronaut has safely docked with the taking off from Russia’s Baikonur Astronauts on the station will also Kurdish fighters were killed the statement said. International Space Station (ISS), Cosmodrome in Kazakhstan. Th ey fi nally be able to enjoy a decent brew in clashes and by bombs dur- “The suspect did not com- Nasa said. are to stay at the space station until thanks to the 20kg machine designed ing an operation on Sunday ply with the offi cers’ orders and Samantha Cristoforetti, along with May 2015. by famed Italian coff ee makers Lavaz- to retake two areas in Diyala reached to his waistband for the Russian cosmonaut Anton Shkapler- Th eir voyage will mean major food za and engineering firm Argotec, province, one of their com- gun.” ov and American astronaut Terry upgrades for the astronauts aboard, which specialises in making space manders said. “The number It added: “Further informa- Virts, arrived at the orbiting space lab with caviar in their baggage and an food. of peshmerga killed is 20 and tion reveals that the weapon on the Soyuz TMA-15M spacecraft espresso machine. In total 16 countries work on the more than 40 were wound- which the 12-year-old suspect at 0249 GMT yesterday, Nasa said. “Th ere will be 15 boxes of 30gm ISS, including Russia and the Unit- ed during clashes against [IS] had is an ‘airsoft’ type replica “A new vehicle has arrived. Th e each of caviar, but also apples, or- ed States, which fi nances most of and bombs at the entrance of gun resembling a semi-automat- Soyuz is confi rmed as attached prop- anges, tomatoes and 140 doses of its operation. A team of astronauts Jalawla, inside Jalawla and in ic pistol, with the orange safety erly,” high above the Pacifi c Ocean, freeze-dried milk and black tea with- is always aboard, with stays of up to Saadiyah,” Mahmud Singawi indicator removed.” — AFP Nasa television added. out sugar,” a space station offi cial was six months. — AFP told AFP by telephone. — AFP TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY RETAIL MARKETING 27 Move over newspaper

Facebook’s perfect personalised ‘newspaper’ spells trouble for media

acebook’s move to fulfil its ambi- tion to be the personal “newspaper” for its billion-plus members is likely to mean more woes for the ailing news media. Th e huge social network has Fbecome a key source of news for many users, as part of a dramatic shift in how people get information in the digital age. Company founder Mark Zuckerberg told 02 a forum in early November that his goal is 01. Facebook founder Mark Zuckerberg told a forum in early November that his goal to make Facebook’s newsfeed “the perfect is to make Facebook’s newsfeed “the perfect personalised newspaper for every personalised newspaper for every person person in the world.” in the world.” Zuckerberg said that while a newspaper 02. The splash page for the social media internet site Facebook is seen in this picture. provides the same information to every Facebook has become a key source of news for many users. Photos by AFP reader, Facebook can tailor its feed to the interests of the individual, delivering a mix of world news, community events and up- make the algorithm better. Th e algorithm Getting ‘soul’ dates about friends or family. gets stronger as more people use it.” But with traditional news media hurting, “It’s a diff erent approach to newspaper- Facebook is a source of news for at least it remains unclear how the industry can ing,” said Ken Paulson, a former editor of 30% of Americans, and a major driver of support the kind of journalism needed to USA Today who is now dean of communica- traffi c to news websites, according to a Pew keep people informed as it has in the past. tions at Middle Tennessee State University. Research Center study. Mutter said what people read may change “It’s neither good nor bad, but it’s some- Th is gives the social network enormous — it may be sponsored or subsidised in a thing a traditional newspaper can’t do.” power over the news media, which is in- way that may or may not be transparent. With Facebook, editorial decisions about creasingly dependent on traffi c from Face- “It won’t necessarily be real journalism, what members see are made not by a journal- 01 book and other social platforms. but it will be content,” he said. ist, but an algorithm that determines which Even though Facebook is known for its Paulson said that while Facebook can items are likely to be of greatest interest to And he said the trend will continue as computer coding, it still must make edito- deliver much of the information from news- each person. younger readers shun print in favour of dig- rial decisions, Usher points out. papers, “it would be hard pressed to capture Th is may concern the traditional jour- ital and mobile platforms. “What’s scary is how reactive a position the soul” of traditional print news. nalism community, but even some media it puts news organisations, which are trying “Freedom of the press was established to experts acknowledge that Facebook appears Algorithm as editor? to guess Facebook’s next move,” she said. keep an eye on people in power and inform to be able to deliver more of what people Nikki Usher, a George Washington Universi- “Th at’s a lot of power to put in a single or- the community,” he added. “Th ere’s a tre- want to see, in an effi cient way. ty journalism professor specialising in new ganisation.” mendous public spirit component that you “It’s intimate, it’s relevant, it’s extraordinarily media, said Facebook confi gures its news Facebook, Google and other tech fi rms can’t address with an algorithm.” timely and it’s about you. Th at’s more than any feed using an algorithm taking into account jealously guard their algorithmic formulas. Paulson said that while Facebook is a use- newspaper can do,” said Alan Mutter, a former tens of thousands of factors. But observers note that a single tweak of that ful platform for sharing, it will not underwrite Chicago daily newspaper editor who is now a “Facebook has all the data to tell you what formula can have important consequences the kind of investigative journalism upon consultant for digital media ventures. all of your friends are reading, so you have a for news organisations. which newspapers often pride themselves. Mutter said that as newspapers cling to better chance of seeing things that you are “News organisations are trying to build With journalism retrenching, that weakens their “ancient” business model, organisa- interested in,” she said. their strategy around trying to guess the the entire democratic process. tions like Facebook are making the news “Th e reason Facebook has so many engi- algorithm, and ultimately that’s a losing “We get the kind of news we deserve and more personal. neers and data scientists are to continually strategy,” Usher said. are willing to pay for,” Paulson added. — AFP 28 live it! TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY TUE WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE Personal ASSISTANT COMPILED BY VICHITRA NADES

WORK. LIFE. BALANCE

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Study: Carbs more harmful than saturated fats

ong-derided saturated fats instead of being burned by the body, the — associated with an array researchers said. of health problems such as “When you consume a very low-carb heart disease — caught a diet your body preferentially burns sat- break when research recently urated fat,” Volek said. revealed their intake could be “We had people eat two times more Ldoubled or even nearly tripled without saturated fat than they had been eating driving up their level in a person’s blood. before entering the study, yet when we Carbohydrates, meanwhile, are associ- measured saturated fat in their blood, ated with heightened levels of a fatty acid it went down in the majority of people,” linked to increased risk for diabetes and he said. heart disease, the same study showed. Th e fi nding “challenges the conven- ENJOY a hearty meal without burning a “Th e point is you don’t necessarily tional wisdom that has demonised sat- hole in your pocket at Marmalade Café save the saturated fat that you eat, and 02 urated fat and extends our knowledge of with set lunches priced at RM25 (exclusive the primary regulator of what you save in why dietary saturated fat doesn’t correlate of tax). Choose from pasta Aglio Olio, terms of fat is the carbohydrate in your creased, total saturated fat in the blood with disease,” Volek said. turkey wraps and fried rice that come with diet,” senior author Jeff Volek of Ohio State did not increase, and even went down By the end of the trial, participants a complimentary iced lemon tea. The University, said in the report. in most people. saw “signifi cant improvements” in blood set lunch is available on weekdays from To conduct the study, which appeared Th e fatty acid called palmitoleic acid, glucose, insulin and blood pressure and 12pm to 3pm at Marmalade Café level in the journal PLOS ONE, scientists put which is associated with “unhealthy me- lost an average of 10kgs. G3, Block C1 Publika Shopping Gallery, 1 16 participants on a strict dietary regime tabolism of carbohydrates that can pro- “Th ere is widespread misunderstand- Jalan Dutamas 1, Solaris Dutamas, and that lasted 4½ months. mote disease,” went down with low-carb ing about saturated fat. In population at Bangsar Village II, 1 Jalan Telawi Dua, Every three weeks their diets were diets and gradually increased as carbs studies, there’s clearly no association of Bangsar Baru. To ﬁ nd out more or to make changed to adjust carbohydrate and to- were re-introduced, the study said. dietary saturated fat and heart disease, yet a reservation, call (03) 2282 8301 or (03) tal fat and saturated fat levels. An increase in this fatty acid indi- dietary guidelines continue to advocate 6201 7991. Alternatively, visit http://www. Th e scientists found that when carbs cates that a growing proportion of car- restriction of saturated fat. Th at’s not sci- ilovemarmalade.com/. were reduced and saturated fat was in- bohydrates is being converted into fat entifi c and not smart,” Volek said. — AFP TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY 29 live it! WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE

FASHION

AFP PHOTO

Singer Robbie Williams launches clothes collection

BRITISH star Robbie Williams is to launch a “What a great collaboration, let’s have it!” 30-piece clothing collection with retailer Primark, Williams said, adding he was “delighted”. Th e the singer announced last Th ursday. autumn-winter collection will be launched in 15 Williams, who rose to fame as a member of branches of the budget chain, which has shops 01 pop band Take Th at, has his own fashion label, in several countries in Western Europe. Farrell. It comes after US singer Beyonce announced Th e brand was saved from closure in 2013 she would launch a sporty clothes collection 01. Be careful of what you eat as research by entrepreneur Peter Jones, and the collection with retailer Topshop in 2015, off ering “clothing, has found carbohydrates heighten will be jointly produced by Farrell and Primark, footwear and accessories across dance, fi tness levels of a fatty acid linked to increased a subsidiary of Associated British Food. and sports”. — AFP risk of diabetes and heart disease.

02. Could too much rice kill you? Scientists have found how carbs can be more harmful than saturated fats.

03. There is an increased risk of diabetes and heart disease should you indulge too much in carbohydrates.

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Zen TODAY Humankind cannot bear very much reality. — TS Eliot

WHITE CEVICHE

Ingredients: OLE CEVICHE! • Skinless fi sh fi llets cut to bite size (any white fi sh of your liking — sea bass, dory, red snapper) • Lime • Tomatoes (seeded), onions, and cori- Make a popular Mexican seafood dish in under eight minutes ander that are chopped • Avocado to be halved, seeded, peeled and coarsely chopped BY CARMEL DOMINIC • Salt 01. Chef Jorge Carlos • Optional: Cilantro for garnish new Mexican eatery at Avenue K Gonzalez. called Fresca: Mexican Kitchen Method: and Bar opened its doors last 02. The Red Ceviche that 1. Rinse the (blanched) fi llets and pat Friday in conjunction with cel- was served with a dry with paper towel. ebrating 40 years of friendship dollop of guacamole 2. Cut fi llets into bite size and place in between Malaysia and Mexico. at the demonstration a clean and dry bowl — the recom- ToA introduce the authentic flavours of Mex- mended size is quarter inch. ico to locals, the Mexican embassy flew in 03. The White Ceviche that 3. In another bowl, juice some lime to celebrated chef Jorge Carlos Gonzalez from the chef made with the same ratio of the amount of cubed the Oaxaca, (pronounced: Wahaka) from the cubed red snapper. fi sh. Add in chopped tomatoes, onions, south western part of Mexico. Photos by coriander and salt to taste. Stir gently. Chef Jorge demonstrated how to make two Haris Hassan 4. Gently add in the cubed fi sh and bathe types of ceviche (pronounced [se βit e]) — White it with the mixture. and Red Ceviche — in less than eight minutes. 5. Cover and chill for about 4/5 hours. Below is a quick step-by-step-how-to. Th e rec- Stir occasionally. ipe is simple and easy and one that is loaded 6. When ready to serve, drain the fi sh with proteins and antioxidants. and plate it. According to Chef Jorge, the fi llets should 7. Add the chopped avocadoes and either be frozen or blanched before making cilantro. the dish. For the freezing method, the fi llets 8. Enjoy! should be in the freezer for about three to 01 four hours before cooking. Th en, thaw the fi llets before making the ceviche. Alternatively, the fi llet can be blanched in boiling hot water for about 10 seconds and immediately placed in a bowl with ice cubes to stop the cooking process. Both methods retain the nutrients of the fi sh for your healthy consumption. For the Red Ceviche, the additional step is to simply add chillies. Chef Jorge used guajillo chiles that are native to Mexico. However, red bell peppers or any other chilli that is available at your convenience can be used as a substitute. Just make a paste and add it in the mixture in Step 3. Th e level of spiciness of the dish is entirely up to the individual. On a side note, both dishes taste better with lime juice that is slightly sweetened. 02 03 TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY SPORTS 31

IN BRIEF

New Zealand coach wary Champion Hamilton of Sharjah conditions SHARJAH, UAE: New Zealand coach Mike Hesson warned his team needs to be at their best to compete on a fl at Shar- ready for new title fi ght jah pitch where they meet Pa- kistan in the third and fi nal cricket Test from tomorrow. New Zealand seek a series-lev- Mercedes dominates season with a record 16 wins in 19 races elling win after losing the fi rst Test in Abu Dhabi by 248 runs and drawing the second in ABU DHABI: Two-time world that we will come back very, very of Germans Michael Schumacher are,” he said. “To be a part of that is Dubai. Hesson said a fl at and champion Lewis Hamilton said strong next year.” at Ferrari, and Sebastian Vettel at something really very special. You grass-less Sharjah pitch will yesterday he is determined to keep Hamilton’s victory, after Red Bull. see the atmosphere in the team, be tough. Hesson said of the winning Formula One titles after Mercedes teammate and sea- “Th e fi rst title was an exceptional you see the guys at the factory and drawn three-day game before his triumph in Abu Dhabi. son-long rival Nico Rosberg made and an incredible feeling for me,” what’s gone on with the partnership the Test series, “We have to After a night of partying follow- a poor start from pole position and said Hamilton. “Th at was achieving with Petronas and all the guys back play very well to be able to ing last Sunday’s Grand Prix victo- then suff ered mechanical problems a life-long goal of getting to For- at the factories in Brackley and Brix- compete in these conditions.” ry, the 29-year-old Briton said he on his way to fi nishing 14th, added a mula One and winning the world worth putting the team together. — AFP would get immediately down to second title to the fi rst won in 2008. championship. I don’t know if I was “Being in a diff erent stage in my work improving the car for next Mercedes dominated the season in a place to really embrace it and life, it just feels sweeter being a bit Famed Russian coach season. with a record 16 wins in 19 races — absorb it in the way I can today. older. It’s very special and a hum- Tikhonov dies aged 84 “We want to be able to go into 11 to Hamilton and fi ve to Rosberg “Being a part of this team is defi - bling experience.” MOSCOW: Viktor Tikhonov, next season and compete again — and produced speed and consist- nitely a more satisfying feeling. Having apparently pushed aside who coached the Soviet Union and be as strong as possible. Th at’s ency that left their rivals stranded. Winning this championship with their once bitter rivalry, Hamilton and Unifi ed Team to Olym- obviously going to be the goal and Th e team now appear poised to this team — a young team that has and Rosberg are already favourites pic ice hockey gold at three I have absolute faith in the team enjoy an era of supremacy like that worked so hard to get to where we to repeat their duel next year. — AFP straight Games, has died “from a long-term illness” at the age of 84 in Moscow, the Russian Ice Hockey Federation said. In addition to winning gold Federer legend Malaysian round delivers great at the 1984, 1988 and 1992 Olympic Games, Tikhonov grows with also won eight world cham- performances, on track action pionships as a coach. He was Davis Cup win also the coach of the Soviet team that lost to the United LILLE (France): It’s taken him 16 PUTRAJAYA: Spectacular fi ghtbacks, States in the semi-fi nal medal years as a pro, but Roger Federer fi ercely contested racing and a host round of the 1980 Olympics in fi nally has won all there is to win of popular attractions combined to a game known as the “Miracle in tennis — well almost. All four create a fantastic atmosphere at last on Ice”. — Reuters Grand Slam titles — a record 17 Saturday’s Putrajaya ePrix. Th e sec- in total — six ATP year-end ti- ond ever race in the history of the Rosberg will bounce tles, 23 Masters Series, Olympic FIA Formula E Championship served back, predicts Wolﬀ gold and now the Davis Cup for to confi rm the growing enthusiasm ABU DHABI: Mercedes Benz Switzerland. for the new racing category. In the team chief Toto Wolff forecast Th e Olympic title of course heart of the “World’s First Intelligent that Nico Rosberg will bounce was in the doubles with Stan Garden City”, the 20 Spark-Renault back stronger next year from Wawrinka in Beijing in 2008 and drivers once again put on a very high his desert duel defeat by Lewis he has yet to match great rival quality sporting spectacle. Hamilton in last Sunday’s title Rafael Nadal and Andre Agassi Following the success of the in- showdown Abu Dhabi Grand as the only men to have won all augural round of the FIA Formula E Prix. In the wake of Hamil- four Grand Slam titles, Olympic Championship in Beijing in Septem- ton’s triumph, and clinching singles gold and the Davis Cup ber, all of the teams and partners in- of his second drivers’ world during the course of their careers. volved in the new series were looking The start of the Formula E race in Putrajaya on Saturday. title, Wolff also pointed to the But it’s an astonishing record for further confi rmation in Putrajaya. strong and respectful rivalry for a player many consider to be A key player since the start of the that underpins their relation- the greatest of all time. Th e Davis project, the Renault Sport teams had Twizy, in the eVillage during the day. ien Buemi (e.dams-Renault), both of ship as teammates. — AFP Cup win was arguably the hard- not rested on their laurels since the In a dramatic, incident-packed whom had fought their way through est of them all for Federer to win, opening race. Th eir never-ending day, Nicolas Prost relinquished pole the fi eld from the back of the grid. Ferrari sack team chief involving as it does other players search for complete reliability, maxi- position to Oriol Servia (Dragon Rac- Th e Brazilian continues to lead Mattiacci and doubles action. mum safety and optimised architec- ing), following the penalty he was the championship standings going MILAN: Ferrari yesterday Asked to compare his feel- ture led them to strengthen the gear- given in Beijing. On lap fi ve, Sam Bird into the next round at Punta del Este, sacked team chief Marco Matti- ings in winning Wimbledon for box installation in order to meet the (Virgin Racing) got past the Catalan in Uruguay, on Dec 13. acci after just seven months in the fi rst time in 2003 and what demands of racing on the streets of and held the lead until he came into Kuan Kim Luen, CEO of TC Euro the post and appointed Maur- he felt on Sunday, he replied: the country’s administrative centre. the pits to change cars. Th ird in For- Cars, Renault’s sole franchise holder izio Arrivabene in his place, a “You can’t compare. When I won Before the start, the enthusiastic mula Renault 3.5 Series in 2012, the for Malaysia: “Not only did we wit- team statement announced. Wimbledon, it was a total shock, crowd was thrilled by a brand-new British driver retook the lead four laps ness a very exciting race but there Arrivabene takes over only days honestly. Davis Cup is something electric vehicle on-track demo, show- from the end when he overtook Dan- was also a great performance from after the team signed Germa- that I knew was possible at some casing the performances of the Re- iel Abt (Audi Sport ABT), who was the two e.dams-Renault cars, which ny’s four-time world champion stage in my career.” — by Allan nault ZE range. Many spectators also on a diff erent strategy. He went on fi nished third and fourth. It was with- Sebastian Vettel on a three- Kelly/AFP took the opportunity to test drive the to secure the win, ahead of Lucas di out doubt a fantastic day for Renault, year contract starting from next brand’s fl agship models, ZOE and Grassi (Audi Sport ABT) and Sébast- both on and off the track!” year. — AFP

Chinese Olympic star Sun Yang failed May drugs test, says Xinhua

BY BENJAMIN HAAS itive test for the stimulant trimetazi- Xinhua did not immediately ex- defended himself in a hearing in July been unaware that it was included dine, was imposed in July, the agency plain why the positive result had only “where the experts decided to hand on the list, Xinhua said. BEIJING: China’s controversial Olym- said, citing the China Anti-Doping come to light now, or how Sun was him a three-month ban”. China’s National Swimming Fed- pic swimming star Sun Yang failed a Agency (CHINADA). able to take part in the Incheon event. Trimetazidine, which improves eration declined to comment and a doping test in May and was subse- Sun, 22, competed in the Asian It said that he tested positive on glucose utilisation, was added to the spokesman for CHINADA could not quently banned for three months, the Games in September, where he took May 17 during China’s national swim- World Anti-Doping Agency’s banned be reached for comment. It is only the offi cial Xinhua news agency reported gold in the 400m and 1,500m freestyle, ming championships, waived his list at the start of this year. Sun said he latest incident to embroil Sun, the bad yesterday. Th e ban, following a pos- and the 4 x 100m relay. right to have his B sample tested, and used it for medical reasons and had boy of Chinese swimming . — AFP 32 SPORTS TUESDAY NOVEMBER 25, 2014 • THEEDGE FINANCIAL DAILY

IN BRIEF

Man City on brink ahead Kiwi teen Ko wins Tour of Bayern test LONDON: Manchester City are teetering on the brink of a third Champions League group-phase elimination in Championship four seasons ahead of Bayern Munich’s visit to the Etihad Stadium today. City’s dismal 2-1 loss at home to CSKA Mos- She picks up a total of US$1.5 million cow in their previous outing left them bottom of Group E with only two points and they NAPLES (Florida): New Zealand will be knocked out if they fail teen Lydia Ko parred the fourth to beat Bayern and there is a play-off hole to beat Carlota Cigan- winner in the Russian cham- da and win the LPGA Tour Cham- pions’ home game with Roma. pionship, completing a US$1.5 Manuel Pellegrini’s side can million (RM5.01 million) haul draw some solace from the last Sunday that included a sea- fact that Bayern, who shaded son points crown. September’s reverse fi xture 1-0 Ko tapped in for par on the fi nal thanks to a last-minute goal extra hole after her Spanish rival by former City player Jerome buried her approach under a bush, Boateng, are already guaran- giving the Seoul-born 17-year-old teed to qualify as group win- her third title of her fi rst full LPGA ners. — AFP season. “This has been a big year, a Arab footballers beat roller coaster ride,” Ko said. “I’ve Jewish rivals 1-0 learned so much this year. Win- SAKHNIN, Israel: Under the ning these play-off s I’ve learned eyes of hundreds of police and a lot. I think it’s going to be even private security guards the better next year.” Israeli premier league’s only It will be hard for Ko to top the Arab club beat mainly-Jew- richest payday in women’s golf his- ish rivals Beitar Jerusalem 1-0 tory, the US$500,000 tournament Lydia Ko of New Zealand playing a shot on the 17th hole during the ﬁ nal round of the CME Group Tour Championship at Tiburon Golf last Sunday. Despite on-pitch top prize and the US$1 million sea- Club on Sunday in Naples, Florida. Photo by AFP brawling between Beitar and son points bonus, an actual box Bnei Sakhnin players in the fi lled with money. 18th hole at Tiburon Golf Club. three-foot (1m) par putt on the sec- parred to extend the drama. seventh minute of extra time, “It’s amazing. I’ve never seen Ko had already clinched the ond extra trip to the 18th, leaving Ko On the fourth play-off hole with police reported only minor that much cash in one place be- LPGA season points bonus prize, and Ciganda to fi ght for the crown. sunset approaching, Ciganda’s ap- incidents off the field. Police fore,” Ko said. “Th is year has been edging American Stacy Lewis for On the third extra visit to the proach trickled down a slope and originally banned the game awesome.” the big pay-off by virtue of her top- course’s second-hardest hole of the under a lakeside bush in a hazard from being held in the Arab Ko, Paraguay’s Julieta Grana- three fi nish, but had another fi ght week, Ciganda dropped her approach beyond the green. She took a drop town of Sakhnin due to safe- da and Ciganda each fi nished 72 to win the season-ending event. six feet from the hole. Ko came up and was well short with a chip. Ko ty concerns after a series of holes on 10-under par 278 to force All three parred the fi rst play- inches short from 30 feet but Cigan- then two-putted from 25 feet for deadly attacks in east Jerusa- a playoff , staged entirely on the off hole but Granada lipped out a da missed right of the cup and both the title. — AFP lem and the occupied West Bank. — AFP Bottom side Stuttgart sack Veh after six months Squad to forge Rodgers under pressure to lift BERLIN: VfB Stuttgart on Mon- day sacked coach Armin Veh ahead without after just six months in charge shattered Reds with his team bottom of the Chong Wei Bundesliga having won just nine points in 12 league games. KUALA LUMPUR: Th e absence BY STEVEN GRIFFITHS ute, but the Reds surrendered their for his sacking unless he can reverse Th e 53-year-old, who steered of Datuk Lee Chong Wei in the advantage in lacklustre fashion with the downward spiral immediately. Stuttgart to the 2007 German 2014 Axiata Cup will not prevent LONDON: Brendan Rodgers admits Dwight Gayle equalising before late “I have a great communica- league title during his fi rst stint the national badminton squad he must restore Liverpool’s shat- goals from Joe Ledley and Mile Jedi- tion line with the owners. We’ve at the club, admitted he was from going for gold at the tour- tered morale quickly after a dismal nak gave Palace their fi rst win since been honest with each other. But emotional when he heard of nament starting this Th ursday 3-1 defeat at Crystal Palace raised September. ultimately you have to get results. his dismissal. “Th is step is very in Jakarta until Dec 5. questions about his job security. But after this latest setback, they Th ey have to see development on hard for me to take because the Men’s singles player, Chong Rodgers’ team hit a new low in an trudged away from south London the fi eld and, barring this period, club and the team are close to Wei Feng is aware of the chal- already troubled campaign at rain- trailing leaders Chelsea by 18 points I think our development has been my heart,” said Veh. “But at the lenges the national squad will be lashed Selhurst Park last Sunday as and sit closer to the relegation zone good and very fast. I can only do end of the day I have to accept facing but is optimistic of meet- they crashed to a third successive than the Champions League places. my best and fi ght even harder. Any it as I am convinced it is the ing the semi-fi nal target. loss in the Premier League. With Liverpool’s season teetering pressure now comes on to me. It’s right thing to do.” — AFP “It is undeniable it will be an Rickie Lambert had given Liver- on the brink of a full-blown crisis, my responsibility as a manager to uphill task to defend the cup pool the perfect start with his fi rst Reds manager Rodgers acknowl- pick the best team that I think can Brandao apologises for without Chong Wei. But I am goal for the club in the second min- edged he will start to hear more calls win the game.”— AFP Thiago Motta headbutt confi dent if we make it to the PARIS: Bastia’s Brazilian strik- semi-final, the players would er Brandao, who was hit with a be ready for the fi nal challenge,” six-month ban for headbutting he told reporters at Bukit Kiara Paris Saint-Germain’s Th iago here yesterday. Match-fi xing scrutiny for Suzuki Cup Motta in August, apologised Besides Wei Feng, the squad publicly for his gesture on comprises Liew Daren (men’s SINGAPORE: A specialist agency will way in Singapore and Hanoi, two of Vietnam has endured a series French television last Sunday. singles), Hoon Thien How look out for suspicious betting pat- the countries in Southeast Asia that of corruption scandals, notably in Brandao, whose gesture was (men’s doubles), Tan Boon terns during Southeast Asia’s Suzuki have had problems with match-fi x- 2007 when a group of players was described as “an inexcusable Heong (men’s doubles), Tan Wee Cup in a move aimed at stamping ing and corruption. convicted for fi xing an international and unjustifi ed assault” by the Kiong (men’s doubles), Tee Jing out potential match-fi xing. “We are not blind to the dangers at the Southeast Asian Games two French disciplinary commis- Yi (women’s singles), Ho Yen Mei Swiss-based data company Spor- that match-fi xing and manipula- years earlier. sion, has been ruled out until (women’s singles), Chan Peng tradar will monitor all 18 matches tion poses,” AFF general secretary “Th e players and fans will make Feb 21, meaning he will miss Soon (mixed doubles), Tan Aik and hold workshops for tournament Datuk Azzuddin Ahmad said in a this [Suzuki Cup] a magic tourna- at least 24 games. “I regret my Quan (mixed doubles), Lai Pei offi cials, following an agreement with statement. Together with the best ment — we will do all we can to actions, I regretted it straight Jing (mixed doubles) and Ng Hui the Asean Football Federation (AFF). monitoring system available, we keep it honest,” said Oscar Brod- away and now I want to off er Lin (mixed doubles). — Bernama Th e eight-team tournament, held will be vigilant, precisely so that kin, Sportradar’s senior manager an apology,” Brandao told Ca- every two years, is currently under- our fans don’t have to be.” in Asia. — AFP nal Plus. — AFP