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FBM KLCI 1716.81
14.87
KLCI FUTURES 1717.00
12.00
STI 3349.87
1.46
RM/USD 3.7560
CPO RM2272.00
2.00
OIL US$63.72
0.23
GOLD US$1174.40
PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.60 (INCLUSIVE OF 6% GST)
FRIDAY JUNE 26, 2015 ISSUE 1990/2015
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
www.theedgemarkets.com
‘Ex-PetroSaudi director’s
arrest suspicious’ PA G E 4
6 HOME BUSINESS
Electricity tariff
to stay until
December 2015
8 HOME BUSINESS
Tanjung Offshore
ffshore
Off
reveals turnaround
strategy
by
u
o
y
o
t
t
h
g
u
o
r
b
s
i
y
11 M’sian companies
p
o
c
l
a
t
i
in Forbes Asia’s ‘Best T h i s d i g
11 H O M E B U S I N E S S
Under A Billion’ 2015
22 H O M E
Don’t meddle with
PAC work, Nur Jazlan
tells Shafee
1.80
FBM KLCI 1716.81
14.87
KLCI FUTURES 1717.00
12.00
STI 3349.87
1.46
RM/USD 3.7560
CPO RM2272.00
2.00
OIL US$63.72
0.23
GOLD US$1174.40
PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.60 (INCLUSIVE OF 6% GST)
FRIDAY JUNE 26, 2015 ISSUE 1990/2015
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
6 HOME BUSINESS
Electricity tariff
to stay until
December 2015
8 HOME BUSINESS
Tanjung Offshore
reveals turnaround
strategy
in Forbes Asia’s ‘Best
22 H O M E
Don’t meddle with
PAC work, Nur Jazlan
tells Shafee
‘Ex-PetroSaudi director’s
arrest suspicious’ PA G E 4
1.80
FR I DAY JU N E 26 , 2 0 1 5 • TH EEDGE F I N AN C I AL DAI LY
4
For breaking news updates go to
ON EDGE T V
Malaysian culture
to overpay for items
Dr M says of Mara’s Melbourne property buy
Courts
Malaysia to
spend RM15m
on refreshing
brand
The Edge Communications Sdn Bhd
(266980-X)
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Editorial
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Tel: 03-7721 8219 Fax: 03-7721 8038
Email: [email protected]
BY ANISAH S HU K RY
KUALA LUMPUR: Majlis Amanah
Rakyat’s (Mara) overpriced purchase of an apartment block in
Melbourne, Australia, is typical
of “Malaysian generosity”, Tun Dr
Mahathir Mohamed said yesterday.
In his usual acerbic manner, the
former prime minister said Malaysians would often overpay for
their goods.
“It is our culture [when] we buy
anything. We are generous. We
overpay them.
“When I go to the shop to buy
items, I hand over RM10 and say,
‘keep the change’,” Dr Mahathir told
a press conference after attending
a buka puasa event with Perkasa in
Kampung Baru.
Dr Mahathir was asked to comment on a report by Australian
newspaper The Age that a “top”
Mara officer, senior official and former politician had allegedly spent
millions of government funds to
buy an apartment block in Melbourne in a property scam.
The report alleged that “a group
of super-rich Malaysian officials”
overpaid by A$4.75 million (RM13.8
million) for an apartment block in
the city in 2013.
The trio had allegedly “overbid”
for the building, called Dudley International House, from A$17.8 million
to A$22.5 million, with the difference
pocketed as bribes back home.
The Sydney Morning Herald reported yesterday that Australian
authorities had launched several
raids in Melbourne following The
Age’s expose.
See related story on Page 6
Prime Minister Datuk Seri Najib Razak said on Tuesday that the
claims by The Age would be thoroughly investigated.
“The authorities here will conduct comprehensive investigations
into the claims, and if any wrongdoing is found, action will be taken,” he said in a statement on his
Facebook and Twitter sites.
On Wednesday, Mara chairman
Tan Sri Annuar Musa said the agency had begun investigations into the
PERFORMANCE
INCENTIVES FOR
SMEs... The government will
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introduce a performance-based
incentive system for small and
medium enterprises (SMEs) by 2016
to grow the sector nationwide, says
Prime Minister Datuk Seri Najib Tun
Razak (left). Najib said the incentives,
which could include tax exemptions,
transport rebates and bank loans,
would be based on criteria such as
productivity, export value and job
creation. SME Corp chief executive
officer Datuk Hafsah Hashim (right) is
seen here during a press conference
after the 18th National SME
Development Council meeting in the
Federal Treasury building yesterday.
Also present was Datuk Seri Mustapa
Mohamed (centre). Photo by Bernama
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purchase two months ago before
the Australian paper reported on it.
He also said Najib had been involved in approving the purchase of
the Melbourne property by way of
his position as chairman of the Economic Council (EC), but stressed
that the purchase decision had
been made collectively.
Annuar said the purchase of any
property by Mara had to go through
certain procedures, including a final approval by the Finance Ministry or the EC.
Najib, who is also the finance
minister, stressed that the Australian property buy was decided by
consensus, and said some media
organisations had purportedly twisted Annuar’s remarks to imply that
the prime minister was responsible.
“The decision is made based on
consensus by the economic council,”
Najib posted on his Twitter account.
The Age said that Australian developers of the property received
sham invoices for fake services,
such as “consultancy and advisory”, from Malaysian firms. — The
Malaysian Insider
‘Why won’t Putrajaya sue The Edge, Sarawak Report?’
BY ANISAH S HU K RY
KUALA LUMPUR: Former prime
minister Tun Dr Mahathir Mohamad yesterday asked Putrajaya why
it did not take legal action against
The Edge and Sarawak Report, if
it believed the media outfits were
publishing false news.
He said The Edge had often challenged the government to take them
to court, yet Putrajaya instead, chose
to issue threats against the business
weekly. “Sarawak Report has been
saying all kinds of things, which you
can sue. But you didn’t sue.
“Even The Edge says a lot of things,
and is practically challenging the
government to sue them. Why didn’t
you sue?” Dr Mahathir said at a press
conference after attending a buka
puasa event with Perkasa in Kampung Baru, here.
Home Minister Datuk Seri Ahmad Zahid Hamidi yesterday reportedly said that ministry had the
power to cancel or revoke publishing permits if the media were found
to be publishing false information.
The minister singled out The Edge
and its owner Datuk Tong Kooi Ong
for special mention. The Edge, a business weekly, has published several
reports on 1Malaysia Development
Bhd’s (1MDB) dealings.
See related story on Page 22
Ahmad Zahid said the information published might be false following news that data and emails leaked
about 1MDB’s dealings with PetroSaudi International Ltd had been
fabricated by a former director of
PetroSaudi. — The Malaysian Insider
‘Ex-PetroSaudi
director’s arrest
suspicious’
BY A N IS A H S H UK RY
KUALA LUMPUR: The arrest of
former PetroSaudi International
director Xavier Andre Justo is “suspicious” and “appears planned”,
former prime minister Tun Dr Mahathir Mohamad said yesterday.
Not ruling out the possibility of
the involvement of the Malaysian
government, he said that “very
clever propagandists” were hard
at work to “blacken” his face.
“What makes me puzzled is
that he didn’t commit a crime
in Thailand. He committed the
crime in Saudi Arabia. Usually,
other countries don’t care unless
he is a terrorist,” Dr Mahathir told
a press conference after a buka
puasa event with Perkasa in Kampung Baru here.
“I guess he must be a terrorist
— that’s why Thailand arrested
him. If it was just a matter of defrauding a company, that should
be Saudi Arabia’s problem.”
When asked if he is prepared to
apologise should the authorities
prove that the leaked documents
on 1Malaysia Development Bhd
(1MDB) have been tampered with,
Dr Mahathir was non-committal.
“I will see what he says. But the
circumstances appear suspicious.
It seems planned. Many clever
people are involved.”
“We are finding some very clever propagandists working very
hard, so now my face is blackened
and my legacy has all been destroyed,” said Dr Mahathir.
He also believes the emails on
PetroSaudi, which Sarawak Report
published on its website earlier
this year, have not been doctored.
“If you look at the series of
emails, it was not tampered with,”
said Dr Mahathir. “When we lie, we
will get trapped by our own lies.
When a follow-up lie is made, it is
hard to match it with the first lie.”
Justo is currently in the custody of Thai police for attempting
to blackmail PetroSaudi over its
deals with 1MDB, The Nation reported. — The Malaysian Insider
US jobless
claims rise
WASHINGTON: The number of
Americans filing new claims for
unemployment benefits increased
modestly last week, but labour
market conditions continued to
tighten.
Initial claims for state unemployment benefits rose 3,000 to a
seasonally adjusted 271,000 for the
week ended June 20, the Labour
Department said yesterday.
It was the 16th straight week
that claims held below 300,000, a
threshold usually associated with
a firming labour market.
The labour market is tightening,
with the unemployment rate not
too far from the 5% to 5.2% range
that most US Federal Reserve officials consider consistent with full
employment. — Reuters
6 HOME BUSINESS
Rajawali Corp wants
a 21% stake in FGV
May consider increasing its equity interest if it has to cede control of Eagle High
THE EDGE FILE PHOTO
BY SU PRI YA SU RENDRAN
KUALA LUMPUR: Indonesia’s Rajawali Corp would want to raise its
shareholding in Felda Global Ventures Holdings Bhd (FGV) to 21%
should the latter decide to seek a
controlling stake in PT Eagle High
Plantations Tbk, in which Rajawali
is currently a major shareholder
holding a 65.54% stake.
Rajawali managing director Darjoto Setyawan was quoted by Reuters as saying that the Indonesian
plantation group may consider increasing its stake in FGV to 21%
from 2.55% under the proposed
offer, if it has to cede control of
Eagle High to FGV.
Darjoto had told Reuters that the
deal could be in the form of a share
swap, and Reuters had reported that
a 21% stake in FGV would be worth
US$360 million (RM1.35 billion)
based on current market prices.
To recap, FGV is proposing to
buy a 37% stake in Eagle High
from Rajawali for about US$680
million, of which US$632 million
would be paid in cash for the 30%
stake, while the remaining 7% stake
would be settled through an is-
sue of 95 million new FGV shares,
which would see Rajawali holding
a 2.55% stake.
Some quarters see that a share
swap deal may not augur well for
FGV given that its share price is in
a trough now. In a matter of one
year, FGV has slumped by 59%,
from RM4.18 a year ago to RM1.72
at the market close yesterday. Indeed, FGV’s share price slid to a
record low of RM1.65 last Monday
as investors and analysts see the
acquisition as too pricey for FGV
to swallow.
The Employees Provident Fund
has expressed its unhappiness
at FGV’s proposed purchase of a
stake in Eagle High. The provident
fund has urged FGV to explain
the hefty premium it is going to
pay for a non-controlling stake in
Eagle High.
Licensed investment adviser
Asia Analytica Sdn Bhd pointed out
that if a share swap scenario were
to take place, the main question
would be at what price the FGV
shares would be issued.
“FGV’s share price is currently
at its low level, if a share swap were
to happen, the crucial question to
ask is whether FGV shares will be
at a premium to current market
prices … only if it is at premium to
FGV’s current market price will it
be a better deal for the FGV camp,”
the research firm told The Edge Financial Daily.
For its first quarter ended March
of financial year 2015 (1QFY15),
the group saw its net profit plummet 97.5% to only RM3.58 million
from RM143.63 million in 1QFY14,
which FGV, the largest palm oil
producer in the world, blamed on
the flash floods that affected half
of its plantations and weak crude
palm oil prices.
Looking at its shaky financials,
Asia Analytica said that the next
question would be whether FGV
has the capacity to take on the longterm commitment to realise the
potential of Eagle High, as the latter company is highly leveraged.
Based on its balance sheet as at
Dec 31, 2014, Eagle High had total
borrowings amounting to 7.3 trillion rupiah (RM2.04 billion), and
a cash balance of barely 178.6 billion rupiah.
“Considering the debt levels of
Eagle High, FGV would need to
take on a long-term commitment,
and would probably need to inject
some fresh capital in order to fully
realise the potential the company
has to offer,” said Asia Analytica.
“FGV will need to take all these
issues into consideration for its proposed venture, so the bigger picture
here is not so much Rajawali taking
on a bigger slice of FGV, but what is
FGV going to do with Eagle High,”
said Asia Analytica.
Electricity tariff to stay until December 2015
BY C H ESTER TAY
KUALA LUMPUR: There will be
no hike in the electricity tariff in
Peninsular Malaysia, Sabah and
Labuan until the end of this year,
following the latest review of the
imbalance cost pass-through
(ICPT) mechanism.
In a statement yesterday, the
Energy, Green Technology and
Water Ministry (KeTTHA) said the
ICPT rebate of 2.25 sen per kilowatt-hour (kWh) for Peninsular
Malaysia and 1.20 sen per kWh or
3.5% average downward revision
of tariff for Sabah and Labuan will
remain for the July to December
2015 period.
It added that the decision applies
to all categories of consumers ex-
cept for domestic consumers with
monthly consumption of 300kWh
and below.
Meanwhile, in line with the government’s initiative to rationalise power subsidies, the ministry
has decided to increase the price
of piped natural gas (PNG) in the
peninsula by RM1.50 per million
British thermal units (MMBtu) to
RM16.70 per MMBtu from RM15.20
per MMBtu from July 1, 2015.
“In other words, the increase
in fuel price will not impact the
electricity tariff and the said rebate
will able to continue, thanks to the
RM1.08 billion cost saving from
ICPT for the January to June 2015
period,” KeTTHA said.
“This sum also includes the
RM300 million cost saving from
the renegotiation of power purchase agreements with first generation independent power producers,” it said.
The ICPT is a mechanism implemented on Jan 1, 2014, which allows
the government to pass excessive
fuel costs to consumers.
KeTTHA said the cost saving in
the peninsula also resulted from the
higher usage of coal-fired power,
for which prices are relatively lower
compared with fuel such as PNG
and liquefied natural gas.
As the ICPT has not been implemented in Sabah and Labuan, KeTTHA said the federal government
will continue to subsidise the fuel
cost and electricity tariff, estimated
to amount to RM685 million this
year for these two areas.
The next review will be in January 2016.
Tenaga Nasional Bhd’s (fundamental: 1.3; valuation: 1.8) shares
fell 22 sen or 1.72% to close at
RM12.56 yesterday, with 13.38 million shares done. It has a market
capitalisation of RM72.13 billion.
The Edge Research’s fundamental
score reflects a company’s profitability
and balance sheet strength, calculated based on historical numbers. The
valuation score determines if a stock is
attractively valued or not, also based
on historical numbers. A score of 3
suggests strong fundamentals and
attractive valuations. Go to www.
theedgemarkets.com for more details
on a company’s financial dashboard.
Australian police raid Melbourne properties in bribery probe
SYDNEY: Australian police raided a
home and a business in central Melbourne yesterday as part of a bribery
investigation reportedly involving
Malaysian government officials and
a multi-million dollar property deal.
Malaysia said on Wednesday it
planned to investigate allegations
that its officials spent millions of
dollars of government funds to buy
an apartment block in Melbourne
at an inflated cost and allegedly received kickbacks for the transaction.
Australian Federal Police confirmed two premises in Melbourne
were raided as part of "Operation
Carambola", which is a probe into
foreign bribery allegations. Australia's Fairfax Media reported the
raids were directly linked to the
Malaysian corruption allegations.
Fairfax reported earlier this week
that the officials had overpaid by
A$4.75 million for an apartment
block, Dudley International House,
bought in 2013 to house Malaysian
students studying in Melbourne.
The alleged kickbacks went to
Malaysian firms that had close
links with a senior official at government agency Majlis Amanah
Rakyat (Mara), the report said. Mara
was originally set up to drive de-
velopment and provide financial
assistance to ethnic Malays.
Mara is conducting an internal
audit and assisting an investigation
by the Malaysian Anti-Corruption
Commission, officials of the investment agency told reporters at
a news conference on Wednesday.
The Australian government did
not immediately respond to requests for comment. — Reuters
Sunway
confident of
adding RM2b
construction jobs
by year-end
BY SANGEETHA AMARTHALINGAM
KUALA LUMPUR: Sunway Bhd
is confident of winning an extra
RM1.5 billion to RM2 billion in
construction jobs by year-end
to boost its current outstanding
order book of RM2.8 billion.
Chief financial officer Chong
Chang Choong told reporters
after the group’s annual general
meeting yesterday that an estimated RM4 billion order book
would be able to sustain a run
rate of two years.
“Our current outstanding
order book is RM2.8 billion. Of
course we target to grow our order book. We are still working on
a few prospects but we are confident by the end of the year, we
should be able to increase our
order book by between RM1.5
billion and RM2 billion.
“(This is) because our annual
run rate for the construction segment averages between RM1.8
billion and RM2 billion a year.
Therefore, our order book of RM4
billion will sustain a run rate of
two years,” Chong said.
He noted that the group
would try its best to sustain high
double-digit growth amid challenging economic conditions
despite recording a compound
average growth rate (CAGR) of
more than 20% in 2013 and 2014.
“Our perspective has been to
try to register growth of 5% to 10%
every year. In the last five years
we have outperformed the target we set. If you track our profit
over the last two years, (you will
see) we have registered a CAGR
of more than 20% for 2013 and
2014,” Chong said.
Sunway’s (valuation: 2.4; fundamental: 1.5) gross development value (GDV) for existing
and ongoing property development amounted to RM5.7 billion as at Dec 31, 2014 while the
average take-up rate to date was
more than 70%, he said.
Chong targets property sales
to be about RM1.7 billion this
year after recording RM240 million sales in the first quarter ended March of financial year 2015
(1QFY15). Currently, Chong said,
unbilled sales for the property
sector amount to RM2.5 billion,
which begins 2015 onwards.
He added that the company
is taking advantage of the soft
property market to expand its
land bank, citing its recent purchase of 6.9ha of prime land in
Kelana Jaya with an estimated
GDV of RM1.8 billion.
“I think given the current market consolidation in the property
sector, it is a good opportunity for
us to look at landbanking opportunities. Plus, when the market
is a bit soft, then the landowner’s expectation of the land price
would not be as high. So that is
an opportunity for us,” he said.
Asked which segment would
drive Sunway’s revenue this year,
Chong said that depends on
sales, construction and billings.
8 HOME BUSINESS
Tanjung Offshore reveals
turnaround strategy
To help O&G service provider return to profitability by 3Q
BY GHO C H EE Y UAN
KUALA LUMPUR: Tanjung Offshore Bhd, which has been in the
limelight after a boardroom fight
broke out early this year and more
recently for making police reports
over questionable deals, is introducing a four-pillar turnaround
strategy, which will help the oil and
gas (O&G) service provider return
to profitability by the third quarter
ending Sept 30, 2015 (3QFY15).
The four pillars involve focusing on the offshore support vessel (OSV) market, the brownfield
O&G segment, maintenance and
its wholly-owned subsidiary Gas
Generators (M) Sdn Bhd (GasTec).
“Much [profit turnaround] still
depends on the overall market situation such as a pick up in the O&G
sector and whether we can weather
the storm. But I think the situation
will be better by early next year,”
Tanjung Offshore group chief executive officer Rahman Shamsudin
told reporters after the group’s annual general meeting yesterday.
“We will let the authorities investigate all the old issues (previous controversial deals). Our focus
now is to turn around the company,” he said.
Tanjung Offshore executive deputy chairman Tan Sri Tan Kean
Soon said the group is looking at
several brownfield projects both
locally and aboard to add to its
RM500 million order book.
“We are keeping a close eye on
new O&G discoveries in Malaysia,
particularly Sarawak, Sabah and
Terengganu,” he said.
It is also looking for opportunities in Indonesia, Vietnam and
Myanmar.
“We have the right mix of services to grow with these new discoveries in undertaking onshore and
offshore projects,” said Tan.
The group plans to inject some
RM100 million in capital expenditure (capex) over the next few years
for its brownfield segment activity.
In addition, Tanjung Offshore
will strengthen its maintenance
and services division by forming
partnerships with international
O&G players to undertake maintenance and services projects at
the Refinery and Petrochemical
Integrated Development (Rapid)
project in Pengerang, Johor.
Selangor water
impasse to prolong
BY C Y NTHI A B L E M IN
KUALA LUMPUR: It seems that the
Selangor water impasse, which was
expected to be resolved yesterday
with the signing of a new supplementary agreement, is now set to
prolong further as The Edge Financial Daily has learnt that both the
federal and Selangor governments
need more time to clarify the details of the agreement before sealing the deal.
It is understood that the draft
supplementary water agreement
that would bring about Selangor’s
water consolidation has gone back
for further amendments.
“Apparently, Azmin (Selangor
Menteri Besar Mohamed Azmin
Ali) will ask for some further amendments after chairing the Selangor
exco (executive council) meeting
yesterday (Wednesday). Some terms
needs to be renegotiated,” a source
with knowledge of the matter told
The Edge Financial Daily.
Perhaps the actual draft was not
as what was promised or discussed
by both parties, the source said. It
is not certain at this point what are
the issues forcing Selangor to reassess the draft, the source added.
Several Selangor exco members,
when contacted, remained tight-
lipped on the details discussed
during Wednesday’s state-exco
meeting.
Yesterday, The Edge Financial
Daily reported that the federal and
Selangor governments were set to
sign the supplementary agreement,
which would see the state maintaining ownership of its water assets and Putrajaya proceeding with
the long-delayed development of
the Langat 2 water treatment plant
project.
Quoting a source, the daily said
that the federal government had
conceded most of the points of
contention in the master agreement
that were raised by the Selangor
government led by Mohamed Azmin, points that had stalled efforts
to finalise the state’s water restructuring so far.
One key issue was that the ownership of land that the water assets
sit on remains with the state government post-restructuring.
Meanwhile, shares in water
pipe manufacturers such as Engtex Group Bhd, rose four sen or
3.67% to close at RM1.13 yesterday after heavy trading, boosted
by news that the protracted water
impasse in Selangor could be resolved with the new supplementary agreement.
“We are in talks with major contractors from South Korea and Japan on possible joint venture opportunities,” said Tan, but nothing
has been confirmed yet.
Despite noting that the O&G
sector has been slowing down on
the capex side, Tan said O&G firms
did not cut down their operating
expenditure (opex).
“They still need to spend on the
maintenance of their safety equipment at their platforms. There is
no way for them to compromise
on this. We are eyeing these kinds
of jobs,” he said.
“Most of our Petronas’ (Petroliam Nasional Bhd) assets out there
are quite old assets and they need
maintenance. As such, we are on
the right track and in good position
on this,” he said.
Additionally, Tanjung Offshore
will re-enter the OSV market following the expiry of the three-year
“non-compete clause”. Tanjung Offshore had sold off its OSV arm Tanjung Kapal Services Sdn Bhd to
Equiti Nasional Bhd in 2012.
“It (the non-compete clause)
will lapse in mid-July this year,”
said Rahman.
“OSV (business) can be one of
the group’s revenue contributions
provided charter rates are favourable,” he said.
“Tanjung Offshore’s business
activities are not heavily contingent on oil prices and the group
is seeking out technologies that
would enable lower operational
costs,” he said.
On its subsidiary GasTec, Rahman said the group will look to
expand into the mechanical and
engineering segment.
For the first quarter ended
March 31, 2015, Tanjung Offshore
fell into the red, registering a net
loss of RM1.97 million against a net
profit of RM2.1 million a year ago.
On its eight-storey office building in Birmingham, the United
Kingdom, Rahman said the group
has yet to decide whether to sell or
retain it for recurring income.
“Disposal could be one of the
options. We can either dispose or
add yield to it (the property) by
undertaking a refurbishment of
the property. But the question is
what kind of refurbishment, be
it a residential, a hostel or other
form,” he said.
Rahman: OSV (business) can be one
of the group’s revenue contributions
provided charter rates are favourable.
Photo by Suhaimi Yusuf
Rahman said the final decision
will depend on the outcome of the
investigations.
Over the past one year, the trading of Tanjung Offshore shares has
been very volatile. Its share price
was traded at a high of 61 sen on
July 9 last year and plunged to a low
of 30 sen on Dec 17 in the same year.
Since then, the stock has slowly recovered and closed two sen
or 4.08% at 47 sen yesterday, for a
market capitalisation of RM185.74
million.
score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers.
The valuation score determines if a
stock is attractively valued or not,
also based on historical numbers.
A score of 3 suggests strong fundamentals and attractive valuations.
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Gamuda, partners to acquire S$345.86m Toa Payoh land
BY AHM AD NAQI B I DRI S
KUALA LUMPUR: Gamuda Bhd,
in a joint venture (JV) with Evia
Real Estate (7) Pte Ltd and Maxdin Pte Ltd, will acquire a 12,154.6
sq m piece of leasehold land in
Singapore for S$345.86 million
(RM968.6 million).
In a filing with Bursa Malaysia yesterday, Gamuda said the
Gamuda-Evia-Maxdin JV had on
June 23, 2015 obtained the Housing
Development Board of Singapore’s
nod to acquire the piece of land.
The current type of allowable development on the land is condominiums or flats, or with written
approval, a combination of flats
and strata landed houses.
“The acquisition and proposed
Toa Payoh development represent
an excellent opportunity for the
group to make its maiden presence in Singapore and to participate in a development which is
strategically located in a matured
residential area,” said Gamuda. “It
is also one of Singapore’s choice
locations in view of its proximity
to MRT lines and stations.
“The proposed Toa Payoh development is expected to contribute
positively to the future earnings
and thereby improve shareholders’ value over the medium to long
term,” it said.
Following the Singapore authority’s approval, a JV company
will be formed in which Gamuda,
via its wholly-owned subsidiary
Gamuda (Singapore) Pte Ltd, will
have a 50% stake while Evia and
Maxdin will hold 20% and 30%
respectively.
Yinson plans private placement to pare down debts
BY C HE S TE R TAY
KUALA LUMPUR: Offshore support
services provider Yinson Holdings
Bhd intends to raise about RM299.5
million through private placement
— a move to pare down its bank
borrowings.
As at Jan 31, Yinson’s total loans
and borrowings stood at RM823.18
million; while its gearing ratio stood
at 0.57 times in financial year 2015.
After the placement exercise, Yinson expects its total borrowings to
reduce to RM533.67 million, while
gearing could drop to 0.31 times.
In a filing with Bursa Malaysia yesterday, the group said by
assuming the issue price for the
placement shares of RM2.90 apiece,
it could raise gross proceeds of
up to RM299.5 million, of which
RM289.51 will be for repayment
of bank borrowings, while the remaining will be for the corporate
exercise expenses.
Yinson (fundamental: 1.5; valuation: 1.5) said the proposal is to
undertake a private placement of
new ordinary shares of up to 103.28
million shares, representing up to
10% of its issued and paid-up share
capital.
“The placement shares will be
placed to third party investors to be
identified at a later date,” the group
said, adding that the issue price will
not be priced at more than a 10%
discount to the five-day volume
weighted average market price of
its shares immediately before the
price-fixing date.
Gabungan AQRS
‘optimistic’ about
more MRT jobs
Group’s order book currently stands at RM1 billion
Azizan said the group is looking to
venture into long-term recurring
income asset management. Photo
by Shahrin Yahya
BY Y I MI E YONG & SAM ANTHA HO
KUALA LUMPUR: Construction
services provider and property
developer Gabungan AQRS Bhd,
which has tendered for some
RM700 million worth of construction projects to date, is “optimistic”
about securing at least one work
package from the Sg Buloh-Serdang-Putrajaya Mass Rapid Transit
(MRT) Line 2.
Gabungan AQRS executive director Datuk Azizan Jaafar said the
group has gained experience from
participating in the Klang Valley
MRT Line 1, so they are hopeful
of securing more work from the
MRT Line 2, as well as the Light
Rail Transit (LRT) Line 3.
Speaking to reporters after the
Gabungan AQRS annual general meeting yesterday, he said the
pre-qualification phase for MRT
Line 2 will be completed at end
July, and the tender process will
start in October.
The group’s order book currently stands at RM1 billion, and
the profit margin of the group’s
construction works is about 10%
to 15%, he said.
Its order book includes Package
V1 of the MRT Line 1 (RM391 million), Tropicana Metropark (RM173
million), and The Peak at Iskandar
Malaysia (RM243 million). “The average success rate for the company
is about 25% to 30%,” he said on the
construction projects the group is
bidding for.
Construction contributed about
65% to group revenue in the financial year ended Dec 31, 2014 (FY14).
However, construction’s contribution to the group’s net profit is
only at 35%, while the remaining
65% was made up by its property
projects.
Gabungan AQRS will be launching two projects in the first half of
next year, the One Jesselton Waterfront mixed development in Kota
Kinabalu and the Altium, a mixed
project in Damansara Perdana with
a gross development value (GDV)
of RM450 million.
One Jesselton Waterfront, is a
joint venture (JV) with Suria Capital Holdings Bhd. It carries a net
sales value of RM1.8 billion and is
Gabungan AQRS’ largest project.
Despite the recent earthquake in
Sabah, Azizan expects demand for
One Jesselton Waterfront to be good
and said the new buildings will be
better able to withstand seismic
shocks compared with older ones.
Construction of One Jesselton
Waterfront is targeted to begin between December 2015 and early
2016, and a soft launch for the serviced apartments and condominiums is slated for the end of this year.
The group’s current land bank of
36 acres (14.56ha) with an aggregate
GDV of RM3.39 billion, together
with its JV projects, is expected to
keep it busy for the next 5-6 years.
Azizan said the group is looking
to venture into long-term recurring
income asset management after
the completion of One Jesselton
Waterfront.
For FY15, Azizan expects the
performance of the group to be
“probably the same” as FY14’s as
the economy and the property market remain “soft”. It made a net profit of RM52.95 million in FY14 on
the back of RM534.16 million in
revenue.
Gabungan AQRS closed unchange at RM1.17 yesterday for a
market value of RM452.7 million.
Keladi Maju expects
flat revenue and profit
growth for FY16
BY M E E N A L A K S H A N A
PETALING JAYA: Property developer Keladi Maju Bhd expects its
revenue and net profit growth in the
financial year ending Jan 31, 2016
(FY16) to be flat compared with
FY15, despite a surge in earnings
for the first quarter of FY16 ended
April 30, 2015 (1QFY16).
This is because its two major new
developments — a residential development in Taman Puteri in Kulim
with an estimated RM240 million
in gross development value (GDV)
and a mixed development in Jalan
Segambut, Kuala Lumpur, worth an
estimated RM2 billion in GDV —
are only expected to be completed
next year.
Keladi Maju managing director
Datuk Chuah Chin Ah said Taman
Puteri, which is a continuation of
its Taman Lagenda development in
Padang Serai, Kulim, and the group’s
development in Jalan Segambut are
expected to be completed next year.
“Both these developments will
contribute to FY17 earnings,” he told
reporters after the company’s annual
general meeting (AGM) yesterday.
The company’s residential developments in Kulim, such as Taman
Lagenda, with a 100% take-up rate,
and Taman Desa Cinta Sayang, had
contributed to a threefold growth
in revenue and profit in 1QFY16.
The company’s net profit leaped
three times to RM8.79 million in
1QFY16 from RM2.92 million in
1QFY15, while revenue ballooned
to RM24.7 million from RM7.93 million, on improved sales and construction progress billings from its
property development division.
In FY15, Keladi Maju (fundamental: 1.65; valuation: 2.4) recorded a
net profit of RM18.53 million, down
13.65% year-on-year (y-o-y) from
RM21.46 million, while revenue
was at RM52.55 million, down 11%
y-o-y from RM58.85 million.
Keladi Maju’s core business of
property development contributes
93% to total group revenue.
Chuah said the company expects
to withstand the soft property market by leveraging on its affordable
developments.
“We are not significantly affected by the strict guidelines on bank
loans because there is good demand
for our projects in Kulim due to the
affordability of the units,” he added.
Meanwhile, the group hopes to
obtain the development order (DO)
by the end of this year for its Jalan
Segambut project, which will be on
nine parcels of contiguous land and
will feature a serviced apartment and
retail space. The proposed development marks its maiden foray into the
Klang Valley property market.
“We will be submitting the application for the DO soon,” he said.
He added that the company is
looking to expand its land bank,
and is especially looking at opportunities in the Klang Valley.
Keladi Maju closed half sen lower
at RM29 sen yesterday for a market
value of RM219.9 million.
Go to www.theedgemarkets.com for
more details on a company’s financial dashboard.
Australian sugar growers reject Wilmar’s proposal Aeon Credit 1Q net profit
came in at RM58.24m
SYDNEY: Australian sugar growers yesterday rejected a marketing
proposal from the country’s largest
sugar processor Wilmar International
Ltd, saying it does not guarantee top
prices, and called for laws that give
them a say in exports.
Wilmar, MSF Sugar, owned by
Thai sugar giant Mitr Phol, and the
Australian unit of Chinese agribusiness COFCO Corp plan to stop selling
sugar through the industry-owned
marketing body from 2017.
Australian sugar is currently controlled by an independent entity,
Queensland Sugar Ltd. The three
processors want to bypass the industry body and use their own exporting
arm, which they say will allow them
to control their supply chains and
maximise revenues.
But the move is unpopular with
sugar farmers in Australia, the world’s
third largest exporter of raw sweetener.
Sugar cane must be processed
within a day of being harvested and
with no alternative millers nearby,
growers say they have no choice but
to sell to the three processors and
have little assurance on crop prices.
“An Australian sugar farmer should have free choice in his
economic destiny and the Wilmar
proposal does not allow that,” said
Steve Guazzo, chairman of the industry body,
Wilmar’s proposal includes the
creation of a committee of farmers that would have access to information on all its Australian sales,
designed to reassure farmers over
returns.
But cane growers have rejected
the proposal.
The industry believes it has the
support of Australian lawmakers,
with a Senate committee set to propose a mandatory code of conduct
for the industry that would give cane
growers control over the sale of two
thirds of raw sugar produced by foreign-owned sugar mills in Queensland.
If such a proposal became law, this
would prevent the processors creat-
ing their own Australian export body.
“Wrapping the sugar industry in
government red tape is simply unnecessary and would have a significant negative financial impact on
cane growers and sugar millers,” said
Shayne Rutherford, executive general
manager, strategy and business development at Wilmar.
Australian cane growers have
called on the conservative government to back them, but while it relies
on the rural vote, it is unclear whether
it will enter the dispute.
Australian Foreign Minister Julie
Bishop has written to Queensland’s
state government, where much of
the country’s sugar is grown, to
reject any moves to legislate how
sugar is marketed, according to
local media.
“It is important that Australia continues to maintain a credible reputation for being an effective and reliable
partner with an exceptional record of
compliance within the terms of our
international trading agreements,”
Bishop wrote. — Reuters
BY G H O C H E E Y UA N
KUALA LUMPUR: Aeon Credit
Service (M) Bhd registered a net
profit of RM58.24 million for the
first quarter ended May 31, 2015
(1QFY16), a 3.5% increase from
RM56.28 million for the quarter
ended May 20, 2014.
Revenue for 1QFY16 came in at
RM232.44 million, up 15.7% from
RM200.9 million over the quarter
ended May 20, 2014.
There were no comparative figures
available as the non-bank financial
institution had changed its financial year-end to Feb 28 from Feb 20
previously.
In a filing with Bursa Malaysia yesterday, Aeon Credit said its non-performing loans (NPL) ratio was 2.74%
as at May 31, 2015 compared with
2.18% as at May 20, 2014.
“Total transaction and financing
volume in 1QFY16 was 844.273 million, (while) the financing receivables
as at May 31, 2015 were RM4.671 bil-
lion, a 21.61% increase from RM3.841
billion as at May 20, 2014,” it said.
It recorded other operating income of RM23.803 million for
1QFY16, mainly comprising bad
debts recovered, commission income from sale of insurance products and Aeon Big loyalty programme
processing fees.
Ratio of total operating expenses against revenue, however, rose
to 61.2% from 54.6% previously,
mainly due to higher allowance
for impairment losses on financing receivables.
Going forward, Aeon Credit expects to maintain its performance
for FY16 ending Feb 29, based on
the implementation of its business
plan, with stronger performance in
the second half of the financial year
based on an anticipated increase
in consumer spending.
Shares in Aeon Credit closed
unchanged at RM14.18 yesterday,
bringing a market capitalisation of
RM2.04 billion.
F R I DAY J U N E 26 , 20 1 5 • T HEED G E FINA NCIA L DA ILY
H O M E B U S I N E S S 11
in Forbes Asia’s ‘Best
Down from 14 last year, but on par with India
BY SA NGEETHA A MARTHALINGAM
KUALA LUMPUR: Eleven Malaysian companies made it into
Forbes Asia’s “Best Under A Billion” 2015 list — which honours
200 leading public companies in
the Asia-Pacific region with annual revenue of between US$5
million (RM18.8 million) and
US$1 billion — down from 14
companies last year.
The 11 companies this year
are: Dayang Enterprise Holdings Bhd, Elsoft Research Bhd,
GD Express Carrier Bhd, Inari
Amertron Bhd, MyEG Services
Bhd, OSK Property Holdings
Bhd, Scientex Bhd, Seal Inc Bhd,
Tambun Indah Land Bhd, UEM
Edgenta Bhd and Vitrox Corp
Bhd.
In a statement, Forbes Asia,
a magazine printed by Forbes
Media LLC, said Malaysia is on
par with India which also has 11
companies featured on the list.
The companies on the list
must also have positive net income and have been publicly
traded for at least a year, according to Forbes Asia.
“From a universe of 17,000
companies, the candidates are
screened on sales growth and
earnings growth in the past 12
months and over three years,
and for the strongest five-year
return on equity,” it said.
The annual list was dominat-
ed by companies from mainland
China, Hong Kong and Taiwan;
the three collectively accounted
for 60% of the top 200 publicly
traded companies in the region.
“Of the 200, some 123 are new
to the list, underscoring the dynamism of the region’s small and
medium-sized sector. A total of
84 companies on this year’s list
are from China and Hong Kong,
down one from last year.
“Pharmaceutical and other
healthcare companies from China featured strongly on the list,
as was the case last year.
“The second largest group of
companies on the list comes from
Taiwan. This year, five more made
it to the list, bringing the total num-
Malaysian companies in Forbes Asia’s ‘Best Under A Billion’ list for 2015
NAME
Dayang Enterprise
Elsoft Research
GD Express Carrier
SALES (US$ MIL)
NET INCOME (US$ MIL)
MARKET VALUES (US$ MIL)
268
55
588
14
6
87
49
7
461
245
31
672
MyEG Services
34
15
859
OSK Property
207
31
125
Scientex
490
46
432
90
18
34
Inari Amertron
Seal
Tambun Indah Land
143
31
196
UEM Edgenta
944
62
810
52
15
217
Vitrox
Source: Forbes Asia
‘Best Under A Billion’ list 2015 (countries)
ber from Taiwan to 36,” it said.
South Korea was third on the
NO OF FIRMS
list with 17 companies, up from ECONOMY
84
12 last year, Australia has nine, China & HK
while Japan dropped out of the Taiwan
36
top five countries with only eight South Korea
17
companies compared to 15 last India
11
year, said Forbes Asia.
Malaysia
11
“Singapore is represented by
9
six companies, up from three Australia
8
last year. Thailand is also repre- Japan
6
sented by six companies, down Thailand
from nine last year,” said Forbes Singapore
6
Asia, adding that Sri Lanka has Indonesia
3
a rare entry with a hydropower Philippines
3
electricity generator.
3
Indonesia, the Philippines Vietnam
Pakistan
2
and Vietnam have three com1
panies each on the list, while Sri Lanka
Source: Forbes Asia
Pakistan has two.
Salcon seeks to bag 30% to
40% of RM2b tender book
Confident of securing projects by end-2015
BY A ZRI L A N N UAR
SUBANG JAYA: Water infrastructure
specialist Salcon Bhd (fundamental: 1.65; valuation: 1.2) is confident
of securing between 30% and 40%
of its RM2 billion tender book by
end-2015, despite the gloomy economic outlook.
Executive director Datuk Eddy
Leong Kok Wah (pic) said the company’s average success rate on its
tender book was at around 20%,
but it could hit the targeted figure
this year.
“The tenders mainly consist of
domestic projects [worth] up to
RM2 billion, out of which RM1.25
billion is local and RM750 million is
overseas. We have eight [ongoing]
local projects and five in Sri Lanka.
“If we can secure one of the local
contracts this year, we can easily secure 30% to 40% of our RM2 billion
PATRICK GOH
tender book. It still depends on the
party … but we know that we are in
the running. We are optimistic. We
have our track record. And we are
trying hard,” said Leong after the
company’s annual general meeting yesterday.
He said the company is quite
comfortable after receiving payment for eight out of its nine concessions in China. Currently, Salcon
is sitting on a RM270 million cash
pile as a result of disposing of its
China portfolio.
“Currently, the final concession is under arbitration. The issue with our partner in Shantung
is that [although] they want to buy
[our] shares, they don’t want to pay
the same amount that our Beijing
client is willing to pay.
“We are confident the matter will
be resolved ... by the third quarter
of this year,” said Leong, adding that
the company is now looking into
areas in which to invest its China
proceeds as some shareholders are
not happy with the 3% bank interest rate the company is gaining as
“sleeping money”.
Moving forward, Salcon hopes
*
that its diversification into the property and telecommunication markets will also contribute to future
revenue when compared with its
more traditional water treatment
and waste water business.
“We have secured a 15-year concession with Prasarana to lay fibre
optics along monorail and LRT
lines to provide broadband to the
rail service. It’s known as Vox Bahn
Technolog. We laid the cables in
January and are now negotiating
with all the major telcos.
“The telcos will then lease [the
service] to end users or subscribers,” Leong said.
He added that the company has
three parcels of land that are being
developed but due to “turbulent
times”, Salcon is taking more time
with it.
“We have diversified a bit into
property development. We got our
first project in Selayang, Selangor,
building 280 units of apartments,
[which we] hope to deliver by end
of next year. The pick-up rate is 70%
and above, so it’s quite positive,”
said Leong, adding that the project’s estimated gross development
value is RM160 million, which is to
be factored in next year.
Salcon’s land bank also includes
a 12.5-acre (4.18ha) lot in Johor
Baru and 5½ acres in Kampung
Attap, Kuala Lumpur.
Bina Puri wins
RM195m Iskandar
Malaysia job
BY A Z R IL A N N UA R
Analysts say
Fernandes
the best
person to
turn airline
around
amid accounting
worries
Page 14
PETALING JAYA: Construction firm
Bina Puri Holdings Bhd’s subsidiary
Bina Puri Sdn Bhd (BPSB) has been
awarded a RM195 million contract
to construct twin towers in Iskandar
Malaysia’s Medini Central Business
District.
The 23-storey landmark project,
awarded by Medini Development
Sdn Bhd, is expected to be completed within 29 months, according to a
statement from Bina Puri yesterday.
This brings the total value of new
projects that Bina Puri has successfully secured this year to RM738
million, while upping its unbuilt
book order to RM2.13 billion to date.
“Securing this project will increase the group’s active involvement in construction and property development in Johor. We have
scaled up our involvement in Iskandar Malaysia over the past five years,”
said Bina Puri group executive director Matthew Tee in the statement.
“Other previous notable projects
in Johor include the RM300 million
Royal Malaysia Police’s Battalion 6
Camp Complex in Muar, and the
RM293 million Eastern Dispersal
Link in Johor Baru, both completed in 2011.
“The group is also active in property development in two properties
with a combined gross domestic
value of RM314 million. They are
the ongoing RM204 million Lakehill Resort in Masai, and the RM110
An artist impression of the twin-tower
in Johor.
million Petrie Villa four-storey link
houses in Johor Baru,” he said.
Bina Puri said BPSB accepted the
letter of award from Medini Development last Monday to undertake
the development.
The towers will comprise a 15-storey office block with an eight-storey
podium consisting of a seven-storey car park and one-storey lobby
area with facilities. There will also
be another three-storey basement
car park in both towers.
Bina Puri (fundamental: 0.15;
valuation: 2) closed at 54 sen yesterday, down 1.5 sen or 2.7%, giving it a market capitalisation of
RM116.8 million.
AirAsia CEO Fernandes
casts other work aside
Heng Huat to
invest RM35m
to build EFB
fibre plant in
Gua Musang
Analysts say he is the best person to turn airline around amid accounting worries
KUAL A LUMPUR : Heng
Huat Resources Group Bhd,
a Penang-based integrated
manufacturer of oil palm and
coconut biomass products, will
invest RM35 million to build a
new oil palm empty fruit bunch
(EFB) fibre manufacturing facility in Gua Musang, Kelantan.
Heng Huat currently operates two oil palm EFB fibre manufacturing plants in
Seberang Perai, Penang. The
new plant, which is to be operational in the second quarter of 2016, will increase the
group’s total oil palm EFB fibre
production lines to 27 from 20
currently, with annual production capacity rising to more
than 135,000 tonnes.
“This expansion plan is
timely in light of the anticipated strong demand, and the
high utilisation rate of 90% at
our existing plants,” Heng Huat
co-founder and managing director H’ng Choon Seng in a
statement yesterday.
“The expansion would allow
us to fulfil a larger share of demand from China, and target
new export markets such as Australia, South Korea and Japan,”
he added. The group currently
exports more than 90% of its oil
palm EFB fibre to China.
The new plant will derive
its raw materials from palm oil
mills throughout Kelantan.
Of the RM35 million, RM11
million is for the purchase of
land and construction of the factory, RM12 million for machinery, RM2 million for support
vehicles and equipment and the
remaining RM10 million for a
biomass co-generation power
plant. The capital expenditure
will be financed via bank borrowings and internal funds.
H’ng said the new biomass
co-generation power plant will
allow it to reduce its operating
costs through better energy-efficiency and re-utilisation of production waste materials.
Exports of oil palm EFB fibre
and related products made up
RM53.3 million or 58.2% of Heng
Huat’s revenue for the financial
year ended December 2014.
At the annual and extraordinary general meetings yesterday,
Heng Huat secured shareholders’
approval to transfer its listing status to the Main Market of Bursa
Malaysia from the ACE Market.
Shareholders also approved
the issuance of bonus shares on
the basis of one bonus share for
every two ordinary shares held.
The entitlement date is to be
determined later.
The bonus shares will effectively increase Heng Huat’s
share capital to RM30.9 million,
comprising 308.7 million shares
of 10 sen par, from 205.8 million
shares currently.
SINGAPORE: AirAsia Bhd boss Tan
Sri Tony Fernandes has told staff and
analysts he will spend more time
working on the budget airline and
put his other business and sporting
interests to one side, after a report
questioning the company’s accounts
sent its share price tumbling.
The chief executive has said his
other work will take a back seat as
he focuses on repairing the financial
damage done to Asia’s largest lowcost airline, according to analysts and
two AirAsia executives who spoke to
Reuters on condition of anonymity.
Analysts covering the airline say
Fernandes told them that he, and
his long-term business partner Datuk Kamarudin Meranun, would
become more hands-on.
“Tony told us in a conference call
last week that he and Kamarudin
will take a back seat to everything
else and focus on AirAsia,” said
Maybank Investment Bank Bhd
analyst Mohsin Aziz.
“He’s back, and he’s getting more
involved in many of the decisions,”
added one executive.
AirAsia declined to comment
on the matter while Fernandes and
Kamarudin did not respond to Reuters enquiries.
Fernandes, one of Asia’s best
known corporate leaders, has built a
sprawling business empire over the
past decade that includes English
football club Queens Park Rangers, a hotel chain and an insurance
business.
That has led to concerns among
some AirAsia staff that he was
spending too much time away from
the airline just as it was expanding
in Japan and India and facing an
increasingly competitive landscape
in Southeast Asia.
AirAsia is the worst-performing airline globally out of mid and
large-cap stocks so far this year, its
share price falling more than 40%
to give the carrier a market value
of RM4.5 billion.
Some executives said he delegated most of the running of the
company to the heads of the group’s
individual airlines and that he was
in the office less and less.
Worries about his absence were
exacerbated after a June 10 report
by little known GMT Research said
AirAsia uses related-party transactions with loss-making associate
carriers to boost its earnings. AirAsia shares are down 24% since the
report was published.
The report has caused investors
to question whether AirAsia is too
reliant on its associates — semi-independent airlines in countries
around Asia that share its branding
and pay it fees to lease planes —
given they owe increasingly large
amounts of money to the parent
company.
Fernandes refuted GMT’s report
at the Paris Airshow last week, saying
AirAsia has a solid balance sheet and
business plan. He is now working increasingly hard behind the scenes to
put the finishing touches on a turnaround plan for the group’s beleaguered Indonesian and Philippine associates, according to staff members.
Share valuations of world’s top
medical glove makers surge
KUALA LUMPUR/BENGALURU:
Share valuations of the four biggest
medical glove makers in Malaysia —
in the world, in fact — have soared
to historic highs, but not because
of the Middle East Respiratory Syndrome (Mers) outbreak.
The median forward 12-month
price earnings ratio of Top Glove
Corp Bhd, Supermax Corp Bhd,
Kossan Rubber Industries Bhd and
Hartalega Holdings Bhd has risen
to 18, the highest ever, according
to Thomson Reuters data.
The figures also show their combined revenue is expected to grow
20% in 2015, the most in five years.
The chief driver of sales is the
ringgit’s slump to nine-year lows
against the US dollar, making exports more competitive.
Low raw material prices will also
help widen profit margins.
Analysts advocate a selective
stock-picking strategy. Among the
four, they see Top Glove as their
top pick. Shares of the world’s big-
gest glovemaker, which commands
a 25% share of the market, have
jumped some 11% since the company released earnings on June 17
that beat expectations.
“I think given the strong rally in
Kossan prices, value has emerged
more in players such as Top Glove
and Supermax,” said Chris Eng,
head of research at Etiqa Insurance & Takaful, which manages
more than RM23 billion of assets.
“Probably Top Glove presents the
most value as we expect oil prices to gradually rise in the coming
months putting upward pressure
on nitrile as well, which will disadvantage Hartalega and Kossan.”
The recent outbreak of Mers in
South Korea has also helped spark
investor interest in the stocks, though
analysts do not expect Mers to translate into a jump in glove demand
with a material impact on earnings.
RHB Research attributed this to
the success of South Korea in containing Mers. — Reuters
Fernandes’ biggest challenge is the tough
business terrain that was worsened by the
crash of an Airbus A320 jet operated by the
Indonesian affiliate that killed 162 people
in December . Photo by The Malaysian
Insider
“He’s telling people that AirAsia
is a small company without deep
pockets or a saviour, and that everyone needs to pull together and work
harder to prove that the report is
wrong,” said the executive.
Last week the company said it
expects its Indonesia unit to break
even and its Philippine business to
return to profitability by the end
of this year.
Since 2007, Fernandes and
Kamarudin have launched a chain
of budget hotels, a mobile phone
group, a school and ventured into
financial services through their
holding company Tune Group.
Last year Fernandes sold Caterham Formula One team, after owning
it for five years. He remains chairman
of loss-making Queens Park Rangers,
which has problems of its own after
it was demoted from England’s top
league and is being scrutinised by
The Football League over whether
its accounts breached the sport’s
“Financial Fair Play” rules.
However his biggest challenge
is the tough business terrain facing
AirAsia, that was worsened by the
crash of an Airbus A320 jet operated
by the Indonesian affiliate that killed
162 people late in December.
The crash led to a drop in the
number of passengers for the
group’s Indonesia unit and it scaled
back marketing activities out of respect for the victims.
Stronger competition from the
likes of Qantas Airways Ltd unit Jetstar, Indonesia’s unlisted Lion Air,
and Singapore Airlines subsidiaries
Tigerair and Scoot contributed to
losses in fourth-quarter 2014, the
first since 2008, though the carrier
returned to profit this year.
Still, analysts say Fernandes is
the best person to turn the airline
around and that its strong route
network and brand recognition
mean its long-term prospects remain healthy.
“It may look ugly now and there
are some challenges to overcome but
AirAsia will get through the current
turbulence,” said Brendan Sobie, a
Singapore-based analyst with aviation consultancy CAPA.
“Its position in the Southeast Asia
market remains strong and the envy
of competitors.” — Reuters
Ban on flights from
Philippines lifted
MANILA: The European Commission has lifted a ban on the
Philippine unit of AirAsia Bhd
offering services to European
Union member
countries, an executive of the airline said yesterday.
The lifting of
the ban which
was imposed in
2010 comes as a
rare spot of good
news for the AirAsia group, which
is currently under
a cloud after a report questioning
the company’s accounts sent
its share price tumbling.
With the lifting of the ban, the
local AirAsia unit could launch
a European service in the next
three to five years, depending
on market demand, director
Alfredo Yao (pic) told Reuters.
“In the future, we can do direct flights but now we are using
AirAsia X Bhd for long haul,” Yao
said, adding that
the local carrier
might buy for itself a wide body
Airbus A330 aircraft.
The local AirAsia, which operates 15 aircraft,
has been in the
red since its creation in 2010, but
expects to book
a profit in the
fourth quarter this year.
The European Commission
had earlier lifted the ban on
Philippine Airlines Inc and Cebu
Air Inc, allowing the carriers
to fly into the airspace of the
28-member bloc. — Reuters
BY S A N G E E T H A
A MA RT H A L IN G A M
16 ST O C KS W I T H M O M E N T U M
This column is an analysis done by Asia Analytica Sdn Bhd on the fundamentals of stocks with momentum that were picked up using proprietary algorithm by
Anticipatory Analytics Sdn Bhd and that first appeared at www.theedgemarkets.com. Please exercise your own judgment or seek professional advice for your specific
investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.
HENG HUAT RESOURCES GROUP BHD (-ve)
HENG HUAT RESOURCES GROUP BHD
FY2015Q1
LISTED in July 2014, Heng Huat (Fundamental: N/A, Valuation: N/A) is a manufacturer of biomass materials such as
coconut fibres and oil palm fibres, which
are mainly exported to China. The Penangbased company also produces and sells
f ibre mat t resses a nd ot her bedd i ng
accessories.
Heng Huat plans to invest RM35 million
in capex to build a new oil palm empty fruit
bunch (EFB) fibre manufacturing facility
in Gua Musang, Kelantan. The new plant,
(ALL FIGURES IN MYR MIL)
31/3/2015
Financials
Turnover
EBITDA
Interest expense
Pre-tax profit
Net profit - owners of company
Fixed assets - PPE
Total assets
Shareholders' fund
Gross borrowings
Net debt/(cash)
which will increase its production capacity by one-third, is expected to commence
operation in 2Q2015.
For 1Q2015, revenue increased 24.1%
y-o-y to RM26.5 million, while net profit
fell 4.0% to RM2.9 million, due to higher
oil palm EFB costs and labour costs.
Last month, it has proposed for a 1-for-2
bonus issue as well as transfer of its listing
from the ACE Market to the Main Market.
The stock trades at a trailing 12-month
P/E of 14.0 times and 2.1 times book.
Valuation score*
Fundamental score**
TTM P/E (x)
TTM PEG (x)
2.06
P/NAV (x)
0.71
TTM Dividend yield (%)
144.06
Market capitalisation (mil)
Shares outstanding (ex-treasury) mil 205.80
1.38
Beta
0.39-0.76
12-month price range
*Valuation score - Composite measure of historical return & valuation
**Fundamental score - Composite measure of balance sheet strength
& profitability
Note: A score of 3.0 is the best to have and 0.0 is the worst to have
DPS ($)
Net asset per share ($)
ROE (%)
Turnover growth (%)
Net profit growth (%)
Net margin (%)
ROA (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
MAGNA Prima (MPB) (Fundamental: 1.1/3,
Valuation: 1.4/3), a niche property developer,
saw its share price rise 2.5% to close at oneyear high of RM1.23 yesterday.
On Tuesday, MPB announced its intention to fully redeem and cancel the entire 40
million redeemable convertible preference
shares (RCPS) issued to Lembaga Tabung
Angkatan Tentera last year. This will enable
MPB to enjoy interest savings of RM2.8 million and reduce its gearing from 1.55 times
to 1.36 times.
Financials
Turnover
EBITDA
Interest expense
Pre-tax profit
Fixed assets - PPE
Total assets
Shareholders' fund
Gross borrowings
Net debt/(cash)
Valuation score*
1.40
1.10
Fundamental score**
12.51
TTM P/E (x)
0.09
TTM PEG (x)
1.95
P/NAV (x)
0.83
399.47
0.66
Beta
0.81-1.20
& profitability
UNITED U-LI CORPORATION BHD (-ve)
ULICORP (Fundamental: 3/3, Valuation: 1.7/3)
rose 7.8% to end at a 3-year high of RM4.14
yesterday, on rising volume.
Last month, Ulicorp declared a 3 sen interim
dividend for 2015, following 1Q2015 earnings
results. The dividend will go “ex” on July 20.
For 1Q2015, revenue increased 3.0% y-o-y
to RM44.2 million, while net profit rose
14.7% to RM4.7 million, thanks to higher
demand and better profit margin from the
electrical lighting and fittings segment as
UNITED U-LI CORPORATION BHD
well as lower tax expenses.
Ulicorp manufactures and trades cable support systems, cable management systems, integrated ceiling systems, building materials and
light fittings. It has a strong balance sheet with
net cash of RM44.5 million or 33.7 sen per share.
The company is in the midst of constructing two new plants with hot dip galvanizing
facilities in Nilai, Negeri Sembilan. Once completed by end-2015, Ulicorp expects to double
its production capacity.
Valuation score*
1.70
3.00
Fundamental score**
21.28
TTM P/E (x)
0.85
TTM PEG (x)
2.41
P/NAV (x)
3.39
506.88
132.00
Shares outstanding (ex-treasury) mil
0.89
Beta
1.08-3.84
& profitability
-
26.5
5.8
0.4
3.8
2.9
64.9
89.5
70.0
25.7
9.2
ROLLING 12-MTH
RATIOS
MAGNA PRIMA BHD
MAGNA PRIMA BHD
-
MAGNA PRIMA BHD (-ve)
For 1Q2015, net profit more than tripled
y-o-y to RM64.7 million while revenue increased 193.1% to RM390.6 million, due
mainly to the completion of its project in
Melbourne — The Istana. It then declared an
interim dividend of 5 sen per share, which
will go “ex” on July 2.
Early this month, the company announced
that it is being sued by 24 people for RM25
million, for the alleged poor quality of its
six-star luxury condominium, The Avare,
at KLCC.
-
MAGNA PRIMA BHD
RATIOS
DPS ($)
ROE (%)
Turnover growth (%)
Net margin (%)
ROA (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
Financials
Turnover
EBITDA
Interest expense
Pre-tax profit
Fixed assets - PPE
Total assets
Shareholders' fund
Gross borrowings
Net debt/(cash)
RATIOS
DPS ($)
ROE (%)
Turnover growth (%)
Net margin (%)
ROA (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
-
-
-
0.01
0.34
1.95
13.17
-
FY12
FY13
FY14
FY2015Q1
31/12/2012
31/12/2013
31/12/2014
31/3/2015
196.5
33.5
0.3
33.8
16.8
1.6
332.1
156.1
169.8
163.0
135.9
19.0
0.2
19.3
17.9
1.4
422.4
160.9
286.3
240.4
142.6
(1.6)
9.7
(7.0)
(13.7)
1.3
245.7
142.1
503.3
458.9
390.6
103.9
4.5
100.2
64.7
1.4
454.3
205.3
318.5
144.2
FY12
FY13
31/12/2012
31/12/2013
31/12/2014
0.02
0.47
11.97
135.38
8.54
5.95
1.36
104.41
105.93
0.48
11.31
(30.82)
6.83
13.19
4.75
1.36
149.42
91.66
0.01
0.43
(9.01)
4.89
(9.58)
(4.09)
1.12
322.84
(0.16)
FY14 ROLLING 12-MTH
0.01
0.62
18.45
156.94
136.24
7.99
8.28
1.59
70.22
6.13
FY12
FY13
FY14
FY2015Q1
31/12/2012
31/12/2013
31/12/2014
31/3/2015
147.3
27.6
1.0
22.5
17.0
50.3
181.2
179.6
19.6
(30.1)
154.3
30.4
1.2
24.5
16.6
63.5
192.8
191.2
22.2
(29.5)
172.3
36.3
0.7
30.8
23.2
66.3
206.1
205.2
18.4
(49.7)
44.2
7.7
0.5
6.1
4.7
67.7
210.9
209.9
28.9
(44.5)
FY12
FY13
31/12/2012
31/12/2013
31/12/2014
0.02
1.36
9.81
3.28
3.38
11.56
9.73
4.84
28.02
0.05
1.45
8.95
4.80
(2.58)
10.75
8.87
4.79
26.23
0.10
1.55
11.72
11.62
40.03
13.48
11.65
4.72
49.98
FY14 ROLLING 12-MTH
0.13
1.59
12.02
6.82
25.07
13.72
11.94
4.19
34.67
1 8 I N V E ST I N G I D E A S
BROUGHT TO YOU BY
I N S I D E R A S I A’S S TO C K O F T H E D AY
STAR MEDIA GROUP BHD
DESPITE earnings contraction over the last
two years and an unexciting outlook for the
print media, Star Media Group (Fundamental: 2.5/3, Valuation: 1.4/3) takes comfort
from its dominant position and its ability to
reward investors with high dividend yields.
Based on total dividend of 18 sen per sen
in 2014, the stock offers an attractive yield of
7.3% — one of the highest on the local bourse.
Excluding exceptionally large payout in
2005 and 2010 of 32 sen and 58 sen, respectively, Star has been paying fairly consistent
dividends of between 15 sen and 18 sen per
year. Excluding those two years, the dividend
payout ratio ranged from 71% to 119%.
While the payout ratio rose from 77% to
119% in 2014, we believe its large dividends
are sustainable over the near term as it has a
net cash position of RM367 million (equivalent to 50 sen per share) and generates an
average free cash flow of RM176 million (24
sen per share) for 2010-2014.
Star is the most widely read English lanSTAR MEDIA GROUP BHD
guage newspaper in the country. Although
it has diversified into radio, television and
event management, the print and digital
segment remains its main revenue generator, contributing 70% of revenue and 106%
of pre-tax profit in 2014.
For 1Q15, revenue rose 3% y-y to RM217.4
million while net profit jumped 63% to
RM26.5 million, primarily due to cost rationalisation expenses incurred in 1Q14.
The print and digital revenue for 1Q15,
however, contracted by 0.3%, mainly due to
lower print circulation and digital revenue.
Looking ahead, the industry’s outlook is challenging as overall advertising expenditure has
been affected by poor consumer sentiment.
The Malaysian Chinese Association (MCA)
owns a 42% stake in the company and institutional investors collectively hold some
41% of its shares. The stock currently trades
at a trailing 12-month P/E of 15.0 times,
compared with Media Prima’s 25.2 times
and Media Chinese’s 8.7 times.
Valuation score*
1.40
2.50
Fundamental score**
14.98
TTM P/E (x)
(1.76)
TTM PEG (x)
1.65
P/NAV (x)
7.29
1,822.76
0.37
Beta
2.12-2.62
& profitability
Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own
judgment or seek professional advice for your specific investment needs. We are not responsible for your investment
decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.
Income Statement
Turnover
EBITDA
Depreciation
EBIT
Associates
Interest income
Interest expense
Extraordinary gain/(loss)
Pre-tax profit
Balance sheet
Fixed assets - PPE
Biological assets
Intangibles & goodwill
Cash and equivalents
Total current assets
ST borrowings
Total current liabilities
Total assets
Shareholders' fund
Long term borrowings
RATIOS
DPS ($)
ROE (%)
Turnover growth (%)
Net margin (%)
ROA (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
FY12
FY13
FY14
FY2015Q1
31/12/2012
31/12/2013
31/12/2014
31/3/2015
1,079.9
339.8
50.7
289.2
(4.5)
10.3
11.0
(24.3)
259.6
208.1
1,025.3
248.8
53.8
195.0
(0.9)
7.6
10.2
1.1
192.6
142.9
1,013.7
227.2
56.0
171.2
(0.6)
6.8
10.1
(13.8)
153.4
111.4
217.4
50.1
10.9
39.2
0.9
2.5
37.6
26.5
535.3
122.3
473.7
842.7
58.2
237.7
1,458.0
1,139.1
206.6
507.3
133.8
543.1
862.3
60.7
223.6
1,474.5
1,162.3
205.0
476.6
107.5
626.4
901.2
65.2
224.0
1,446.3
1,142.5
204.2
467.4
107.9
637.3
943.0
66.1
300.4
1,404.6
1,105.8
203.9
FY12
FY13
31/12/2012
31/12/2013
31/12/2014
FY14 ROLLING 12-MTH
0.18
1.54
18.88
1.15
11.48
19.27
14.64
3.55
31.01
0.15
1.58
12.42
(5.05)
(31.34)
13.93
9.74
3.86
24.41
0.18
1.55
9.67
(1.13)
(22.02)
10.99
7.63
4.02
22.40
0.18
1.50
10.78
0.41
(8.53)
11.93
8.48
3.14
23.44
20 B R O K E R S’ C A L L / T E C H N I C A L S
A retest of 1,714 and lower
BY LEE CHENG HOOI
U
S markets ended much lower
on Wednesday as
American investors
fretted about when
the US Federal Reserve would raise American interest rates. More damagingly for the
markets was the fact that Greece is
stumbling closer to defaulting on
its debts as negotiations in Brussels yielded little progress, and no
breakthrough was in sight ahead
of the June 30 deadline to repay
€1.5 billion (RM6.3 billion) to the
International Monetary Fund. The
SP 500 Index tumbled 15.62 points
to 2,108.58 points while the Dow
Jones Industrial Average plunged
178 points to end at 17,966.07.
In Malaysia, the FBM KLCI
moved in a narrower range of 19.09
points for the week with lower volumes of 1.54 billion to 1.79 billion
traded. The index closed at 1,716.81
yesterday, down 14.87 points from
the previous day as blue-chip stocks
like British American Tobacco (M)
Bhd, PPB Group Bhd, RHB Capital
Bhd, Telekom Malaysia Bhd and
Tenaga Nasional Bhd caused the
index to fall on some persistent
selling activities. The ringgit was
much weaker against the US dollar
at 3.7570 as Brent crude oil inched
up to US$62.25 per barrel.
The index rose on a rally from the
801.27 low (Oct 2008) to its 1,896.23
all-time high (July 2014) and it represents an extended Elliott Wave “Flat”
rebound in a “Pseudo-Bull” rise
completed. The next few months’ index price movements since July 2014
comprised key swings of 1,837.28
(low), 1,879.62 (high), 1,766.22
(low), 1,858.09 (high), 1,671.82
(low), 1,810.21 (high), 1,706.18 (low),
1,831.41 (high), 1,774.30 (low) and
1,867.53 (high).
All the index’s daily signals are
mainly negative for now, with its
CCI, DMI and Oscillator indicators
showing much weaker readings. As
such, the index’s weaker support
levels are seen at 1,671, 1,706 and
1,714, while the resistance areas of
1,716, 1,755 and 1,795 will cap any
index rebound.
The KLCI’s 18-day and 40-day
simple moving averages (SMA) depict an obvious downtrend with a
“Dead Cross” for its short-term daily
chart. The recent price bars of the
index have also turned below the
50-day and 200-day SMA with a
“Dead Cross” too. This may not augur well for the index, as the longerterm trend of the index is bearish
as well. As such, the index remains
on its persistent downturn from its
recent 1,867.53 high in late April.
Upon a break of the critical intermediate support of 1,714, the
index may head towards its next
Worst likely over for Glomac
Glomac Bhd
(June 25, 80 sen)
Upgrade to buy with an unchanged
target price of RM1.06: Glomac’s
core net income (CNI) for financial
year 2015 (FY15) of RM63 million
was 15% ahead of our estimate of
RM55 million and accounted for
92% of the consensus estimate of
RM69 million. We had underestimated the margin for Glomac’s
property development division.
Admittedly, Glomac’s FY15 CNI
declined 32% year-on-year (y-o-y) to
RM63 million, which was in line with
the lower revenue (-30% to RM472
million). The revenue decline was
mainly due to lower recognition
as a result of the completion of the
Damansara Residences. Glomac’s
share price tumbled 44% from its
peak of RM1.41 on May 21, 2013 so
we believe the market may have already priced in the lower FY15 CNI.
The increase in earnings for the
fourth quarter (4Q) of FY15 was due
to improvement seen in the core
earnings before interest and tax
margin, which increased to 30.3%
(against 4QFY14’s 24.7%). Note that
the impact from significant margin
improvement outpaced the revenue
decline of 4% to RM168 million. The
profit in 4QFY15 was mainly recognised from Saujana Rawang, Glomac
Centro and Reflection Residences.
Our new sales estimate of RM485
million for FY15 was slightly too
conservative due to a lower take-up
rate assumption for landed property
projects. New sales in FY15 are also
a slight improvement against FY14’s
new sales of RM504 million. Looking ahead, we expect Glomac to
deliver new sales of RM544 million
(+8% y-o-y) in FY16 on the back of
RM802 million worth of launches.
— MIDF Research, June 25
downside targets of 1,671 and 1,623.
A PTI of 79 on the charts may be
interpreted as very firm chances of
the index achieving the stipulated
downside targets.
Due to the poorer tone for the
KLCI, we are recommending a
chart “sell” on K-One Technology Bhd (K1). Looking at the most
recent results announcement for
the first quarter of financial year
2015 (1QFY15), the group recorded
lower revenue of RM32.6 million
compared with RM45.9 million in
1QFY14. The decline of 29% was due
to the reduced demand for network
cameras. The lower revenue was due
to customers lowering their inventory level requirements, and also the
transfer of a couple of its network
camera product lines to another
manufacturing partner’s site.
Correspondingly, profit before
tax was also lower from the weaker
sales. The lower profit was mainly
due to three factors. A reduction
in sales price for various product
lines that were moving towards
their end-of-life resulted in margin
compression. Increased costs from
the development of prototypes and
sample pitches for new businesses
also resulted in diminished margins. The difference in product mix
in the current quarter compared
with the same period last year also
yielded lower margins overall.
According to the announcement,
K1 expects sales to pick up in the
subsequent quarters pending the
launch of new product lines, as well
as sales being higher historically in
the second half of the year. K1 also
highlighted that the strength of the
US dollar relative to the ringgit will
be favourable to the group.
A check on Bloomberg consensus reveals that no research house
covers the stock. The stock currently trades at a reasonable historical
price-earnings ratio of 12 times. Its
price-to-book value of 2.05 times indicates that its share price is trading
at a steep premium to its book value.
K1’s chart trend on the daily and
weekly time frames is very firmly
down. Its share price made an obvious plunge since its major daily
Wave-5 high of 67 sen on May 20,
2015. Since that 67 sen high, K1 has
tumbled to its May 2015 recent low
of 25.5 sen.
As prices broke above its recent
key critical support levels of 57 sen
and 43.5 sen, look to sell K1 on any
rallies to its resistance areas as the
moving averages depict a very firm
short- to medium-term downtrend
for this stock.
The daily and weekly indicators (like the CCI, DMI, Oscillator
and Stochastic) have issued clear
“sell” signals and now depict firm
indications of K1’s eventual plunge
towards lower levels. It would attract firm selling activities at the
resistance levels of 28 sen, 43.5 sen
and 57 sen. We expect K1 to witness
weaker buying at its support areas
of 12 sen, 22 sen and 25.5 sen. Its
downside targets are located at 20
sen, 11 sen and seven sen.
Lee Cheng Hooi is the regional chartist
at Maybank Kim Eng. The views expressed in the article are the opinions
of the writer and should not be construed as investment advice. Please
exercise your own judgment or seek
professional advice for your investment decisions. Technical report appears every Wednesday and Friday.
Genting Plantations’ CPO
output, earnings set to expand
Genting Plantations Bhd
(June 25, RM10)
Recommend hold with a target
price of RM10.90: Having expanded aggressively in Indonesia since
2007, Genting Plantations’ crude
palm oil (CPO) output is forecast to
expand by a 12% compound annual growth rate (CAGR) over the next
three years. Earnings are likewise expected to expand by a 20% CAGR. For
its long-term strategy, Genting Plantations has concurrently embarked
upon improving its planting material
through genome filtering. The group
also recently undertook downstream
projects through partnerships with
Musim Mas Group and Elevance
Renewable Sciences to produce high
value added olefin products.
Sabah, where the majority of
Genting Plantation’s mature Malaysian estates are located — has been
dry year-to-date; and is forecast to
book flat fresh fruit bunch yields.
This, combined with lower spot CPO
prices, Indonesia’s planned CPO
export levy and forecast foreign exchange losses, will adversely impact
the group’s bottom line this year.
We expect Genting Plantations to
book property earnings before interest and tax contribution of RM90 million this year and RM75 million next
year, primarily from new launches,
with industrial land sales expected
to dissipate. We have not imputed
contribution from the planned construction of its second premium outlet in Genting Highlands, scheduled
for completion in late 2016.
Persistent weakness in crude oil
prices and China’s decelerating gross
domestic product remain the biggest challenges to CPO prices. But
we believe any near-term weakness
should be viewed as an opportunity
to collect the stock for its long-term
earnings outlook. A strong recovery in
CPO prices would lift the share price
above our fair value, and vice versa.
— AllianceDBS Research, June 25
Correction
In an article titled “Gamuda results
within expectations” published in
the Brokers’ Call section yesterday,
the target price for Gamuda stock
as set by MIDF Research should
read as RM4.86 and not as reported. The error is regretted.
B R O K E R S’ C A L L 21
Acquisition price for EHP
may be too high for FGV
Felda Global Ventures
Holdings Bhd
(June 25, RM1.72)
Maintain reduce with an unchanged target price of RM1.69:
Felda Global Ventures (FGV) and
PT Rajawali Capita hosted an analysts’ briefing on FGV’s proposal
to acquire a 37% stake in PT Eagle High Plantations Tbk (EHP)
for US$680 million (RM2.56 billion) and a 95% stake in Rajawali’s
sugar project for US$67 million
cash. The key takeaways from the
briefing were: i) FGV said it used
a combination of discounted cash
flow and enterprise value per hectare (EV/ha) valuations to arrive
at the acquisition price for EHP
(US$680 million, or 775 rupiah
[22 sen] per share or EV/ha of
US$17,400); ii) Rajawali believes
the selling price is attractive for
FGV because few plantation companies with over 100,000ha of estates are willing to sell a 37% stake;
iii) FGV said there is a possibility
that it may control EHP in future;
and iv) both parties believe they
can derive synergies by collaborating on trading of EHP’s crude
palm oil and downstream venture.
We remain negative on the acquisition following the briefing
as we are of the view that the potential synergies from the deal in
the form of potential downstream
expansion and collaboration will
not be sufficient to outweigh our
concerns. We continue to believe
that the acquisition price for EHP, Felda Global Ventures Holdings Bhd
which is at a premium of 85%
to its current share price, is too FYE DEC (RM MIL)
2013A
2014A
high and the acquisition would Revenue
12,568
16,462
be earnings and cash flow dilutive Operating Ebitda
703
1,009
for FGV. FGV will not have con- Net profit
982.4
306.4
trol over EHP, and we are of the
0.03
0.10
view that this deal is not compa- Core EPS (RM)
Core
EPS
growth
(%)
(85)
200
rable with past transactions where
FD
core
PER
(x)
54.28
18.10
the buyers gain full control of the
0.16
0.10
estates. We are also negative on DPS (RM)
the plans to venture into down- Dividend yield (%)
9.14
5.71
stream value-add processing in EV/Ebitda (x)
11.30
7.26
Indonesia as it is a highly com- P/FCFE (x)
2.63
32.43
petitive industry, and the group Net gearing (%)
(5.0)
(14.6)
has little competitive advantage
0.97
1.00
against other larger and more P/BV (x)
ROE
(%)
1.86
5.45
established palm oil players with
strong distribution networks. — CIMB/consensus EPS (x)
Source: CIMB, Company reports
CIMB Research, June 25
Dayang’s seeks approval for
proposed Perdana stake buy
Dayang Enterprise Holdings Bhd
(June 26, RM2.26)
Maintain market perform with an
unchanged target price (TP) of
RM2.50: The extraordinary general
meeting (EGM) of Dayang Enterprise will take place in Miri, Sarawak on July 2 to seek approval
for the proposed acquisition of a
5.74% equity interest in Perdana
Petroleum Bhd (market perform;
TP: RM1.55) from Affin Hwang Asset Management Bhd. The approval
of the proposal will bring Dayang’s
stake to 38% from the current 32%,
triggering a mandatory general
offer (MGO) at RM1.55 per share.
According to the tentative timetable in the circular attached earlier, the closing date of the proposed
MGO will be some time during
mid-August this year. In the event
of acceptances for the offer not
exceeding the 50% + 1 share level,
an upward revision in offer price
is highly unlikely given near-term
earnings risk for the target company
and it may seek to slowly gain more
control through open market and
off-market transactions.
Post the meeting with management, we gather that Dayang does
not intend to privatise Perdana
through the MGO. The listing status
of Perdana is likely to be maintained
to ensure access to funding from the
equity capital market to finance its
long-term expansion plans. Instead,
Dayang intends to gain a controlling
stake of 50% +1 share in the company to better manage its fleet of
vessels, ensuring sufficient availability of vessels, for its Pan Malaysia
hook-up and commissioning (HUC)
contract. Currently, Dayang is already in discussion to add another
member to Perdana’s board with
two of its existing non-executive
members to have more hands-on
control of the company. On top of
Dayang Enterprise Bhd
FYE DEC (RM MIL) 2014A
Turnover
Ebit
PBT
Net profit
(NP)
Core NP
Consensus
(NP)
Fully dil
EPS (sen)
EPS growth
(%)
DPS (sen)
BV (sen)
NTA (sen)
PER (x)
PBV (x)
Net gearing (x)
Dividend yield
(%)
2015E
2016E
876.9 1,059.1 1,308.7
199.7 163.7 203.6
217.7 175.0 223.9
178.6
178.6
140.0
140.0
182.4
182.4
-
183.4
215.1
20.4
16.0
20.8
48.2 (21.6)
7.0
7.0
1.1
1.1
1.1
1.1
11.8
15.0
2.2
2.1
0.0
0.1
30.3
7.0
1.2
1.2
11.5
2.0
0.1
2.9
2.9
2.9
Source: Kenanga
that, we believe it is not likely for
the current management team of
Perdana to be subjected to significant changes due to their expertise
in the marine business.
Business operations of Perdana
are expected to remain status quo if
Dayang were to gain a controlling
stake. The delivery of two 500-men
accommodation work barges to be
delivered in 2016 will most probably be delayed for six months, allowing for more breathing space
for the target company to secure
charter contracts in the challenging offshore support vessel market.
Aside from that, the group has also
made clear of its intention to make
Perdana syariah-compliant by converting its US dollar borrowings to
Islamic ringgit borrowings. This we
believe will be a positive catalyst
for Perdana as it will have access
to government-linked companies
and other syariah investors.
HUC activities appear to be
weaker with Shell Sarawak running slow compared to a year ago,
and confirmed orders from Petronas Carigali Sdn Bhd remaining
uncertain. However, things appear
to be more positive on its recently
secured jobs, namely facilities improvement project contract (RM250
million) and the engineering, procurement, construction and commissioning Bardegg-Baronia (off
Sarawak) contract (RM280 million)
that still look strong and poised
to be on track with its scheduled
progress in the coming years. We
also believe in the possibility of
higher upside on these contracts
due to variation orders when the
contract undergoes the execution
phase, suggesting a potential upside for earnings contribution from
these contracts. To recap, we have
imputed contract replenishment
of RM500 million for both financial year 2015 (FY15) and FY16 for
the group earlier. It looks well on
track to hit our target with RM400
million tenders submitted and another RM1 billion to be submitted
within the next quarter.
While Petroliam Nasional Bhd’s
renegotiation of existing contract
terms is still ongoing, we believe it
is not a major concern as we have
already factored in slower revenue recognition from its existing
HUC contracts earlier. Moreover,
it is believed that the group will
only agree to a discount (possibly
10%) if it were to obtain further
extensions of contracts in return
to protect its interest. Overall, the
company’s fundamental remains
solid albeit it is not entirely spared
from the overall industry slowdown.
— Kenanga Research, June 25
2015F
2016F
2017F
16,263
907
261.8
0.07
(28)
25.11
0.07
3.71
10.87
5.21
9.5
0.97
3.92
0.89
17,073
1,214
465.8
0.13
83
13.70
0.09
5.14
8.34
4.71
8.6
0.95
6.97
1.20
18,351
1,274
500.0
0.14
7
12.77
0.10
5.71
8.19
4.75
8.2
0.93
7.33
1.15
Hai-O’s better results chiefly due to
strong recovery of divisions in 4Q
Hai-O Enterprise Bhd
(June 26, RM2.31)
Maintain sell with an unchanged
target price of RM1.90: Hai-O Enterprise’s fourth quarter of financial
year 2015 (4QFY15) net profit recorded at RM9.4 million increased
28.5% quarter-on-quarter (q-o-q)
while it declined 10.8% year-onyear (y-o-y). However, quarterly revenue managed to record a
positive growth of 14.5% y-o-y and
13.7% q-o-q.
The firm’s 12 months of FY15
(12MFY15) net profit of RM30.1 million reached 110% and 104% of our
forecast and market consensus respectively. The better-than-expected results were chiefly attributed to
strong recovery of retail and wholesale divisions in 4QFY15 thanks
to the pre-goods and services tax
(GST) stock-up. Overall, the group
recorded a 25.3% drop in FY15 net
profit on the back of lower top-line,
down 5.3%. The group’s multilevel
marketing (MLM) division reported
a profit before tax (PBT) of RM8.7
million in 4QFY15, increased by
4.4% y-o-y and 2.1% q-o-q. The
overall contribution of small-ticket
items surged to over 60% of the total
sales. The better performance was
aided by attractive year-end sales
campaigns to attract distributors,
notably the new recruits.
However, the MLM division reported a PBT of RM28.2 million in
12MFY15, decreasing 6.2% y-o-y.
The change in selling strategy by
promoting more small-ticket items
still failed to spur the division’s revenue. The higher sales recorded by
small-ticket items were still unable to cushion a larger drop in the
big-ticket items coupled with higher
advertising and promotional costs.
Hai-O’s wholesale division
posted a positive quarterly performance. The wholesale segment’s
PBT expanded 156.6% for 4QFY15.
The impressive performance was
backed by higher inter-segment
sales and the pre-GST promotion,
which contributed higher revenue
from the sales of a Chinese medicated tonic and patented medicine to its medical hall customers. However, for 12MFY15, the
division posted a PBT of RM6.6
million, recording a decrease of
48.6% y-o-y. The sluggish performance was caused by lower inter-segment sales coupled with
higher expenditure on corporate
social responsibility activities and
further dented by the weakening
of the ringgit against the US dollar.
The group’s retail division registered better performance in
4QFY15 after recording a positive PBT number of RM2.1 million
against a net loss of RM600,000 in
the last quarter mainly due to Chinese New Year sales and followed
by year-end Grand members’ sales
campaign. Furthermore, consumers rushed to stock up before the
GST came into effect on April 1,
2015. That lifted the full-year segmental PBT by 6.2% y-o-y amid
stiff competition.
We maintain our FY16 net earnings forecast of RM 33.2 million,
slightly higher by 1.02% y-o-y amid
a challenging outlook for its wholesale division coupled with the stiff
competition in the retail market.
We foresee the MLM division may
slightly improve with its small-ticket
items strategy, which could boost
sales in a longer term. In addition,
the group will continue to introduce more new products and carry
out an effective sales campaign to
strengthen its MLM business. We
foresee that consumer sentiment
to stay fragile in the second half of
calendar year 2015 as consumers
are cautious about their spending
mainly due to a higher cost of living
after the implementation of the GST.
Furthermore, the strengthening of
the US dollar against the ringgit will
increase the import cost of purchases. — JF Apex Securities, June 25
22 H O M E
Five countries push for
UN tribunal on MH17
To try those responsible for the downing of the plane over Ukraine last year
AMSTERDAM: Malaysia, the Netherlands and three other countries
want a United Nations tribunal
to be set up to try those responsible for the downing of the Malaysia Airlines aircraft over Ukraine
last year, a senior diplomat said
on Wednesday.
Malaysia is expected to present
a draft resolution to the UN Security Council next month on setting
up the tribunal, said the diplomat,
who asked not to be named.
It remains unclear, however,
whether Russia would back the
creation of the special tribunal,
modelled after other courts set up
by the UN for the prosecution of
serious crimes.
All 298 passengers and crew on
board flight MH17 — most of whom
were Dutch — died when the plane
was shot down on July 17 last year.
Suspicions immediately turned
to the pro-Russian separatists in
east Ukraine, who may have used
a surface-to-air missile supplied
by Russia to bring down the plane.
Spurred by a global outcry over
the downing, the Security Council
last year adopted a resolution demanding that the perpetrators be
brought to justice.
The five countries of the joint
investigation team — Australia,
Belgium, Malaysia, the Netherlands
and Ukraine — met last week in
New York to discuss the proposed
international court.
The diplomat said the countries
were mindful of the need to “avoid
a Russian veto” and that careful
negotiations would be required
on the wording of the resolution
to set up the court.
Malaysia is hoping that the
council will adopt the proposal
on July 22 to mark the one-year
anniversary of the first resolution
passed just days after the tragedy.
There is also concern that the
resolution should be adopted before the criminal investigation is
completed in the coming months,
the diplomat said.
A Dutch government spokesman declined to comment on the
planned tribunal, saying only that
the five countries are in talks on
ways to ensure that those responsible are prosecuted.
“At the moment, these five countries are consulting with relevant
states to seek support for the best
option,” said the spokesman.
The Netherlands has been tasked
with leading the probe into the
cause of the accident and identifying the victims.
The Boeing 777 passenger jet
was travelling between Amsterdam and Kuala Lumpur when it
was shot down, with the wreckage
still strewn across fields in eastern
Ukraine controlled by the separatist
fighters. — AFP
Stop intimidating press, focus on probe
into false 1MDB info, says Geramm
KUALA LUMPUR: The government
should stop intimidating the media
and focus on investigating allegations of wrongdoing and dubious
deals involving state investor 1Malaysia Development Bhd (1MDB),
a media freedom advocacy group
said yesterday.
Gerakan Media Marah (Geramm) reminded the government
that the media serve public interest
and have a duty to unearth alleged
corruption and improprieties.
“While the integrity and security
of commercial data and business
transactions are an issue of great
concern to all, but when the wider
issue of public interest is at hand,
and if corruption and impropriety
are involved, it is contingent upon
the media to unearth such issues,”
Geramm, a loose coalition of journalists, media representatives and
activists, said.
The group was commenting on
a threat by Home Minister Datuk
Seri Dr Ahmad Zahid Hamidi on
Wednesday that the ministry has
the power to cancel or revoke publishing permits if the media are
found publishing false information.
The minister singled out The
Edge weekly and its owner Datuk
Tong Kooi Ong for special mention.
The Edge has published several reports on 1MDB’s dealings.
Ahmad Zahid said the information published might be false, following news that data and emails
leaked about 1MDB’s dealings with
PetroSaudi International had been
fabricated by a former director of
PetroSaudi.
The news about fabricated
data was first reported by the
New Straits Times, which quoted an anonymous source for private cybersecurity firm Protection
Ahmad Zahid (second from right) presenting aid to 117 orphans and zakat recipients in
Banting, Selangor, during a break of fast event hosted by the Home Ministry yesterday.
He said on Wednesday that the ministry has the power to cancel or revoke publishing
permits if the media are found publishing false information. On the right is Home
Ministry Chief Secretary Datuk Alwi Ibrahim. Photo by Bernama
Group International.
Geramm said yesterday that
“[Ahmad] Zahid had spouted broad
hints that the media and journalists who reported on the matter
may also face the brunt of ongoing
investigations, expressing willingness to take action and extradite
Malaysians or those in Malaysia
if required by Thai investigators”.
Instead of shooting the messenger, it added, Putrajaya should
ensure it practises greater responsibility and accountability to the
public.
“It is no use to try to silence the
tale by killing the storyteller.”
PKR, meanwhile, said Ahmad
Zahid’s warning to the media was
premature as the PetroSaudi ex-employee, Xavier Andre Justo, had not
been proved guilty.
The party’s communications director Fahmi Fadzil said being accused of something does not mean
that the accusation is true.
“By law, a person charged in
court is innocent until proven
guilty. The former director [of PetroSaudi], as far as I know, has not
even been charged in court.
“To equate the warning on the
basis of allegations is premature,”
Fahmi said in a statement yesterday, and urged the minister to withdraw his warning against The Edge.
Justo was arrested in Koh Samui,
Thailand, on Monday, and is being
investigated for alleged blackmail
and fabrication of data and emails
regarding PetroSaudi’s dealings
with 1MDB, which he leaked to
whistle-blower website Sarawak
Report.
Justo has denied the allegations,
Thai media reported.
In a related development, a little known group calling itself the
Malaysian Chinese Network urged
police to initiate investigations into
all media outlets that have reported and published news on 1MDB.
This, according to the non-governmental organisation’s president
Ng Lum Yong, is because they have
published articles based on the
“forged documents” provided by
Justo.
Ng lodged a police report at the
Dang Wangi police headquarters
in Kuala Lumpur yesterday, and
singled out The Edge and The Malaysian Insider as examples of media outlets responsible for such
reporting.
“All local media organisations
operating in Malaysia must be investigated by police for publishing articles using the forged documents provided by Justo, who
has been detained on charges of
extortion.”
When asked how he came to the
conclusion that the information
used were false, Ng said: “As shown,
many of the numbers quoted are
sometimes not accurate.
“The Edge wrote articles on
1MDB, but the details were not
exact.
“Therefore, this causes chaos
to our economy,” said Ng, who is a
former PKR founding member, at
a brief press conference in front of
the police station.
The Malaysian Insider is part
of The Edge Media Group, which
publishes The Edge. — The Malaysian Insider
Don’t meddle
with PAC work,
Nur Jazlan tells
Shafee over
IMDB probe
KUALA LUMPUR: Parliament’s
Public Accounts Committee
(PAC) chairman Datuk Nur
Jazlan Mohamad has ticked
off Tan Sri Muhammad Shafee
Abdullah for suggesting that
DAP lawmaker Tony Pua quit
the bi-partisan panel, telling
the Umno lawyer not to poke
his nose into PAC’s business.
Malaysiakini reported Nur
Jazlan as saying that Shafee
has no right to tell Pua, a wellknown critic of 1Malaysia Development Bhd (1MDB), to step
down from the panel.
“He doesn’t have the right to
tell off PAC members who are
members of the legislature, the
third branch of the government
and elected by the people,” he
was quoted as saying by the
news portal.
In coming to Pua’s defence,
Nur Jazlan said the DAP’s Petaling Jaya Utara (PJU) federal
lawmaker had never used PAC’s
information on troubled 1MDB
in his statements.
Instead, Pua had shone the
spotlight on important matters
related to the debt-laden state
investment vehicle.
“I personally think he has
helped to highlight the issue
on 1MDB which the majority
of Malaysians today believe the
PAC will dismiss in favour of
the government. [But] we are
working well as a team. Pua
performs a dual role as a MP for
PJU and a PAC member. And as
far as I am concerned, he has
not used any information obtained from PAC hearings on
1MDB in his statements.
“Whatever information he
uses in his statements are obtained from parliamentary answers and other sources,” Nur
Jazlan told Malaysiakini.
Earlier yesterday, Berita Harian reported Shafee as suggesting that Pua quit PAC to
ensure the current probe into
1MDB can be conducted in a
fair and transparent manner.
The Bahasa Malaysia daily
quoted Shafee as airing his personal view by suggesting that
Pua and PAC members, who are
1MDB’s most strident critics, are
more suited as witnesses in the
inquiry instead. However, Nur
Jazlan reminded Shafee that PAC
is not a court of law. “The PAC
is not a court of law created by
statute but it is a body that represents the voice of the country.
“Our job is to gather information, get testimonies from
witnesses, analyse and [distinguish] fact from fiction and come
out with [an accurate] report.
“[Most Malaysians [perceive] that there is something
wrong with 1MDB because the
issue has been left to fester in
the public domain for too long.
PAC can help clear the negative
perception by writing a report
that is based on the facts of the
case.” — The Malaysian Insider
24 H O M E
‘Civil court cannot hear
custody dispute’
Hindu mother’s former husband has converted their children to Islam, says lawyer
BY V A N B A L AGA N
PUTRAJAYA: The civil court has
no jurisdiction to hear a custody dispute initiated by a Hindu
mother as her former husband
has converted their two children
to Islam, the Federal Court heard
yesterday.
Lawyer Mohamed Haniff Khatri Abdulla, appearing for Muslim
convert Izwan Abdullah, told the
five-man bench that the Guardianship of Infants Act 1961 prohibits
the civil court from making custody orders on Muslim children.
He also said Section 51 (2) of
the Law Reform (Marriage & Divorce) Act 1976 only allows the
civil court to issue custody orders
on non-Muslim children once a
divorce petition is filed due to
conversion to Islam by one of the
spouses.
“The civil court (High Court)
cannot decide on the custody issue because Izwan has unilaterally
converted his children to Islam,”
he said of the appeal brought by
Izwan against a Court of Appeal
ruling last year granting custody
of the children to his former wife
S Deepa.
Mohamed Haniff said Deepa, the
respondent in the custody appeal,
also did not contest the conversion.
On April 7 last year, the High
Court in Seremban granted Deepa
custody of the couple’s two children, Sharmila (Nurul Nabila), now
10, and Mithran (Nabil), seven.
The decision overrode an April
2012 Syariah Court order granting
Izwan custody of the children.
However, two days after the
High Court order, Izwan abducted Mithran from Deepa’s home in
Jelebu, and had been holding on
to the boy since then.
Deepa then obtained a recovery
order from the High Court on May
21 last year to get police to search
for Izwan, whose Hindu name is
N Viran, and Mithran.
However, on Jan 14, the Federal Court allowed Izwan to keep
Mithran, pending the outcome of
his appeals against the custody
and the recovery order.
On Dec 17, the Court of Appeal upheld the High Court order
granting custody of the children
to Deepa.
The appellate court also dismissed Izwan’s appeal against the
recovery order obtained by Deepa
to get her son back, saying the order was correct in law.
Lawyer Fahri Azzat, who appeared for Deepa, told the bench
chaired by Tan Sri Md Raus Sharif
that the Guardianship of Infants
Act is only applicable if the children’s parents are dead, which is
not the case here.
“It is the High Court that has
jurisdiction because the marriage
of Deepa and Viran [now Izwan]
was registered under civil law,”
he added.
Fahri said that although Izwan
is a Muslim, he could submit to the
civil court to settle all matrimonial issues with Deepa because the
civil marriage is governed under
the Law Reform (Marriage and
Divorce) Act.
The lawyer said a syariah court
is an inferior tribunal, and the High
Court has a supervisory role over
any religious court that acts beyond its jurisdiction.
Senior federal counsel Suzana
Atan told the court that the police were unable to enforce the
recovery order obtained from
the High Court as Izwan had secured a similar order from the
syariah court.
“The police were in a quandary because there were two conflicting orders,” said Suzana, who
represented Inspector-General of
Police Tan Sri Khalid Abu Bakar
as intervener.
Fahri, in response to Suzana,
said the recovery order was closely
tied to the custody order issued by
the High Court, and the police were
in contempt for refusing to act.
“Unlike the order obtained from
the High Court, the syariah court
order had no direction to the police,” he added.
Khalid applied to be a party
in the suit because the order was
directed at the police to look for
Mithran.
The order, served on Bukit
Aman on June 26 last year, stated
that Izwan must return Mithran
to Deepa, failing which the police must locate the ex-husband
to take the child from his unlawful custody.
Before adjourning the case, Md
Raus instructed Mohamed Haniff
and Fahri that their clients must
bring along the children when
the court delivers its ruling at a
date to be fixed later. — The Malaysian Insider
Malaysia looks to higher score in Pisa 2015
NASSAU: Deputy Prime Minister
Tan Sri Muhyiddin Yassin has expressed hope that Malaysian students will perform better in the
Programme for International Student Assessment (Pisa) this year.
He said a number of initiatives
implemented in recent years, such
as Higher Order Thinking Skills
(Hots), should be able to help Malaysia improve its ranking.
“One of the criteria used in Pisa
is evaluating the thinking skills of
students, meaning that they’re not
supposed to simply give answers.
“We’ve implemented Hots over
the past two years, so we’re hopeful that our students will be able
to achieve better Pisa results this
year,” he told Malaysian media on
Wednesday as he wrapped up his
working visit to The Bahamas.
Muhyiddin, who is also the education minister, represented Malaysia at the 19th Conference of
Commonwealth Education Ministers (19CCEM) being held in the
Bahamian capital from Monday
to today.
He noted that Hots had featured
in both the Malaysian Certificate of
Education and Form Three Assessment examinations.
According to Muhyiddin, a presentation of Pisa at the Nassau conference indicates that being among
the lowest-ranked countries does
IN BRIEF
Worker jailed for hitting
customers who spat
KUALA LUMPUR: An employee
of a restaurant was sentenced to
11 days’ jail and fined RM1,500
by the magistrate’s court here for
causing hurt to a married couple for spitting in the premises.
Magistrate Ashraf Rezal Abdul
Manan handed down the sentence on Wang Week Fook, 36,
after he pleaded guilty to causing hurt to Thang Beng Hong,
44, and Jing Choy Ling, 44, with
a chair last week. Wang was ordered to serve the jail sentence
from the date of his arrest, which
was June 16. He paid the fine.
Wang was charged with committing the offence at the D’ Mamak
Style Restaurant, Taman Miharja,
in Cheras here, at 5am on June
16. — Bernama
Palanivel, three others fail
to get interim stay order
KUALA LUMPUR: MIC president
Datuk Seri G Palanivel and three
others yesterday failed to obtain
an interim stay against a court
ruling which upheld the Registrar of Societies (RoS) directive to
the party to hold fresh elections.
Judge Datuk Asmabi Mohamad
dismissed the application by the
four for an interim stay, after
allowing the RoS’ objection to
the interim stay. She made the
decision in chambers. Senior
federal counsel Amarjeet Singh told the media that the court
had initially fixed July 10 for the
hearing of the proper stay application. However, Amarjeet said,
the four applied for an interim
stay, pending the hearing of the
proper stay. — Bernama
Teresa Kok fails to get
sedition case transferred
K UA L A LU M P U R : D A P
vice-chairman Teresa Kok Suh
Sim, who is facing a charge under
the Sedition Act over a Chinese
New Year video clip, failed in her
bid yesterday to transfer the case
from the Sessions Court to the
High Court. High Court judge
Kamardin Hashim dismissed
her application on the grounds
that the Sessions Court is competent to hear the case. “If the
hearing originated in the Sessions Court, [its] decision can still
be appealed to the High Court
and the Court of Appeal because
both the courts are competent
to decide on issues of law,” he
said. — Bernama
Company fined RM30,000
for profiteering
Muhyiddin (third from left) addressing the 19CCEM in The Bahamas on Wednesday. Photo by Bernama
not mean that a country’s education
standards are low.
“There are other factors at play
that we’ll need to look into,” the
deputy prime minister said.
There have been concerns over
Malaysia’s performance in Pisa,
with the country placed in the
bottom third, ranking 52 out of 65
countries, in the 2012 survey.
Pisa is administered by the Organisation for Economic Cooperation and Development every three
years on 15-year-olds in both mem-
ber and non-member countries.
At Wednesday’s 19CCEM proceedings, Muhyiddin delivered a
speech focusing on education, skills
and employment.
The deputy prime minister
also presented Malaysia’s contribution amounting to US$200,000
(RM752,000) for initiatives under
the Commonwealth of Learning, a
Canada-based organisation which
encourages the development and
sharing of open learning and distance education knowledge, re-
sources and technologies.
Muhyiddin also took the opportunity of the presence of Commonwealth education ministers in
Nassau to highlight Malaysia’s intention to join the executive board
of the United Nations Educational,
Scientific and Cultural Organization
(Unesco) for the 2015 to 2019 term.
According to him, a number of
countries have stated their support
for Malaysia in its Unesco bid.
Muhyiddin left Nassau for home
on Wednesday night. — Bernama
MELAKA: Sengheng Electric (KL) Sdn Bhd was fined
RM30,000 by the Sessions Court
here on Wednesday for profiteering. Judge Amran Jantan
handed down the sentence after the company, represented
by its finance manager Mah
Chin Ngiap, pleaded guilty to
the charge. When handing down
the sentence, Amran said he took
into account public interests.
Sengheng Electric was charged
with making unreasonably high
profits by marking up the price
of a Pensonic 50 ML Mini Bar
PEN-PMF-65 from RM459 to
RM479. — Bernama
26 C O M M E N T
The two sides of Tokyo’s deficit trap
Ruling class must be leaders, not politicians, and able to persuade the public to accept painful compromises
People using
wooden dumbbells
during a health
promotion event
to mark Japan’s
‘Respect for the
Aged Day’ in Tokyo
last September.
The government
can either cut
payouts to local
governments or
payments to the
elderly, who have
vast political power.
Photo by Reuters
BY N OA H SMI TH
J
apanese Prime Minister
Shinzo Abe looks like he’s
trying to get serious about
deficit reduction. This is a
good thing. The economy
has mostly normalised —
a highly relative term in an
economy whose long-run real potential growth is only slightly above
zero. Japanese unemployment is at
its lowest level in 18 years.
That means that the time for fiscal
stimulus is over. But with a budget
deficit of 7.7% of gross domestic product in 2014 (compared with 2.8% in
the United States), Japan now needs
fiscal consolidation. Recognising this,
the Abe government has released a
fiscal blueprint that includes flexible
spending caps.
Abe’s measures, although a step
in the right direction, won’t be anywhere near enough to get the job
done. The administration’s projections for deficit reduction rely on
an incredibly rosy assumption for
2% annual GDP growth.
In the US, 2% would be respectable, or even a little slow. In Japan,
where the population is shrinking, it’s
pie in the sky. It’s about as realistic as
the 4% growth rate that Republican
presidential candidate Jeb Bush has
promised to deliver if elected. Unless
Japan decides to suddenly open its
borders to a truly huge and unprece-
dented inflow of immigrants, the 2%
thing isn’t going to happen.
Here, in the languid words of the
Wall Street Journal, is the crux of the
budget problem: Curbing spending
in social welfare like medical costs
remains a pressing issue, but the
administration is reluctant to show
how much cuts would be needed in
fear of offending voters.
Japan’s government has two main
areas of spending it could reduce.
The first is payouts to local governments, which are heavily dependent
on the national government for their
revenue in Japan’s highly centralised
system. The second is transfers to
the elderly, through social security
and healthcare.
Local government payouts are
difficult to cut because of politics. As
political scientist Ethan Scheiner has
described, the dominance of Japan’s
long-ruling Liberal Democratic Party
(LDP) depends on an unofficial quid
pro quo system — the LDP uses its
control of the central government to
deliver payouts to regions that vote
to maintain its control.
The old saying of “to the victor,
the spoils” is in full force in Japan.
Although this system has weakened
somewhat in recent decades, fiscal
centralisation still makes it devilishly
difficult to lower payments to local
governments.
The other, even bigger thing that
Japan could cut is benefits to the elderly. Much of Japan’s government
acts as a massive conduit for transferring resources from the young to
the old, via taxes and spending. Abe
has promised to cap social security
spending. But few believe that this
will actually happen, because of the
vast political power of the elderly.
Japan has an inverted population pyramid — the old are numerous, and have higher turnout than
the young. This means they can use
their numbers to threaten any leader who doesn’t pay them as much
money as they would like (this is
also a problem in the US). Japan
is a gerontocracy.
That leaves two ways for Japan
to cut its monster deficits: (i) inflation; and (ii) productivity growth.
Sustained higher inflation would
erode both the deficit and the debt.
It is basically a tax on the elderly,
who saved most of their money in
bonds, postal accounts and bank
deposits. After Abe and the Bank of
Japan unleashed the “first arrow”
of Abenomics monetary easing —
inflation surged into the 1% range.
But keeping it there has been a
problem; already, the rate is drifting back to zero. Even a sustained
burst of quantitative easing, and
a promise to do whatever it takes,
appears to have generated only a
brief flash of inflation. That bodes
ill for Japan’s ability to inflate away
its debt or reduce its deficit through
higher nominal growth rates.
Sustained productivity improvements are another potential source
of growth. Abe’s new corporate gov-
ernance code and other measures
will raise productivity in the long
run, by encouraging the slimming
down of old, unproductive companies and the emergence and growth
of new, more productive ones.
Already, there is some evidence
of a new focus on profitability and
shareholder control at Japanese
companies. But in the short run,
the way you improve productivity
is by firing people. That’s great for
companies’ bottom lines, but it isn’t
very helpful with the near-term
deficit, because the unemployed
and the underemployed pay little
or no tax and often receive government aid. For productivity to work
its magic on growth, you need to
wait for the new, more productive
companies to be born and grow,
and that takes time.
So the easy, win-win solutions
seem out of reach for Japan’s budget.
The only real answer is to cut local
government payouts and transfer
payments to the old — exactly the
things Japan’s political system is set
up not to do.
In other words, the deficit reduction fight is a stern test of the ability
of Japan’s ruling class to be leaders,
rather than politicians. They have to
resist the urge to pander, and persuade the public to accept painful
compromises. If they can’t, Japan
is going to find itself in trouble. —
Bloomberg View
Japan stands up to play a greater role
BY Y U RI KO KOI KE
JAPANESE Prime Minister Shinzo
Abe has decided to extend the Diet’s current session for 95 days, until Sept 27 — making for the longest
continuous session in the Japanese
parliament’s post-war history. The
reason is clear: Abe is determined
to pass a set of national security bills
allowing a reinterpretation of Japan’s
constitution that enables the country to play a greater role not only in
enhancing its own security, but also
in advancing world peace.
Abe’s actions in the Diet come on
the heels of his performance at the
recent Group of Seven (G-7) summit
in Germany, where he broke with
Japanese tradition. For the previous
39 years, Japanese representatives to
the G-7 had focused on the economic
discussions at such meetings, content to remain largely silent as the
industrialised world’s other leaders
surveyed the planet’s political hot
spots and recommended action or,
more often, inaction.
But the summit showed that Japan no longer intends to stand on
the diplomatic sidelines. On the two
foreign policy issues that dominated the agenda, Abe was a forceful
participant, advocating a muscular
response to Russia’s encroachment
on Ukraine’s sovereignty — indeed,
Abe visited Kiev before the summit
— and supporting efforts to roll back
the Islamic State.
Abe’s interventions at the G-7, and
his determination to create a legal
framework for a more proactive security strategy, are proof that Japan,
at long last, is constructing a foreign
policy — a Weltpolitik — that reflects
not only the global weight of its economy, but also the impact of faraway
events on its national security.
This foreign policy assertiveness
is as revolutionary for Japan’s diplomacy as “Abenomics” has been for
its economic policy. It marks a stark
contrast with the seven decades following Japan’s defeat in 1945 in the
Pacific War, when successive governments mostly outsourced foreign
policy to the United States.
Until the 1980s, this made sense.
By concentrating on reconstructing
the country after the devastation of
war, our leaders brought about an
economic miracle. Japan became
the world’s second-ranking industrial power, and almost all Japanese
enjoyed lifestyles and levels of social
security that their parents could never have imagined.
Of course, there were jolts along
the way. In fact, the two greatest were
administered by the US. First came
Henry Kissinger’s secret mission to
meet Mao Zedong to prepare President Richard Nixon’s visit to China; then came the so-called Nixon
Shock — the decision just a short
time later to end the US dollar’s direct convertibility to gold (a pillar of
the post-war international monetary
system created at Bretton Woods in
1944). The opening to China and the
Nixon Shock confirmed the position
of those in Japan who knew that the
country could not remain on permanent sabbatical from its foreign policy
role and responsibilities.
Because successive Japanese governments badly underestimated its
consequences, the rise of China has
been the third and final shock to
Japan’s policy of neo-isolationism.
Over much of the past three decades,
Japanese firms and official agencies
have happily invested hundreds of
billions of dollars in China, hoping
to bind the two economies together
in a way that would end the lingering
bitterness from World War II.
Instead, as the friction of recent
years has amply attested, China continues to nurture the bitterness of
its people, and those of other Asian
countries, toward Japan. Its hope
is to rule out any Japanese role in
resolving regional security issues,
and to diminish the potency of the
US-Japan alliance.
But it is not only China that has
reawakened Japan’s foreign-policy
ambitions. Russia was a concern for
Japan even before President Vladimir
Putin unleashed his armed forces
on Ukraine. The Kremlin has maintained Russia’s illegal occupation of
Japanese islands — our “Northern
Territories” — seized by Stalin after
Japan’s surrender in the Pacific War.
In the decades since, both the
Soviet government and the Russian
government of President Boris Yeltsin periodically engaged in diplomatic efforts to end their country’s
estrangement from Japan. But under
Putin, Russia no longer makes even
a pretence of talking. Indeed, for the
first time since the islands’ seizure,
Russian leaders have actually visited
them, reinforcing Russia’s spurious
sovereignty claim.
Given Chinese and Russian actions, it should surprise no one that
Japan has fundamentally rethought
its diplomatic posture. And now the
world is witnessing the results, not
only in Abe’s reinterpretation of Japan’s constitution to allow for greater military support of the country’s
allies, but also in the reinvigorated
mutual-defence pact that Abe and
President Barack Obama signed in
Washington, DC, in late April.
At the same time, Japan is moving
out of America’s diplomatic shadow. A strategic partnership with India has been gaining strength since
Prime Minister Narendra Modi as-
sumed office last year, and Abe has
been deepening Japan’s strategic ties
around Southeast Asia, particularly
with countries such as the Philippines
and Vietnam, which are confronting
China’s hegemonic ambitions in the
South China Sea.
Japan’s engagement with the
world’s most vexing problems goes
beyond Asia. The country was the
first of the world’s leading economies to provide financial assistance
to Ukraine after Putin’s placeman,
President Viktor Yanukovych, was
ousted last year. And it is beefing
up its relations with emerging giants like Brazil, Mexico, Nigeria and
Turkey.
These initiatives reflect Japan’s
recognition that the global framework that has kept the peace, and
created opportunities for prosperity,
for ever more countries — including
China — is under threat. Japan and
like-minded countries must actively defend it. The positions that Abe
staked out in Germany represent an
important step in that direction. —
Project Syndicate
Yuriko Koike, Japan’s former defense
minister and national security adviser, was Chairwoman of Japan’s
Liberal Democratic Party’s General
Council and currently is a member
of the National Diet.
W O R L D B U S I N E S S 27
ICBC keen to join London gold price benchmark
BY A A N A NTHA L A KSHM I
SHANGHAI: Industrial and Commercial Bank of China Ltd (ICBC),
the world’s largest bank by assets,
said it was interested in participating
in the twice-daily London gold price
benchmarking process.
Asia is the largest consumer of gold
but the London benchmarking system
has not until recently included any
South Korean
M&A quirks
hold perils for
investors
BY U NA GA L A NI
HONG KONG: Samsung has cast a
spotlight on South Korea’s quirky rulebook for mergers and acquisitions.
A US$9.2 billion (RM34.59 billion)
merger led by the holding company
of the country’s biggest conglomerate
has helped the ruling Lee family plan
its succession at the expense of independent shareholders. For foreign
investors, it’s key to understanding
how the system is stacked in favour
of the giant chaebols.
In most countries, companies
that decide to join forces set the
terms by negotiation. Not in South
Korea. For mergers between listed
related parties, the ratio at which
one set of shares is exchanged for
another is set by a formula based
on previous trading prices.
The rule is supposed to protect
independent investors by preventing friendly parties from under- or
overpaying for each other. But the
Lee family has abused the spirit of the
safeguard. Its holding company Cheil
Industries launched its offer to merge
with related construction company
Samsung C&T in May. At the time,
the latter’s relative value was at its
lowest since Cheil joined the market in December. C&T is important
because it owns 4% of smartphone
maker Samsung Electronics.
To smooth its controversial deal,
Samsung has exploited two loopholes. The first involves issuing treasury shares: stock held by a company
that can be transferred to third parties
without approval from other investors. Faced with resistance, C&T sold
a 6% stake to friendly South Korean
builder KCC Corp, diluting the voting power of the deal’s opponents.
The manoeuvre relies on a second loophole: the lack of restrictions on interested parties. In most
developed markets, investors with
ties to an acquirer are barred from
voting on a transaction. In South
Korea, however, Samsung affiliates
which own around 15% of C&T as
well as KCC will be able to vote on
the deal on July 17.
US hedge fund Elliott, which owns
7.1% of C&T, is opposing both the
merger and the stake sale. Though a
victory for the foreign investor would
send shock waves through South Korea, an upset is possible. In the meantime, investors hoping to influence
Samsung’s broader restructuring
should remember how the South
Korean system can work against
them. — Reuters
banks from the region as members.
“ICBC is very keen on participating,” Zhou Ming, general manager in the bank’s precious metals
department, said yesterday at an
industry event in Shanghai, adding
that the London price should have
more Asian participation.
The comment comes after the
London Bullion Market Association
said last week Bank of China would
become the first Chinese bank to
participate in the electronic platform
that sets the benchmark.
As the world’s top producer and
leading consumer of bullion, China has been seeking more say in
the pricing of the precious metal
and other commodities. The Shanghai Gold Exchange said yesterday it
would launch a yuan-denominated
gold fix by year-end.
IN BRIEF
Zhou said ICBC was working on
opportunities to participate in the
global gold market.
ICBC completed the acquisition of
a 60% stake in Standard Bank’s global markets arm earlier this year, including its precious metals business.
“We are still integrating our operations. We still need to get board
approval [before joining the London
process],” Zhou said. — Reuters
US$14b package
to spur growth
Seoul announces stimulus programme to boost troubled economy
SEOUL: South Korea announced
yesterday a 15 trillion won (US$14
billion or RM52.64 billion) stimulus
package to boost its troubled economy, hammered by the deadly Middle
East Respiratory Syndrome (Mers)
outbreak which has dented consumer spending and business sentiment.
In announcing the programme
— which follows a central bank
interest rate cut to a record low
this month — the finance ministry
also slashed its growth outlook for
this year.
Finance Minister Choi Kyunghwan said the extra move was crucial
as a recovery in Asia’s fourth-largest
economy hinged on efforts to quickly contain the effects Mers.
As of yesterday the virus had
killed 29 people and infected 151
since the first case was confirmed
on May 20, making it the worst outbreak outside Saudi Arabia.
“We can say that we have overcome the Mers crisis only if our economy rebounds,” Choi said, warning
that growth could come in below
3% without support from the extra
spending.
“The economy is being weighed
down by Mers, which has seriously
hurt consumption and the service
sector,” he said, adding that the government would use all available resources to prop up growth, support
exports and create jobs.
WASHINGTON: After weeks
of legislative clashes Congress
handed US President Barack
Obama a major policy victory on Wednesday, giving him
authority to rapidly conclude
a Pacific trade accord strongly
opposed by many in his party.
Bucking political tradition, the
Democratic president relied on
his Republican rivals to help realise the top economic priority
of his second term: creating a
12-nation trans-Pacific free-trade
area aimed at opening new markets for US exports in countries
like Japan, Chile, Australia and
Vietnam. Obama’s own party
has rebelled, worried about a repeat of the 1990s North American
Free Trade Agreement, which led
to manufacturing jobs going to
Mexico, where labour costs were
lower. But after a major trade
package, including so-called
trade promotion authority (TPA),
stalled in Congress this month,
the White House and Republican
leaders secured the necessary
votes to advance at least the TPA
measure. — AFP
Over 3 million more cars to
be recalled over airbag
A woman (right) wearing a mask in an underground shopping district in Seoul. The Mers
outbreak has dented consumer spending and business sentiment. Photo by Reuters
Choi said the government would
issue bonds to fund the extra budget,
the size of which will be decided after
analysing the impact of Mers.
The finance ministry slashed its
growth forecast for this year to 3.1%
from an earlier 3.8%. It said the Mers
outbreak could pare up to 0.3 percentage point off annual economic
growth, vowing to keep close tabs on
rising household debt and encourage
corporate restructuring that could
reduce risks to the economy.
The slowing global economic recovery and a weak yen and euro are
other risks to South Korea, it said.
As part of the package provin-
cial authorities will be encouraged
to spend more on infrastructure
projects, while it will also be used
to help contain Mers, address the
effects of a severe drought and create more jobs.
“We’re trying to cope with shocks
from non-economic issues by boosting fiscal spending sufficiently and
keeping it expansionary,” said Lee
Chan-woo, a director-general at the
ministry.
The central Bank of Korea cut interest rates this month to a record
low of 1.5% as businesses including
shops, restaurants and cinemas reported slumps in sales. — AFP
China to scrap limit on lending
BEIJING: China is to abolish a limit on the amount of loans banks
can grant, a liberalising step for the
heavily regulated banking sector
which could make stimulus measures more effective.
Banks will no longer be required
to cap the amount of loans they
make at 75% of the deposits they
keep, known as the loan-to-deposit
(LDR) ratio, according to a statement
released on the website of the State
Council, China’s cabinet, after a regular meeting on Wednesday chaired
by Premier Li Keqiang.
The proposal is expected to be
Congress passes trade bill
in victory for Obama
approved by the standing committee of the country’s rubber-stamp
legislature.
Regulators will still “monitor” the
ratio but it will no longer be mandatory, according to the statement.
The requirement, first imposed
on state-owned commercial banks
in 1998, is outdated as banks can
now raise funds in several ways other than deposits, the People’s Daily
said yesterday.
Analysts said the move will allow lenders, particularly smaller
banks, to lend more, and will make
cuts in the reserve requirement ra-
tio (RRR), a limit on the amount of
money banks must keep in reserves,
more effective.
The existence of the LDR has
limited the impact of recent RRR
cuts by Beijing, a stimulus measure to promote lending and boost
slowing growth in the world’s second-largest economy.
“Easing the LDR regulation will
help banks to extend loans, but the
short-term impact on loan growth
will likely be limited,” Nomura analysts said in a report, citing dampened loan demand and lenders’
caution over credit risks. — AFP
TOKYO: Toyota and Nissan, Japan’s two top automakers, yesterday said they will recall over three
million more cars globally because of concerns about airbags
involved in eight deaths worldwide. “Toyota will now globally
expand its recalls to involve approximately 2,860,000 additional
vehicles equipped with certain
front passenger airbag inflators,”
the automaker said. Nissan said it
would recall 198,000 units worldwide, while Mitsubishi also said it
would call back 120,000 vehicles.
Toyota alone has a total of 12.66
million units now affected, but
Honda, Japan’s No 3 automaker, has been the hardest hit, with
more than 19 million vehicles
recalled globally. — AFP
‘China to merge 3 cargo
airlines to create leader’
SHANGHAI: China will merge
its three biggest freight airlines
and build the combined entity
into Asia’s largest air cargo operator, a top aviation official was
reported as saying. “Currently,
this work (the merger) is being
actively pushed,” Xinhua quoted
Zhou Laizhen, deputy chief of
the Civil Aviation Administration
of China, as telling an industry
forum. China’s top three cargo
operators are the freight arm of
Beijing-based flag carrier Air China, Shanghai-based China Cargo
Airlines, and China Southern
Airlines Cargo, headquartered
in Guangzhou. — AFP
McDonald’s to franchise all
413 Taiwan stores
TAIPEI: US fast-food giant McDonald’s said it would sell all of
its 413 stores in Taiwan to a franchise operator as part of a plan
to turn around the retailer, BBC
reported. The sale would result
in the end of over three decades
of company-owned stores in Taiwan, where it has 20,000 workers.
28 WORLD
Child buyers targeted
Revised criminal law will increase penalties for offenders in China
BEIJING: Couples who buy abducted children in China will face criminal punishment under proposed
laws that would remove their exemption from prosecution, reports
said yesterday, as the authorities
clamp down on the flourishing
child-trafficking industry.
More than 13,000 children were
rescued by police in China last year,
the China Daily said, with demand
for stolen youngsters fuelled by a
traditional preference for sons and
a one-child limit for some couples.
Current law imposes harsh sentences for child trafficking, including
the death penalty in certain cases.
Buyers of kidnapped children
can be sentenced to up to three
years in jail, but are exempt from
criminal proceedings if they have
not abused the children or obstruct-
‘Back to the
Future’ hover
board unveiled
TOKYO: The future is here already — or at least the one imagined for Marty McFly — with
a carmaker unveiling a real,
working hover board, like that
used in the Back to the Future
film franchise.
Toyota’s luxury car brand
Lexus said it had created a prototype that glides frictionlessly just above the ground with
technology similar to that used
in so-called maglev trains.
A teaser video posted online
appears to show the hover board
floating, although the sequence
ends before a skateboarder actually begins to ride it.
While the hover board Michael J Fox’s character rides in
Back to the Future Part II floats
above anything — except water — the Lexus model requires
magnets to be embedded in
the ground, limiting its range
to special tracks.
The project is “the perfect
example of the amazing things
that can be achieved when you
combine technology, design
and imagination”, said Mark
Templin, executive vice-president at Lexus International.
Testing will take place in
Barcelona, Spain, “over the
coming weeks until summer
2015”, the company said.
A US team last year unveiled what they said was a
working hover board, funded
through the Kickstarter crowdfunding website.
Japan has expertise in magnetic levitation technology,
which uses electrically charged
magnets to propel vehicles
along. Central Japan Railway
is aiming to put a superfast maglev train into operation in 2027.
The maglev hovers 10cm
above the tracks. — AFP
ed efforts to rescue them.
The revised criminal law will “increase penalties for those who buy
children”, the state-run newspaper
said, without specifying potential
sentences.
“Buyers would receive a less severe penalty if they did not abuse
the child or attempt to hinder rescue efforts,” it added.
Child trafficking has grown into a
huge problem in China, where this
year alone police have broken up
several criminal gangs found keeping babies in disused mortuaries and
confining pregnant women in factories before selling their newborns.
Almost 13,000 people involved
in human trafficking were punished
between 2010 and last year, the China Daily said, citing the Supreme
People’s Court.
More than 13,000
children were rescued
in China last year,
with demand fuelled
by a traditional
preference for sons.
More than half of those convicted received sentences ranging from
five years in prison to death.
The new criminal law was submitted on Wednesday to the Standing Committee of the National
People’s Congress, China’s rubber-stamp parliament.
Other revisions include harsher
punishments for those involved in
“cults or superstitious activities”,
and widening the list of activities
which can be defined as “terrorism”,
state news agency Xinhua said.
China has previously cracked
down harshly on groups it labels
“cults”, most notably the Falun Gong
spiritual movement, which was
banned in the late 1990s.
More recently, the outlawed
Quannengshen (Church of Almighty God) has been targeted. A
father and daughter who belonged
to Quannengshen were executed in
February, having been convicted of
beating a woman to death.
China has also rolled out tough
measures to confront what it labels
“terrorism” in the largely Muslim region of Xinjiang, sentencing to death
scores of people, while hundreds
have been jailed or detained. — AFP
Thai students caught with gun
in Pakistan return home
BANGKOK: A group of Thai students who were detained in Pakistan after one of them was caught
carrying a gun through the Lahore
airport returned home yesterday,
after officials secured their release.
Thailand’s Ministry of Foreign
Affairs said the students — who all
hailed from the kingdom’s Muslim-majority deep south — left Lahore late on Wednesday evening.
The Thai government said the
students are not linked to any
insurgent groups, including in
Thailand’s conflict-plagued south,
where ethnic Malay Muslims have
been fighting for a level of autonomy.
“All the Thai students are in
good health and good spirits as
they have returned to their respective hometowns,” the ministry
said in a statement.
The ministry did not say whether any deal was struck to secure
the group’s release or whether
they still face any charges.
The five students were detained
by Pakistani police on June 8, after
a handgun and bullets were found
in one of the Thai’s luggage as they
checked in for a flight at Allama
Iqbal International Airport.
The group’s release came as
a former senior Thai policeman
was arrested earlier this week in
Japan, after he was caught carrying a loaded pistol through Narita Airport.
Comronwit Toopgrajank, a former Bangkok police chief, was
detained on Monday as he tried
to fly back to Thailand.
Officials stationed at the airport
discovered a revolver with five live
rounds in the 60-year-old’s suitcase and arrested him on the spot
on suspicion of violating gun laws.
Thai junta chief Prayut Chano-cha has ordered officials to investigate whether Comronwit was
able to take the pistol through Thai
airport security before fl ying to
Japan. — AFP
Japan executes murderer who suffocated woman
TOKYO: Japan yesterday executed a man who robbed and killed
a woman after plotting the crime
with accomplices he met online.
The execution brings to 12 the
total number of death sentences
carried out since Prime Minister
Shinzo Abe took power in 2012.
Tsukasa Kanda, 44, was hanged
for killing 31-year-old Rie Isogai
in Nagoya, central Japan, in 2007.
He met his two accomplices via
a mobile phone-based web service
and the three of them together devised a plan to target a random
woman victim.
The men kidnapped Isogai from
a Nagoya street and suffocated her
by wrapping her head and neck
with a plastic bag, adhesive tape
and rope, before battering her head
with a hammer, according to Justice
Ministry records.
“This was an extremely brutal
case that brought unimaginable
suffering to the victim and her fami-
Kamikawa: This was an extremely
brutal case that brought unimaginable
suffering to the victim and her family.
Photo by Reuters
ly,” Justice Minister Yoko Kamikawa
told a press briefing after the execution, the first since she came to
office in October last year.
“After a series of careful reviews,
I ordered the execution,” she said.
Kanda’s accomplices are serving
life sentences.
Kanda did not appeal against
his death sentence after the original district court ruling.
Japan and the United States are
the only major advanced industrial
nations that continue to have capital punishment.
Surveys have shown that the
death penalty has overwhelming
public support, despite repeated
protests from European governments and human rights groups.
International advocacy groups
said Japan’s system is cruel because inmates can wait for their
executions for many years in solitary confinement and are only
told of their impending death a
few hours ahead of time. — AFP
IN BRIEF
French cabbies angry at
Uber block Paris airports,
train stations in protest
PARIS: French cab drivers angry at competition from taxi
app Uber yesterday blocked access to Paris airports and train
stations as they protested losing
customers to the popular service. Access to three terminals
at Paris’ Charles de Gaulle Airport in the north was blocked,
and cabs were converging on
the Orly Airport in the south
and at train stations inside the
city, officials said. The striking
cabbies also blocked a western section of the Peripherique highway that encircles
the French capital for about
30 minutes, overturning trash
bins onto the busy throughfare before police moved in to
restore the traffic flow, police
officials said. — AFP
Mom and baby survive
Colombia plane crash
BOGOTA: A mother and her
infant son who disappeared in
a plane crash in the dense jungles of northwestern Colombia
several days ago were found
alive and well on Wednesday,
in what the authorities called a
“miracle”. Nelly Murillo, 18, and
her son Yudier Moreno, not yet
one year old, were discovered
near the site where the Cessna 303 crashed on Saturday in
thick brush. “It’s a miracle. It
is a very wild area and it was a
catastrophic accident,” Colonel
Hector Carrascal, commander
of the Colombian Air Force in
the Antioquia Department, told
AFP. “His mother’s spirit must
have given him [the] strength
to survive.” — AFP
Mentally ill man jailed for
lese majeste in Thailand
BANGKOK: A Thai man was
sentenced to more than three
years in jail yesterday under the
kingdom’s controversial royal
defamation law, despite having a history of mental illness.
Thanet Nonthakot is the second person in the last month
suffering from a mental health
condition to be convicted under Thailand’s notorious lese
majeste legislation — one of the
world’s strictest. Under Section
112 of Thailand’s criminal code,
anyone convicted of insulting
the king, queen, heir or regent
faces up to 15 years in prison
on each count. — AFP
Canadians told not to
flush goldfish away
EDMONTON: Canadians in
Alberta have been told not
to flush their goldfish away
as the pet fish the size of dinner plates are multiplying like
bunnies from Lethbridge to
Fort McMurray, CBC reported. “It’s quite a surprise how
large we’re finding them and
the sheer number,” said Kate
Wilson, aquatic invasive species coordinator at Alberta Environment and Parks, CBC said.
In one case, the municipality of
Wood Buffalo pulled 40 of the
domestic fish species from a
storm-water pond.
S P O RT S 2 9
Whitmarsh fears F1 could ‘crash and burn’
BY A L A N B A L D WI N
PORTSMOUTH: Former McLaren team principal Martin Whitmarsh says he is saddened by the
current state of Formula One (F1)
and fears it may “crash and burn”
before eventually recovering.
“I love Formula One and I love
McLaren. I was there 25 years. I am
saddened by it,” Whitmarsh told
Reuters at a media day for British
America’s Cup yachting challenger
Ben Ainslie Racing, of which he was
appointed chief executive in March.
The Briton, who has said very
little about the sport since his departure, said he still watches the
races on television as a fan.
“I am staying away as much as
I can, and try not to comment on
it, but I’m saddened by what’s happening in the sport,” added the
57-year-old, who was ousted by
Argentine house
arrest for Fifa
‘graft’ duo
BUENOS AIRES: Two Argentine
businessmen arrested last week
in a sweeping probe of alleged
corruption at Federation Internationale de Football Association (Fifa) were placed under
house arrest on Wednesday
pending a decision on extraditing them to the United States.
Father and son sports marketing executives Hugo and
Mariano Jinkis, the owners
of the company Full Play, are
among the 14 people indicted
by the US in its investigation
into graft at the heart of world
football’s governing body.
Judge Claudio Bonadio
rejected their request to be
released and granted them
house arrest only with bail
payments of four million pesos (RM972,197) for Hugo Jinkis and eight million pesos for
Mariano.
The duo handed themselves
in to authorities in Buenos
Aires last Thursday.
An Argentine-Italian businessman indicted in the case,
Alejandro Burzaco, turned
himself in two days earlier in
Italy and is also under house
arrest outside Milan. — AFP
McLaren Group head Ron Dennis
in January last year.
“I think it (the sport) will crash
and burn before it gets turned
around, in my view. It will do
eventually but I’m sad to see it
go through the process it’s going
through.”
McLaren, the second most successful team in the history of F1,
have not won a race since 2012 and
have scored only four points in eight
Grands Prix this season — the first
of a new partnership with Honda.
At the same time, F1 has suffered
a wave of negativity with leading
figures — including commercial
supremo Bernie Ecclestone and
the bosses of former champions
Red Bull — talking it down.
More recent headlines this week
have focused on the possible sale
of the sport to RSE Ventures, who
own the Miami Dolphins National
Football League team, and Qatar.
Whitmarsh, who said working
with Ben Ainslie Racing reminded him of his early days at McLaren when the team employed little
more than 100 people, felt F1 was
still struggling to adapt to changing
circumstances.
“If you look at the cycle ... you
had the sport as it was 30 years
ago, then the tobacco era which
was the big growth spurt and the
automotive era when we had at
one time seven of the nine largest
automotive companies.
“Then that went away with the
economic crisis and it’s diversified but in order to diversify it
also has to recognise, which it’s
struggling with, that it has to be
doing it at a slightly different level,” said Whitmarsh, a former head
of the now-defunct F1 Teams’
Association.
“And it’s also got to be a bit more
equitable in terms of distribution.
It is an ongoing argument and unfortunately at the moment it’s led
itself into a very difficult place.”
The Briton was much more
enthused by his new surroundings, even if there are many similarities between America’s Cup
yachting and F1.
“It was a pretty short conversation. I said I’d like to do that. Not
planned, not long-term passion,
just something very lucky to get
involved with,” he recalled of his
response to Ainslie when Britain’s most decorated yachtsman
approached him.
“He came to my home, we sat
for about two hours and talked
about it and actually I just said I
don’t care about the money, I just
want to do this. I told him there and
then,” he said. — Reuters
China deputy
minister probed
For suspected ‘serious breaches of discipline and the law’
BY M ICHAEL MARTI NA
BEIJING: A deputy sports minister who sits on China’s Olympic
committee is being investigated
for suspected “serious breaches
of discipline and the law”, the ruling Communist Party’s anti-graft
watchdog said, using a term often
employed to denote corruption.
China’s sports bodies are in the
international spotlight, as Beijing
competes with Almaty in Kazakhstan to host the Winter Olympic
Games in 2022.
China, which is aggressively
seeking to stamp out graft in party and government ranks, has also
sought to eject corrupt elements
from its sports establishment, especially within soccer, which has
been hit by match-fixing scandals.
President Xi Jinping, an avowed
soccer fan like hundreds of millions of his compatriots, has bemoaned corruption of the game
in China as a national embarrassment.
In a brief statement on its website yesterday, the Central Commission for Discipline Inspection
(CCDI) said Xiao Tian, whose rank
is equivalent to that of a vice-minister, was being investigated, but
gave no other details of the probe.
Xiao, a deputy head of China’s
General Administration of Sport
(Gas), is listed as a vice-chairman on the website of the Chinese Olympic Committee.
Calls to Gas went unanswered.
Xiao and the Chinese Olympic
Committee could not be reached
immediately for comment.
Xiao has played a prominent
role in the country’s sporting establishment. In one of his more
recent public appearances, state
media reported in May that he
presented an award to newly retired Chinese hurdler and national
sports icon Liu Xiang.
But in 2009, Xiao made headlines when he delivered a heated,
expletive-strewn response to reporters when asked about allegations of result rigging at a national
diving competition.
Xiao also represents China internationally, holding a spot on the
board of the International Basketball Federation (Fiba), the sport’s
world governing body, according
to the organisation’s website. Fiba
did not respond immediately to a
request for comment.
Many Chinese have linked
previous sports cheating scandals to China’s pursuit of victory
and medals at all costs, and have
criticised the system for putting
too much pressure on athletes
to succeed.
In January, Gas pledged to drop
the nation’s obsession with gold
medals after the CCDI warned of
the damaging extent of match-fixing
and cheating in sports.— Reuters
‘Tevez heading back to his first club, Boca Juniors’
Tevez controlling the ball during a training
session in La Serena, Chile, on Tuesday.
Martucci tells a radio station the Tevez
transfer is a done deal. Photo by Reuters
BUENOS AIRES: Carlos Tevez is set
to return to his first club, Boca Juniors, after the Argentines reached
agreement with Italian champions Juventus, a club official announced.
Boca general secretary Cesar
Martucci told radio station 1.050am
the Tevez transfer was a done deal,
even though there was no official
confirmation either in Buenos Aires
or Turin.
“We are very happy, after having
put in so much work, to clinch the
return of our star Carlos Tevez to
Buenos Aires,” he said.
Martucci gave no details of the
deal but said Tevez would be paraded before the fans at the club’s
Bombonera stadium on July 7.
Tevez, 31, known as “Apache”
after the Buenos Aires slum district
where he was brought up, played
for his beloved Boca from 2001 to
2004 before moving to Corinthians
in Brazil.
From there he joined West Ham
in England in 2006 and then played
for Manchester United before moving to rivals Manchester City for
more than £40 million in 2009.
He joined Juventus in 2013 after
four seasons at City and last season
was the Italian league’s second top
scorer with 20 goals as Juventus
won the league and reached the
Champions League final, where
they lost to Barcelona.
Juventus coach Massimiliano
Allegri, resigned to losing the Argentine, said Tevez had had an “extraordinary season”. — AFP
IN BRIEF
Gatlin disputes he’s a
two-time drug cheat
EUGENE, Oregon: Controversial
sprinter Justin Gatlin does not
understand why people insist
on calling him a two-time drug
cheat and want him kicked out
of the sport. The American, who
has served two doping bans,
also expects future generations
to look at him less judgementally, he told Reuters in an interview ahead of the US world
championships trials where he
will run only the 200m. “Last
time I checked, someone who
takes medication for a disorder
is not a doper,” said Gatlin of his
first drugs violation when he
was tested positive in 2001 for
an amphetamine contained in
attention deficit disorder medication he had taken since being
a youth. — Reuters
Ramos wants to leave
Real Madrid — press
MADRID: Real Madrid defender Sergio Ramos has told the
club he wants to leave after falling-out with its president Florentino Perez, media reported
yesterday, saying Manchester
United were interested in buying
the player. Spain’s major sporting and general dailies reported
that Ramos met top club officials on Wednesday and asked
them to listen to offers from other clubs. Real have yet to renew
Ramos’ current contract, which
expires in 2017. The 29-year-old
is a hero at Real, having scored a
decisive goal in the historic 10th
European championship final
victory last year. But his tense
relations with Perez have been
widely reported. Ramos notably
defended ex-coach Carlo Ancelotti who was fired by Perez last
month. — AFP
Marseille accept €15m
West Ham offer for Payet
MARSEILLE: Marseille have accepted a €15 million (RM63.19
million) offer from Premiership
side West Ham for French international midfielder Dimitri Payet, the club announced
yesterday. But the club have no
intention of selling one of their
chief assets and are trying to
force the player’s hand, a statement explained. Marseille have
decided “to react favourably” to
the offer “in order to make the
player face up to his responsibilities”, the statement said. — AFP
PDP to send five riders for
competition in Japan
KUALA TERENGGANU: The
Terengganu Pro Development
Project (PDP) team are expected
to send five riders to participate
in a cycling championship in
Tokyo, Japan in August. Team
coordinator Nasiruddin Wan
Idrus said the riders would be
sent to the championship to gain
exposure since the team was only
recently set up by the Terengganu Sports Council. “During their
stay in Tokyo, the riders will also
undergo a week-long training
with professional Japanese riders,” he told Bernama yesterday
adding that no target would be
set for the riders. — Bernama
30
live it!
FR I
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
WEEKEND
by numbers
26.06.15 to 28.06.15
Your quick guide to rest and relaxation. By Shalini Yeap
4 staycations not far from home
Sekeping Tenggiri
Surrounded by all that greenery, it is easy
to forget that this retreat is actually located smack in the middle of Bangsar. The
rooms come in an array of choices — the
glass room, courtyard room, loft, sky view,
pool view and garden view. Part of the
Sekeping Retreats collection, Sekeping
Tenggiri maintains the common theme
of unpainted concrete and brick walls and
appreciation for nature. Take a drive out to
town this weekend and be pleasantly surprised by the rustic charm of this retreat.
Find it at 48 Jalan Tenggiri, Bangsar, Kuala
Lumpur. For reservations, call (017) 207
5977 or visit www.sekeping.com.
Villa Samadhi
Escape to tranquillity and luxury at Villa
Samadhi without having to even leave the
city. Dubbed one of the city’s best kept secrets, the villa is hidden within an upscale
neighbourhood and looks like a private
villa. It is made up of 21 spacious rooms
furnished like a holiday home, and no two
rooms are the same. Bamboo and salvaged
timber that form the facade of the building
welcome guests to have a restful stay at
the retreat. Villa Samadhi is located at 8,
Persiaran Madge, off Jalan Madge, Kuala
Lumpur. Call (03) 2143 2300 or visit www.
villasamadhi.com.my for reservations.
Anggun Boutique Hotel
This charming boutique hotel is housed in
two 1920s colonial houses that were once
owned by the Chung clan, and its present
custodians have striven to maintain its
splendour. Situated in Kuala Lumpur’s
Golden Triangle, the hotel weaves history
and culture with chic, modernistic architectural designs with furniture made out
of restored railway sleepers and period
lanterns strung from the skylit roof. The
traditional ambience of Anggun is bound
to take you back in time, all while never
having to step out of Kuala Lumpur. Located at 7 & 9, Tengkat Tong Shin, Kuala
Lumpur. Call (03) 2145 8003 or visit www.
anggunkl.com for reservations.
Kuang Kampung Retreat
Nestled amongst fruit trees, the traditional
wooden house-inspired architecture of the
three-bedroom Kuang Kampung Retreat is
bound to take you back in time. Keeping
with the nostalgic theme, the adjustable
timber louvres in living and dining areas
are made from wood salvaged from an
old palace in Kuala Lipis, Pahang while
the guest bathroom has decorative tiles
found in an old house in Malacca marked
for demolition. A short drive from the city
centre is all it takes to get away from the
hustle and bustle of city life. Kuang Kampung Retreat is situated along Lorong Orkid, Kuang, Sungai Buluh. For reservations
visit www.avillionprivatecollection.com.
2 places to go japanese this weekend
Nobu Kuala Lumpur
Check out the new lunch menu at Nobu
Kuala Lumpur, which comprises a range
of lunch sets from RM55++. Take your
pick from choices like the Norwegian
salmon grilled with Yuzu butter sauce
or the sushi and sashimi platter with
tuna, salmon, yellowtail and other seasonal fish. Each lunch set comes with a
tempura assortment, salad rice, pickles
and miso soup as well as complimentary
green tea and handmade Nobu biscuits.
Nobu is located at level 56, Menara 3
Petronas, Persiaran KLCC, Kuala Lumpur. Call (03) 2164 5084 for reservations.
Iketeru
If you have a craving for Japanese food and better still, are a fan of freshwater eels, the unagi
promotion at Iketeru, Hilton Kuala Lumpur may
just tickle your palate. Rest assured about freshness as this summertime delicacy is delivered
twice weekly from the Miyazaki prefecture in
Kyushu Island, renowned for premium unagi.
The unagi meat can be savoured in two cooking
styles — the grilled and sweet Unaijyu style or
the crispy and aromatic Nagoya style —and the
seven-course set menu is priced at RM350nett
per person. Iketeru is located on level 8, Kuala Lumpur Hilton, Jalan Stesen Sentral, Kuala
Lumpur. Call (03) 2264 2264 for reservations.
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live it! 31
1
experimental
theatre
piece to
catch
2 music gigs to groove to
Serious Play Improv Lab Series (SPIL)
Catch the performance by acclaimed Japanese musicians and composers Otomo Yoshihide and
Sachiko M, who are here in Malaysia for the first time. The duo will be performing at Findars
under this month’s instalments of the Serious Play Improv Lab Series (SPIL), an art lab for musicians and artists alike. Come and be entertained by Sachiko performing alongside Sudarshan
Chandra Kumar, Siew-Wai and Game of Patience at Findars, Level 4, 8 Jalan Panggong, Kuala
Lumpur. Doors open at 8.30pm onwards for their Saturday night show, and admission is by suggested donation of RM20. Call (012) 350 1844 or visit www.facebook.com/FINDARS for more.
B.E.D (But Everybody Dreams,
Big Enough Dreams)
Drop by the KLPac lobby this weekend to view an
experimental theatre titled B.E.D (But Everybody
Dreams, Big Enough Dreams) presented by the
Embassy of the Republic of Poland. Watch as a
group of five people, made up of dancers, choreographers, musicians and actors use mattresses
as major props to depict their perceptions of what
a society dreams of. It follows the story of three
people who encounter two women dancers in
a word ruled by men that has forgotten about
dancing. KLPac is located along Jalan Strachan,
off Jalan Ipoh, Kuala Lumpur. Admission is free,
and show time on Friday is at 8.30pm and 5pm
on Saturday and Sunday. Call (03) 4047 900 or
visit www.klpac.org for details.
Kebaya Jazz
Let Ida Mariana serenade you with her vocals
and some jazzy tunes from the 1960’s as Alexis
Bistro Ampang brings you Kebaya Jazz, happening today and tomorrow. Ladies are welcome
to join in the fun and dress in kebaya, if they
like. Be transformed to the era of lacy kebayas
with the classic tunes at Alexis Bistro Ampang,
Great Eastern Mall, 303 Jalan Ampang, Kuala
Lumpur. Showtime is from 10pm onwards.
Call (03) 4260 2288 or visit www.alexis.com.
my for details.
3 art exhibitions to visit
Adolescence
This group exhibition at Minut Init Art Space explores
reminiscence and reconnection through contemporary images of imaginary tales and folklore. Among
the works featured in this exhibition are that of Nadia
Mahfix, Elena Kravchenko, Mils Gan, Aleff Ahmad, Jaël
Estrella and Borhanazali. View Adolescence at Minit
Init Art Space, level 3, 29B Jalan SS21/37, Damansara
Utama, Petaling Jaya. Gallery hours are from 8pm to
10pm on weekdays and by appointment on weekends.
Call (019) 697 8897 or visit www.minutinit.com for more.
BIODATA: Art Investment Exhibition 2015
View contemporary art by emerging artists at BIODATA: Art Investment Exhibition 2015. The exhibition
features the works of 13 contemporary Malaysians
artists, namely, Aini Ab, Aizat Amir, Azri Abdullah,
Fahmi Taib, Hady Aris, Hazul Bakar, Izzat Aziz, Keat
Leong, Muji Lee Mok Yee & Nazmi Ismail, Norlisham
Selamat, Saiful Amir and Tune Zikri. The exhibition
aims to provide new collectors the opportunity to
invest in the art market. Artseni Gallery is located at
B-G-02, Gateway Kiaramas, 1 Jalan Desa Kiara, Mont’
Kiara, Kuala Lumpur. Gallery hours are 11am to 6pm
on weekdays and on weekends by appointment. Call
(012) 398 9608 for more.
Can You Keep A Secret?
Visit a ceramic art installation titled Can You Keep
A Secret? at Publika Shopping Gallery this weekend.
Organised by the Women’s Aid Organisation, the
exhibition strives to educate the public on domestic
violence through ceramic works by artist James Seet
from Arc Worldwide. The artwork is a depiction of real
life stories from survivors of domestic abuse and also
aims to encourage bystanders to speak up against it.
Head over to the Black Bridge, level G3, Publika, Jalan
Dutamas 1, Kuala Lumpur anytime between 10am
and 10pm. Log on to www.wao.org.my or contact (03)
7957 5636 or (03) 7957 0636 for details.
32
live it!
Zen TODAY
It is the set of the sails, not the direction of the wind, that
determines which way we will go. — Jim Rohn
Scenes from the
SILVER SCREEN
‘Star Wars VII — The Force Awakens’
poised for global success
According to an analyst at Morgan Stanley,
the next instalment in the Star Wars saga, The
Force Awakens, could become the third-highest grossing film in history, behind James
Cameron’s Avatar and Titanic.
Six months before its release, Star Wars
VII is already the focus of intense financial
scrutiny. If the Morgan Stanley analyst is
correct, the J J Abrams-helmed film is supposedly capable of grossing US$1.95 billion
(RM7.33 billion) worldwide, an estimate that
would totally change the landscape at the
top of the rankings.
With such a haul, the next Star Wars would
leapfrog the two Avengers films, currently in
fourth and fifth place, and even take over the
third spot, currently held by Fast & Furious
7 and its US$1.52 billion.
Even with US$1.95 billion, the Jedis
wouldn’t get close enough to threaten James
Cameron’s epics. Avatar has been enjoying
the top spot since 2010, having become the
first feature film to surpass the symbolic
US$2 billion mark, and though it came out
years before, Titanic finally joined the exclusive US$2 billion club in 2012 thanks to
a 3D re-release which propelled it US$100
million over the cap.
Should things work out as predicted, Star
Wars VII would become the most successful film in the 38-year-old saga created by
George Lucas. So far, only 1999’s Phantom
Menace has surpassed the US$1 billion mark.
With this latest instalment, the first to
come out under the Disney banner, the studio could see close to a US$1 billion return
on its investment. In addition to ticket sales,
Disney is counting on merchandising (toys,
clothes and other accessories), DVD sales
and video games to fill its coffers. According to Morgan Stanley, fans of the franchise
could end up spending close to US$3 billion,
of which US$215 million would go directly
into the studio’s pockets.
Though nothing yet indicates that The
Force Awakens will go down this road, fans’
anticipation for the film is palpable. In April,
the movie’s second trailer was viewed more
than 30 million times on YouTube in just 24
hours, hitherto unheard of. To date, the video
has recorded 54 million unique views, which
bodes very well for ticket sales.
‘Noma My Perfect Storm’ inches closer
to international distribution
Following the fortunes of multi-award winning restaurant Noma, the culinary documentary Noma My Perfect Storm is closing
in on international distribution.
With Japan already in the bag, the threeyear profile of René Redzepi’s two Michelin-starred restaurant has also been secured
for show in South Korea, Germany, Austria,
the Netherlands, Belgium and Luxembourg,
according to Variety.
The Copenhagen eatery has had a first-
Noma My
Perfect Storm
Star Wars VII — The
Force Awakens
place ranking on the annual World’s 50 Best
Restaurants list four times this decade — in
2010, 2011, 2012 and 2014 — one behind the
record held by elBulli.
Noma My Perfect Storm had been previously announced for a February 2016 premiere, with its debut trailer expected late
summer or fall.
‘Jellyfish Eyes’ set for July release on
iTunes and Amazon
The debut film from Japanese artist Takashi
Murakami, Jellyfish Eyes, is heading for a July
15 release on iTunes and Amazon.
Well known for his colourful and eclectic art style, contemporary design icon
Murakami’s full-length feature is all about
Japanese youngsters who can see strange
creatures — while adults are oblivious to
their presence.
Janus Films has arranged North American
distribution, Deadline reports, and Jellyfish
Eyes is only the first entry in a trilogy of films.
The picture, which was an April 2013
release in Japan and has received festival
screenings abroad since then, will also be
shown at the IFC Center in New York to coincide with Janus’ digital debut.
Murakami has previously collaborated
with Kanye West and Pharrell Williams on
music videos and other creative projects.
— AFP
M A K E B E T T E R D EC I S I O N S
Read this copy online @ theedgeproperty.com
M A K E B E T T E R D EC I S I O N S
ep4 N E W S
e p 1 2  1 3 F E AT U R E
ep14 D E A L M A K E R S
ep15 H O M E I D E A S
Southern Marina
Residences officially
launches
Bringing life back to
The Row
The exuberance and
wisdom of youth
Touch of the East
SENTUL’S
makeover
The grand old Sentul neighbourhood has seen more
futuristic-looking additions to its skyline since YTL Land and
Development Bhd rolled out its Sentul Masterplan 13 years ago.
Research by theedgeproperty.com shows that the majority of
non-landed residences here appreciated in value over the 12 months
leading up to 3Q2014. For the details, see our story on Pages ep8 & 9.
PATRICK GOH/THE EDGE PROPERTY
EP
2
PROPERTY
| NEWS
NEWS ROUNDUP
For more news go to theedgeproperty.com
Tambun Indah expands landbank in Bukit Mertajam
Sentul
moves up
Exciting times
ahead for
Jalan Ipoh
Penang-based property developer Tambun Indah Land Bhd has
expanded its landbank by buying
a 19.05-acre plot in Kota Permai,
Bukit Mertajam for RM39.42 million. The acquisition increases Tambun Indah’s landbank to 472 acres,
which will sustain the group for six
to seven years.
Tambun Indah managing director Ir. Teh Kiak Seng said in
a statement on June 19 that the
Penang property market holds
tremendous potential for growth
given the state’s infrastructure
plans and growing private investment in the manufacturing and
services sectors.
The company is now focusing
on developing recreational aspects
of its flagship Pearl City township
in Seberang Perai South, with the
Gems International School on
track to open in September, and
Pearl City Mall by the first half of
next year.
High-rise serviced apartments
Avenue Garden, located next to
the school, will be launched in the
second half of this year.
Axis-REIT, Haisan enter sale
and leaseback agreement
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Editorial
For News Tips/Press Releases
Tel: 03-7721 8219 Fax: 03-7721 8038
Senior Managing Editor Azam Aris
Contributing Editor Sharon Kam
Editor Rosalynn Poh
Deputy Editors E Jacqui Chan,
Wong King Wai, Llew-Ann Phang
Assistant Editor Lam Jian Wyn
Writers Zatil Husna Wan Fauzi,
Chai Yee Hoong, Lim Kian Wei,
Rachel Chew, Hannah Rafee,
Carmel Dominic
Axis REIT Managers Bhd, the
manager of Axis Real Estate Investment Trust (Axis-REIT), is
acquiring an industrial facility in
Port Klang from Haisan Resources Bhd for RM46 million cash on
an acquisition and leaseback arrangement.
According to a filing with Bursa Malaysia on June 22, the proposed acquisition of seven parcels
of leasehold industrial land with
buildings comes with a leaseback
deal for 15 years with Haisan, with
an option to renew for another
15 years.
Axis-REIT owns 34 units of commercial, office and office/industrial
real estate in Malaysia.
1MDB begins request for
proposal process for
Bandar Malaysia
1Malaysia Development Bhd
(1MDB) said the request for proposal process for its Bandar Malaysia development in Kuala Lumpur
has begun, with its wholly-owned
subsidiary 1MDB Real Estate Sdn
Bhd (1MDB RE) calling for devel-
Gamuda 3Q net profit
down 9.83%
Gamuda Bhd saw its net profit decline 9.83% to RM160.43 million for
the third quarter ended April of financial year 2015 (3QFY15) from
RM177.92 million a year ago, on
completion of the electrified double-tracking railway project and
amidst a soft property market.
Revenue fell 12.63% to RM553.78
million in 3QFY15 from RM633.83
million y-o-y. The group also declared a second interim dividend of
six sen per share for FY2015 ending
July, payable on July 29.
According to Gamuda in a filing
with Bursa Malaysia on June 24, its
future projects include Seri Serai
and Serai Springs township develop-
Trinity Aquata KL South launch
Date: Tomorrow and Sunday
Venue: The Magellan Sutera,
Meeting Room 3, Level 1, Sutera
Harbour Resort, Kota Kinabalu
Time: 10am to 6pm
Contact: (012) 385 1985
Drop by Sutera Harbour Resort
for the exclusive launch of Trinity
Crest Builder to increase
property segment
contribution to revenue
Crest Builder Holdings Bhd expects
its property segment to contribute
50% to the group’s revenue from the
current 40% by year-end.
Executive director Eric Yong
Shang Ming said the property segment is contributing 40% to revenue,
but 70% to its bottom line.
Yong said the company will be
aggressive in pushing its property segment forward to achieve
the 50% contribution target. “We
see property sales picking up two
months after the introduction of
the Goods and Services Tax,” he
said on June 24.
He added that the total GDV of
the company’s projects for this year
is RM320 million, and that its Alam
Sanjung development in Shah Alam
(pictured) has recorded a 70% takeup rate.
residential development by
Sydney-based developer
Greenland Group, sits in the
inner Sydney growth area, being
near to bus, light rail and train
station. The units offer one to
three bedroom apartments with
selling price starting at A$828 psf.
Devonport Place and Finsbury
Park Road launch
Time: 11am to 7pm
Venue: Malaya I, Level 1,
Westin Hotel, Jalan Bukit
Bintang, Kuala Lumpur
Contact: (019) 227 5317
Regal Homes, a London-based
developer is launching two its
latest developments, Devonport
Place and Finsbury Park Road.
The former offers a collection of
six 1-bedroom apartments and a
2-bedroom penthouse located in
Zone 2 of East London. The latter
offers three luxurious apartments
in Finsbury Park, a 115 acre oasis of
recreational space which includes a
lake, café, exhibition space and an
athletic stadium which is home to
The London Mets Baseball Team.
ments located at the intersections of
the North-South Expressway, Guthrie
Corridor Expressway and the Kuala
Lumpur–Kuala Selangor Expressway;
619 ha of development land opposite
the Cyberjaya/Putrajaya interchange
along Expressway Lingkaran Tengah;
and 257 acres of land adjacent to the
Kota Kemuning township.
Gamuda said it is also preparing to launch its maiden project in
Australia, a high-rise development
in Melbourne with a GDV of RM400
million.
If you have any real estate-related events, email us at [email protected].
Events listed here will also appear on theedgeproperty.com.
Aquata at KL South, a freehold
development in Sungai Besi by
Trinity Group Sdn Bhd, which
offers units with a built-up area of
between 1,100 sq ft and 1,400 sq ft.
Corporate
Managing Director Au Foong Yee
Deputy Managing Director
Lim Shiew Yuin
The Edge Property is published and
distributed with The Edge Financial
Daily every Friday. For more
property data, listings and news, go
to theedgeproperty.com.
Johor-based property developer
KSL Holdings Bhd plans to start
construction of KSL City Mall 2,
expected to be one of the largest
shopping malls in Klang, by yearend, according to a statement released on June 23.
KSL City Mall 2 has a gross development value (GDV) of RM2
billion and 2 million sq ft of gross
floor area. It will be integrated with
a 400-room hotel and three blocks
of serviced apartments.
KSL chairman Ku Hwa Seng said
the development is commensurate
with the economic development of
Klang and a natural progression
for KSL after the completion of its
Canary Garden@Bandar Bestari
township in the vicinity.
“Our existing KSL City Mall and
Hotel Resort in Iskandar Malaysia
has been a great success with more
than a 90% occupancy rate for the
mall. We aim to replicate this feat
in the Klang Valley,” said Ku.
LAUNCHES & EVENTS
Art Director Sharon Khoh
Design Team Cheryl Loh,
Valerie Chin, Aaron Boudville,
Aminullah Abdul Karim,
Yong Yik Sheng, Tun Mohd Zafian
Mohd Za’abah
Advertising & Marketing
To advertise contact
GL: (03) 7721 8000
Fax: (03) 7721 8288
Chief Marketing Officer
Sharon Teh (012) 313 9056
Senior Sales Managers
Geetha Perumal (016) 250 8640
Fong Lai Kuan (012) 386 2831
Shereen Wong (016) 233 7388
Peter Hoe (019) 221 5351
Gregory Thu (012) 376 0614
Ad-Traffic Manager
Vigneswary Krishnan (03) 7721 8005
Ad Traffic Asst Manager
Roger Lee (03) 7721 8004
Executive Ad-Traffic
Norma Jasma (03) 7721 8006
KSL to start construction of
second mall by end-2015
opment partners.
In a June 22 statement, the project’s master developer 1MDB RE
said the process will begin with a
request for expressions of interest
(EOI) advertised in local newspapers, seeking development partners to participate in the 486-acre
project in Sungai Besi.
The closing date for submission
of EOI is July 10, with CH Williams
Talhar & Wong acting as the real
estate adviser and managing the
exercise.
“This follows the presentation
of a rationalisation plan for 1MDB
to the Cabinet on May 29, and the
company is pleased to have begun
making progress towards its implementation,” said 1MDB RE.
Bandar Malaysia is a mixed-use
urban development that is expected
to serve as a catalyst for the transformation of Greater Kuala Lumpur,
the statement read.
The development will serve as
Kuala Lumpur’s gateway for the
high-speed rail line to Singapore
and become a central transport
hub in the city via MRT lines 2 and
3, KTM Komuter, Express Rail Link
(ERL), and future access to 12 major highways, it added.
Southern Marina Residences’
Tower 2 units for sale
Sydney’s Leichhardt
Green units for sale
Time: 11am to 7pm
Venue: Jalin Showroom Publika, A3G2-3 Solaris Dutamas, No 1, Jalan
Dutamas 1, 50480 Kuala Lumpur
Contact: (016) 232 1099
Leichhardt Green, a low-rise
Time: 9.30am to 7pm
Venue: Southern Marina Sales
Gallery, Lebuh Bahtera, Puteri
Harbour, 79100 Nusajaya, Johor
Contact: (012) 969 8099
Southern Marina Development
Sdn Bhd offers for purchase its
second residential tower that
will comprise 236 units with
built-ups from 769 sq ft to 2,013
sq ft. Selling price from RM900
psf with maintenance fee of
50 sen including sinking fund.
Its facilities include a 50m lap
pool, function room by the pool,
garden terraces and sky garden.
EP
4
PROPERTY
| NEWS
Southern Marina Residences
officially launches
Phase 1 of Southern Marina Puteri Harbour released for sale this weekend
BY L I M KI A N WEI
PETALING JAYA: A total of 236 condominium units at the Southern Marina integrated
development in Nusajaya, Johor will be released for sale this weekend. This follows the
encouraging sales reached from its earlier
release of 220 units in 1Q2015 despite the
current slowdown in the high-end non-landed residential segment in Johor.
The Southern Marina integrated development comprises two condominium towers
(Southern Marina Residences) in Phase 1;
a 34-storey office and suites (Phase 2); and
a 38-storey seafront residence (Phase 3).
It will also feature a waterfront retail component with a net lettable area of 200,000 sq
ft. Further details of phases 2 and 3, and the
retail components are still being finalised.
The entire project spans 5.058ha of freehold land along Lebuh Bahtera, Puteri Harbour. It has a gross development value (GDV)
of RM1.5 billion and is slated for completion by 2019.
It is close to Puteri Harbour International
Ferry Terminal and a five-minute drive from
Legoland, Mall of Medini and Gleneagles
Medini Hospital.
“We believe that Puteri Harbour is the
most strategic and sought-after location in
Nusajaya today [and] we believe that discerning investors will recognise this as an
opportunity to pick up a unique offering at
attractive prices,” PPB Group Bhd managing director Lim Soon Huat told The Edge
Property in an email.
PPB Group holds a 28% indirect stake
in the project developer, Southern Marina
Development Sdn Bhd, which is a joint ven-
Artist impression of Southern Marina Puteri Harbour. Photo by PPB Group
ture with Kuok Brothers Sdn Bhd (42%) and
Khazanah Nasional Bhd (30%). Lim is also
chairman of the JV company.
The Southern Marina Residences consists
of 33- and 35- storey towers. Units come in
1+1 and 2+1 bedroom, as well as 3+1 bedroom garden units with private terraces and
penthouse layouts, while built-ups range
from 769 sq ft to 3,317 sq ft. Prices start from
RM880 psf while the maintenance fee is 50
sen psf, including sinking fund.
Its amenities and features include a gym,
a 50m lap pool, a function room by the swimming pool, garden terraces and sky gardens.
Its first tower offering 220 units was released for sale in 1Q2015 and half-sold via
private previews to date. Phase 1 has a GDV
BY L I M KI A N WEI
TROP’s landscape
design for 8 Conlay.
Photo by KSK Land
Bangkok-based landscape design studio
TROP unveiled its landscape design for 8
Conlay at the press conference.
TROP founder and lead design director
Pok Kobkongsanti is landscaping the 26th
and 44th floors of 8 Conlay’s two residential
towers, where they connect with each other.
The 44th floor will have a futuristic vertical park that resembles a tropical rainforest,
while the main swimming pool on the 26th
floor has the motif of dew drops.
“Malaysia is famous for its biodiversity.
I was inspired by the country’s lush topography and the tropical forest at the heart of
Kuala Lumpur (in Bukit Nanas). I intend to
design a garden in the sky that resembles a
BY Z AT IL H US N A WA N FAUZ I
SINGAPORE: The central business district of Singapore welcomes a new hotel, the 442-room Park Hotel Alexandra
in June.
“We are thrilled to announce the
opening of Park Hotel Alexandra,” said
its general manager Angeline Tan in a
press release.
Park Hotel Alexandra is a 10-minute
drive from Orchard Road and Sentosa,
and 30 minutes from Changi International Airport.
The hotel is connected to Alexandra
Central, a three-storey mall that offers
fashion, dining and lifestyle outlets for
guests to explore, said Tan.
“With a great location just moments
away from both business and leisure destinations, and stunning views of greenery, we are well positioned to cater to
the needs of all our guests.
“Our infinity pool and swim-up bar is
truly unique and we can’t wait for guests
to indulge in the experience and take in
their surroundings with us.”
Park Hotel Alexandra is the latest addition to the Park Hotel Group’s portfolio
of properties.
of about RM550 million and is expected to
be completed by end-2018.
Lim revealed that the project had attracted Malaysians working in Singapore and
foreign buyers from Indonesia and Japan.
“We have seen a growth of astute investors, who realise that long-term property
holdings help withstand the vagaries of a
cyclical market. They are actively looking for
high-value products. The buying sentiment
is muted but it is there.
“The extensive network of highways in
this country has opened up new areas for
development – Nusajaya is a classic example of this. So buyers are much more willing
to venture further if the product is interesting,” said Lim.
8 Conlay to launch in October
KUALA LUMPUR: KSK Land Sdn Bhd is expected to launch the first residential tower,
Tower A at its maiden development 8 Conlay
in October. The project is located on Jalan
Conlay in Kuala Lumpur.
The luxury residences will have a built-up
area of between 682 sq ft to 1,295 sq ft, and an
average selling price of RM2,700 psf. Tower
B will be launched next year, said KSK Land
managing director Joanne Kua on Tuesday
at a press conference.
Kua expects the property market to be
even more “challenging” towards the end of
the year but said 8 Conlay is being launched
in October because it has a niche market as
a branded luxury development.
She described 8 Conlay as “more than
just a stylish address” but “a sanctuary” for
residents and the “ultimate experience of
comfort and style”.
8 Conlay has a total gross development
value (GDV) of RM4 billion and sits on 1.6
ha of freehold land. Tower A has a GDV of
RM1.4 billion while Tower B, RM1.3 billion.
The project comprises Towers A and B
which offer 1,062 luxury residences in total, a hotel tower with 260 hotel suites and
300 serviced suites and 120,000 sq ft of retail
space across four storeys on the lower floors.
Singapore CBD
welcomes Park
Hotel Alexandra
tropical rainforest for 8 Conlay,” Pok said.
“Our collaboration with TROP is testimony to our vision to build a quality urban
living environment through the clever use
of greenery and landscaping.
“We want to create a vertical garden that
local residents have never seen before,”
said Kua.
KSK Land has also signed on Europe's
oldest luxury hotelier Kempinski to manage the hotel and residences. Renowned
interior designer Steve Leung will work on
8 Conlay's Tower A in association with UKbased design studio YOO Ltd while another
celebrity designer will be in charge of Tower
B, also in collaboration with YOO.
Room with a view and the infinity pool. Photos
by Park Hotel Group
There are six room types: the Superior Room, Deluxe Room, Premier
Room, Crystal Club Room, Executive
Suite and Park Suite, all fitted with the
latest modern conveniences, mini bar
and complimentary wireless access.
The suites showcase lavish touches,
including a grand living room, designer furniture and state-of-the-art sound
systems, said Tan.
Guests can enjoy the 25m infinity pool
on the seventh floor which overlooks
the green belt of the Southern Ridges,
as well as the leisure lounge and buffet
with a view at Crystal Club Lounge on
the top floor, Aqua Luna bar, The Coffee Belt, and its signature restaurant,
The Carvery.
Park Hotel Alexandra also offers four
function rooms for meetings and private events.
“Powered by the latest technology
and equipment, Botanique features operable partitions to form one large area,
perfect for ballroom-style events. Its flexible configuration accommodates up to
150 guests. Outdoor cocktail parties and
other private events can also be held at
the elevated pool deck, overlooking the
infinity pool and Aqua Luna,” said Tan.
EP
F R I DAY MAL
J U NAYSIA
E 26 , 20 1 5 • T HEED G E FINA NCIA L DA ILY
PKNS honoured as
TOP DEVELOPER
C
onstruction media group BCI Asia named Perbadanan
Kemajuan Negeri Selangor (PKNS) as one of the country’s
top developers at its 11th annual BCI Asia Awards 2015
ceremony held recently.
PKNS was among Malaysia’s top 10 to be chosen and
honoured with the title “BCI Asia Top Developers for 2015”. Together
with PKNS on the list were United Malayan Land Bhd, Sime Darby
Property Bhd and IJM Land Bhd.
According to PKNS general manager Azlan Md Alifiah, as a
corporation that has been in existence for the last 50 years, PKNS
wants to show it is capable of being a developer that enriches
people’s lives.
He says PKNS is a pioneer of property development and building townships in Malaysia. Among the townships it had a hand in
developing are Petaling Jaya, Shah Alam and Bangi. Its team is now
working on plans to develop Selangor Science Park 2 in Cyberjaya.
“I think our most important philosophy is that we have always
delivered. What we want to do now, going forward, is to enhance
the quality of our products and houses that we deliver to the public,” says Azlan.
He is proud to say that since the beginning, PKNS has maintained the essence of being a sustainable and green developer
before these became industry buzzwords.
For PKNS, sustainability and the development of green space
have always been a part of its plans since it embarked on the journey of being a developer.
Recognition as a top developer means that it has clearly taken
a big step forward towards its goal, which is to be the driving force
behind socio-economic development in Selangor.
While property development is not the be-all and end-all of its
activities, it is among the core components that serve the people
of the state.
According to Azlan, PKNS’ winning strength is putting emphasis
on meeting quality and green standards, which include the Green
Building Index (GBI) and Quality Assessment System in Construction (QLASSIC).
“We have embarked on QLASSIC and we have reached above
70%. We are now targeting 75% and above. Within the next few
years, [it will be] 80% and above. That is the kind of quality that
we are looking at.
“If [it is] QLASSIC, what the Construction Industry Development
Board (CIDB) is looking at is to have standards to go beyond 70%.
We have exceeded that now,” he observes.
Azlan (second from right) receiving the award for top developer during the 11th annual BCI Asia Awards 2015
BCI Asia assessed 10 projects done by PKNS to determine the
award. These include Taman Keruing’s medium-cost apartments,
the Kota Puteri townhouses, Suria Ixora and Evo Shopping Centre
in Bangi CBD.
Apart from that, the corporation continues to benchmark itself
and its developments against the highest standards and quality ratings. PKNS wants to ensure that its projects incorporate the latest
best practices of eco-sustainability architecture.
However, Azlan notes that it has not been an easy journey. While
the corporation has gone through several periods of growth and
decline over the last 50 years, the last 12 months were no walk in
the park. The first quarter of 2015 was tough, he says.
This was not experienced by PKNS alone but by other developers that it had joint ventures with. According to Azlan, demand,
particularly for middle and high-end properties, has been weak.
He sees affordable housing driving the construction industry over
the next three years.
“That is what we are focusing on. What we can also say, even
with the data that we have from the National Property Information
Centre (Napic), is that the issue is not just about demand.
“Oversupply, tougher credit checks on potential buyers and high
rejection rates of housing loan applications have caused many developers to delay their launches.
“The demand is now mainly on the secondary market. On the
primary market, it is the new offerings that are facing a problem of
demand. This is exacerbated by the Goods and Services Tax (GST)
and restrictions in terms of bank lending,” he says.
Azlan observes that people buying second homes usually face
few challenges in getting loans. It is the first-time homebuyers who
have difficulties but it is this segment of the population that needs
a house, he adds.
Therefore, moving forward, PKNS will continue to focus on developing affordable housing, especially for first-time homebuyers.
“This is where we are now and this is what we are going to do,”
stresses Azlan. “We are not going to forget the iconic buildings that
we want to do but our emphasis has always been that 80% of our
product offerings are affordable. We have never run away from that.”
Selangor itself has embarked on a mission to build and launch
20,000 affordable houses and it is looking to launch about 5,883
units built by PKNS this year.
PKNS’ subsidiary company Worldwide Holdings Sdn Bhd will
be launching close to 600 units. So, in total, about 6,483 units
will be launched this year within the group.
Azlan says PKNS is committed to support the state and its
programme of providing 20,000 affordable homes to be either
launched or delivered within the next three years.
“What we want to do now is to ramp up our projects despite
the fact that we are facing a difficult period in terms of the economy,” he remarks.
PKNS is also ambitious and wants to ensure that its success as a
sustainable developer continues. For one, it is looking to participate
in the green building competition. Currently under development
is PKNS’ own headquarters in Section 14, Shah Alam.
Its Laman PKNS is aiming to score a platinum rating — the
highest — on the GBI, which is designed specifically for the tropical climate (hot and humid) and Malaysia’s current social, infrastructure and economic development.
As for maintaining its place among the top developers, Azlan
says PKNS has many ongoing projects with 45 running concurrently
at present. By ramping up affordable housing, Azlan believes PKNS
will be able to keep its top developer position.
PKNS will be launching 3,000 affordable homes in Kota Puteri
in November this year. Following that, in the last quarter of the
year, it is looking to launch 2,000 affordable homes in Selangor
Science Park 2 in Cyberjaya.
“These are among the biggest in terms of projects. We are also
in the midst of construction in Datum Jelatek. We are embarking
on the PJ Sentral development for Menara PKNS — a 57-storey
iconic tower right [in the middle] of PJ Sentral.
“We are going to start developing Selangor Science Park 2
on the first 500 acres with our joint-venture partners. We will announce that soon,” Azlan says.
Normally, in a year, the corporation manages around 30 projects. However, it has worked hard to take up the challenge and
increase its productivity.
Azlan says that, hopefully, with the stepped-up pace, PKNS will
continue to perform and contribute to the people of Selangor.
BROUGHT TO YOU BY
5
EP
8
PROPERTY
| C OV E R ST O RY
FR I
PHOTOS BY PATRICK GOH
Sentul Park is one of Malaysia’s first private gated parks.
Sentul
moves up
YTL Land’s Sentul Masterplan has radically altered the Sentul skyline.
More launches and a greater range of housing products
have raised the profile of an original KL district
BY RAC H EL C H EW
A
mere 13 years ago, YTL Land
& Development Bhd (YTL
Land) kickstarted a multi-billion ringgit urban renewal project in Kuala Lumpur’s Sentul
district, with its historic prewar shophouses, temples, churches, public housing and the old Malayan Railway
train depot .
YTL Land demarcated the 294-acre Sentul into two parts – Sentul East (108 acres,
mainly commercial) and Sentul West (186
acres, mainly residential). Besides a number
of upmarket high-rise, high-end condominiums and office buildings, the ongoing urban
renewal project is also home to the Kuala
Lumpur Performing Arts Centre (KLPac)
that is located in Malaysia’s first gated park.
The redevelopment project has not only
changed Sentul’s skyline but revitalised its
real estate scene as well.
According to theedgeproperty.com data,
the average price psf of Sentul’s non-landed residential property (excluding those in
Sentul West*) rose 17.5% in the third quarter
of 2014 (3Q2014) to RM387 psf, from RM330
in 3Q2103. (See Chart 1)
However, transaction activity has been
Hong: Higher-priced new products
in the primary market have pushed
up the price level of existing
products in the secondary market.
muted, with total transactions for the 12
months to 3Q2014 plunging 41.8% to 191
units from 328 units a year ago.
One possible reason for the steep decline
in transaction volume are the measures introduced last year by Bank Negara to cool the
property market, says managing director of
PA International Property Consultants (KL)
Sdn Bhd, Jerome Hong.
Consequently, banks became more cautious in their loan criteria and tightened
property financing for homebuyers.
“Kuala Lumpur and Selangor saw overall
transactions decline although the total transacted [market] value was higher. This has been
the trend for the past few years,” says Hong.
As for Sentul, he believes its accessibility,
good availability of public transport, urban
renewal process and the entry of established
developers into the area will push its property prices up further in the near future.
Like other original settlements in KL such
as Kerinchi and Brickfields, the neighbourhood is still predominantly a low-to-medium-cost market.
Analysis by theedgeproperty.com of
transactions in the 12 months to 3Q2014
shows that more than half (56%) of residential property sales fell in the RM201
to RM400 psf range. Sales in the RM601 to
Sentul Park Apartment had the highest growth in average price psf in 3Q2014.
RM800 psf range accounted for only 8.9%
of transactions in the same period.
In absolute prices, almost three-quarters
(73.3%) of transactions in the same period were
for homes below RM400,000. In the mid-market
segment, the RM600,001 to RM700,000 price
range accounted for 15.2% of transactions.
“‘Affordable’ is the trend in Sentul’s subsales market, especially below the RM400,000
range. I see mainly local buyers from Gombak,
Selayang and Jalan Ipoh,” says senior negotiator
of Vivahomes Realty, Davis Ong. As he explains:
“Sentul is a ready secondary market; demand for affordable homes is always more
than supply, especially those close to LRT
stations. Whenever there are units listed for
sale or rent, they go real quick. Non-landed projects that are in hot demand now
are Sentul Utama and Menara Orkid; their
values have been appreciating significantly
recently. For instance, Sentul Utama, which
was priced around RM200 psf in 2011, now
sells at RM390 to RM400 psf. However, this
is still within the affordable range.”
Sentul Utama Condominium was completed at the end of 2009 and launched at
RM177,000 for a 877 sq ft unit.
According to theedgeproperty.com research, among the area’s most affordable
projects are Murni Flats (RM150 psf), Pangsapuri Fasa 3 (RM184 psf ) and Sentul Park
Apartment (RM188 psf ), which are older
low-cost developments.
Sentul Park Apartment recorded a 21.3%
rise to RM188 psf in the 12 months to 3Q2014
according to theedgeproperty.com data. The
Ong: ‘Affordable’ is the trend for the Govin: Sentul is the property hotspot freehold development is located on Jalan
Sentul and comprises six blocks of 480 units
Sentul sub-sales market now.
that could never go wrong.
with a built-up area of about 722 sq ft each.
Other projects that saw significant price
growth during the same period were Pelangi
Condominium (+21.2% to RM332 psf), Menara
Orkid (+19.3% to RM269 psf), Melur Apartment
(+18.2% to RM328 psf) and 1 Sentul (+14.4%
to RM476 psf). The price growth of these projects was strong given their low base.
While the Sentul Masterplan is the main
driver of growth in property values, PA International’s Hong believes the area’s proximity to KTM or LRT stations has also played
a role in the rising trend.
“The key selling point of these projects
is their proximity to KTM or LRT stations,”
he says, adding that the current rental yield
ranges between 3% and 5%.
Vivahome’s Ong also recommends buyers to consider units close to LRT stations,
namely the Sentul and Sentul Timur stations,
such as Melur Apartment and Mawar Apartment. “Both are just a stone’s throw away
from Sentul Timur LRT station and are still
fairly affordable. Most of the buyers here
are concerned about traffic. So a unit close
to the LRT is a major draw and the returns
are more stable,” he says.
Melur Apartment was completed in
2006 and offers 800 units spread over four
blocks. Units are currently being transacted
at around RM400 psf. Meanwhile, units of
Mawar Apartment, which is located next to
Melur Apartment, are now being transacted
at between RM350 and RM400 psf.
Hong is optimistic on the outlook for existing non-landed properties in Sentul because of planned major improvements to the
public transport network around the area.
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C OV E R ST O RY |
PROPERTY
EP
9
Source: theedgeproperty.com
Chart 1: Sentul non-landed residential average price
by average price (RM/psf)
Ongoing developments in Sentul
DEVELOPMENT
NO OF
UNITS
LAUNCH
DATE
COMPLETION
DATE
BUILT-UP
AREA (SF)
LAUNCH
PRICE (RM PSF)
SALES
RATE
Bayu Sentul
Rafflesia @ BB Sentul
The Fennel
Maxim Citilights
360
504
458
1,338
2012
2013
2013
2014
2016
2016
2016
2017
2014
2017
RM453
RM370
RM609
RM395RM439
RM558RM564
100%
100%
100%
70%
462
1,230
1,365
1,110
8561,095
9481,096
Sentul Village —
Mercury (Phase 1)
ch.
ice
ngi
ara
ent
4%
ro-
ain
ermyed
cts
ns,”
eld
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ns,
artway
till
ere
ose
rns
in
our
ted
s of
t to
ted
exbethe
ea.
The Capers is one of several projects in the area
connected by LRT.
He also believes the new developments in
Sentul will stand it in good stead with prospective buyers and investors.
“The entry of developers such as UOA Group
into the locality [besides the YTL Group] will
further improve the product offerings and
raise the profile of purchasers and investors.
“Higher-priced new products in the primary market, such as The Fennel by YTL
Land and Bayu Sentul by Melati Ehsan
Group, as well as upcoming products such
as Block Mercury @ Sentul Village by UOA
Development Bhd and Maxim Citilights
(formerly known as Sentul Prime) by Meridian Maxim Sdn Bhd and Platinum Victory
Development Sdn Bhd, have pushed up the
price level of existing products in the secondary market,” Hong says.
Oversupply a concern
As at February, 2015, the asking rental rates
for the older developments in Sentul ranged
between RM1.40 and RM2 psf, according to
theedgeproperty.com data, while rental rates
for the condominiums under the Sentul Mas-
terplan range between RM2 and RM2.50 psf.
However, the high volume in the incoming
supply of high-end units in Sentul could mean
that rental returns from higher-end developments are likely to be subdued.
The existing high-rise residences under
the Sentul Masterplan are The Saffron (467
units), The Tamarind (498 units), The Maple
(318 units) and the eye-catching “crooked”
building, The Capers (338 condo units and
128 low-rise suites).
The Capers is the third residential development to be launched in Sentul East,
after The Tamarind and The Saffron. (The
Maple is in Sentul West.) The development
was sold out within two days of its preview
in 2011, despite its launch price of RM700
psf being one of the highest in the area. Its
average current price psf is RM800.
The latest launch under the Sentul Masterplan’s series of high-end, high-rise residences
is another interesting-looking condominium
called The Fennel, launched in 2013 and due
for completion next year. The freehold development comprises four blocks of 916 units.
GDS Properties principal realtor Govindasamy Balaguru warns of a possible oversupply of high-end high rise residences in
Sentul. “There are so many luxury products
being pumped into the market and sold
within a second, but can you see how low
the occupancy is?”
He says new projects would offer capital
appreciation, but “low or no returns” of rental
in some instances due to oversupply. On the
other hand, existing affordable secondary
properties may give better capital appreciation and yields “for astute investors who
exercise prudence and investment strategy”.
Govin, however, believes Sentul is a
property hotspot and one “could never go
wrong” investing there in the long-term,
but it needs more and better infrastructure such as public transport, given the
increase in the number pf high-rises and
higher density projects in the area.
100%
Source: PA International Property Consultants (KL) Sdn Bhd
The transformation
Keretapi Tanah Melayu Bhd (KTM) built its first train depot in Sentul in 1960, which
drew many Indian workers to stay in the area. In 2002, YTL Corporation Bhd announced its acquisition of Taiping Consolidated Sdn Bhd, which held large chunks
of land in Sentul. Taiping Consolidated was renamed YTL Land and Development
the same year, and embarked on a massive redevelopment called the Sentul Masterplan. It was the 2008 FIABCI-International Prix D’Excellence Award runner-up in
the Master Plan category.
The Sentul Masterplan separates Sentul into two halves: Sentul West and Sentul East.
The centrepiece of Sentul West is a 35-acre private gated park, inspired by New York’s
Central Park and London’s Hyde Park. Sentul East aims to be Malaysia’s answer to
New York’s Soho area.
Home to performing arts
The KL Performing Arts Centre (KLPac) in Sentul West is a city landmark. It was designed to function as the locus for performing arts in Malaysia.
KLPac was formerly the 100-year-old KTM warehouse. In the 1800s, the building
was a wood-crafting workshop and sawmill, and later became the region’s most important railway depot and workshop. It was bombed at the tail-end of the Second
World War but soon rebuilt and converted into a makeshift golf clubhouse in the late
1960s before being abandoned in the early 1990s.
In May 2004, Yayasan Budi Penyayang Malaysia, YTL Corp and The Actors Studio
Malaysia joined hands to redevelop the abandoned place into a performing arts centre.
The beautiful colonial red brick facade was retained and a glass atrium was added
to the historic building. KLPac opened its doors to the public in May 2005.
theedgeproperty.com’s analysis on Sentul
does not include non-landed residences in
Sentul West. Data on properties in Sentul West
were included in the analysis for Jalan Ipoh.
KLPac is a redevelopment of a warehouse once owned by KTM.
EP
10
PROPERTY
| M A R K E T WAT C H
Go to theedgeproperty.com for more listings
FOR SALE [in Sentul East, Kuala Lumpur]
of Propleague Realty Sdn Bhd
Tel: (010) 225 7565
The Saffron
Type: Condominium/
serviced residence
Tenure: Freehold
Asking price: RM778,000
Built-up area: 1,087 sq ft
Bedroom(s): 3
Bathroom(s): 2
Description: Well-kept, interiordesigned unit in move-in condition
on a high floor. Panoramic
view of KLCC. Fittings include
air-conditioners, water heater,
living room chandelier, built-in
bedroom wardrobes and kitchen
cabinet. Two parking bays.
Agent/negotiator: CK Lim
of GS Realty Sdn Bhd
Tel: (016) 238 3217
The Capers
Type: Condominium/
serviced residence
Tenure: Freehold
Asking price: RM1,100,000
Bedroom(s): 3 + 1
Bathroom(s): 3
Description: Partly furnished, with
fans, lighting, air-conditioners,
water heater and kitchen cabinet.
Two parking bays; KLCC view. A
15-minute drive from city centre.
KTM Komuter and LRT stations
within walking distance.
Agent/negotiator: Oscar
Tan of Focus Properties
Tel: (018) 351 0018
Website: http://oscartan.iagent.my/
The Capers
Type: Condominium/
serviced residence
Tenure: Freehold
Bedroom(s): 2
Bathroom(s): 2
Description: The uniquely designed
Capers by YTL Land & Development
is situated in the heart of Sentul
East, a 15-minute drive from
KLCC. KTM Komuter and LRT
stations within walking distance.
Agent/negotiator: Belle
Low of Hartamas Real
Estate (OUG) Sdn Bhd
Tel: (012) 503 5111
The Capers
Type: Condominium/
serviced residence
Tenure: Freehold
Bedroom(s): 3
Bathroom(s): 4
Description: The Capers is situated
at the heart of Sentul East, with
The Tamarind and The Saffron.
a 15-minute drive from KLCC.
This unit has a maid’s room, airconditioning, bathtub, intercom,
water heater and a city view.
Agent/negotiator: CK Chong of
Huttons OneWorld Real Estate Group
Tel: (012) 260 6662
Website: www.
malaysianewlaunchproperty.com
The Capers
Type: Condominium/
serviced residence
Tenure: Freehold
Bedroom(s): 3
Bathroom(s): 4
Description: Comes with airconditioning, bathtub and intercom.
Agent/negotiator: Evon Heng
The Saffron
Type: Condominium/
serviced residence
Tenure: Freehold
Bedroom(s): 3
FOR RENT [in Sentul East, Kuala Lumpur]
Bathroom(s): 2
Description: The Saffron in
Sentul East is one of the most
well-received residential projects
by YTL Land & Development in
Sentul. A 15-minute drive from
the city centre, and potentially
the most affordable luxury
condominium in Kuala Lumpur.
Partly furnished mid-floor unit
with views of KLCC and KL Tower.
Comes with two parking bays.
Agent/negotiator:
Elaine Kow of Reapfield
Properties(Puchong) Sdn Bhd
Tel: (017) 225 0683 / (012) 266 9231
Email: elainekow@reapfield.com
The Saffron
Type: Condominium/
serviced residence
Tenure: Freehold
Asking rent: RM2,700
Bedroom(s): 3
Bathroom(s): 2
Description: Unit is being
refurbished. Fully furnished with
built-in kitchen cabinet that comes
with hood and hob, beds, cupboards,
sofa, dining table and chairs,
curtains, fans, air conditioners,
twin-door refrigerator, etc. Bright,
with good ventilation and good
views. Suitable for families/
professionals. Near LRT station.
Agent/negotiator: Mary Tay
of Hosanna Properties
Website: www.
hosannaproperties.com
Tel: (012) 382 2618
The Saffron
The Saffron
Type: Condominium/
serviced residence
Tenure: Freehold
Bedroom(s): 3
Bathroom(s): 2
Description: The Saffron has a
barbecue area, basketball court,
wheelchair-friendly slopes,
cafeteria, gymnasium, jogging
track, mini market, playground,
and squash and tennis courts,
among other facilities.
There is a 25m lap pool next
to a reflection pool and yoga
lawn, a leisure pool with
cabanas as well as a waterspray pool for the young ones.
Agent/negotiator: Sean
Seng of Hartamas Real
Estate (Malaysia) Sdn Bhd
Tel: (012) 227 9807
Type: Condominium/
serviced residence
Tenure: Freehold
Bedroom(s): 2
Bathroom(s): 2
Description: Fully furnished,
with air-conditioning.
Agent/negotiator: Prema
Anne Aethirajun of Peninsular
Property Agent
Tel: ( 012) 942 6946
Email: premaanne.
[email protected]
The Capers
Type: Condominium/
serviced residence
Tenure: Freehold
Built-up area: 999 sq ft
Bedroom(s): 2
Bathroom(s): 3
Description: Partly furnished lowrise unit with big master bedroom
and balcony, air-conditioners,
cooker hob, hood and water heater.
Agent/negotiator: Evon Heng
of Propleague Realty Sdn Bhd
Tel: (010) 225 7565
The Capers
The Saffron
Type: Condominium/
serviced residence
Tenure: Freehold
Bedroom(s): 3 + 1
Bathroom(s): 3
Description: Centrally located,
freehold strata-titled property.
Connects to KL Sentral via Sentul
Link. 24/7 security. Semi-furnished
with air-conditioning, cooker
hob/hood and water heater.
City view. Two parking bays.
Agent/negotiator: Kenneth Chong
of Peninsular Property Agent
Tel: (012) 333 7598
Email: kenneth@
peninsularproperty.com
Website: www.
ppakualalumpur.com
Type: Condominium/
serviced residence
Tenure: Freehold
Built-up area: 999 sq ft
Bedroom(s): 2
Bathroom(s): 2
Description: The Capers in Sentul
East comprises two 40-storey
towers of duplex townhouse-style
units. It is the fourth development
after the highly successful The
Maple, The Tamarind and The
Saffron, all part of a city renewal
project. KTM Komuter and LRT
stations within walking distance.
Agent/negotiator: Belle Low of
Hartamas Real Estate (OUG)
Tel: (012) 503 5111
1 Sentul
Type: Condominium/
serviced residence
Tenure: Freehold
Bedroom(s): 3
Bathroom(s): 2
Description: Equipped with a
recreational deck, swimming pool,
wading pool, gym, sauna, nursery,
multi-purpose hall, children’s
playground, play school, launderette,
etc; 24-hour security with card
access and intercom system.
Agent/ negotiator: Amarat
Gill Gill of Metro Homes KL
Tel: (019) 263 6200
The Tamarind
Type: Condominium/
serviced residence
Tenure: Freehold
Bedroom(s): 3
Bathroom(s): 3
Description: The Tamarind is
YTL’s debut residential property
in Sentul East comprising two
31-storey towers of 498 units and
two low-rise blocks with a choice
of a view of scenic Sentul Park or
a panorama of the city. Each unit
is a corner unit and comes with
a maid’s room. Facilities include
infinity pool, lap pool with jacuzzi,
jogging track, barbecue area, gym
with a view, tennis court, security
system with intercom and CCTV
around the condominium.
Agent/negotiator: Patrick Ooi of
Hartamas Real Estate (M) Sdn Bhd
Tel: (012) 383 9157
The Tamarind
Type: Condominium/
serviced residence
Tenure: Freehold
Built-up: 1,115 sq ft
Bedroom(s): 3
Bathroom(s): 2
Description: Facilities at The
Tamarind include a half-Olympicsize infinity lap pool with jacuzzi,
barbecue area outside a function
room, gym with a view of the pool,
tennis court, children’s pool area,
children’s playground with open
lawn, 24-hr security with intercom
system, creche facility on pool
deck, nursery on ground floor,
children’s bicycle track on pool
deck, launderette and convenience
store, and 1.5m-wide walkways.
Agent/negotiator: Sean
Seng of Hartamas Real Estate
(Malaysia) Sdn Bhd
Tel: (012) 227 9807
1 Sentul
Type: Condominium/
serviced residence
Bedroom(s): 3
Bathroom(s): 2
Description: Fully furnished unit in
a luxury condo along Jalan Sentul.
Facilities include a recreational
deck with a swimming pool, minitheatre, sauna, gymnasium, nursery,
multi-purpose hall, reading room,
WiFi access and a snack bar.
The condo enjoys access
to major highways such as
DUKE, MRR2, Mahameru and
Sentul Link. Also near Jalan
Ipoh and Jalan Tun Razak.
Agent/negotiator: Daniel
of Chester Properties
Tel: (012) 298 6269
EP
12
PROPERTY
| F E AT U R E
FR I
The Row will see a readaptation of 22 shophouses
along Jalan Doraisamy in Kuala Lumpur into a
mixed-use development. Photo by Sam Fong
Co
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eve
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Bringing life back to The Row
Combining vintage charm with a fresh design-conscious functionality
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BY C H A I Y EE HOONG
T
wenty-two 1940s shophouses
along Jalan Doraisamy in Kuala
Lumpur that had been converted into the Asian Heritage Row
of nightspots in the early 2000s,
are again being readapted. This
time, The Row, as the new incarnation is
called, will be a 74,000 sq ft mixed-use commercial development comprising retail shops,
galleries, cafes, bars, restaurants and offices.
The urban regeneration project is being
undertaken by first-time niche property developer Urbanspace Sdn Bhd, in collaboration with Singapore-based creative development consultancy firm Pocket Projects and
home-grown architecture firm Studio Bikin.
The plan is to transform the street “into
a mixed-use neighbourhood for day and
night, and away from late night bars and
clubs,” said Pocket Projects director Karen
Tan at the launch of the project’s first phase
on June 16, which was officiated by Kuala
Lumpur mayor Tan Sri Ahmad Phesal Talib.
“When we spoke to the local people, many
of them still have fond memories of this place
and because of that many are looking forward to its reinvention,” Tan said.
“The Row was once vibrant and we hope to
bring it back to life, recreating an icon in KL.”
The new shophouses will no longer be
a series of long and narrow terraced shops
by
wil
pu
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as
intr
bal
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Tan: [Our] architectural approach [focuses] on
adaptive reuse instead of tearing everything down
and building from scratch. Photo by Urbanspace
but feature different unit configurations and
sizes in two blocks.
The North block will house 12 units, and
the South block, 10. The project, to be completed in three phases, will see around 30
tenantable units of different sizes.
Phase one of the project saw the completion of five shophouses in the North block,
which includes a 3,300 sq ft event space
called Slate that was unveiled at the launch.
Ghaus: KL is ready for more expansions that
culminate with creative adaptations of existing
buildings. Photo by Urbanspace
Slate is built for the burgeoning creative
community in the Klang Valley. Encompassing a 2,800 sq ft ground floor area and a 500
sq ft mezzanine, the fully air-conditioned
space has double-height ceilings suitable
for performances, film screenings, talks, exhibitions and parties. Slate is open for lease
for both public and private events and has
been installed with an AV system.
The five refurbished shophouses in phase
Chan: We target the creative community and an
interesting mix of independent and complementary
businesses. Photo by Sam Fong
one comprise two 1,500 sq ft F&B units,
three office units measuring 2,400 sq ft,
3,800 sq ft and 4,900 sq ft, and an open-air
rooftop space suitable for an office terrace
or for F&B.
The North block’s remaining shophouses
are expected to be open by year-end.
Meanwhile, the South block will be completed in early next year and offer a mix of
retail, F&B and offices.
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F E AT U R E |
PROPERTY
EP
13
PHOTOS BY WWW.PHILIPP-ALDRUP.COM
04
01
y
its,
ft,
air
ace
ses
mx of
Communal spaces
Without completely discarding the old, The
Row’s design philosophy is based on adaptive reuse.
“[Our] architectural approach [focuses] on adaptive reuse instead of tearing
everything down and building from scratch.
To emphasise the old and new, we’ve kept
the old windows, tiles and floors, and new
tenants can introduce new furniture when
they move in,” said Tan.
As the shophouses have been modified
by tenants over the years, Tan said The Row
will make the best of what they are now.
“We have incorporated some of the old
concepts into our new design, such as picture windows to bring in light and that allow
you to see the greenery outside. We have also
kept double-volume spaces and quirky details like round windows,” Tan said.
Much focus has been given to communal
spaces, as reflected in the landscaped front
plaza, where the segregated front yards of the
past are designed as a high street reminiscent of a five-foot way, encouraging visitors
to explore and linger in the area.
“We feel it is important to introduce new
public spaces for people to enjoy and to facilitate interaction. [In] the front plaza, we
introduced stretches the whole length of the
street. We have also converted a little alleyway into a beer garden shaded by old trees,”
Tan said. She added that Slate also doubles
as a public space by day.
Pockets of green and light have also been
introduced in the form of internal courtyards,
balconies and roof terraces.
“We’ve kept the old trees in front of the shops
and planted new creepers, as well as introducing natural light into the spaces,” she said.
“There is a shop where whoever was
using it before invested a lot in potted
plants, so we have kept this greenery in
the new project.”
According to Tan, phase one is a prelude
to what is to come. Phases two and three
will offer more common spaces, such as the
completion of the front plaza that will run
across the entire row. There are also plans
to open up the back lanes of The Row to become common spaces.
as League of Captains (a multi-label urban
lifestyle store and a spin-off to the localBuilding a community of tenants
ly owned brand Pestle & Mortar), The Co.
The first five tenants of The Row offer an array (co-working space for the start-up comof local independent brands that comple- munity), Butter + Beans café, Mojo bar and
ment the project’s aspirational tone, such beer garden, and a contemporary Peranakan
05
01. The landscaped front plaza stretches
the whole length of the street.
Photo by Sam Fong
02. The 3,300 sq ft events space Slate that was
unveiled at the launch.
03. The interiors of contemporary
Peranakan restaurant LimaPulo.
Photo by Sam Fong
04. The Row’s tenant mix includes multi-label
urban lifestyle store League of Captains.
02
03
restaurant LimaPulo.
“We have eschewed the standard commercial offerings. Instead, we target the creative community and an interesting mix of
independent and complementary businesses,” said Urbanspace director Chan Chia Lin.
05. The Butter + Beans café is one of The
Row’s first five tenants.
According to Tan, phases two and three
are seeing strong tenant interest. She reveals
that future tenants will include Timbre, a live
music bar from Singapore, Wheel Love, an
urban skate shop from KL, as well as a local
wine and tapas bar.
Another director of Urbanspace Ghaus
Ismail said, “KL is ready for more expansions
that culminate with creative adaptations of
existing buildings [that are] a refreshing alternative to the ubiquitous shiny high-rises
that have come to characterise KL.”
Urbanspace was formed two years ago
specifically to acquire the 22 pre-war shophouses. The company’s investors are from
the fast-moving consumer goods, coal and
property sectors. The Row is the maiden
project of Urbanspace and the company is
looking to develop properties in other parts of
the country. The other directors of the company are William Ng and Wang Shang Ying.
Specialising in adaptive reuse of old
buildings, Pocket Projects is known for its
work in Singapore, namely the Lorong 24A
Shophouse Series project in Geylang and
The Projector, a multi-use space reinvented
from a rundown 1970s cinema.
Meanwhile, the architecture firm Studio
Bikin has made its name through projects
for Sekeping Kong Heng in Ipoh, and Hit &
Mrs restaurant and bar in Bangsar.
EP
14
PROPERTY
| DEALMAKERS
The exuberance and wisdom of youth
Jonathan Kuek is the Gen Z agent showing them how it’s done
BY L I M KI A N WEI
R
eal estate agents should be
consultants, not salesmen, says
Reapfield Properties Sdn Bhd
real estate negotiator Jonathan
Kuek.
The confident, frankly
speaking young man inspires trust. His team
leader, Reapfield head of sales T K Indran
describes the 23-year-old as a determined,
disciplined and honest person.
Kuek began his career in real estate with
Reapfield just last August and got right down
to work, closing 28 deals from September to
January this year. He focused on Sunsuria
Bhd’s Suria Residence serviced apartment
project in the primary market. Kuek says
half of his buyers were first-time homeowners, while the others were investors.
He advises first-timers to purchase small
apartment units they can sell later, when
their value appreciates, so they can upgrade
to a bigger home.
“There are many couples [with a baby]
who come to me looking for property. But
they want to buy the biggest one, which is
about 1,200 sq ft and is very expensive, [but]
they cannot afford to service [the loans].
So I advise them to buy a smaller unit first.
When their children are older, the value of
their property would probably have gone
up, and they can sell it off to buy a bigger
house,” Kuek says.
The hard-working agent took the time to
understand the products he markets and his
clients’ needs so he could advise them well.
Just how methodical is he?
“Being knowledgeable is very important;
you study locations to fully understand your
product [and] sell what people in the neighbourhood like to do. I noticed people in Bukit
Jelutong like to go jogging, so I went jogging
there as well because I wanted to get into
the environment of Bukit Jelutong, and that’s
how I sell; I get a feel for what the residents
there are doing. This is very important; for
you to sell a project and sell lots of them,
you have to be fully focused on it. You can’t
focus on different areas and different projects at the same time, or you will sell fewer
products than you could have,” Kuek says.
He adds that one must understand clients
to be able to advise them accordingly, “If you
only sell but don’t know how to consult and
give advice, then you are a salesman. When
I market to my buyers, I try to understand
their needs.”
Kuek is currently focused on condominiums and serviced apartments in
the primary and sub-sale property
market, including those in Icon
Residence, Mont’Kiara; Icon City,
Petaling Jaya; D’Sara Sentral, Sungai Buloh (all by Mah Sing Group
Bhd); and Paramount Utropolis
@ Glenmarie (Paramount Corp
Bhd) in Shah Alam.
A veteran at learning
Kuek wasn’t born
with a silver spoon
in his mouth. His father passed away
when he was nine
and his mother
had to look after four children while
working as
a babysitter. Kuek,
Kuek: Money important, but it’s not your priority... Photos by Mohd Izwan Mohd Nazam/The Edge Property
being the third child, started working parttime while in secondary school.
“I started working part-time when I was
13; [first] as a dim sum worker, then as a
promoter when I was 15. But I was fired by
the management because I was under-age,”
says Kuek. He later delivered cement and gas
cylinders part-time while studying.
He enjoyed working and learning on the
job, but it took a toll on his studies. “During
high school, I lost focus on my studies, so
my results were very bad… I failed English
(for SPM) and I didn’t know how to spell
‘watermelon’ then,” he recalls.
‘I believe that property
is the best investment to
make, and I like to invest
in the future...’
A benefactor emerged in the
form of an aunt, who gave him
RM5,000 to further his studies.
So he decided to take an English
course at the British Council. “I
have never looked back since,”
he says. Armed with a new language, he went to KDU University
College for a diploma in Business
Administration.
“That RM5,000 was the greatest investment I have ever
made in my life. The
best thing to invest
in first is yourself.
I took English because all of the
subjects in university are in
English. During my college days,
I studied
really hard and received a National Higher
Education Fund loan. I had distinctions in
my subjects but I didn’t take up a degree
[course],” Kuek says.
He joined Reapfield instead. Why? “I want
to learn about investing and to become an
investor and entrepreneur in future. Tertiary education doesn’t teach people how
to make investments and buy stocks.” Besides, he didn’t want to burden his family
financially by furthering his studies. So he
bought books on investing and self-studied.
“I want to be an entrepreneur in future,”
he reiterates. “But in order to be a successful
entrepreneur, you need a lot of skills, such
as leadership, communication and negotiation skills. I don’t think colleges will teach
me these and I don’t think many lecturers
know how to invest in properties. That’s why
I decided to join the real estate industry to
learn how to invest in property.”
Kuek rarely used to make time for family. He used to work even longer hours until,
one day, “during my fourth or fifth month
in real estate, I didn’t rest well and I kept
working. One day, while having lunch with
my leader (Indran), I suddenly felt a pain
in my chest and felt like I couldn’t breathe.
He then told me to stop working and go for
a medical check-up. My cholesterol levels
were very high,” he says.
Indran has been one of the biggest influences in his real estate career so far.
“He made sure that every single step that
I [took] was correct; he made sure I have
time for my family. I worked 14 to 15 hours
a day when I first joined. After a roadshow,
I would go home and work because of my
passion for it. I had no time for my mother and girlfriend. Mr Indran came into my
life and stopped me [from burning out].
He said, ‘Money is important but you must
have time for your family,’” Kuek says. He
describes his relationship with Indran as
akin to father and son.
Indran says Kuek has room for improvement because he is yet to be exposed to
different property sectors, such as commercial, industrial, warehousing and land. He
believes Kuek is on the path to becoming a
top real estate agent.
“He will be among the top 10 dealers
in the company. His achievements in less
than a year of being a negotiator have been
remarkable. He is a go-getter. We can guide
another candidate the same way, but whether they run or sit with it are two different
things... I believe he will be a good future
leader for Reapfield and a future entrepreneur,” Indran says.
The uses of ambition
Kuek aims to be a property investor himself and hopes to own at least five pieces of
property by the time he is 30.
“I believe that property is the best investment to make, and I like to invest in the
future... Let’s say my children are in Form 1
when I buy properties. And when they want
to go overseas [to study], I sell off the properties. That’s why I think that real estate is
very good.” He believes property prices in
Malaysia will continue to rise in the next
10 years.
Kuek is confident that there will be demand for property in both good and bad
times. “If the property market crashes, agents
will be very busy because the listings will
be under-priced. Definitely in good or bad
times, there will be investors who will buy
properties.”
What does he have to say to those now
inspired to become an estate agent? “I believe that when you want to join [an agency] as a new estate agent — before you step
in — there are a lot of negative things [said
about the profession]. You close your ears
and don’t give up and don’t care about all
the negative things said.”
What about the million-dollar question:
what’s the secret of his success? “Money is
important, but it’s not your priority. Newcomers have to learn constantly. And, don’t
give up.”
HOME IDEAS |
PROPERTY
EP
15
PHOTOS BY RAYMOND LEE
01
05
02
06
03
04
Touch of the East
The Asian style still the rage the world over
T
he serenity of Asian-style, particularly ‘Oriental’ interiors, has
always been popular among design-savvy homemakers. Coming back to a tranquil abode is
always welcome respite from the
cut and thrust of so-called global lifestyles.
Mind you, the fascination for all things
Oriental started hundreds of years ago when
Western merchants travelled to the Far East
seeking prized spices. They often also brought
home many exotic finds, such as silk drapes,
hand-woven rugs, ceramics, furniture and
even plant species. “Exotic Asia” continues
to inspire contemporary designers to create
some of the more beautiful elements for the
modern home.
Creating an Asian-inspired room is much
more than just adding a few distinctive decorative objects. It takes care, precision and a clear
thought process to create that harmony and
balance. Around the world today, Asian de-
BY RAYMOND LEE
sign elements have become a fusion of several
different styles that range from the Japanese
and Chinese to the Indian. Tribal influences
from faraway islands are also de rigeuer in
many stylish homes. More importantly, contemporary pieces of furniture by European
brands such as Poltrona Frau, Minotti or B&B
Italia mix beautifully with these Asian pieces.
Spotted this season are brands such as
Designers Guild and Osborne & Little who
have collaborated with designers Matthew
Williamson and Nina Campbell to create
inspired home collections.
A popular theme seen in many Oriental-flavoured homes are the blue and white
Chinese ceramic plates that made an appearance on the Andrew Martin wallpa-
per I spotted at last year’s Decorex show in
London. What’s more, if you have not been
so fortunate as to inherit the original Ming
dynasty plates from your grandparents, you
can now hang wonderful photographic prints
of these rare plates on your walls.
Drama reigns supreme when you have an
exotic-design wallpaper by Osborne & Little
featuring the peacock feather motif set next
to a mid-century teakwood sideboard and
a glass table lamp with a silky-brown paper
shade. Very glamorous indeed!
So go on and have fun spicing up your
home with today’s many exciting Asian-inspired design elements. Start with grandma’s
crockery cupboard!
Raymond Lee is an interior designer and founder of
Xceptional Interiors. He can be contacted at Email:
[email protected] or check out
www.xceptional-interiors.com
07
01. Nina Campbell showing off the “Cathay” range of
wallpapers and fabrics.
02. Place a few Chinese vases in a white glaze for that
Oriental touch. Photo by Chris Leong
03. Handy baskets encrusted with shells add texture
to the table-top setting. Photo by Chris Leong
04. Malaysian artist Kelvin Chap’s artwork, inspired by
the tribal motifs of East Malaysia, complements
the simple elm wood Chinese cabinet in the foyer
of this apartment. Photo by Chris Leong
05. Photographic print of an antique Chinese blue and
white plate makes an elegant statement.
06. “Peacock” wallpaper designed by Matthew
Williamson for Osborne & Little.
07. Andrew Martin wallpaper available at Janine BSC.

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