PP16832/01/2013 (031128) Malaysia

Economics 27 July 2012

GTP Roadmap 2.0 The Next Level…

Suhaimi Ilias  PEMANDU launched the Roadmap for Government [email protected] Transformation Plan (GTP) 2.0. at the GTP Open day in KL on 24 (603) 2297 8682 July, which provided some details on the targets, deliverables and initiatives for the next phase of GTP covering the years 2013-2015 Ramesh Lankanathan (GTP 2.0). The GTP was launched in Apr 2009 to improve [email protected] Government performance and delivery in six National Key Result (603) 2297 8685 Areas (NKRAs) – Reducing Crime, Fighting Corruption, Education

William Poh (Improving Student Outcomes), Social Welfare (Raising Living [email protected] Standards of the Low Income Households), Improving Urban Public (603) 2297 8683 Transport and Rural Basic Infrastructure. In June 2011, Cost of Living was added as the seventh NKRA. These seven NKRAs under GTP 1.0 remain in GTP 2.0. GTP is implemented in three

stages – the first phase i.e. GTP 1.0 started in 2010 and will conclude this year.

 Raising the bar in GTP 2.0. The seven National Key Result Areas

(NKRAs) under GTP 1.0 essentially remain in GTP 2.0 i.e. Reducing Crime; Fighting Corruption; Addressing Rising Cost of Living; Assuring Quality Education; Improving Rural Development; Raising

Living Standards of Low Income Households; and Improving Urban

Public Transport. The basic issue and challenge for GTP ahead is raising the bar on the targets/KPIs. We feel that the ability of the GTP to broadly meet or exceed targets/KPIs thus far has been a function of realising the “low-hanging fruits”, “quantitative metrics” and “quick wins” given PEMANDU’s and the Government’s professed aim and GTP 1.0 mantra to deliver “Big Fast Results”. Going forward, “higher-hanging fruits”, “qualitative metrics” and “tough fixes” should be the order of the day.

 GTP 2.0 has to deal with perception gaps and quality issues, which mainly revolves around crime, corruption and education. There is also a need for greater synchronization and better integration of GTP with the Economic Transformation Programme (ETP) and the Strategic Reform Initiatives (SRI) to avoid the risks of policy frictions and conflicting signals. In addition, stronger internal audits and rigorous independent external audits on to the outcomes and results of the NKRA targets/KPIs are a must to detect and prevent “statistical discrepancies and data anomalies” so as to reduce credibility gap in the data and boost confidence on Malaysia’s transformation story.

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS GTP 2.0 Roadmap

PEMANDU launched the Roadmap for Government Transformation Plan (GTP) 2.0 at the GTP Open day in KL on 24 July, which provided some details on the targets, deliverables and initiatives for the next phase of GTP covering the years 2013-2015 (GTP 2.0). The Open Day is also an opportunity for PEMANDU / Government to obtain public feedbacks and ideas. The other two GTP Open Days will be held in East Malaysia i.e. Kuching, Sarawak (10 Aug) and Kota Kinabalu, Sabah (14 Aug).

Recap on GTP. The GTP was launched in Apr 2009 to improve Government performance and delivery in six National Key Result Areas (NKRAs) – Reducing Crime, Fighting Corruption, Education (Improving Student Outcomes), Social Welfare (Raising Living Standards of the Low Income Households), Improving Urban Public Transport and Rural Basic Infrastructure. In June 2011, Cost of Living was added as the seventh NKRA. GTP is implemented in three stages – the first phase i.e. GTP 1.0 started in 2010 and will conclude this year.

The Three Phases of GTP:

 GTP 1.0 (2010-2012): Establish a new engine for change and deliver substantial outcomes for the people quickly. This includes setting and achieving targets within the National Key Result Areas (NKRAs) and the Ministerial Key Result Areas (MKRAs) to address people’s priorities.  GTP 2.0 (2013-2015): More pervasive change within Government. The important aspects of daily life as defined by the NKRAs and MKRAs should have improved significantly. The structure of the economy should have evolved into higher-value-added sectors in line with the New Economic Model, and government productivity should have been further advanced. The first shoots of a higher-income nation should be emerging.  GTP 3.0 (2016-2020): Fundamental changes to the Malaysian society as envisaged by Vision 2020 should have happened. People should be experiencing a new sense of being Malaysian, a higher level of prosperity and better public services. It is expected that the Government would then be smaller, more agile and work increasingly in partnership with the private sector to provide public services efficiently. Innovative and people-centric models of public service delivery – centered on choice and competition – should be in place by then. Source: PEMANDU

Improved GTP 1.0 outcomes in 2011 versus 2010, with further progress so far in 2012. PEMANDU reported that most of its targets and commitments set for all the seven National Key Result Areas (NKRAs) have been delivered based on the 2011 results. In the second installment of the GTP Annual Report, the outcome in 2011 was much better than in 2010. All six NKRAs exceeded targets and these were achieved without busting their budget allocations, as summarized by the tables overleaf. In contrast, two NKRAs underperformed in 2010 i.e. Social Welfare and Rural Infrastructure. We gathered from media reports that further progress are being made to achieve 2012 targets.

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Government Transformation Programme’s (GTP) NKRA Overall Performance, 2011 NKRAs 2011 Target (%) 2011 Actual (%) 2011 Budget 2011 Actual Budget Utilisation (MYR m) Budget (MYR m) (%) Crime 100 130 473 349 74 Social Welfare 100 103 506 497 98 Education 100 187 375 265 71 Rural Basic Infrastructure 100 123 6,480 6,086 94 Urban Public Transport 100 108 1,387 1,328 96 Corruption 100 133 7 4 49 Source: GTP Annual Report 2011

Government Transformation Programme’s (GTP) NKRA Overall Performance, 2010 NKRAs 2010 Target (%) 2010 Actual (%) 2010 Budget 2010 Actual Budget Utilisation (MYR m) Budget (MYR m) (%) Crime 100 168 337.9 257.7 76 Social Welfare 100 79 1,170 1,163 99 Education 100 156 244.6 117.5 48 Rural Basic Infrastructure 100 91 3,234 2,372 73 Urban Public Transport 100 107 448.3 397.5 89 Corruption 100 121 8.2 4.3 52 Source: GTP Annual Report 2010

Snippets of the latest developments under GTP 1.0, 2012 NKRA Updates / News Reducing Crime The nation's crime index fell by 10.1% in Jan-May 2012, recording 63,221 cases as compared to 70,343 cases during the same period last year. However, street crime which recorded a 43% reduction as compared to the same period last year was two per cent short of the government target of 45% reduction. The 2012 target is to reduce the index by 5% after the 11.1% drop in 2011 and 15% drop in 2010.

Fighting Corruption 991 people were convicted of corruption by MACC, including high-profile titled personalities, and are listed on the MACC portal complete with their photographs, personal particulars and case history. In Jan-May 2012, 211 people were convicted (2012 target: 300) after 496 in 2011 and 284 in 2010.

Improving Rural Basic Sarawak has built or upgraded 119.02km of roads in the rural areas in Jan-Apr 2012, far exceeding the target of 48.5km, Infrastructure and built or renovated 924 houses versus the target of 731 houses.

A total of 363 out of the 829 Rural Electrification projects have been completed and the remaining projects are in various stages of implementation under the NKRA programme in Sarawak. The number of houses that have been connected with grid electricity supply to date is 21,635. Currently the coverage of rural grid electricity is 74.3%.

Improving Urban A fully air-conditioned, 562m long, 5m wide elevated walkway was opened in May 2012, connecting busy areas of Jalan Public Transport Pinang, Jalan Perak and Jalan Raja Chulan with escalator and staircase entry and exit points at strategic locations, forming a major portion of the 1.173km pedestrian linkages connecting City Centre to , and improving access to Bukit Bintang and Raja Chulan Monorail Stations, as well as KLCC LRT Station.

Education (Improving Principals, teachers and support staff of 124 secondary schools nationwide received about MYR10m under the Student Outcomes) government's new deal for exceeding their set educational goals. The schools selected for the awards made up 5.51% of the country's 2,248 secondary schools. The government's efforts to bridge the rural-urban gap in education had been fruitful, judging from the fact that 67 or 54% of the 124 schools are rural schools.

Social Welfare The Government spent MYR706.6m in carrying out various 1AZAM programmes since its introduction, which benefitted (Raising Living 80,597 participants nationwide as of mid-2012 versus 63,147 at end-2011 (end-2012 target:102,747 ). Standards of the Low- Income Households) Under the initiative to increase home ownership among the poor, a total of 5,352 tenants have purchased flats under the People's Housing Project-National Economic Action Council (PPR-MTEN) and Kuala Lumpur City Hall Public Housing (PA DBKL) programmes so far this year, up from the total of 4,865 reported as at end-2011. To recap, the Government had approved the sale of 44,146 flats to existing tenants under these programmes and as of May 2012, 37,133 flats have been offered, and 11,823 tenants have responded that they wished to continue renting.

Cost of Living Mydin Holdings Bhd, which is the managing company of the government-initiated Kedai Rakyat 1 Malaysia (KR1M) outlets that offered everyday products as discounted prices, plans to set up at least 85 stores nationwide by the end of this year. There are currently 36 KR1M outlets in the country.

Sources: Media reports, PEMANDU

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Raising the bar in GTP 2.0. The seven National Key Result Areas (NKRAs) under GTP 1.0 essentially remain in GTP 2.0 i.e. Reducing Crime; Fighting Corruption; Addressing Rising Cost of Living; Assuring Quality Education; Improving Rural Development; Raising Living Standards of Low Income Households; and Improving Urban Public Transport. The basic issue and challenge for GTP ahead is raising the bar on the targets/KPIs. We feel that the ability of the GTP to broadly meet or exceed targets/KPIs thus far has been a function of realising the “low-hanging fruits”, “quantitative metrics” and “quick wins” given PEMANDU’s and the Government’s professed aim and GTP 1.0 mantra to deliver “Big Fast Results”. Going forward, “higher-hanging fruits”, “qualitative metrics” and “tough fixes” should be the order of the day.

To deal with perception gaps and quality issues. Among the key ones are:

 Addressing serious, syndicated and organized crimes. Under GTP 2.0, the focus to reduce crime shifts from street crimes to vehicle thefts, house break-ins, crimes against women and children, and human trafficking.

 Intensifying the efforts to tackle corruption amid the still-prevalent negative public and international perceptions e.g. Malaysia’s deteriorating ranking in the Corruption Perception Index published by Transparency International. Among the key initiatives highlighted in the GTP 2.0 Roadmap to tackle the corruption issue and address the perception problem:

1. Strengthen the independence of the Malaysian Anti-Corruption Commission (MACC).

2. Enable authorities to act quickly in addressing issues raised in the Auditor-General’s Performance and Financial Audit Reports e.g. fast-tracking access to Auditor General (AG) Performance Audit Report for immediate action by for example issuing the audit report three times a year instead of current practice of releasing annual report after the announcement of the Annual Budget to reduce time lag and information overload that has led to inaction or inadequate responses; establish an Action Committee chaired by the AG Office consisting of AG, police and MACC to focus on corruption-related concerns from the report; online dashboard to make publicly available outstanding issues in the AG report; “Putrajaya Inquisition” lead by the PM to prompt the resolution of outstanding issues.

3. Improve the governance framework on political financing e.g. include provision on specific procedures to govern political financing under Societies Act 1966.

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Malaysia: Corruption Perception Index – Rank & Score 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 6

5.3 5.3 5.3 5.2 10 5.0 5.1 5.0 5.0 5.1 5.0 5.1 5.1 5 4.8 4.9 4.5 20 4.4 4.3 23 4 26 30 29 32 32 33 3 36 36 37 40 39 39 44 43 47 2 50 56 56 60 1 60 CPI Rank (LHS) CPI Score (RHS) 70 0

Source: Transparency International

 Improving the quality of the country’s education system, especially after the controversy surrounding the policy U-turn on the teaching of Mathematics and Science in English. Perception is also a major issue on the education front amid conflicting reports, ranking and/or indicator on the state and quality of the country’s education system e.g. World Economic Forum’s (WEF) survey-based Global Competitiveness Index 2011 ranked Malaysia above US, UK, Germany and many regional peers on the quality In contrast, the study-based Programme for International Student Assessment (PISA) 2009 rankings of 74 countries by the OECD, ranked Malaysia 57th in Mathematics, 53rd in Science and 55th in Reading versus the higher placements for US (31st, 23rd and 17th respectively), UK (28th, 16th and 25th respectively), and Germany (16th, 13th and 20th respectively), while regional peers like China, South Korea, Taiwan, Hong Kong and Singapore occupied the top five spots, with Thailand coming in ahead of Malaysia.

Country WEF GCI – Quality of Primary WEF GCI – Quality of The PISA – Maths PISA – Science PISA – Reading Ranking Education (out of 142) Education System (out of 142) (out of 74) (out of 74) (out of 74) USA 37 26 31 23 17 UK 23 20 28 16 25 Japan 19 36 9 5 8 Germany 36 17 16 13 20 Australia 10 13 15 10 9 China 31 54 1 1 1 India 86 38 72 72 72 South Korea 22 55 4 6 2 Taiwan 8 19 5 14 23 Hong Kong 25 21 3 3 4 Singapore 3 2 2 4 5 Malaysia 21 14 57 53 55 Thailand 85 77 52 51 53 Indonesia 54 44 68 66 62 Philippines 110 61 NA NA NA Vietnam 83 69 NA NA NA Sources: World Economic Forum’s Global Competitiveness Index 2011 (WEF GCI ranking is based on Executive Opinion Survey), OECD’s Programme for International Student Assessment (PISA ranking is based on study by the OECD on 15-year-old school pupils' scholastic performance on mathematics, science, and reading )

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 Greater synchronization and better integration of GTP with the Economic Transformation Programme (ETP) and the Strategic Reform Initiatives (SRI). This is to avoid the risks of policy frictions and conflicting signals. In a view, a case for this is the suspension of the Subsidy Rationalisation Programme (SRP) – a key element in the SRI for Public Finance – since mid-2011 which came about as the Government added “Cost of Living” as the seventh NKRA for GTP in June 2011. This gives rise to suggestion, for example, that there are scopes for one programme / initiative like GTP to take precedence or gain priority over the other, like SRI. Moreover, SRP and GTP’s NKRA on “Cost of Living” need not be conflicting but can be complementary e.g. expenditure savings from executing SRP can be utilised to address the cost of living issue. There could also be implications from the uncertainty over commitments to SRP on the GTP’s NKRA for Urban Public Transport and ETP’s NKEA on Greater KL/KV (i.e. MRT) in terms of encouraging greater use of public transportation as opposed to private/personal transportation that are being continually subsidised via fuel subsidies, and boosting the socioeconomic viability of the MRT.

 Stronger internal audit and rigorous independent external audits on to the outcomes and results of the NKRA targets/KPIs to detect and prevent “statistical discrepancies and data anomalies” so as to address the “moral hazard” risk in view of the monetary and non- monetary rewards for delivery of targeted outcomes and achievements in some of the NKRAs, thus reduce credibility gap in the data and boost confidence on Malaysia’s transformation story.

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APPENDIX TABLES – GTP2.0 ROADMAP

GTP Roadmap 2.0 - Crime Reduction

1. Prevention of vehicle theft ‐ Target hardening e.g. lighting up car parks, addressing a car park league table and having better security features in cars. ‐ Collaborative enforcement on illegal and suspicious workshops ‐ Having a dedicated investigation team ‐ Public awareness campaign ‐ Container scanners

2. Prevention of house break-ins ‐ Omnipresence e.g. Resident Police Volunteer (PVR) programme & car/motorcycle patrols ‐ Having a dedicated house break-in investigation team ‐ Partnering with commerce associations, NGOs, Rela, PVR, JPAM, ATM, SRS to form joint patrols or conducting crime awareness programme ‐ Introduction of Home security features of the ‘Crime Prevention through Environmental Design’ (CPTED) model

3. Whitening Black Spots ‐ Expands ‘Safe City’ Programme ‐ San Peng Pilot project: Care and Cure Clinics (C&C) to assist in recovery of drug addicts in the area, abandoned government quarters to be quarantined and demolished, and proper scheduling for collection of rubbish. ‐ Whitening of ‘Black Spot’ model through establishment of a working committee to identify issues and solutions.

4. Online Tracking System ‐ Provide transparency on progress of case and to allow public to view details online ‐ Utilizes the current Police Reporting System (PRS), Compound Online Payment System (COPS) and KOMPOL (Komunikasi Maklumat Polis Online) ‐ 5. Omnipresence ‐ High-profile policing Walkabouts by senior police officers/IGPS ‐ Stop and talk: Personnel to stop and talk to public for 10 minutes instead of just patrolling ‐ Feet on the street: Personnel patrol together with JPAM, PVR and RELA ‐ Strategic Positioning: Positioning personnel for a defined time through Ops Payung in strategic locations ‐ National Blue Ocean Strategy: Bringing PDRM and Angkatan Tentera Malaysia in to combat crime ‐ Deployment in places of interests ‐ Community Policing

Source: PEMANDU

GTP Roadmap 2.0 - Fighting Corruption

1. Enforcement Agency ‐ Strengthen the independence of the Malaysian Anti-Corruption Commission (MACC) ‐ Special committee to answer questions concerning MACC Annual Report in the Parliament ‐ Start an executive review committee in MACC ‐ Project management office on prevention of corruption through Jawatankuasa Eksekutif Transformasi JET) ‐ Monitor compliance unit activities ‐ Monitor ‘name and shame’ database which publishes names and IC of offenders on MACC website ‐ Corporate Integrity System Malaysia (CISM) ‐ Streamline oversight committees: To have 5 oversight committees to act as a check and balance mechanism for MACC

2. Grand Corruption ‐ Establishment of Special Corruption Courts to complete prosecution of corruption cases within 1 year ‐ Improve political financing governance framework e.g. include provision on specific procedures to govern political financing under Societies Act 1966 ‐ Insertion of Corporate Liability Provision into MACC Act

3. Government Procurement ‐ Initiatives to enable authorities to act quickly after the publication of the Auditor-General’s Performance and Financial Audit Reports e.g. fast-tracking access to Auditor General Performance Audit Report for immediate action by issuing the audit report three times a year instead of current practice of releasing annual report after the announcement of the Annual Budget to reduce time lag and information overload that has led to inaction or inadequate responses; establish an Action Committee chaired by the AG Office consisting of AG, PDRM and MACC to focus on corruption related concerns from the report; online dashboard to make publicly available outstanding issues in AG report; “Putrajaya Inquisition” lead by the PM to provide closure on outstanding issues. ‐ Implementation of comprehensive integrity pact for Public Private Partnership (PPP) projects ‐ Upgrading MyProcurement and integration with related procurement portals like NETI, E-Perunding and E-Perolehan ‐ Guidelines for middle-men/lobbyist by referring to Acts and laws from US, Canada and Australia

4. Education and Public Support ‐ Setting up a Corruption Prevention Secretariats in Teachers’ Training Colleges ‐ Training of Member of Parliaments (MPs) to enhance knowledge and awareness of corruption/abuse of power/malpractice ‐ Incorporate anti-corruption element in textbooks in primary and secondary schools

Source: PEMANDU

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GTP Roadmap 2.0 - Education

1. Pre-schools ‐ Focus on quality e.g. National Standards for pre-school and childcare; and up skilling of pre-school teachers ‐ Continue increasing number of classes ‐ Review fee assistance and launching grant

2. Literacy and Numeracy (LINUS) Programme ‐ Align LINUS models with Kurikulum Standard Sekolah Rendah (KSSR) and add skills training for remedial teachers ‐ Achieve 12 contructs to re-enter mainstream curriculum (Arus Perdana) ‐ LINUS 2.0 – Add English literacy from Years 1-3 (aligned to KSSR) with training of English Remedial teachers.

3. New Deals ‐ New teacher career package; faster progression for high performing teachers & transition support for non-supporting teachers ‐ New Principal Charter helps to fast-track career based on performance ‐ Standardized process for state-based deployment

5. SIP (School Improvement Programme ) ‐ Reduce performance gap between urban and rural schools by 25% ‐ Extend SIP and SISC (School Improvement Specialist Coaches) coaches to be full time in State (JPN) and District (DPD) Improvement Programme under the State and District Transformation Programme ‐ Strengthen Pejabat Pelajaran Daerah (PPDs) to support schools ‐ Standard dashboards and KPIs for all states, districts and schools integrated with SAPS system ‐ Tailored set of interventions for different schools

6. English Proficiency testing and segmentation for proficient English teachers ‐ Test 10,000 English teachers on Cambridge Placement Test ‐ Define needs based segment for 4 pilot states and also rollout plan to complete testing for 60,000 teachers.] ‐ New minimum requirements for incoming teachers in training

Source: PEMANDU

GTP Roadmap 2.0 - Improving Urban Public Transport

1. KTM Komuter Enhancement Programme ‐ Track rehabilitation programme ‐ EMU fleet refurbishment and overhaul ‐ Upgrade current electrification and signaling system from 10 minutes headway to 7.5 minutes headway ‐ RapidKL extension line to serve highly populated catchment area on Kelana and Ampang lines ‐ KL Monorail expansion to add capacity by 112%

2. Bus ‐ Stage bus network re-organization and feeder bus network improvement by rationalizing the number of operators per route and re- routing all stage buses to stop at dedicated Inter Urban Transport Terminals (IUTT) located at peripherals of the CBD

3. Taxi ‐ Establish New Taxi Company to reduce operating cost of taxi drivers through economies of scale and transfer of risk ‐ Establishment of a Centralised Taxi Service System (CTSS) to enhance enforcement monitoring

4. Integration ‐ First-mile pulling factors : Parkway Drop –Zone Rail-bus integration along major highways, park n ride parking facilities, increase covered walkways/pedestrian linkages ‐ Last-mile enablers : Proposed Skywalk at Pude Sentral, and Bandaraya ‐ Proposed at-grade linkages at WangsaWalk ‐ Upgrading of existing Komuter Stations into fully equipped metro-style stations ‐ Implementation of AFC Integration for seamless passenger travel and lessen congestion at stations

5. Travel demand ‐ Revise current on-street and off-street parking rates in KL city centre ‐ Reduce the number of on-street parking in KL CBD ‐ Strengthen parking enforcement through setting up dedicated parking wardens, blacklisting of drivers, towing and immobilization of the vehicle

Source: PEMANDU

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GTP Roadmap 2.0 - Raising Living Standards of Low-Income Households

1. Broaden Monitoring through AKRAB (Rakan Pembimbing Perkhidmatan Awam) and RELA (Ikatan Relawan Rakyat Malaysia) ‐ Monitor 1AZAM projects through successful 1AZAM participants mentoring (AKRAB) and NGOs/students

2. Financial Literacy ‐ Financial literacy education for every 1AZAM participant ‐ AKPK/NGOs to conduct trainings

3. Insurance ‐ Providing insurance coverage for all 1AZAM participants

4. Corporate involvement ‐ Tax exemption to NGOs that provide support to the poor

5. Updating and synchronizing eKASIH database

Source: PEMANDU

GTP Roadmap 2.0 - Improving Rural Basic Infrastructure

1. Rural Development ‐ 95% - 99% of population have access to roads ‐ 95% - 99% of population with treated water ‐ 95% - 99% of population with 24 hours electricity supply ‐ Effective maintenance for all GTP roads, electricity and water supply projects

2. 21st Century Village ‐ Increase household income to RM2,500 which is higher than the bottom 40% of urban households income of RM2,200 ‐ State and federal driven modern integrated farms with the collaboration of the states, FAMA and PAKAR. ‐ Private sector driven large scale fruits or vegetables farms through an anchor company that will build and operate farm, hire locals and pay a contribution to the land owner based on productivity of farm ‐ Co-operative driven tourism, plantations and industry support villages through creation of pilot villages ‐ Youth Entrepreneur Rural Based Modern Agricultural Businesses

Source: PEMANDU

GTP Roadmap 2.0 - Lowering Cost of Living

1. Kad Diskaun Siswa 1Malaysia ‐ Reduce cost of living for students with products and services ranging from food, clothes, books and stationeries

2. SOSCO benefits for taxi drivers

Source: PEMANDU

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RESEARCH OFFICES REGIONAL ECONOMICS P K BASU Suhaimi ILIAS Regional Head, Research & Economics Chief Economist (65) 6432 1821 [email protected] . Singapore | Malaysia (603) 2297 8682 [email protected] WONG Chew Hann, CA Acting Regional Head of Institutional Research Luz LORENZO (603) 2297 8686 [email protected] Economist

THAM Mun Hon . Philippines | Indonesia (63) 2 849 8836 [email protected] Regional Strategist (852) 2268 0630 [email protected]

ONG Seng Yeow Regional Products & Planning (852) 2268 0644 [email protected]

MALAYSIA SINGAPORE THAILAND WONG Chew Hann, CA Head of Research Stephanie WONG Head of Research Mayuree CHOWVIKRAN Head of Research (603) 2297 8686 [email protected] (65) 6432 1451 [email protected] (66) 2658 6300 ext 1440 [email protected] . Strategy . Strategy . Strategy . Construction & Infrastructure . Small & Mid Caps Maria BRENDA SANCHEZ LAPIZ Co-Head of Research Desmond CH’NG, ACA Gregory YAP Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 (603) 2297 8680 [email protected] (65) 6432 1450 [email protected] [email protected] . Banking - Regional . Technology & Manufacturing LIAW Thong Jung . Telcos - Regional Andrew STOTZ Strategist (603) 2297 8688 [email protected] Wilson LIEW (66) 2658 6300 ext 5091 . Oil & Gas (65) 6432 1454 [email protected] [email protected]

. Automotive . Hotel & Resort Suttatip PEERASUB . Shipping . Property & Construction (66) 2658 6300 ext 1430 [email protected] ONG Chee Ting James KOH . Media (603) 2297 8678 [email protected] (65) 6432 1431 [email protected] . Commerce . Plantations . Logistics Sutthichai KUMWORACHAI Mohshin AZIZ . Resources (66) 2658 6300 ext 1400 [email protected] (603) 2297 8692 [email protected] . Consumer . Energy . Aviation . Small & Mid Caps . Petrochem . Petrochem YEAK Chee Keong, CFA Termporn TANTIVIVAT . Power (65) 6433 5730 [email protected] (66) 2658 6300 ext 1520 [email protected] YIN Shao Yang, CPA . Healthcare . Property (603) 2297 8916 [email protected] . Offshore & Marine Woraphon WIROONSRI . Gaming – Regional Alison FOK (66) 2658 6300 ext 1560 [email protected] . Media (65) 6433 5745 [email protected] . Banking & Finance . Power . Services Jaroonpan WATTANAWONG WONG Wei Sum, CFA . S-chips (66) 2658 6300 ext 1404 [email protected] (603) 2297 8679 [email protected] Bernard CHIN . Transportation . Property & REITs (65) 6433 5726 [email protected] . Small cap. LEE Yen Ling . Transport (Land, Shipping & Aviation) Suchot THIRAWANNARAT (603) 2297 8691 [email protected] ONG Kian Lin (66) 2658 6300 ext 1550 [email protected] . Building Materials (65) 6432 1470 [email protected] . Automotive . Manufacturing . REITs / Property . Construction Materials . Technology WeiBin . Soft commodity

LEE Cheng Hooi Head of Retail (65) 6432 1455 [email protected] [email protected] . S-chips VIETNAM . Small & Mid Caps . Technicals Michael KOKALARI, CFA Head of Research

HONG KONG / CHINA INDONESIA +84 838 38 66 47 [email protected] ETIAWAN Edward FUNG Head of Research Katarina S Head of Research . Strategy (852) 2268 0632 [email protected] (62) 21 2557 1125 [email protected] Nguyen Thi Ngan Tuyen . Construction . Consumer +84 844 55 58 88 x 8081 [email protected] Ivan CHEUNG . Strategy . Food and Beverage (852) 2268 0634 [email protected] . Telcos . Oil and Gas . Property Lucky ARIESANDI, CFA Ngo Bich Van . Industrial (62) 21 2557 1127 [email protected] +84 844 55 58 88 x 8084 [email protected] Ivan LI . Base metals . Banking (852) 2268 0641 [email protected] . Coal Nguyen Quang Duy . Banking & Finance . Oil & Gas +84 844 55 58 88 x 8082 [email protected] ARINA Jacqueline KO Rahmi M . Rubber (852) 2268 0633 [email protected] (62) 21 2557 1128 [email protected] Dang Thi Kim Thoa . Consumer Staples . Banking +84 844 55 58 88 x 8083 [email protected] Andy POON . Multifinance . Consumer (852) 2268 0645 [email protected] Pandu ANUGRAH Nguyen Trung Hoa . Telecom & equipment (62) 21 2557 1137 [email protected] +84 844 55 58 88 x 8088 [email protected] Samantha KWONG . Auto . Steel (852) 2268 0640 [email protected] . Heavy equipment . Sugar . Consumer Discretionaries . Plantation . Macro Alex YEUNG . Toll road (852) 2268 0636 [email protected] Adi N. WICAKSONO . Industrial (62) 21 2557 1130 [email protected] Catherine CHAN . Generalist (852) 2268 0631 [email protected] Anthony YUNUS . Cement (62) 21 2557 1134 [email protected] Anita HWANG, CFA | Jacky WONG, CFA . Cement [email protected] | [email protected] . Infrastructure (852) 2268 0142 | (852) 2268 0107 . Property . Special Situations Arwani PRANADJAYA . Quants (62) 21 2557 1129 [email protected] . Technicals INDIA Jigar SHAH Head of Research PHILIPPINES (91) 22 6623 2601 [email protected] Luz LORENZO Head of Research . Oil & Gas +63 2 849 8836 [email protected] . Automobile . Strategy . Cement Laura DY-LIACCO Anubhav GUPTA (63) 2 849 8840 [email protected] (91) 22 6623 2605 [email protected] . Utilities . Metal & Mining . Conglomerates . Capital goods . Telcos . Property Lovell SARREAL Haripreet BATRA (63) 2 849 8841 [email protected] (91) 226623 2606 [email protected] . Consumer . Software . Media . Media . Cement Ganesh RAM . Mining (91) 226623 2607 [email protected] Kenneth NERECINA . Telecom (63) 2 849 8839 [email protected] . Contractor . Conglomerates Darpin SHAH . Property (91) 226623 2610 [email protected] . Ports/ Logistics . Banking & Financial Services Katherine TAN Gagan KWATRA (63) 2 849 8843 [email protected] (91 )226623 2612 [email protected] . Banks . Small Cap . Construction Ramon ADVIENTO (63) 2 849 8842 [email protected] . Mining

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APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES

DISCLAIMERS This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report. The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice. This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events. MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report. This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect. This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report. Malaysia Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis. Singapore This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law. Thailand The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information.The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result. Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET. MBKET accepts no liability whatsoever for the actions of third parties in this respect. US This research report prepared by MKE is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations. UK This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Services Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.

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DISCLOSURES Legal Entities Disclosures Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission.Philippines:MATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Kim Eng Vietnam Securities Company (“KEVS”) (License Number: 71/UBCK-GP) is licensed under the StateSecuritiesCommission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.

Disclosure of Interest Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies. Singapore: As of 27 July 2012, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report. Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report. Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission. As of 27 July 2012, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report. MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment.

OTHERS Analyst Certification of Independence The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

Reminder Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.

No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.

Definition of Ratings Maybank Kim Eng Research uses the following rating system: BUY Total return is expected to be above 15% in the next 12 months HOLD Total return is expected to be between -15% to +15% in the next 12 months SELL Total return is expected to be below -15% in the next 12 months Applicability of Ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies. Some common terms abbreviated in this report (where they appear): Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings BV = Book Value FV = Fair Value PEG = PE Ratio To Growth CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity DPS = Dividend Per Share NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date EV = Enterprise Value PBT = Profit Before Tax

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 Malaysia  Singapore  London  New York Maybank Investment Bank Berhad Maybank Kim Eng Securities Pte Ltd Maybank Kim Eng Securities Maybank Kim Eng Securities (A Participating Organisation of Maybank Kim Eng Research Pte Ltd (London) Ltd USA Inc Bursa Malaysia Securities Berhad) 9 Temasek Boulevard 6/F, 20 St. Dunstan’s Hill 777 Third Avenue, 21st Floor 33rd Floor, Menara Maybank, #39-00 Suntec Tower 2 London EC3R 8HY, UK New York, NY 10017, U.S.A. 100 Jalan Tun Perak, Singapore 038989 50050 Kuala Lumpur Tel: (44) 20 7621 9298 Tel: (212) 688 8886 Tel: (603) 2059 1888; Tel: (65) 6336 9090 Dealers’ Tel: (44) 20 7626 2828 Fax: (212) 688 3500 Fax: (603) 2078 4194 Fax: (65) 6339 6003 Fax: (44) 20 7283 6674

Stockbroking Business:  Hong Kong  Indonesia  India Level 8, Tower C, Dataran Maybank, Kim Eng Securities (HK) Ltd PT Kim Eng Securities Kim Eng Securities India Pvt Ltd No.1, Jalan Maarof Level 30, Plaza Bapindo 2nd Floor, The International 16, 59000 Kuala Lumpur Three Pacific Place, Citibank Tower 17th Floor Maharishi Karve Road, Tel: (603) 2297 8888 1 Queen’s Road East, Jl Jend. Sudirman Kav. 54-55 Churchgate Station, Fax: (603) 2282 5136 Hong Kong Jakarta 12190, Indonesia Mumbai City - 400 020, India

Tel: (852) 2268 0800 Tel: (62) 21 2557 1188 Tel: (91).22.6623.2600 Fax: (852) 2877 0104 Fax: (62) 21 2557 1189 Fax: (91).22.6623.2604

 Philippines  Thailand  Vietnam  Saudi Arabia Maybank ATR Kim Eng Securities Maybank Kim Eng Securities In association with In association with Inc. (Thailand) Public Company Kim Eng Vietnam Securities Anfaal Capital 17/F, Tower One & Exchange Plaza Limited Company Villa 47, Tujjar Jeddah Ayala Triangle, Ayala Avenue 999/9 The Offices at Central World, 1st Floor, 255 Tran Hung Dao St. Prince Mohammed bin Abdulaziz Makati City, Philippines 1200 20th - 21st Floor, District 1 Street P.O. Box 126575 Rama 1 Road Pathumwan, Ho Chi Minh City, Vietnam Jeddah 21352 Tel: (63) 2 849 8888 Bangkok 10330, Thailand Fax: (63) 2 848 5738 Tel : (84) 838 38 66 36 Tel: (966) 2 6068686 Tel: (66) 2 658 6817 (sales) Fax : (84) 838 38 66 39 Fax: (966) 26068787 Tel: (66) 2 658 6801 (research)

 South Asia Sales Trading  North Asia Sales Trading Connie TAN Eddie LAU [email protected] [email protected] Tel: (65) 6333 5775 Tel: (852) 2268 0800 US Toll Free: 1 866 406 7447 US Toll Free: 1 866 598 2267 www.maybank-ke.com | www.kimengresearch.com.sg

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