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This digi
FBM KLCI 1761.25
5.58
KLCI FUTURES 1751.00
6.50
STI 3365.15
0.96
RM/USD 3.4950
CPO RM2267.00
18.00
OIL US$57.55
0.35
PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.50
FRIDAY JANUARY 2, 2015 ISSUE 1871/2015
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
www.theedgemarkets.com
8 HOME BUSINESS
New year, old spats
10 H O M E B U S I N E S S
Big task ahead for
aviation sector
Kinsteel’s Pheng
and sons quit
Perwaja board
15 H O M E
A sad New Year’s Day
as people mourn
flight QZ8501
16 H O M E
Twitter abuzz with
‘missing Rosmah’
Best cars to start 2015
18 F O C U S
GOLD US$1184.10
16.30
2
FR I DAY JAN UARY 2 , 2 0 1 5 • TH EEDGE FI N AN C I AL DAI LY
For breaking news updates go to
ON EDGE T V
MoF orders stop to
foreign asset buying
Bid to cease outflow of money
Malaysia
expected to
produce 20
million tonnes
of crude palm
oil in 2015
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BY THE M ALAYS I AN I NS I DE R
KUALA LUMPUR: In a bid to stop
the outflow of money, the government has directed all government-owned companies, statutory bodies and subsidiaries to stop
buying foreign assets.
The circular dated Dec 26, 2014
sighted by The Malaysian Insider
was signed by the secretary-general
of the Ministry of Finance (MoF)
Tan Sri Irwan Siregar and is a policy
response to the 40% fall in oil price
and the recent depreciation of the
ringgit that triggered the outflow
of funds, which is worrisome for
Malaysia’s economy.
“After taking into consideration
the uncertain world economic outlook in 2015, the government ... is of
the opinion that domestic consumption must be increased to generate
and support the country’s economy,”
according to the Treasury circular.
“In relation to that, and to support the government’s efforts to
increase domestic consumption,
government-owned and linked companies, statutory bodies and subsidiaries must give priority to domestic
investments and immediately cease
acquiring foreign assets to reduce the
outflow of funds,” stated the circular .
The Treasury order came amid
criticism as to why Putrajaya has
so far refused to revise its Budget
2015 projections to account for
low oil prices and a weak ringgit.
The budget tabled last October was
prepared on the assumption that oil
prices would hover around US$100
(RM350) to US$105 a barrel.
Global oil prices had fallen off
their highs of US$110 a barrel in mid2014 to below US$60 a barrel currently, putting pressure on revenues of
several oil producers, including Malaysia, where oil revenue accounts for
close to 40% of government revenue.
Other oil-exporting countries
have revised their 2015 budgets.
On Dec 24, Indonesia’s Finance
Minister Bambang Bordjonegoro
said President Joko Widodo will
present a revised budget this month
that will now assume oil at US$70 a
barrel, instead of US$105 a barrel
when it was first tabled.
Saudi Arabia, the world’s biggest
oil exporter, had on Dec 26 tabled
a 2015 budget with a staggering
deficit of US$38.6 billion, based
on an oil price of US$60 a barrel.
Government officials have in
recent weeks insisted that the 2015
budget targets are still achievable,
triggering criticisms that Putrajaya
was in denial. And now, with the
worst floods since 1972 likely to cost
it billions in unplanned spending,
analysts are even more convinced
that the government has to present
a revised Budget 2015.
Not showing a new plan of action could exert further selling of
the Malaysian ringgit, which had
fallen from 3.28 to the US dollar
at the start of October, to close to
3.50. The ringgit was the worst- performing emerging market currency
against the US dollar in 2014.
Malaysian statutory bodies and
agencies such as the Employees
Provident Fund (EPF) and Tabung
Haji (haj fund) have made huge
property investments over the past
few years, particularly in Europe.
Malaysian government-linked
companies or those owned by government-linked funds have also
increased their exposure abroad
despite a property boom in Malaysia, particularly in Kuala Lumpur,
Johor’s Iskandar region and Penang.
Felda Investment Corp had in
the past 12 months acquired two
hotel assets in Britain that cost £158
million (RM870 million).
Then there is the 100% MoFowned 1Malaysia Development
Bhd (1MDB) which has accumulated US dollar debts of close to
US$7 billion. Just servicing the
debts alone will cost an outflow
of RM1.5 billion a year.
It is undestood that national oil
company Petroliam Nasional Bhd
(Petronas), which has committed
to spending RM50 billion on the
refinery and petrochemical integrated development (Rapid) project in Johor, has asked its various
units to revise their budget for 2015.
Petronas, which contributes to
almost 40% of the national coffers,
had urged the government to “tighten its belt” as the national oil firm
was facing the possibility of lower
earnings from falling crude oil prices.
Petronas group chief executive
officer Tan Sri Shamsul Azhar Abbas said last November that the
price range of Brent crude oil at
US$70 to US$75 may be a “new era”,
until the end of 2015, if not for the
next two years.
Based on new oil price assumptions, Shamsul said Petronas was
looking to cut as much as 15%
to 20% of its capital expenditure
(capex) budget for next year.
Shamsul also called on the government to be prudent in its spending as the state oil firm has to safeguard its growth plans.
Putrajaya has committed to continue providing direct cash aid or
Bantuan Rakyat 1Malaysia (BR1M)
in 2015 at a higher amount than the
previous two times.
But it hopes to get RM23.2 billion
from the introduction of the goods
and service Tax (GST) from April
1 and savings from stopping fuel
subsidies last November, which was
said to cost RM24 billion last year.
Malaysia’s current account surplus has been shrinking recently because of the strong outflow of capital
attributed to repatriation of profits
and dividends by foreigners and investments overseas by Malaysians.
The foreign reserves of Bank Negara Malaysia fell 11% in 2014 or
RM46.66 billion to RM394.1 billion.
Noorul Ariffin
survives
assassination
attempt
BY V SHANKAR GANESH & T VIGNESH
PETALING JAYA:
The failed assassination attempt
on Malaysian
Athletic Federation (MAF)
vice-president
Datuk Noorul
Ariffin Abdul
Majeed (pic) on
New Year’s Eve
could be linked to his involvement
in sports associations.
It is learnt that Noorul Ariffin’s
involvement in the sports fraternity has caused some uneasiness
among several quarters, and that
he had received a letter recently
demanding that he resign from
his positions in the associations.
Noorul Ariffin has also been the
president of the Johor Amateur
Athletics Federation since 2012.
In the Wednesday night incident, 49-year-old Noorul Ariffin is
believed to have been shot at least
four times by two men on a motorcycle at his Bandar Rahman Putra
house in Sungai Buloh.
Two of the bullets struck his leg
while the rest hit his car.
The assailants sped off when
Noorul Ariffin’s daughter screamed
for help after the shooting.
He was rushed to the Sungai
Buloh Hospital for treatment and
was later transferred to Universiti
Malaya Medical Centre.
Although police have yet to establish the motive, it is believed that his
sports involvement was one of the
key areas of police investigations.
When contacted, MAF president
Datuk Karim Ibrahim said Noorul
Ariffin was in stable condition and
had spoken to the police about the
shooting.
Karim said he had known Noorul
Ariffin for about 30 years since they
started running together for the
Light Athletic Club in the 1980s.
Noorul Ariffin was a national
3,000m steeplechase runner who
had represented Malaysia in several SEA Games.
He is also believed to own several restaurants.
Fernandes to escort family to Palembang
BY LOOI SUE -C HE RN
SURABAYA: The body of one flight
attendant of Indonesia AirAsia’s
flight QZ8501 has been recovered,
and if her remains are confirmed
to be Khairunnisa Haidar Fauzie
(pic), the low-cost carrier’s chief
Tan Sri Tony Fernandes will escort
her family home to Palembang.
The Malaysian Insider reported
that Fernandes, who is AirAsia group
chief executive officer, said this yesterday in his tweet: “If our beautiful and wonderful crew [member]
is identified, we will go from Surabaya to Palembang with her parents.
Heartbreaking, soul-destroying (sic).”
He may be making the trip very soon,
as Indonesian news
portal Detik.com reported yesterday afternoon that three of
the bodies recovered
since Tuesday had
been identified. This
is based on identification found on them.
Khairunnisa, 22, was one of
them. The other two named in the
Detik.com report were Hayati Lutfiah Hamid from Tegalsari in Surabaya, and Kevin Alexander Soetjipto
from Malang City, who was a university student in Australia.
A Reuters report
said heavy seas had
stopped divers reaching the possible wreck
of an Indonesia AirAsia jet off Borneo yesterday,and an aviation
official said it could
be a week before the
black box flight recorders are found.
Nine bodies have so far been recovered from the Airbus A320-200.
The bodies were brought in numbered coffins to Surabaya where
relatives gathered to identify them.
Meanwhile, an AFP report reported that the pilot may have man-
aged to make an emergency water
landing, only for the plane to be
overcome by high seas.
“The emergency locator transmitter would work on impact,
be that land, sea or the sides of
a mountain, and my analysis is it
didn’t work because there was no
major impact during landing,” said
Dudi Sudibyo, a senior editor of
aviation magazine Angkasa.
“The conclusions I have come to
so far are that the plane did not blow
up mid-air, and it did not suffer an
impact when it hit a surface, because
if it did so the bodies would not be
intact,” Chappy Hakim, a former air
force commander, said.
4 HOME BUSINESS
Experts ‘cautiously optimistic’
about Malaysian stocks
THE Malaysian stock market disappointed investors
last year, with the benchmark FBM KLCI dipping
4.95% or 91.7 points to end the year at 1,761.25, from
2015 1,852.95 on Jan 2, last year. The sectors that perOUTLOOK formed poorly included oil and gas (O&G), banks,
plantations, gaming and automotive. Analysts and
fund managers who spoke to The Edge Financial Daily did not hide their disappointment with the performance of Bursa Malaysia, which was one of the worst
performers among the key regional markets. The main index tumbled the most
on Dec 1 by 2.34%, its worst single-day drop since September 2011. Going into
the New Year, market experts are cautiously optimistic about prospects for the
market, believing there is no lack of good stocks to buy in 2015.
The current strong momentum of
construction activities is backed by a
long list of ongoing and shovel-ready
mega public infrastructure projects
such as the RM73 billion Klang Valley
mass rapid transit (MRT), the refinery
and petrochemical integrated development (Rapid) (RM89 billion),
Pan-Borneo Highway (RM27 billion),
Penang Transport Master Plan (RM27
billion), West Coast Expressway (RM5
billion) and the East Klang Valley Expressway (RM1.55 billion).
BY L I EW JI A TENG
LIM CHEE SING
RHB Research Institute Sdn Bhd
executive director and chairman
TEFD: What were the sectors and
companies that outperformed the
market in 2014? What were the
contributing factors?
Lim Chee Sing: The technology
and telecommunications sector
has gained 8.3% year-to-date (up
to Dec 12, 2014). The technology
sub-sector was powered by export
recovery as companies shifted their
focus to meet the rising demand
for smartphones, tablets and other
smart devices. The share prices of
Unisem (M) Bhd, Inari Amertron
Bhd, Malaysian Pacific Industries
Bhd (MPI) and Globetronics Technology Bhd have been up by between 34.4% and 80% year-to-date.
The telecommunications sector,
which will benefit from the implementation of the goods and services
tax (GST) as the 6% services tax on
the prepaid segment will be replaced
by the consumption tax and borne
by the subscribers, also did relatively well. Year-to-date, Time Dotcom
Bhd’s share price has gone up by
35.2%, Telekom Malaysia Bhd (TM)
by 23.8% and DiGi.com Bhd by 23.4%.
What were the sectors and companies that underperformed or
performed in line with the market in 2014?
The O&G sector was roiled by a collapse in oil prices and suffered a
significant derating in the fourth
quarter, with share prices of stocks
such as Perisai Petroleum Teknologi
Bhd, Bumi Armada Bhd, Alam Maritim Bhd, Daya Materials Bhd, Malaysia Marine and Heavy Engineering Holdings Bhd, SapuraKencana
Petroleum Bhd (SKP), Dayang Enterprise Holdings Bhd and Perdana
Petroleum Bhd dropping between
32.7% and 74.2% year-to-date.
Similarly, the plantations sector
was down by 13.2% year-to-date amid
falling crude palm oil (CPO) prices,
while the industrial products and
finance sectors also contracted by
12% and 8.8% respectively.
In terms of overall performance,
how did the local stock market
perform in 2014? Was it a disappointment?
Overall, the local bourse did badly
in 2014 with the benchmark FBM
KLCI down by 7.2% up to Dec 12,
2014. This was disappointing considering the fact that regional peers
such as Thailand, the Philippines
and Indonesian markets performed
very well, up by between 16.7% and
22.7% in the same period.
Indeed, the local bourse was one
of the worst-performing markets
around the globe.
What are the companies and sectors to look out for in 2015? What
are the positive factors?
Inari Amertron, Unisem, MPI and
Globetronics in the technology sector will likely to benefit from the
resilient demand growth for smartphones and tablets.
Within the aviation sector, airline
companies will benefit from lower
crude oil and jet fuel prices that
will outweigh the impact of a weaker ringgit on maintenance, capital
expenditure and US dollar-denominated borrowings.
In the utilities sector, Tenaga Nasional Bhd (TNB) is a clear winner
of falling energy costs. It could potentially recoup “under-recovery”
of fuel costs from the “savings from
first-generation independent power
producer (IPP) renegotiations” that
have now grown to about RM600
million to RM700 million.
Gamuda Bhd, IJM Corp Bhd and
Pintaras Jaya Bhd in the construction
sector are also favoured.
What are your top picks?
I like TNB with a target price of
RM15.50, Press Metal Bhd at RM5.75
and Berjaya Auto Bhd at RM4.50.
TNB has gradually regained its lost
ground in the power generation business, having emerged as the biggest
winner of new power plant projects
in the country in recent years.
Press Metal, a low-cost aluminium smelter with operations based
in the Sarawak Corridor of Renewable Energy (Score), is expected to
ride on the projected global primary
aluminium supply deficit.
Berjaya Auto is attractive for its
undemanding valuations. We believe Mazda’s strong product suit
will ensure continued market share
gains and with its highly cash generative business and it being in a
net cash position, it could also pay
higher dividends for shareholders
or venture into new earnings-accretive business in the period ahead.
will 2015 be a better year than
2014? What will be the highlights
of events in 2015?
Yes, we expect 2015 to be a better year
as long as global economic growth
is not derailed. Our end-2015 KLCI
target is 1,960 points, based on 16.5
times of one-year forward earnings.
Our cautiously optimistic outlook
is predicated on a better growth
outlook for the developed economies that will sustain the country’s
exports and gross domestic product
growth, albeit at a more moderate
pace. We forecast earnings per share
growth for the KLCI stocks to reverse
trend and pick up to 7% and 7.8% for
2015 and 2016 respectively.
SYED
MUHAMMED
KIFNI
MIDF Amanah Investment
Bank Bhd head of equity
research
TEFD: What were the sectors and companies that outperformed the market in
2014? What were the contributing factors?
Syed Muhammed Kifni: Technology was the biggest winner,
followed by property and construction, having gained 11%,
4% and 3.1% respectively. Technology stocks outperformed for
the second year in a row as the
sector was well on the recovery track pursuant to the 2012
slump. This was attested by the
continued rise in global semiconductor sales.
What were the sectors and
companies that underperformed or performed in line
with the market in 2014?
The plantation index lagged all
the other sectors for the second
year in a row, with a 9.7% drop
attributable to the prolonged
depressed CPO prices.
Going forward, we expect the
plantation companies to fare
slightly better in 2015 as we see
a decent upside to crude palm oil
(CPO) with an average price target of RM2,650 per tonne for 2015.
The downside is also rather
limited as, technically, a major
support for CPO price is pegged
at RM2,000 per tonne.
In terms of overall performance, how did the local stock
market perform in 2014? Was
it a disappointment?
It was hard not to be disappointed as the performance of the
KLCI so far (up to Dec 3) in 2014
put it in the bottom spot compared with its Asian peers. The
top three Asian performers were
the Mumbai Sensex, the Shanghai Composite Index and the
the Philippine Stock Exchange
Composite Index which recorded 34.3%, 31.4% and 25% returns
respectively. When measured in
terms of US dollar, the ranking
of the KLCI remained at the bottom out of the 11 Asian markets.
What are the companies and
sectors to look out for in 2015? What are the positive factors?
The cheaper crude oil should
bode well for airline operators
as typically 30% to 50% of an airline’s operating expenses consist
of jet fuel cost. Similarly, shipping operators may also get a relief from lower bunker prices as
the percentage of the bunker cost
component over the operating
expenses is about 20% to 30%,
depending on the spot market
price of bunker oil. Moreover, the
power utilities may also benefit
from lower imported liquefied
natural gas (LNG) prices.
AirAsia Bhd is expected to
benefit from the decline in jet
fuel price. This should enable
the low-cost carrier to price its
fares competitively as its fuel
surcharge could be reduced.
Furthermore, we expect yields
to improve with the cutback in
industry capacity.
As for the shipping sector,
MISC Bhd and Malaysian Bulk
Carriers Bhd may benefit from
the lower bunker costs.
In addition, TNB is expected
to benefit from lower generation costs.
Are there any sectors or stocks
that investors should avoid
in 2015?
During the period of heightened uncertainty, small- and
mid-cap stocks do not invariably perform well. The biggest
uncertainty which may put a
damper on these stocks moving
forward is the dwindling risk
appetite in view of the anticipated tightening of financial liquidity. Hence, only a stringent
bottom-up approach to smalland mid-cap stocks selection is
recommended.
Globetronics Technology Bhd
with a target price of RM5.45,
Gamuda Bhd at RM5.28 and
SapuraKenchana Petroleum
Bhd (SKP) at RM3.70.
Globetronics is tapping into
the healthcare wearable value
chain. This venture is in line with
the global market movers such
as Apple, Samsung and Google.
With a growing cash pile, we are
confident that the company will
continue to provide an attractive
dividend yield of around 5%.
We believe Gamuda is in the
best position to benefit from the
imminent implementation of
additional mega rail projects.
CONTINUES ON PAGE 6
6 HOME BUSINESS
Changes in top positions at MISC
Yee Yang Chien replaces Nasarudin Md Idris as chief of MISC
BY L EVI N A L I M
KUALA LUMPUR: MISC Bhd has
promoted its chief operating officer
(COO) Yee Yang Chien to president
and chief executive officer (CEO),
replacing Datuk Nasarudin Md Idris who has been redesignated as a
non-independent and non-executive director.
Yee, 46, was appointed to his
current position in July last year,
when he was also given oversight
over the group’s finance and human resource functions as well as
the chemical tanker business unit.
In a filing with Bursa Malaysia
on Wednesday, Petroliam Nasional Bhd’s (Petronas) shipping arm
said Yee first joined MISC in 2001
as senior manager of research and
evaluation of the corporate planning and development unit.
He subsequently joined MISC’s
petroleum arm AET Tankers Holdings Sdn Bhd as its group vice-president of corporate planning in June
2005, before returning to MISC in
April 2008 as its vice-president of
corporate planning and development, focusing on strategic planning and budget development for
the group.
Yee is also a director of Malaysia Marine and Heavy Engineering
Holdings Bhd.
The 59-year-old Nasarudin,
meanwhile, had served as MISC’s
non-independent non-executive
director since Oct 11, 2004 before
assuming his current post on June
15, 2010.
Nasarudin joined Petronas in
1978 and held various positions
within the oil and gas group including as vice-president of corporate planning and development
and group CEO of KLCC Holdings
Bhd. He was also senior general
manager of the corporate planning
and development division, executive assistant to the president and
general manager of marketing at
Petronas Dagangan Bhd.
MISC shares closed five sen or
0.69% lower at RM7.22 on Wednesday, giving it a market capitalisation
of RM32.27 billion. Bursa Malaysia
was closed yesterday in conjunction with New Year’s Day.
Start of US interest rate tightening among main highlights of this year
FROM PAGE 4
Its recent appointment as the
project delivery partner for MRT
Line 2 is a case in point. The revision in Gamuda’s 40%-owned
Syarikat Pengeluar Air Selangor
Holdings Bhd’s (Splash) takeover
offer towards its book value of
RM2.8 billion will possibly raise
Gamuda’s target price.
Fundamentals of SKP remain
intact. Its current order book of
approximately RM28 billion with
more than RM11 billion worth of
extension options are still solid.
We believe that the recent slump
in its price was an overreaction
to the derating of local oil and
gas stocks.
Moving forward, we believe
that investors would come to realise that SKP’s valuation derating was overdone and it should
technically be valued higher.
will 2015 be a better year than
2014? What will be the highlights of the events in 2015?
Among the main highlights of
this year would be the start of US
interest rate tightening. Thus far,
the US Federal Reserve (Fed) has
made reference to a “considerable period of time” before it starts
to raise interest rates.
We believe the “considerable
period” will not extend beyond
2015. Our view is that the market
will react negatively when it is affirmatively clear that the Fed will
start raising the funds target rate.
However, we expect the market to quickly price in the risk and
stabilise thereafter. Hence, the
global equity market is expected
to be more volatile in 2015 than
it was in 2014. Nonetheless, we
expect the New Year to be a better
year as far as the local market is
concerned partly due to its underperformance in 2014.
What is your year-end target
for the KLCI in 2015?
Our year-end 2015 target for the
KLCI is 1,970 points which we
first mentioned on Oct 1, 2014.
We reiterate the same target level
despite the recent market pullback which was attributable to
slumping crude oil prices.
Our house view is that the
price of international benchmark
Brent crude oil will average at
between US$85 and US$75 per
barrel in 2015. Therefore, at those
levels, the net impact on the nation’s overall output growth as
well as inflation situation is arguably positive.
CHRIS ENG
POH YOON
Etiqa Insurance & Takaful head
of research
TEFD: What were the sectors and
companies that outperformed
the market in 2014? What were
the contributing factors?
Chris Eng Poh Yoon: Tenaga Nasional Bhd (TNB), real estate investment trusts (REITs) and the telcos
outperformed given their defensive
nature which were being valued in
the second half of 2014 when markets were hit by jitters. Stronger prof- worst-performing stock market in
its from TNB as fuel prices retreated Asia-Pacific despite it having a dealso boosted its share price.
cent growth rate and some fiscal
reform efforts by the government.
What were the sectors and companies that underperformed or What are the companies and secperformed in line with the mar- tors to look out for in 2015? What
ket in 2014?
The O&G sector underperformed We like the construction, finance
the market given the retreat in oil and plantation sectors as we still
prices in the second half. The plan- expect a number of large constructation sector also underperformed tion contracts to be awarded in
as CPO was weaker than in 2013 2015. These contracts will need to
and El Nino failed to materialise. be financed while our plantation
call is more seasonal for the first
In terms of overall performance, quarter of 2015.
Stock-wise, we like names such
perform in 2014? Was it a disap- as Gamuda Bhd, which stands to
pointment?
benefit from the mass rapid tranThe KLCI was a significant un- sit Line 2 and potentially the highderperformer compared with its speed rail project linking Singapore
peers in 2014. Malaysia was the and Kuala Lumpur. We also like
DANNY WONG TECK MENG
What were the sectors and companies that underperformed or
performed in line with the marAreca Capital Sdn Bhd chief
ket in 2014?
executive officer
Plantation, O&G, finance were
TEFD: What were the sectors and among the dogs.
companies that outperformed
the market in 2014? What were In terms of overall performance,
the contributing factors?
Danny Wong Teck Meng: In terms perform in 2014? Was it a disapof gainers, the performing sectors pointment?
were construction, technology, The KLCI was the worst performproperty and REITs, mainly due er in the region. In the first half,
to the Economic Transformation most inflows were seen in other
Programme (ETP) and recovery in higher beta markets and Malayexports. The property sector was a sia, a defensive low beta market,
surprise performer, but confined to lagged behind. After June 2014, oil
mid-to-small caps. REITs reversed prices started to tumble and as a
from the previous years which were net oil exporter and significantly
sold down due to a rate hike fear. oil dependent country, Malaysia
that the stock market did not move
in tandem with gross domestic
product growth. The steep downfall in crude oil prices was beyond
predictable range.
suffered the most in terms of outflow of equity funds in the region.
[As such,] 2014 was a disappointment mainly due to weak
commodity prices. It was a surprise
What are the companies and sectors to look out for in 2015? What
We are still positive on ETP-related
companies, export-oriented sectors and some dividend yielders,
especially when most of the stocks
were pared down.
I like small mid-cap O&G service-based players as most of them
have contracts for the next two to
three years where earnings are quite
stable. With a strong indication that
the US, being the biggest consumer
market, is seeing continued recovery,
smaller construction player Mitrajaya Holdings Bhd, which has expanded its order book significantly.
Among planters we like Sarawak
Oil Palms Bhd for its decent growth
trajectory and solid management.
that investors should avoid in
2015?
We are more cautious about consumption-related stocks such as
consumer, property and automotive given the implementation of
the GST this year.
We like TNB as the outlook for fuel
prices is still low in 2015, Gamuda
being the beneficiary of major infrastructure contracts and AirAsia
Bhd, which will benefit from both
the low oil price as well as the restructuring in Malaysian Airline
System Bhd.
Do you expect 2015 to be a better
year than 2014? What will be the
highlights?
Depending on where the KLCI ends
the year, upside in 2015 may still
be limited. Highlights will be in
April when Malaysia implements
the GST, the UK elections in May
which may put pressure on the
European Union and whether the
US will raise its interest rates in the
third quarter of 2015.
I like those counters that will benefit
from the strong US dollar such as
electrical and electronics counters
and exporters.
I would also bet on second liners (stocks that have less operating
experience and capitalisation) as
their top lines and earnings are
sensitive to any positive contribution given the general assumption
that 2015 may have moderate corporate earnings growth.
that investors should avoid in
2015?
Based on the experience in Japan,
Singapore and Australia, consumption was affected post-implementation of the GST. As such, I am cautious about the consumer sector.
8 HOME BUSINESS
New year, old spats
Corporate dramas galore that may well continue into 2015
BY L I EW JI A T ENG, CHAR LOTTE
CHON G & GHO C HEE YUAN
KUALA LUMPUR: There was no
shortage of drama in the local corporate scene last year, what with
some very public shareholders’ spats,
family feuds and boardroom tussles
that have surely spiced things up for
the investing community.
The eventful year that was 2014
is well and over now. But that does
not mean that all the dramas have
similarly come to an end. Here are
some corporate feuds that will most
likely continue to hog the limelight
in the brand new year:
Protasco Bhd
Things have turned ugly at Protasco as three extraordinary general
meetings (EGM) were called in the
span of two days between Nov 28
and Nov 30 last year, one of which
was called off, did not seem to have
resolved the dispute between managing director Datuk Seri Chong Ket
Pen and its two former directors,
Tey Por Yee and Ooi Kock Aun.
The outcome of the EGMs saw Tey
and Ooi being ousted from the board,
with Chong seemingly the winner.
But things appear to be far from
over: both factions have continued
to mop up shares in Protasco after
the EGMs.
The saga is likely to continue in
the courts this year as Protasco has
filed a lawsuit against Tey, Ooi and
PT Anglo Slavic Utama (PT Asu)
to reclaim the US$27 million that
Protasco had paid in its foiled attempt to buy a 63% stake in oil and
gas outfit PT Anglo Slavic Indone-
Tey (right) with his lawyer Gideon Tan. Photo by Sam Fong
Lysaght’s troubles began as a family
dispute brewed in its boardroom.
Photo by Abdul Ghani Ismail
sia (PT Asi) from PT Asu.
Tey had countered the accusation by launching his own legal
suit against Chong and some Protasco top brass, alleging that they
had made some personal gain of
RM10 million in the transaction,
which Tey claimed had been channelled to RS Maha Niaga Sdn Bhd,
a vehicle that is controlled and run
by Protasco’s senior management.
Lysaght Galvanized Steel Bhd
Low-profile traffic pole maker Lysaght came under the spotlight after
it emerged that a family dispute was
brewing in its boardroom between
managing director Liew Hoi Foo
and his sister-in-law Annie Chew
Meu Jong, just a few months after
the passing of its late founder Chew
Kar Heing in February.
The dispute surfaced in October
when the Lysaght board aborted a
proposed share split, bonus issue,
Tan : They (Laxey and City of London)
are very experienced; we can’t
underestimate them... this time they
may lose but they may come back
again.” Photo by Sam Fong
and free warrants — exercises which
it had proposed in May — due to
objections from Lysaght Malaysia
Sdn Bhd (LMSB), its controlling
shareholder with a 55.26% stake.
It is learnt that Liew, the only executive on Lysaght’s board and Chew’s
son-in-law, wanted to push through
the proposals. But LMSB, which is
controlled by Meu Jong, proved an
immovable stumbling block.
The key to settling the feud is
Singapore-listed United Engineers
Ltd, which owns an 11.63% stake
in LMSB.
It is believed that both Liew and
Meu Jong intend to take up the stake
to control LMSB, for whoever controls LMSB will then control Lysaght.
icapital.biz Bhd
British hedge fund Laxey Partners
Ltd and UK-based investment advisory firm City of London Investment Management Company Ltd
have come back to haunt the outspoken fund manager Tan Teng
Boo, who manages closed-end fund
icapital.biz Bhd.
City of London, together with
Laxey Partners, had voted against a
resolution to reappoint Tunku Abdul Aziz Tunku Ibrahim as director
in the closed-end fund through a
proxy form just two days before
icapital.biz’s 10th annual general
meeting (AGM) on Oct 11.
However, the AGM was later
adjourned to Nov 30 when Tan accused the London firms’ action as
“unethical” and “oppressing the
majority”.
Tan had told pressmen then:
“They (Laxey and City of London)
are very experienced; we can’t underestimate them... this time they may
lose but they may come back again.”
Tan’s statement proved to be a
prescient warning. When the AGM
resumed on Nov 30, Abdul Aziz
failed to be reappointed a director
of icapital.biz.
It later emerged that City of London had been acumulating more
shares in icapital.biz since November. As at Dec 24, the firm owned
an 11.65% stake, compared with
9.88% in April.
In November 2012, Tan successfully blocked Laxey Partners’ entry
into icapital.biz’s board when the
two firms had requested for three
board seats in an AGM.
From the look of things, City of
London seems to be gearing up for
another try.
Kian Joo Can Factory Bhd
Kian Joo’s executive director Datuk
Anthony See Teow Guan has filed
an appeal on his suit against CanOne Bhd and few others regarding
the sale of Kian Joo’s assets and liabilities to Aspire Insight Sdn Bhd
for RM1.47 billion, after the case
was struck out by the Kuala Lumpur High Court on Nov 14 this year.
See in May this year commenced
legal action against Can-One, its unit
Can-One International Sdn Bhd,
and four others including Kian Joo,
to prevent Can-One and Can-One
International from voting on the sale.
In his suit, See alleged that Aspire
Insight and Can-One were related parties, and therefore the latter
should not be allowed to vote.
In November last year, Freddie Chee Khay Leong, who is CanOne’s former chief operating officer (COO) and Kian Joo’s current
COO, with the Employees Provident
Fund, through Aspire Insight, jointly proposed to acquire Kian Joo for
RM3.30 apiece.
It is believed that the See family
still owns more than 15% fragmented stakes in Kian Joo, after they lost
a bitter court battle to invalidate the
sale of the family’s 32.9% stake in
the company to Can-One in 2012.
GDP to grow only 4.7% this year, says MARC
BY A HMA D NAQ I B IDRIS
KUALA LUMPUR: Malaysian Rating
Corp Bhd (MARC) expects Malaysia to post a gross domestic product (GDP) growth of 4.7% in 2015,
lower than the government’s growth
projection of between 5% and 6%,
as it expects slower growth in private consumption and investment.
The country’s export performance
will also be moderated next year
due to uncertainties in major economies, especially in Europe, China
and Japan, despite the continued
strength of the US economy and lower-than-expected average oil price.
“Although declining oil prices
will boost consumer spending (as
in the United States), in the case of
Malaysia, it may only prevent a significant erosion in consumer spending which would have taken place if
pump prices were on the uptrend.
“This is because consumers
are already overstretched by high
household debt and are facing rising costs of living,” said MARC in
its 2015 outlook report titled “Gyrations Amid Pockets of Silver Lining” on Wednesday.
Its forecast is similar to World
Bank’s estimation. Last Dec 17,
World Bank, which originally had
a 4.9% GDP growth projection for
Malaysia this year, cut its forecast
to 4.7% as it expects the nation’s
economy to grow at a slower pace
amid tumbling oil prices.
Two days later, Swiss bank UBS
AG followed suit with a steeper cut
on its GDP forecast for Malaysia,
from 5% to 4.5%, on what it expects
to be a “sharper slowdown” in the
country’s economy this year.
Meanwhile, MARC expects private
consumption growth to moderate to
5.5% this year from 6.4% last year.
Although the research agency expects investments to remain
relatively resilient next year, it cautioned that growth will continue
to normalise as the government
tightens its belt following a cloudier outlook for the global economy
and lower oil revenue.
“In addition, the leverage level
of large corporations has evidently
increased since 2012, with the average debt-to-Ebit (earnings before
interest and tax) levels of Bursa-listed companies (ex-financial) surging
to 10.1% in 2013 from 5.6%.
“Such an increase would normally cause corporations to scale
down their future investments as
they would find it more difficult to
service their debt.”
On inflation, it expects the consumer price index (CPI) to continue to rise in 2015, due to the
implementation of the goods and
services tax (GST) and possible
further cuts in subsidies. Hence, it
forecasts an average inflation rate
of 4% to 4.5% next year.
It further noted that the increase
in CPI due to the implementation
of the GST is likely to be a “transient
phenomenon”, and that CPI growth
may subside in the following year.
Despite its forecast of rising consumer prices, MARC does not expect
Bank Negara Malaysia to respond
with a hike in the overnight policy
rate (OPR), as price increases will
not be due to demand-pull inflation.
Hence, the agency expects the
OPR to remain stable at 3.25% this
year, although it foresees lending
growth to moderate due to the lag
effects of Bank Negara’s macro-prudential measures, which will continue to be felt by consumers, as well
as slower economic growth, which
will dampen demand for credit.
“The growth in household lending is expected to drop to below
10%, which we anticipate to be
contributed by slowing personal
and hire purchase loans, despite a
stable pace in loan growth for residential properties,” it said.
Similarly, the pace of business
loan growth will also stabilise, it
said, giving an overall loan growth
forecast of 8% to 9% this year.
MARC also noted that the overall impact of the slump in oil prices
on governmental revenue would
hinge on the sustainability of the
current price.
“Based on global economic
prospects and the long-term trend
of oil prices, we view that the recent
sell-offs are overdone and oil prices
will rebound slightly to stabilise at
around US$65 (RM227.50) to US$75
per barrel in 2015,” it said.
It believed, however, that oil
prices of above US$90 per barrel
are no longer a possible scenario
“at least in the next one year”.
As it estimates that every US$1
drop in the price of Tapis will trim
Malaysia’s oil revenue by RM400
million to RM500 million, it thinks
the budget deficit target of 3% of
GDP has become “more challenging, not only because the amount of
government revenue is dropping,
but also because of the shrinking
value of nominal GDP in 2015”.
“For this reason, we think that
if the oil price is sustained below
US$65 per barrel for a considerable period, the budget deficit target
may be adjusted slightly by approximately 30 to 40 basis points above
the initial target.”
Big task ahead for aviation sector
Industry faces major challenge in rebuilding reputation following MH370, MH17 and QZ8501 tragedies
KUALA LUMPUR: Malaysia’s aviation industry has a big task ahead
to rebuild its reputation after three
devastating airline disasters in less
than a year, with analysts turning
more cautious about the sector, at
least in the near term.
The year 2014 saw Malaysian
Airline System Bhd (MAS) being
privatised as part of a restructuring
plan to keep the flag carrier in business after its two plane disasters in a
year, which partly led to its net loss
widening to RM1.33 billion for the
nine months ended Sept 30, 2014
from RM830.25 million a year ago.
Deputy Transport Minister Datuk Abdul Aziz Kaprawi told The
Edge Financial Daily that air traveller confidence in the region would
be shaken by the three air tragedies
in the near term.
“My view is that the latest incident [involving Indonesia AirAsia
flight QZ8501] will affect air trav-
ellers’ confidence in this region,”
he said, noting that aviation stakeholders and government authorities
should work together to rebuild the
confidence in air travel in the region.
“Our expectation of potential air
travel demand recovery in 2015 is
now hampered by the latest air incident. We have now turned more cautious about the outlook of air travel
demand, at least in the near term,”
said HLIB Research analyst Daniel
Wong in a note dated Dec 29, 2014.
“Any meaningful rebound in air
travel demand may only be realised
in 2016,” he said.
Wong expects the AirAsia group,
including AirAsia X Bhd, to further
cut its yields in 2015 in order to
stimulate air travel demand, leveraging on the low jet fuel price.
He is maintaining a “neutral” call
on the aviation sector.
Kenanga Research analyst Adrian Ng believes that passenger traffic
will continue growing at a moderate
pace in 2015 compared with previous
2015
OUTLOOK
years’, given heightened geopolitical
risks, especially in the Middle East
and Hong Kong, coupled with the
slowdown in China and the recent
three air travel tragedies in Malaysia.
“This would hamper recovery in
passenger traffic volume that may
not bode well for Malaysia Airports
Holdings Bhd (MAHB),” he said in
a note on Dec 30, 2014.
“On the flip side, we are expecting a strong set of fourth-quarter
2014 earnings in the upcoming February 2015 results season for AirAsia Bhd, which is underpinned by a
seasonally strong quarter coupled
with better earnings prospects on
lower jet fuel cost despite the recent
‘Angel investors need time
to learn to fly’
BY L I EW JI A TENG
KUALA LUMPUR: Malaysian Business Angel Network (MBAN), which
has 65 registered angel investors in
the country, is asking the public for
more time and patience before the
association can make a real impact
on the angel investing community
by closing some significant deals.
“As a young organisation, we
are making good progress. But the
public must realise that angel investing is a nascent initiative and
some time is needed before all our
plans bear fruit,” MBAN president
Richard Wong Chin Mun told The
Edge Financial Daily in an interview recently.
The newly-formed MBAN is a
trade organisation and governing
body under Cradle Fund Sdn Bhd,
a Ministry of Finance’s agency. Its
task is to grow more accredited
angel investors and be their official voice.
“As at end-September this year,
we had 65 registered angels from
Penang, Johor, Perak, East Malaysia, Kuala Lumpur and Selangor,
with another 10 to 15 members
being processed. This is a big win
for us, as no other organisation has
done so much to build a dedicated
network of angels in such a short
time,” said Wong.
MBAN’s key performance indicator (KPI) last year was to close
three to five deals with a member
base of 75 angel investors.
He was responding to the article
“ViC: Angel investment community largely neglected” published in
The Edge Financial Daily on Oct 27
last year. The report quoted Virtuos
Wong: We are working on
plans to study the Malaysian
angel ecosystem to obtain data
on local angel activities and
the investments they make.
Investment Circle (ViC) chairman
Bob Chua as saying that MBAN “is
there for no purpose”.
“They don’t even know the
number [of deals] themselves.
They should capture the information about the size of the industry
and how many deals have been
concluded,” Chua said. ViC is a
non-profit group launched in August 2010 to facilitate angel investments by providing services for entrepreneurs to find angel investors.
“We take his (Chua’s) comments
as an opportunity to improve our
initiatives and our organisation. We
can only do this with the support of
people like him,” said Wong.
He, however, said data on angel
investments are rarely available, except in developed countries where
angel investing is more established.
“[Nevertheless], we are working
on plans to study the Malaysian
angel ecosystem to obtain data on
local angel activities and the investments they make,” said Wong.
Wong is also chairman of Vistage
Malaysia Sdn Bhd, a private advisory board for chief executive officers,
executives and business owners
that contributes close to 20 angel
investors to MBAN.
Going forward, MBAN aims to
double its member base to 150 angel investors with 10 deals in 2015,
followed by 300 members and 30
deals in 2016.
It has also engaged with numerous angel clubs like TPM Angel and
Vistage Angel Club to introduce
potential investments to angel investors.
“Previously, it was all about laying the groundwork. But 2015 will
be a fresh year for us because we are
not a baby anymore. We can now
plan for more activities and let the
angels learn how to fly. The hard
work has only just started,” he said.
An angel investor can qualify
for tax relief of up to RM500,000
per annum in the third year of his
shareholding for equity investments
made in a qualified technology
company or a series of companies.
To qualify for this incentive, the
angel investor must be accredited
with MBAN.
tragedy on Indonesia AirAsia,” Ng
added, reiterating a “neutral” recommendation on the sector.
Ng is of the view that the recent
sharp plunge in global oil prices,
which led to lower jet fuel cost, is
the only saving grace for the airlines, especially low-cost carriers
like AirAsia, as it makes up more
than half of its operating costs.
“Based on our sensitivity analysis, US$1 (RM3.50) per barrel drop
in jet fuel price pegged to our inhouse USD/MYR exchange forecast
of 3.43 for 2015, could translate
into an additional RM10.5 million
to AirAsia’s bottom line, assuming
yield remains constant,” he said.
Maybank Investment Bank aviation analyst Mohshin Aziz has a
higher estimate for AirAsia, noting
that a US$1 reduction in oil price
will increase the low-cost carrier’s
bottom line by RM21 million for the
financial year ending Dec 31, 2015.
Prior to the flight QZ8501 incident, AirAsia group chief executive
officer (CEO) Tan Sri Tony Fernandes expressed optimism that
the lower oil prices would bump
up its profitability this year.
“Jet fuel is a massive [operating]
cost for us and our profitability is
going to be highly improved [on
falling oil prices],” he said, adding
that this will more than offset the
foreign exchange loss on its borrowings due to a weaker ringgit.
“Some of the profitability will be
passed back to consumers, which is
not a bad thing because that would
in turn increase demand for the
airline,” he said.
FlyFirefly Sdn Bhd CEO Ignatius
Ong also noted that lower jet fuel
prices will translate into higher earnings for the turboprop operator.
“This will translate into lower
expenditure and in turn we can
be more attractive in our pricing
to consumers,” he said, adding that
air fares are determined by the airline’s cost structure as well as market competitiveness.
Kinsteel’s Pheng and sons quit
Perwaja’s board
BY W E I LY N N TA N G
KUALA LUMPUR: Kinsteel Bhd managing director (MD) and major shareholder
Tan Sri Pheng Yin Huah (pic) has quit as
Perwaja Holdings Bhd MD, but will continue to remain as a non-independent
non-executive director.
His son Datuk Pheng Chin Guan has
quit as Perwaja chief executive officer
and executive director. Chin Guan’s
brothers Pheng Chin Huat and Pheng
Chun Shiun have also concurrently quit
as non-independent non-executive directors of Perwaja.
Kinsteel, which has held a 37.34% stake in Perwaja since the
latter was first listed in 2008, had also reduced its equity interest
to 31.25%.
With its cessation of management control, Perwaja is no longer a
subsidiary of Kinsteel, Kinsteel told Bursa Malaysia on Wednesday.
Kinsteel’s stake reduction in Perwaja was via the disposal of 34.1
million shares or a 6.09% stake in Perwaja in the open market from
Dec 19 to 30, “for a total cash consideration of RM1.82 million only”.
The total consideration of RM1.82 million translates into an average of 5.3 sen per share. Perwaja shares were trading between
4.5 sen and 8.5 sen throughout December.
“Following Kinsteel’s reduced shareholdings in Perwaja and the
resignations of the abovementioned Perwaja directors, Kinsteel
ceased to have management control of Perwaja, with effect from
Dec 31, 2014,” Kinsteel said.
“Hence, Perwaja will cease to be a subsidiary and shall remain
as an associate company of Kinsteel, with effect from Dec 31,
2014,” it said.
Kinsteel said in line with its shareholding reduction in Perwaja, some Perwaja’s board members (who were also directors or alternate directors of Kinsteel as at Dec 30) — in addition to Pheng
and his sons — have resigned from their respective positions in
Perwaja effective Dec 31.
It is worth noting that Datuk Ong Tee Thong has resigned as
Perwaja group executive chairman, but will continue to remain as
a non-independent non-executive director.
Datin Hong Cheng Guat, who is the sister of the senior Pheng,
has also resigned as a director from Kinsteel’s board “to streamline
board composition”.
Kinsteel closed unchanged at 15 sen on Wednesday, giving it
a market capitalisation of RM157.4 million. Perwaja was 0.5 sen
or 11.11% higher at five sen, with a market capitalisation of just
RM28 million.
THE EDGE FILE PHOTO
BY C Y NTHI A B L E M IN
ST O C KS W I T H M O M E N T U M 11
F R I DAY JA N UA RY 2, 2015 • T HEED G E FINA NCIA L DA ILY
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.
Evergreen Fibreboard Bhd
OVER the past week, Johor-based Evergreen
Fibreboard saw sharply higher trading volume, which drove its share price to rally 5.1%
to a high of 62.0 sen, before paring back gains
to close at 60.5 sen on Wednesday.
Evergreen Fibreboard produces woodbased products such as medium density fibreboard (MDF), particleboard and a wide
range of wooden furniture. The company
also manufactures downstream products
such as paper, veneer, printed, melamine
board laminations and knock down furniture.
It operates seven manufacturing plants in
Malaysia, three in Thailand and one each in
Indonesia and Singapore. Annual production
capacity for its medium density fibreboard
(MDF) and particleboard operations exceed
1.30 million cubic meters. The company’s
products are mainly exported to Middle East
and Southeast Asia.
Over the past two years, the company has
been experiencing consecutive annual de-
cline in revenue, from RM1.06 billion in 2011
to RM938.7 million in 2013. Following weak
demand from the Middle East, a supply glut
in fibreboard and wood products, and rising
production and logistic costs, Evergreen fell
into the red last year, for the first time since
its listing in 2005.
It posted net losses of RM42.8 million in
2013, from net profit of RM32.2 in 2012. This
trend continued into 2014, with net losses
of RM14.2 million so far for the first nine
months of 2014. At its peak, the company
chalked up net profit of just under RM120
million in 2007 and 2010.
Evergreen’s balance sheet has a net gearing
ratio of 32.5% with its last dividend paid of
1 sen per share in 2012. No dividends were
paid in 2013. Although the stock is trading at
just 0.4 times book, Evergreen’s fundamentals appear unexciting given the uncertain
earnings outlook. The Edge Research rates
it a Fundamental Score of 0.75 out of 3.0.
*Valuation factor — Composite measure of historical return & valuation
**Fundamental factor — 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
Homeritz Corp Bhd
HOMERITZ, a manufacturer of upholstered
home furniture, was previously highlighted
as Insider Asia’s Stock of the Day on November 20 at 80 sen.
After a slight decline following the subsequent broad market sell-off, the stock has been
on an uptrend again since mid-December,
accompanied by rising volume, and closed
at 86 sen on Wednesday.
A net exporter with products exported to
over 40 countries including Asia, Australia,
Europe and the US, Homeritz offers investors exposure to the strengthening US dollar
(USD) with some 97% of its trade receivables
denominated in USD.
Revenue for the company has grown from
RM89.8 million in FY Aug 2011 to RM112.9
million in FY2013. In the same period, net
profit increased an outsized 40% from RM10.8
million to RM15.1 million while EBITDA
margins expanded from 15.9% to 20% due
to economies of scale, increased productivity
and efficiency.
For FY2014, the company posted revenue
of RM127.2 million, boosted by recovery in
demand from its key export markets and the
strengthening USD. Net profit was RM20.2
million, a significant 33.9% increase from the
previous year.
Homeritz’s valuations are fairly attractive. The stock trades at a price to book ratio of 1.85 times with a trailing 12-month
P/E ratio of only 8.5 times. Return on equity
(ROE) is high at 24.5%. It has a strong balance sheet with net cash of RM49.3 million,
equivalent to 24.6 sen per share or 28.6%
of its share price.
Last but not least, Homeritz offers good
yields. The company has a minimum 40%
dividend payout policy. For FY2014, Homeritz has proposed a final dividend of 3.1 sen.
This brings total dividends for the financial
year to 5.1 sen per share — up from 3.75 sen
in FY2013 — or about 50% of net profit. This
earns shareholders a substantially higher than
market average net dividend yield of 5.9%.
*Valuation factor — Composite measure of historical return & valuation
**Fundamental factor — 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
1 2 I N V E ST I N G I D E A S
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.
I N S I D E R A S I A’S S TO C K O F T H E D AY
Tasco Bhd
TASCO is a logistics player offering logistics
solutions covering air, sea and land transportation, for both domestic and international
shipments. The company has been established since 1974 and was formerly known as
Trans-Asia Shipping Corp. It has 25 logistics
centres with over 1,500 employees in Malaysia.
Currently, Tasco derives 40-50% of its
revenue from the contract logistic division
which involves activities such as warehousing
services and haulage transportation. Moving
forward, future earnings growth will likely be
underpinned by the company’s expansion
into the e-commerce segment.
Indeed, over the longer run, e-commerce
is expected to overtake the traditional brickand-mortar retailing business model. With
this secular trend change in the logistic industry, retail companies would demand more
sophisticated distribution and warehousing
systems from domestic logistic companies.
Tasco posted a 26.5% rise in revenue to
RM559.6 million for FY March 2014 while
net profit was up 5.2% to RM30.4 million.
For 1H2015, revenue rose 15.8% to RM257.4
million while net profit surged 42.8% to
RM18.1 million. The company has consistently chalked up double-digit ROE for the
past three years.
Tasco has a solid balance sheet with net
cash of RM13.8 million as at end-September
2014. The company paid dividends of 9.01
sen in FY2014 which translates into a yield
of 3.48% at current market price of RM2.59.
The stock is currently trading at a priceto-book ratio of 0.9 times and a trailing
12-month P/E ratio of 8.3 times. Tasco’s
valuations are cheaper than its peers. Freight
Management Holdings Bhd is trading at
a price-to-book ratio of 1.6 and a trailing
12-month P/E of 11.9 times while Century
Logistics Holding Bhd is trading at priceto-book ratio of 0.9 and trailing 12-month
P/E of 8.7 times.
As the year draws to a close, we are cognizant of the fact that trading will inevitably slow as market participants go away on
longer breaks. Thus, InsiderAsia’s Stock of the Day will run the same stock recommendation for two consecutive trading days. As
such, the featured stock today is Tasco Bhd, the same as that for Wednesday, 31 December, 2014. We will have a new stock pick
on Monday. Thank you for your support.
T O N G ’S
MOMENTUM
P O RT F O L I O
ASIAN markets ended the year mixed as US
stocks dropped, led by technology and utility
companies. At the closing bell on Tuesday,
the Dow and the S&P 500 closed down 0.31%
and 0.49% respectively.
In China, the Shanghai Composite Index
settled at the highest level since January 2010
despite slowing economic growth. The index
rose 2.18% to close at 3,234.68.
Oil prices continued to decline amid worries of inundated supply going into 2015.
Brent crude and WTI crude are now hovering around $57 and $53 per barrel, respectively (at the time of writing). Crude prices
are likely to remain low for a considerable
period and this will pose a risk to Malaysia’s
economy and government finances.
At home, the local bourse extended its
losses on the last trading day of 2014, with
the FBM KLCI declining 0.32% to close at
1,761.25. Market breadth was neutral with
394 losers and 391 gainers.
For the full year, the benchmark index
ended 5.66% lower.
Meanwhile, the ringgit ended 2014 at a
five-year low, after losing nearly 7% of its
value during the year. The currency was
trading at around 3.50 per US dollar, a fiveyear low. The ringgit is still exposed to huge
outflows in 2015, as foreign funds held over
40% of Malaysian government securities.
My portfolio started on 8 July 2014 with
a capital of RM100,000. Since then, it has
outperformed the FBM KLCI by 8.1%, registering an annualised return of 2.3%.
Willowglen, the only stock held in the
portfolio, rose 4.2% to 75 sen.
This is a personal portfolio for information purposes only and does not constitute a recommendation or solicitation or expression of views to influence readers to buy/sell any stocks.
Portfolio started on 8 July 2014 with RM100,000.
B R O K E R S’ C A L L 13
Rubber as resilient as ever
Rubber Products
Maintain “overweight”: Global
glove consumption is expected
to remain strong, led by demand
from the healthcare segment, and
is anticipated to expand 8% to 10%
per annum.
Demand is often touted as inelastic due to the crucial protective role that gloves provide, especially for the healthcare sector.
Thus, glove suppliers have a resilient earnings profile combining defensive qualities with steady
earnings growth. We believe that
the additional capacity from the
expansion in nitrile production
will be absorbed by the market. The
commissioning of new production
lines is being done progressively,
which will enable the glove mak-
A 3% increase in the exchange
rate could lift the rubber
industry’s earnings by
approximately 2% to 4%.
Photo by Abdul Ghani Ismail
ers to time upcoming capacity to
the prevailing demand landscape.
The strengthening of the dollar against the ringgit will benefit
the industry because revenue will
have a greater sensitivity to the
greenback relative to costs. A 3%
increase in the exchange rate could
lift the industry’s earnings by approximately 2% to 4%.
We maintain our “buy” recommendation on the stock as we continue to like its organic and inorganic growth potential. We have
a higher target price of RM3.89
(from RM3.43), i e 20 times FY16F
price-earnings and a 14.4% upside, on the back of an expected
three-year FY14-FY17F earnings
per share compounded annual
growth rate of 23.8%.
Heightened competition among
glove players could lead to lower
average selling prices and margins
that, in particular, would not bode
well for Top Glove Corp Bhd and
Supermax Corp Bhd, as both are
margin laggards in the industry. We
continue to like stocks in the rubber products sector that have good
earnings growth, strong balance
sheets and decent dividend yields.
Our top picks are Hartalega
Holdings Bhd, Kossan Rubber Industries Bhd and Karex Bhd. — RHB
Research Institute, Dec 31
O&G shares aligned with oil price than fundamentals
Oil and Gas
Maintain “overweight”: We keep
our overweight stance on the sector. We downgrade Petronas Dagangan Bhd (PetDag) from “add”
to “reduce” but maintain our calls
for other stocks despite removing
the 30% premium valuation for the
big caps, a move that also affects
the small caps. Our top picks remain SapuraKencana Petroleum
Bhd and Perdana Petroleum Bhd.
The share prices of the companies under our coverage have
been hammered by an average of
44% year to date (YTD). The share
prices of five companies that make
up 42% of our Malaysian oil & gas
(O&G) portfolio have fallen below
net tangible assets (NTA), with Perisai Petroleum Teknologi trading at
the steepest discount of 47%.
Our forecasts for Bumi Armada
Bhd, Malaysia Marine and Heavy
Engineering Holdings Bhd, Perdana, PetDag, TH Heavy Engineering Bhd, Uzma Bhd and Wah
Seong Corp Bhd are intact, but
we lower our earnings per share
(EPS) for Alam Maritim Resources
Bhd, Dialog Group Bhd, Perisai,
SapuraKencana and UMW Oil
& Gas Corp Bhd. Perisai has the
largest cuts as we remove its two
idle assets from our forecasts.
Despite the EPS cuts, 58% of the
companies under our coverage are
set for all-time net profit highs in
CY15. The companies are Bumi
Armada, Dialog, Perdana, SapuraKencana, UMW-OG, Uzma and
Wah Seong.
Net gearing for Bumi Armada,
Perisai and SapuraKencana is expected to exceed 1 time in CY15
to CY17, but their gearing levels
are far below their debt covenants,
which are net debt per equity of 1.5
to 1.6 times for SapuraKencana and
2.2 times for Perisai, and net debt
per earnings before interest, taxes,
depreciation and amortisation of
9 times for Bumi Armada.
The share prices seem to be
aligned with the oil price rather
than the fundamentals of the companies.
Although we think that the oil
price will recover over the longer
term, we remove the 30% premium
that we attached to the valuations
of big-cap stocks, given the shortterm challenges which could dictate
sentiment on the stocks.
We now value these stocks at
our revised CY16 target market
price-earnings of 15 times. We continue to value the small-caps at a
30% discount to the big-caps. —
CIMB Research, Dec 31
One of SapuraKencana’s oil rigs.
14 B R O K E R S’ C A L L
DEIA approval a step
forward for Benalec
Benalec Holdings Bhd
(Dec 31, RM0.56)
Maintain “buy” with higher target price (TP) of RM0.74: Approvals for the Detailed Environment
Impact Assessment (DEIA) report
for Benalec’s 3,485-acre (1,410ha)
Tanjung Piai Integrated Petroleum
Hub and Maritime Industrial Park
is expected in first quarter of 2015
(1Q15). The binding term sheet to
undertake the reclamation works
and sale of approximately 1,000
acres of land in the concession has
been extended for the fourth time
to June 11, 2015. Reclamation works
can commence after approvals are
secured. The DEIA study on the
1,760-acre Pengerang reclamation
concession is still ongoing. Based
on a selling price of RM50 per sq ft
(psf) for the initial 1,000 acres, rising to RM75 psf for the remaining
2,485 acres as well as a conservative net profit margin of 10%, the
Tanjung Piai concession will generate approximately RM10 billion
in billings and RM1 billion in net
profit over the next 10 to 15 years.
Net profit margin may exceed
10%. Net margin for the group
ranged from 14% to 53.3% in financial years 2009 to 2013 (FY09-FY13),
and dipped to 3.4% in FY14 before
recovering to 25.1% in 1QFY15. Based
on a selling price of RM50 psf and net
profit margin of 10%, we forecast a
total revenue and net profit of RM3.8
billion, and RM383 million from the
Pengerang concession.
We tweaked our FY15E-FY17E
forecasts lower by 0.5% to 4.6% after
incorporating higher depreciation
and a higher share base (808.1 million versus 804.4 million previously).
At current low implied FY15E- Menara Telekom. TM was awarded the SKR1M project by MCMC. The Edge file photo
17E price-earnings, our “buy” rating
is maintained. TP for the stock is
raised from 68 sen (10 times FY15
earnings per share [EPS]) to 74 sen
(10 times calendar year 2015 EPS).
Approval to start work on the
Tanjung Piai concession will greatly
enhance profit forecasts and valuation. — AffinHwang Capital Re- Telekom Malaysia Bhd
viding 50% of the investment, with
(Dec 31, RM6.88)
search, Dec 31
the remaining contributed by the
Maintain “underperform” with private partner, in this case, TM.
unchanged target price (TP) of Besides providing partial capital
RM6.26: The submarine cable sys- expenditure (capex) for the project,
tem project (Sistem Kabel Rak- TM will also be responsible for 20
yat 1Malaysia [SKR1M]) was first years of operation and maintenance
brought up in the 2014 Budget to of SKR1M, and be paid accordingly
improve national broadband con- from the USP fund. TM will have
nectivity and reliability within Pen- no problem funding the capex of
insular Malaysia, Sarawak and Sa- RM400 million over two years and
bah. It was originally budgeted to has the experience in development
The overall property market is cost RM850 million. Subsequent- and investment in submarine caexpected to be challenging in first ly, the Malaysian Communica- ble systems.
quarter of 2015 (1Q15), especial- tions and Multimedia CommisWe reiterate our “underperly in Johor. However, we believe sion (MCMC) called for an open form” call and an unchanged TP
that Crescendo’s light balance sheet tender for the project under the of RM6.26 based on discounted
and right product offerings in Johor public-private partnership (PPP) cash flow valuation.
should provide some cushion.
arrangement using the Universal
The submarine cable project
Crescendo had planned RM850 Service Provision (USP) fund. The was within our expectations and
million worth of launches over the project will take around 2½ years we maintain our call mainly due
next two years. Its residential project, to complete and will include lay- to stretched valuation: (i) TM is
namely Bandar Cemerlang with gross ing of the submarine cable system trading at forward financial year
development value of RM3 billion, connecting Peninsular Malaysia, 2015 (FY15) price-earnings of 27.7
is targeted for launch in early 2015. Sarawak and Sabah and the set- times and enterprise value earnNo changes to FY15 and FY16E ting up of six cable landing stations ings before interest, taxes, depresales of RM200 million and RM209 (Mersing, Kuching, Bintulu, Miri, ciation and amortisation of eight
million, respectively. However, we are Kota Kinabalu and Cherating).
times, which is at the top end of
tweaking our sales mix to lean more
Although TM did not provide its historical trading range; and (ii)
towards its township offerings rather the contract value of SKR1M, it TM’s earnings may face headwinds
than its NCIP inventory sales. This was reported that the open tender from consolidating P1’s losses from
will result in softer billings and mar- was for a RM800 million contract. fourth quarter of FY14. — PublicIngin compressions. So, we reduce our Under the PPP, MCMC will be pro- vest Research, Dec 31
FY15 and FY16E earnings estimate
by 20% and 9% to RM65.7 million
and RM78.8 million, respectively.
We further reduce our TP to
RM2.46 from RM2.50 previously as
we further widen our revalued net
asset value discount to 61% (previously, 60%), pegging it to its historical high discount levels. Our TP
implies FY16E core price-earnings
of seven times, which is in line with
small- to mid-cap peers average of
7.1 times. Thus, we are comfortable
maintaining our “market perform”.
— Kenanga Research, Dec 31
Crescendo 9MFY15 results
below expectations
Crescendo Corp Bhd
(Dec 31, RM2.30)
Maintain “market perform” with
lower target price (TP) of RM2.46:
Crescendo’s nine-month of financial
year 2015 (9MFY15) core earnings of
RM38.2 million came in below our
and consensus expectations, accounting for only 47% and 60% of our and
consensus FY15E full-year estimates.
The weaker-than-expected results were mainly due to the lower-than-expected industrial property
inventory sales recognition from the
Nusa Cemerlang Industrial Park
(NCIP). Positively, its 9MFY15 sales
of RM182 million were well ahead
of our full-year estimates of RM200
million driven by its residential and
commercial properties in Taman
Dato Chellam.
Year-on-year (y-o-y), Crescendo’s
9MFY15 core earnings decreased
45% to RM38.2 million, following
the decrease in revenue (-18%) coupled with compression in earnings
before interest, taxes, depreciation
and amortisation (Ebitda) margins
(-10 percentage points [ppt]) to only
32.6%. The slump in revenue and
margin compression were mainly
due to lower industrial property
inventory sales from NCIP, which
normally contributes higher margins as compared with commercial
and residential properties.
Quarter-on-quarter (q-o-q), its
3QFY15 core earnings saw an improvement of 24% to RM18.1 million
despite a flattish revenue growth of
4%. The improvement on its core
earnings was largely driven by the
property operating margins improving by +13ppt to 43% due to similar
reasons above.
TM to provide partial capex
for SKR1M
H O M E 15
A sad New Year’s Day
As people mourned the crash of Indonesia AirAsia flight QZ8501
KUALA LUMPUR: There was no
celebration to welcome 2015 in
Surabaya, Indonesia on Wednesday night, as people mourned the
crash of Indonesia AirAsia flight
QZ8501, the BBC reported.
The British broadcaster said
hundreds of residents and relatives of those on board the jetliner
lit candles and observed a minute’s
silence for the victims in a vigil on
Wednesday night. Among those
at the vigil were young children.
New Year’s Eve celebrations in
East Java province were cancelled
while in Jakarta, people began new
year festivities with prayers for the
victims.
Several other Indonesian cities
have also cancelled or scaled down
their new year celebrations, the
BBC reported.
Indonesian news portal Detik.
com reported that there were no
fireworks lighting up the sky when
the clock struck midnight in Jakarta
and other cities.
In Pangkalan Bun, central Kali-
mantan, where search units were
based, the mood was dark and
sombre.
Onboard warship KRI Banda
Aceh, personnel ushered in the new
year chatting with each other and
drinking coffee, said operations
department chief Major Cahyo.
He said they needed to rest because they had to get back in the
search in the morning.
“Why does God send big disasters to us at the end of the year? It
started with the tsunami, then the
earthquake in Yogya, the loss of
Adam Air, and more,” he was quoted as saying by Detik.com.
Yesterday, Detik.com also reported that some family members
of QZ8501 passengers found their
luggage removed from their rooms
at Hotel Halogen, near the Juanda
International Airport in Surabaya.
Their belongings were reportedly moved out because the rooms
had been booked in advance for
the new year, angering the already
upset families, who scolded the
Indonesians holding up candles in a vigil for the victims of the ill-fated AirAsia flight in
Surabaya on Wednesday night. Photo by Reuters
hotel and AirAsia staff.
“We were told by AirAsia that
we could stay here until tomorrow
(yesterday). But when we reached
our rooms, we were shocked to find
our things moved out and left by
the door,” one family member told
Detik.com.
Indonesia AirAsia chief executive officer Sunu Widiatmoko had
earlier told a press conference
that it was a challenge to find ho-
Rising seas as search goes on for plane wreck
SURABAYA: Search teams looking
for the sunken wreck of AirAsia flight
QZ8105 struggled to resume fullscale operations yesterday after a
small window of fine weather closed,
giving way to rising seas which have
dogged the search from the start.
As dawn broke, revealing blue
skies, hopes had risen for divers to be
able to investigate what is believed to
be the fuselage of the Airbus A320200, which was carrying 162 people
when it crashed on Sunday during
stormy weather on a flight from Surabaya to Singapore.
“Clouds have started to descend
again ... and the weather conditions
will deteriorate again,” search and
rescue official Tatang Zaenudin
told TV, adding that the conditions
would limit air searches. “For the
sea search, we will continue.”
A team of 47 Indonesian Navy
divers is on standby to go down
to a large, dark object detected by
sonar on the ocean floor, lying just
30m to 50m deep. If it is the AirAsia
plane, divers would look to retrieve
its black boxes. None of the tell-tale
black box “pings” had been detected, an official said.
The plane’s black box flight data
and cockpit voice recorder should
help solve the mystery of the crash.
Investigators are working on a theory that it went into aerodynamic
stall as the pilot climbed steeply to
avoid a storm.
Bodies recovered from the Java
Sea are being taken in numbered
coffins to Surabaya, where relatives
of the victims have gathered, for identification. Authorities have been collecting DNA from the relatives to help
identify the bodies. Some of the bodies recovered so far have been fully
clothed, including a flight attendant
still wearing her AirAsia uniform.
That could indicate the Airbus was
intact when it hit the water and also
support the aerodynamic stall theory.
Most of the 162 people on board
were Indonesians. No survivors
have been found.
Strong wind and waves hampered the search and with visibility
at less than a kilometre, the air operation was called off on Wednesday afternoon.
“The weather ... was really challenging in the field, with waves up
to 5m high, wind reaching 40kph
[and] heavy rain, especially in the
search area,” Fransiskus Bambang
Soelistyo, the head of the search
and rescue agency, said.
Indonesian President Joko
Widodo said his priority is retrieving the bodies. Relatives, many of
whom collapsed in grief when they
saw the first grim television pictures
confirming their fears on Tuesday,
held prayers at a crisis centre at
Surabaya airport.
The plane was travelling at
9,753m (32,000 feet) and had asked
to fly at 38,000 feet to avoid bad
weather. When air traffic controllers granted permission for a rise
to 34,000 feet a few minutes later,
they received no response.
A source close to the probe into
what happened said radar data appeared to show that the aircraft made
an “unbelievably” steep climb before
it crashed, possibly pushing it beyond
the Airbus A320’s limits.
The AirAsia group, including affiliates in Thailand, the Philippines
and India, have not suffered a crash
since its Malaysian budget operations
began in 2002. — Reuters
Dr M: Why Boeing not using aircraft locator know-how?
KUALA LUMPUR: Former prime
minister Tun Dr Mahathir Mohamad has raised questions over aircraft
manufacturer Boeing’s apparent reluctance to use existing flight data
recording technology on commercial aircraft that can immediately
help locate a plane following a disaster, asserting that such a system
could make the search for crashed
jetliners much faster.
Writing in his blog yesterday about
the AirAsia Indonesia QZ8501 crash,
Dr Mahathir highlighted an ongoing
disagreement between Boeing and
rival Airbus over the use of deployable flight data and voice recorder
systems for commercial aircraft.
This system, according to the
description on the website of the
Flight Safety Foundation, either
allows the recorder to automatically eject itself from the aircraft
in a fatal crisis to become a beacon
locator for the downed plane later,
or to virtually transmit data upon
a “triggered transmission”.
Dr Mahathir noted that Airbus,
which made the 320-200 plane used
for flight QZ8501, is said to be ready
to move forward with the system,
but Boeing remained reluctant,
without any reasons given.
Boeing, the maker of the plane
for MH370, disagreed about the system being suitable or safe for com-
mercial planes. Yet, the company
had installed deployable recorders
on at least three military aircraft
fleets, Dr Mahathir said, citing an
article published in October this
year on the Flightglobal website.
“Just imagine if this recorder and
beacon are installed on the [Indonesia] AirAsia aircraft or MH370,
we would not have to search the
oceans for the planes.
“I cannot understand why Boeing is against it,” he wrote in his
popular chedet.cc blog.
The article titled “Why flight
tracking philosophies must align”,
said the Airbus concept involved
deploying one of the two sets of
flight data and cockpit voice recorders in the event of a mid-air
collision or impact with the ground.
The deployable unit includes
a locator beacon, and is designed
to float if the crash occurs in water,
said Dr Mahathir.
Dr Mahathir also cited a December 2006 Flightglobal article
titled “Diagrams: Boeing patents
anti-terrorism auto-land system
for hijacked airliners”.
The article reported that in late
November that year, Boeing had received a US patent for a system that
allows seizure of an aircraft by remote
control as a means to prevent terrorist
hijacking. — The Malaysian Insider
tel rooms near the crisis centre set
up at the airport on New Year’s Eve.
“The families will remain here
(Juanda airport). It is difficult for
us to find hotels on New Year’s Eve.
We will move them tomorrow (yesterday),” he reportedly said.
Detik.com said a Halogen Hotel receptionist had claimed that
the decision to remove the family
members’ belongings was approved
by AirAsia, and that AirAsia staff
had also helped to move some of
the items.
Flight QZ8501 was carrying 162
people from Surabaya to Singapore, when it disappeared on Sunday morning. There were 137 adult
passengers, 17 children, one infant,
two pilots and five crew members
on the Airbus A320-200. The majority of those on board were Indonesians.
Debris from the flight was found
in the sea on Tuesday and search
teams have begun recovering bodies of passengers and crew. — The
Malaysian Insider
Postpone GST to
deal with floods,
govt urged
KUALA LUMPUR: With time
needed to recover from flood
disasters around Malaysia, Putrajaya should defer the implementation of the goods and services tax (GST) that is to take
effect on April 1, the DAP said.
Its secretary-general Lim
Guan Eng said while the country dealt with a major natural
disaster that will cost billions
of ringgit in aid and rebuilding,
the GST should be postponed to
“avoid an economic disaster for
the 14.1 million labour force”.
He said the government’s assertion that the mean monthly gross household income has
increased by an annual rate of
8.4% to RM5,919 in 2014 from
RM5,000 in 2012 was meaningless for the 14.1 million labour
workforce of 13.7 million employed and 378,000 unemployed.
“A more accurate measure
is that the median income for
the bottom 40% of households
increased 11.2% to RM2,312 in
2014 from RM1,847 in 2012,” he
said in a statement yesterday.
Lim, who is also Penang chief
minister and Bagan MP, said a
deferment of the GST was important as 80% of households in
Malaysia were still earning less
than RM4,000 a month.
“This is why we have recorded the second-highest personal
household debt in Asia of 87%
of GDP (gross domestic product),” he said. Lim also reiterated DAP’s call for the federal
government to declare a state
of emergency for the floods. —
The Malaysian Insider
16 H O M E
Lawyer and his firm ‘betrayed trust of clients’
PUTRAJAYA: Lawyer Gurbachan
Singh and his legal firm have been
found by the Federal Court to have
betrayed the trust of their clients in
the purchase of more than 1,400ha
of estate land in Perak about 20 years
ago.
A five-man bench chaired by Tan
Sri Richard Malanjum on Nov 27
said the prominent lawyer should
have acted in good faith and refrained from profiting from the trust
placed in him in the purchase of
the land in Hutan Melintang, read
a court judgment on the case posted
on the Malaysian judiciary website.
“He should not have placed himself in a position where his duty and
his interest conflicted.
“He should not have acted for
his own benefit or the benefit of
any third person without the informed consent of his principals
(the purchasers),” said Malanjum,
the Chief Judge of Sabah and Sarawak, in dismissing an appeal by
Gurbachan and legal firm, Messrs
Bachan and Kartar.
Gurbachan was part of the legal
team which represented Datuk Seri
Anwar Ibrahim in his first sodomy
charge in 1999.
Malanjum said a committee representing the group had approached
Gurbachan to obtain his professional services to ensure claims of the
Twitter abuzz with
‘missing Rosmah’
The prime minister’s wife has not been present at his flood tours
KUALA LUMPUR: Social media users took to Twitter yesterday to enquire about the whereabouts of Datin Seri Rosmah Mansor, the wife of
the prime minister, a week after her
husband drew heavy flak from social
media after he was pictured golfing
with US President Barack Obama in
Hawaii at the height of the country’s
worst floods in decades.
Datuk Seri Najib Razak cut short
his holiday and returned last Saturday to tour badly hit flood areas to
monitor relief efforts as well as meet
evacuees, who numbered close to
quarter of a million earlier this week.
But the conspicuous absence
of his wife by his side has triggered
questions from online users.
“@NajibRazak Rosmah kat mana
(where is Rosmah), Rosmah Rosmah
kat mana (yeaa), Rosmah kat mana,
Rosmah Rosmah kat mana (ditanya
tanya lagi) (asking again) #TaufikBatisah,” tweeted Lucius Maximus,
mocking a short video clip which
had gone viral not long ago.
Kedahkini also asked: “ROSMAH
MANSUR KAT MANA?” ... TERUS
JADI TANDA TANYA (where is Rosmah Mansur? ... remain a question)”
MMXII (@faarahs_) tweeted in
Malay: “@_puteriazman rosmah
ada tak? Hahaha ada petanda tu
(was Rosmah around? Hahahah,
it’s a sign).”
In a tweet tagging several others,
including Najib and Gerakan Youth
chief Tan Keng Liang, Philbert Lorickson wrote: “mana rosmah? (where
Almost half of flood
victims return home
KUALA LUMPUR: The flood situation improved greatly in Kelantan
and almost half of the evacuees
were allowed to return home yesterday morning.
A spokesman from the state Social Welfare Department said the
number of evacuees had dropped
from 81,458 on Wednesday night
to 44,081 as at 10am yesterday.
He said there were from 10,753
families still housed in 178 relief
centres in eight districts.
They comprised 14,184 evacuees in Tanah Merah, Tumpat
(9,524), Kuala Krai (5,645), Kota
Baru (4,910), Machang (3,769),
Pasir Mas (3,015), Gua Musang
(3,006) and Pasir Puteh (28).
The weather in Kelantan was
also reported to be fine yesterday morning. The total number of evacuees in Kelantan, Pahang, Terengganu, Perak and
Johor stood at 111,855 yesterday
morning.
In Terrenganu and Pahang,
the flood situation continued
to improve, with the number of
people sheltering in Terengganu dropping to 10,051 yesterday
morning from 11,175 on Wednesday night. In Pahang, the number
dropped slightly to 50,272 from
50,292 on Wednesday night. They
are housed in 232 relief centres in
eight districts.
A spokesman for the state
police contingent headquarters’
flood operations room said Temerloh still had the highest number of evacuees at 21,773 at 70
relief centres.
Pekan district had 13,425
evacuees, Jerantut (4,776), Bera
(3,174), Maran (3,021), Lipis
(2,745), Kuantan (1,174) and
Rompin (130).
In Perak, the number of evacuees rose slightly to 7,313 (from
1,981 families) from 7,139 (1,950
families) last night, housed in 52
relief centres in five districts.
Central Perak still had the highest number yesterday morning
at 5,145, Kuala Kangsar (1,231)
Hulu Perak (762), Kerian (107)
and Manjung (68).
In Johor, the number remained
at 138 in two districts — Segamat
(93) and Batu Pahat (45). — Bernama
is Rosmah?) Why no go kelantan?
(Why has she not gone to Kelantan?)
Ahliang can you ask this question
(?) please repeat 100x (100 times)?”
Megat Trainor (@akeemzamani) posted sarcastically: “Rosmah
ulang alik kt US shopping barang
utk mangsa banjir kot #Husnuzon”
(Rosmah may be travelling back and
forth to the US to shop for things for
flood victims), and got a cheeky reply
from Munifah (@mo0n94): “alhamdulillah (praise be to God). Mcm ni
la FLOM yg kita nak (This is the first
lady of Malaysia that we want).”
Najib’s Twitter account was filled
with pictures of him speaking to flood
evacuees.
Rosmah’s absence from the country at a time of national disaster has
led to allegations she is not practising
what she preaches. In a Nov 7 report
in a local daily, Rosmah was quoted as
saying that the wives of the country’s
leaders and people’s representatives
played a pivotal role in motivating
them to serve the rakyat better.
“Behind every successful husband
is a loyal and supporting wife. As
wives of politicians, it is our duty to
support and motivate our husbands
and ensure they can better serve the
rakyat,” she said.
In the report, Rosmah, the president of the Association of Wives
of Ministers and Deputy Ministers
(Bakti), said women should improve
their soft and inter-personal skills, in
educating the public on current political issues. — The Malaysian Insider
purchasers of the land were secured.
“In this case, the evidence adduced and on the given facts and
circumstances, the relationship between Gurbachan and the purchasers could only be properly characterised as fiduciary,” Malanjum
said in 101-page judgment. — The
Malaysian Insider
Police find
senior citizen
living in jungle
for 30 years
BY A H MA D MUL IA DY
A B D UL MA J ID
KUALA LUMPUR: Amid the rapid development in the national capital, the plight of an old
man living in a patch of jungle
in Wangsa Melawati for the past
30 years is easily overlooked. Mohamad Dris, 74, says he has lived
alone in the jungle behind the
Damaisari housing area as he
could not afford to rent a house
after losing his rubber tapping
job. The area was originally a rubber plantation.
“I am too old to work, and
worse, I have diabetes. I have to
be careful with what I eat fearing
it will worsen,” he told Bernama
at his hut in the tiny jungle.
Mohamad, who has never
married, said he did not like to
seek sympathy from others but
tried to continue his life alone.
The dilapidated hut, which he
built in 1980 using discarded
planks and zinc, is now rotting
and contains a wooden bunk
he made himself, covered with
a mat for him to sleep on. He
has never enjoyed electricity and
running water since he moved
into the hut.
Wangsa Maju Police Station
deputy chief Sergeant Jasman
Aris told Bernama police found
the old man when conducting
Operation “Santa” on Christmas
Eve. “We had received complaints
from local residents about a hut
in a small jungle area behind the
Damaisari housing. They were
worried the hut could be used
as a den for criminal activities.”
Jasman said police raided
the hut at 1am. Their arrival was
greeted by dogs barking. Then a
weak old man wearing a wornout sarong and shirtless emerged
from the hut.
“We felt sad looking at his
situation. A policeman quickly
bought food and the old man
shed tears ... He then broke into
a smile and said he could not eat
rice and consume sweet drinks as
he had diabetes,” Jasman said. He
said the Wangsa Maju Police Station had notified the Federal Territory Islamic Religious Council
Baitulmal, and is trying to find a
more comfortable home for him.
Mohamad said: “I want to
thank the policemen at the
Wangsa Maju Police Station for
bringing food ... Now I don’t have
to worry where my next meal is
coming from. — Bernama
P R O P E RT Y 1 7
Vinci awarded RM700m Jesselton Residences project
BY L I M KI A N WEI
KOTA KINABALU: Vinci Construction Grands
Projets Sdn Bhd has been awarded the main
contract to complete Jesselton Residences in
Kota Kinabalu, Sabah, by Palikota Sdn Bhd.
Palikota is a wholly-owned subsidiary of
Jesselton Waterfront Holdings Sdn Bhd (Jesselton Group), and Vinci Construction is a
wholly-owned subsidiary of Vinci, a French
concessions and construction company founded in 1899 as Societe Generale d’Enterprises.
Projects undertaken by Vinci Construction
in Kuala Lumpur include the Berjaya Times
Square and Berjaya Central Park, which incorporate the Ritz Carlton Residences and
offices for Bangkok Bank. In Kota Kinabalu,
Vinci Construction is building Menara Hap
Seng in the central business district (CBD).
Jesselton Group executive chairman Datuk David Chu expressed confidence that
with the appointment of Vinci Construction, purchasers will be assured of quality
finishes and construction.
Jesselton Residences has a gross development value of RM700 million and is scheduled to be completed by July 2016. The development features three towers comprising
333 luxury condominium units and a premium mall in the podium. The mall will have
123 lots spread over three floors with a net
lettable area of 80,000 sq ft. The building has
Jesselton Residences has a
gross development value of
RM700 million.
28 storeys and will be the tallest building
in the Kota Kinabalu CBD waterfront area.
The selling price of the units starts from
RM700 per sq ft with built-ups ranging from
1,669 sq ft to 2,266 sq ft. The mixed development was first launched in December 2011
with a take-up rate of 80%.
About 80% of buyers are Sabahans. The rest
are from countries such as China, Hong Kong,
Japan and South Korea with direct flights
to the Kota Kinabalu International Airport.
Gatehouse and Sigma to
develop 927 rental homes
HOT DEALS
How much is your property worth?
Which and what property has just been
sold, and for how much? What interesting
buys are now on the market? Check out
the following Hot Deals of the week.
Go to www.theedgemarkets.com for more.
Sold
JV to address imbalance in delivering affordable and sustainable housing in UK
BY L I M KI A N WEI
LONDON: Gatehouse Bank plc and Sigma
Capital Group have started construction of
927 rental homes in the greater Manchester
and Liverpool areas in the United Kingdom.
Gatehouse is a wholesale syariah-compliant investment bank based in London, while
Sigma Capital is an Alternative Investment
Market-listed finance, residential property
and urban regeneration specialist with offices in Edinburgh, Manchester and London.
“The importance of the [private rental]
sector is becoming increasingly critical as
the supply and demand imbalance of quality in UK housing stock continues. The joint
venture will play its part in addressing the
imbalance to deliver affordable, sustainable,
efficient homes in scale and in areas where
they are most needed,” said Gatehouse real
estate investment vice-president Scott Nicol
in a statement recently.
The project has a development cost of £110
million (RM600 million) and comprises 927
double-storey linked houses and apartments
for the private rental sector. The expected total
built-up is 720,000 sq ft across 14 sites with
an average rental value of £650 per month.
Gatehouse noted that the units are not
for sale and cater for locals, expatriates and
Thomas: We are
delighted to see
Gatehouse playing a
strong role in developing
the real economy in such
a crucial sector.
students. The first batch
of homes is scheduled for
completion and lease by
the second quarter of 2015.
The land was acquired
from the city councils in
Manchester and Liverpool at a discount.
“Further to the [British] prime minister’s
positive statement on Gatehouse and Sigma’s
intention to develop much needed housing
stock for the private rental sector, I welcome
the announcement that development work
has begun in Liverpool and Greater Manchester. This is a sure sign of investment
flowing into cities in the north of England,
which contributes to the local economy,
creates jobs and delivers more homes for
hardworking people,” said UK Minister for
Universities, Science and Cities Greg Clark.
“We are delighted to see Gatehouse playing a strong role in developing the real economy in such a crucial sector,” said Gatehouse
Malaysia chief representative Richard Thomas.
Thomas said that relations between leaders in
the Malaysian Islamic finance sector and the UK
had played an important
role in promoting initiatives within the UK. Initiatives such as the World
Islamic Economic Forum
in London had led directly
to the first UK government
sukuk. He noted that future
cooperation between Malaysia and the UK
can bring more success in developing real
benefits for mutual economic development.
Gatehouse Malaysia’s first local recruit
Sharifah Bakar Ali told The Edge Financial
Daily that the tie-up is to develop the Islamic
real estate capital market in the UK in the
years to come. This offers the potential for
the issuance or creation of syariah-compliant Islamic real estate investment trusts
(REITs) or sukuk. It also showcases the value
of syariah-compliant investments in the UK
and supports the UK government’s effort in
developing the country into a Western hub
for Islamic finance especially, after the issuance of its maiden sukuk recently.
Marriott International launches fifth hotel in India
BY LIM K I AN WE I
Kochi Marriott Hotel offers 274 rooms, including
25 club suites, one vice-presidential suite and a
presidential suite.
KOCHI: Marriott International Inc launched
its fifth hotel in India — Kochi Marriott Hotel in Kerala — on Dec 21.
“Kochi Marriott Hotel introduces a stylish,
modern hotel experience for guests and has
been designed to provide the best in-house
service and facilities for business and leisure
travellers,” said Kochi Marriott Hotel general
manager Vineet Mishra in a statement recently.
Kochi Marriott Hotel is located 22km from
the Cochin International Airport, 9km from
the city centre and within walking distance
from the Lulu Mall.
The 21-storey hotel offers 274 rooms, including 25 club suites, one vice-presidential
suite and a presidential suite. The hotel has
200 parking bays and eight meeting rooms
for functions, which can accommodate up
to 600 people per room.
“We believe the city of Kochi has tremendous potential for business and hospitality
growth, making it an obvious choice for the
Marriott Hotels brand,” said South Asia Marriott
International vice-president Rajeev Menon.
He told The Edge Financial Daily that the
hotel’s location is an upcoming business
hub and commercial area. Currently it’s
surrounded by shopping malls and entertainment zones. The Lulu Mall near the hotel
has over 150 retail outlets with an average
daily footfall of 85,000.
Marriott International revealed that over
20 hotels will be opened next year within
Asia-Pacific, offering more than 6,000 rooms.
Serviced apartment in Vue Residences,
Titiwangsa, Kuala Lumpur
Built-up: 737 sq ft; 2 bedrooms; 1
bathroom; Freehold; RM530,000
This unfurnished unit has one car park
bay. Located in Jalan Pahang, the serviced
apartment is within walking distance to the
Titiwangsa monorail station and Ampang
LRT line, as well as the Pekeliling bus station. Other nearby developments include
KLCC, Bukit Bintang, Kuala Lumpur Hospital, Putra World Trade Centre, Grand
Seasons Hotel, National Art Gallery and
National Library. It is accessible via Jalan
Tun Razak, Jalan Kuching, Jalan Chow
Kit, Jalan Ipoh and the NKVE. Facilities
available include an indoor lap pool and
children’s pool, a pool deck and terrace,
changing rooms, a multipurpose hall, a
games room, a gymnasium, 24-hour security, CCTV surveillance, a rooftop garden
and barbecue area.
Sale concluded by Laura Rahim of Hartamas Real Estate (Malaysia) Sdn Bhd
(012) 787 3799
On the market
3½-storey bungalow in Bukit
Damansara, Damansara Heights, Kuala
Lumpur
Built-up: 13,000 sq ft; Land area:
12,300 sq ft; 8+ bedrooms; 7
bathrooms; Freehold; RM17 million
This house is partly furnished and vacant.
It has 3½ floors, which includes a basement that can accommodate six cars and
two rooms. The ground floor consists of a
living hall, dining area, dry and wet kitchens, a room, swimming pool and garden.
Its master bedroom is located on the first
floor with four other bedrooms, while the
second floor has an AV room, a study, an
additional room and a bathroom. Schools
nearby include Sri Cempaka, SMK Sri
Hartamas, SK Bukit Damansara and SK
Taman Sri Hartamas. The house is close
to Plaza Damansara.
Sale handled by Sean Seng of Hartamas Real
Estate (Malaysia) Sdn Bhd (012) 227 9807
18 FO CU S
FR I
A
2
The seven
best cars to
start 2015
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From coupes to supercars to SUVs
BY HA NN A H EL L IOTT
A
hh, New Year, new
you. Better yet, new
car. The Chinese zodiac tells us 2015 is
the Year of the Green
Wooden Ram, if you
believe all that. (It’s also known as
the Year of the Sheep or Goat — the
details remain foggy.)
Let’s go with the ram: Apparently that woolly creature represents
prosperity and well-being, and the
relaxed feeling that comes after work
well done. 2014 was the year of the
horse, after all — a proper beast of
burden. Work animal. So it’s only fitting that you should reward yourself
with something grand.
I’ve got a few ideas.
Why not consider the US$106,500
(RM372,750) Audi RS7? It’s a fastback four-door sedan that marries
Audi’s S line of sporty sedans to its
performance R line. It comes with
a turbocharged 560-horsepower
V8 engine, 516 reassuring poundfeet of torque, and a top speed of
174mph. Adaptive suspension, a
high performance-tuned eightspeed automatic transmission and
all-wheel drive are standard.
Rims, fender, grille
The RS7 will hit 60mph in 3.7 seconds, equal to the Mercedes CLS63AMG and much quicker than
similarly priced Porsche 911 Carrera
(0-60mph in 4.3 seconds). The 20inch rims, flared front fenders, and
gaping black grille are perfect counterparts to the sexy slanted roofline
and clean side body. If you want the
space and power of a large sedan but
won’t sacrifice the performance and
allure of a sport coupe, you’ll love it.
How about something with fewer doors but more grandeur? Try
the six-figure Rolls-Royce Wraith, a
5,500-pound, 17-foot coupe whose
nimble athleticism, silent interior
and haute style beat all competitors
in this range. Not that it really has any
competitors: the Wraith has a V12,
624-horsepower twin-turbo engine,
power-operated doors that swing out
the opposite way of most cars, and a
massive trunk. Beat that, if you can.
Or maybe something whippet-light and considerably less polite: the McLaren 650S Spider. I like
this one for its virtual perfection as a
road-friendly race car.
A caged cat
For a convertible with a pedigree,
consider the F-Type Jaguar. It’s
modern but also a direct descendent of the E-Type, a car often considered the most beautiful ever
made. The 2016 versions of the
F-Type coupe and convertible come
with a manual gearbox — increasingly rare in any automobiles — or
optional all-wheel-drive. Plus they
come with a 770-watt Meridian surround-sound audio system, 14-way
power seats, and remote engine
start. All as standard offerings.
When that F-Type engine turns
over, it sounds like a caged, enraged
cat. Pair it with those feline arches
and the thing sounds and looks
almost as hot as its predecessor.
It drives like an animal — and not
exactly the woolly variety.
Our recommendations for 2015, by
type, below:
Coupe — Rolls-Royce Wraith
This huge and incredibly athletic coupe, named after a previous
1938 model, has a downright aristocratic profile with a long front
hood and erect windshield. The
effect simulates those handsome
blue-blood faces carved into Victorian-era ivory cameos. Options
like exotic woods, bespoke leather,
lambswool floor mats and champagne coolers are just the start of
what it offers, for the right price
(US$320,000).
in t
01
please do. This is one of the most funto-drive cars I’ve tried. It combines
the thrill of driving an M machine
with the height-induced dominance
you feel driving an SUV. Its square,
punchy stance reminds me of an eager pitbull, and those muscles don’t
lie: It has a 567-horsepower twin-turbo V8 that does 0-60mph in 4 seconds
flat. Try it, you’ll like it (US$102,100).
02 Convertible — Jaguar F-Type
Oddball — Mercedes AMG GT
This stunner replaces the SLS gullwing models Mercedes virtually perfected decades ago. I call it an oddball
because it’s simultaneously short in
the rear and long in front; the extended hood is especially phallic, just like
it was in the SLS. This one, though,
is lighter with a bigger trunk and a
new V8 engine (503 horsepower).
Its seven-speed automatic transmission will go 0-60mph in 3.7 seconds
(US$150,000).
Sedan — Audi RS7
This is my favourite sedan of 2015
so far. It comes with a turbocharged
560-horsepower V8 engine, 516 reassuring pound-feet of torque, and a
top speed of 174mph. Adaptive suspension, a high performance-tuned
eight-speed automatic transmission,
and all-wheel drive are standard. The
RS7 will hit 60mph in 3.7 seconds,
equal to the Mercedes CLS63AMG
coupe and much quicker than the
similarly priced Porsche 911 Carrera (0-60mph in 4.3 seconds). Drive
it for a week and you’ll fall in love
(US$106,500).
SUV — BMW X6M
Sorry I’m not sorry. I love this car. Yes,
you hate how it looks. Yes it’s small
for an SUV. Some might call it a simplified, jacked-up sedan. But hear
04 me out. Have you driven it? If not,
The new edition (a 2016 model)
comes with a manual transmission
on the supercharged V6 (that’ll get
you 340 horsepower or 380 horsepower in the souped-up S line).
That’s significant because almost no
automakers — even luxury sportscar automakers — sell them anymore. And because they’re really
fun. Or you can choose an F-Type
03 with all-wheel drive, a first-timefor-the-model thing that is optional on the V6 F-Type and standard
on the R models. Either way you’ll
come out ahead. Pricing to be determined (TBD).
01. The Rolls-Royce Wraith is a
huge and incredibly athletic
coupe, named after a previous
1938 model.
02. The Mercedes AMG GT is a
stunner that replaces the SLS
gullwing models Mercedes
virtually perfected decades ago.
03. The Audi RS7 comes with a
turbocharged 560-horsepower
V8 engine, 516 reassuring
pound-feet of torque and a top
speed of 174mph.
04. The BMW X6M combines the
thrill of driving an M machine
with the height-induced
dominance you feel driving an
SUV.
Supercar — McLaren 650S Spider
McLaren introduced the new 650S
as a second act to 2011’s successful
12C, but its unmistakable swooping sidelines and gaping air intakes
mark it as a direct descendent of the
line’s Formula One icons. It has a
twin-turbo V8 mid-placed engine
(641 horsepower, 500 pound-feet of
torque), new double-wishbone suspension, and Formula One-derived
seven-speed double-clutch transmission for that elegant performance. Oh, and its 3-second 0-to62mph sprint time beats the 12C,
Ferrari F12 and Porsche 911 Turbo.
Top speed is 207mph ($280,225).
Bonus — The Mystery Bentley SUV
Look for the Bentley SUV toward
the end of the year. The company
has been hyping it for years now,
and after a prototype received some
criticism for its overblown looks,
I’m intensely curious about how
it’ll look and drive when it finally debuts. Bentley has promised
that it’ll be the most powerful and
most luxurious SUV on the market
today — and will look better than
initial concepts. We shall see. Pricing TBD. — Bloomberg
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FO CU S 19
F R I DAY JA N UA RY 2, 2 015 • T HEED G E FINA NCIA L DA ILY
Audi to invest US$29b through
2019 to surpass BMW
BY C L AU D I A RACH
AUDI will spend €24 billion (RM102
billion) to develop technology and
expand production, boosting its fiveyear investment plan by €2 billion
as it chases BMW for the top spot in
luxury car sales.
About €16.8 billion, or 70% of the
total, is earmarked for new models
like the Q1 subcompact sport-utility vehicle, the Ingolstadt, Germany-based unit of Volkswagen AG
(VOW) said on Saturday in a statement. Audi expects to sell a record of
more than 1.7 million autos this year.
“We are making large investments
in the innovative areas of electric mo-
bility, connectivity and lightweight
construction,” chief executive officer
Rupert Stadler said in the statement.
The brand intends to increase its lineup to 60 models by 2020 from 50.
Audi, the No 2 in global luxury
car sales, aims to surpass BMW AG’s
namesake brand in deliveries by the
end of the decade. The race tightened
this year. BMW outsold Audi by just
42,600 cars in the first 11 months of
2014 compared with 54,600 a year earlier. Audi’s budget is part of Volkswagen’s €85.6 billion investment programme to beat Toyota Motor Corp
in global auto industry sales.
Audi plans to spend the equivalent
of €4.8 billion a year, an increase from
the previous rolling five-year plan that
called for investing €4.4 billion annually in new vehicles and expanding
production capacity.
“Despite the growth in total investment, we will keep a watchful eye on
the upcoming challenges and exercise
the required cost discipline,” chief
financial officer Axel Strotbek said.
Audi, which already outsells BMW
in China and Europe, is aiming to
catch up in the United States. In November, it unveiled the Prologue concept car in Los Angeles to showcase
a more aggressive design. The company also plans an electric crossover
for the US in 2017 to challenge Tesla
Motors Inc and is building a factory
in Mexico that will start building the
Q5 SUV in 2016 for America.
BMW is seeking to fend off Audi
and Mercedes-Benz, which also covets the top spot, with its own expansion, adding cars like the US$44,700
(RM156,450) X4 coupe-like SUV and
the US$135,700 i8 plug-in hybrid
sports car. — Bloomberg
An Audi R8 5.2 luxury automobile sits
on display in the Audi AG Forum in
Neckarsulm, Germany. Audi, the No
2 in global luxury car sales, aims to
surpass BMW AG’s namesake brand in
deliveries by the end of the decade.
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Billionaires chasing Warhols fuels US$16b art sales
01. Andy Warhol’s Triple Elvis,
a 1963 silkscreen of Elvis
Presley, sold for US$81.9
million at Christie’s on Nov
12, 2014. Warhol’s Four
Marlons depicting four
identical images of a young
Marlon Brando fetched
US$69.6 million.
BY MA RY ROMA N O
ANDY Warhol was the top-selling
artist at an auction in the past year as
increased competition for the most
expensive segment of the market
drove global art sales higher.
Collectors bought 1,295 works
by the deceased artist totalling
US$653.2 million (RM.29 billion),
ahead of sales for Pablo Picasso and
Francis Bacon, according to preliminary figures by New York-based researcher Artnet. Auctions worldwide
rose 10% to US$16 billion.
Art sales have more than doubled from US$6.3 billion in 2009, as
surging financial markets lifted the
fortunes of the world’s richest. The
top 400 billionaires added US$92
billion in wealth this year, for a net
worth of US$4.1 trillion as of Monday, according to the Bloomberg
Billionaires Index. Bidding for the
most coveted artists has been driving
much of the surge in auctions, said
Jeff Rabin, a principal at advisory
firm Artvest Partners in New York.
“The headline number is not so
much a comment on the art market
as it is on global wealth,” Rabin said.
“We haven’t seen a considerable
increase in the number of objects
sold. We have seen price appreciation at the top end.”
A record US$2.3 billion of art
was auctioned over two weeks in
New York in November. As part of
those auctions, Christie’s on Nov
12 sold 75 contemporary works for
US$852.9 million, a record for an
evening auction.
“That total in one evening sale
for less than 100 works is extraordinary,” Rabin said.
No women
At US$16 billion, this year’s art sales
would be the second highest on record. The Artnet numbers for 2014
are preliminary, and final figures
next week could still surpass the
previous record of US$16.3 billion,
set in 2011. The figures take into account sales of paintings, drawings
and sculpture but not other collect-
02. Georgia O’Keeffe’s Jim Weed/
White Flower No 1 sold
on Wednesday for nearly
three times the work’s high
estimate of US$15 million.
01
02
03. Amedeo Modigliani’s Tete is
sold for US$70.7 million at
Sotheby’s on Nov 4 in New
York.
04. Alberto Giacometti’s ‘Chariot’
is sold for US$101 million at
Sotheby’s on Nov 4 in New
York.
05. An untitled 1970 painting by
Cy Twombly sold for US$69.6
million at Christie’s in New
York, an auction record for
the artist, on Nov 12, 2014.
03
ibles such as furniture or decorative
objects. The numbers also don’t
include private sales.
No women were among the top
10 artists in 2014, and only one, Gerhard Richter, 82, is still living.
Warhol, who died in 1987, had
two of the most expensive works
at an auction in 2014. Triple Elvis,
a 1963 silkscreen of Elvis Presley
in a publicity image for the movie
Flaming Star in which the singer is
shown as a cowboy with a gun, sold
for US$81.9 million.
Four Marlons, a 1966 canvas depicting four identical images of a
young Marlon Brando wearing a
leather jacket and a cap in a still from
the movie The Wild One, fetched
US$69.6 million. Both works were
sold in November at Christie’s in
New York.
04
Chinese artists
Picasso was the second-biggest
selling artist, with 2,820 of his
works fetching US$448.7 million.
Although he didn’t have an individual work among the top sellers,
collectors sought out the artist because he had “an incredible body
of work and multiple periods of
exceptional work,” Rabin said.
Bacon, Richter and Mark Rothko rounded out the top five artists. Two Chinese artists, Qi Baishi,
known for painting shrimp, fish
and frogs, and Zhang Daqian, who
was famous for his landscapes,
ranked sixth and ninth, respectively. Claude Monet was seventh, with
US$252.1 million of his works sold.
Jean-Michel Basquiat was 10th, at
US$172.2 million.
Alberto Giacometti’s “Chariot”
05
sculpture of a painted bronze figure on wheels ranked as the most
expensive work at an auction this
year, when it sold for US$101 million in November at Sotheby’s in
New York. The artist, who died in
1966, ranked eighth among the
top 10 artists with 140 of his works
selling for US$235.2 million.
Black fire
Although they didn’t rank among
the top 10 artists, Cy Twombly,
Barnett Newman and Edouard
Manet took spots among the top
sales. After Giacometti’s sculpture,
Newman’s Black Fire I, a canvas of
vertical blocks of black and beige,
was the second most expensive
sale at US$84.2 million at Christie’s in May.
A rare 1970 painting of white
concentric loops on a gray background by Twombly set an auction
record for the artist in November at
Christie’s, fetching US$69.6 million.
Manet’s Le Printemps, a portrait
of a woman with a parasol, was
purchased by the J Paul Getty Museum in Los Angeles for US$65.1
million at Christie’s on Nov 5.
Bacon, Rothko and Amedeo
Modigliani also had works among
the top 10 sales of 2014.
An untitled abstract painting
by Joan Mitchell sold for US$11.9
million at Christie’s in New York in
May, setting an auction record for
a woman artist. Georgia O’Keeffe
broke that record six months later,
when her painting Jimson Weed/
White Flower No 1 sold for US$44.4
million at Sotheby’s on Nov 20. —
Bloomberg
20 C O M M E N T
Hangover for US investors?
Two-year run has propelled US stocks up by nearly 50%
BY DAVI D GA FFE N
& ROD RI GO CA MP OS
R
evelers may need
to watch out for the
next day’s hangover.
Investors may experience a similar feeling
early in 2015 after a
two-year run that has propelled
US stocks up by nearly 50%.
The S&P 500 gained more than
11% on the year, shaking off concerns about valuations thanks to
improved economic growth and
a very accommodative US Federal
Reserve. Add in dividends and the
advance was nearly 14%.
However, the S&P 500’s forward
price-to-earnings multiple — based
on 2015 earnings expectations —
is at about 17 now, exceeding the
15-year average of about 15.
The valuation level means that
a pickup in profits growth may be
essential if the market is to continue to add to its historic gains. Yet,
Wall Street analysts’ estimates for
S&P 500 earnings growth for coming quarters are languishing in the
mid-single digits.
With the Federal Reserve ready to
begin raising interest rates for the first
time in a decade and the strong dollar
providing a headwind for companies
with overseas operations, a lot will
depend on whether the recent strong
growth in domestic demand can drive
corporate profits higher than those
estimates. Whether consumers and
companies benefit enough from lower oil prices to more than offset the
effects of the slide on the energy sector is also critical.
“Multiples almost always go down
when the Fed raises rates; you’re going to have to depend on earnings,”
said Jim Paulsen, chief investment
strategist at Wells Capital Management in Minneapolis, which has
US$345 billion (RM1.2 billion) in
assets under management.
The S&P 500’s forward price-toearnings ratio sat at about 13 times
at the beginning of 2013; it is now
closer to 17, according to Thomson
Reuters data.
Since 1940, such a level is associated with S&P returns (excluding dividends) of about 5% over a
12-month period, according to data
from Citigroup. The high valuation
concerns are starting to have some
impact on trading. Stocks have been
noticeably more volatile in the last
few months; the CBOE Volatility Index, or VIX, has averaged 15.4 over
the past 12 weeks, compared with
12.6 at the end of August.
If the Fed tightens, the higher rates
would not only raise financing costs
generally but would also be a deterrent to borrowing to fund the share
buybacks that have helped propel
earnings per share growth and stock
prices gains in the past few years.
With such artificial support
crumbling, corporate America
will have to rely much more on
demand from domestic customers
to drive earnings growth. Europe is
expected to grow at just above 1%
in 2015, according to Reuters data;
Russia has been slammed by oil’s
decline, and China and other major
emerging markets are struggling
with weak demand as well.
Switching to more of a reliance
on sales growth rather than the Fed’s
cheap money may not be an easy
transition. Fourth-quarter estimates
have plunged in recent weeks, largely in the energy sector as crude oil
prices have cratered. Annual growth
is now expected to come in at 4.3%
for the S&P 500 in the fourth quarter, down from a forecast of 11.1%
growth on only Oct 1.
Citigroup’s chief equity strategist, Tobias Levkovich, in a note on
Tuesday, said estimate cuts in the
next few weeks, when companies
typically warn if they expect to report disappointing quarterly results,
could lead to some reversals and
volatility, as “some of the late 2014
S&P 500 gains appear to have been
borrowed from 2015’s returns.”
In perhaps a sign of things to
come in the energy sector, Civeo
Corp, which builds temporary
housing for oilfield workers, said
revenue could fall by one-third due
to falling crude prices, and it cut its
workforce and suspended its dividend. The company’s shares lost
almost 53% on Tuesday.
Earnings expectations for S&P
500 companies for the first half of
next year aren’t that encouraging:
First- and second-quarter earnings
growth estimates currently stand at
5.3% and 5.9%, respectively.
“If you don’t feel that you have
the earnings wind at your back,
and you don’t have the monetary
policy wind at your back, why pay
more than the prices people have
paid in many cases since 2000 for
stocks?” said Mike O’Rourke, chief
market strategist at JonesTrading
in Greenwich, Connecticut.
That said, earnings expectations
coming into 2014 turned out to be
far too pessimistic: On Dec 31, 2013,
the forecast was for per-share earnings of US$120.89 on the S&P 500.
With fourth-quarter earnings season
approaching, actual and expected
earnings were US$126.50 per share,
according to Reuters data.
So far in the fourth quarter, expectations have fallen largely due to
the energy industry’s woes. But sectors that could benefit from lower
fuel costs, particularly the consumer
discretionary sector, which includes
many retailers, have not seen an
attendant pickup in expectations.
That sector is currently forecast to
grow 8% for the quarter, down from
13.9% estimated on Oct 1.
Despite the caution, few are calling
for a bear market given the US economy’s acceleration. An early December
Reuters poll of Wall Street strategists
forecast the S&P 500 hitting 2200 at
the end of 2015. After December’s big
gains, that suggests just a small rally
amid a year of short-term advances
and retreats. That said, it’s not as if
2014 didn’t have its rough spots, and
yet the year is ending with a flourish.
“In the spring of 2014 the market
went nowhere for three months. In
the summer through the fall the
market went nowhere, and the market at its bottom in October was
unchanged for the year,” said Dan
Greenhaus, chief strategist at BTIG
LLC in New York.
“The question is whether the
general environment is supportive of higher stock prices, and the
answer is still yes.” — Reuters
Geopolitical concerns to weigh in this year
with their neighbors.
The main risk, according to Tan
Kim Eng, head of Asia Pacific sovereign ratings at S&P, is that dissatisfaction with Chinese economic
reforms leads to more aggressive
foreign policy.
However, as long as China’s
economy remains “robust”, its
leadership should keep their current stance.
BY CAT HERI N E BOYLE
THE geopolitical storms which
rocked markets in 2014 are unlikely to calm in the coming year,
with a raft of warnings about a new
era of instability.
The relative calm to the start of
2014 now seems like a distant memory. “From jihadism to populism
to revanchism, politically-generated challenges to globalisation
are transforming the landscape,”
as Tina Fordham, chief global political analyst at Citi, pointed out
in a report.
And after many got their fingers burned by not spotting risks
like the dispute between Russia
and Ukraine this year, investors
are likely to react more quickly to
geopolitical concerns.
On one hand, this could be positive as big market moves in response to news can often be the
spur for governments to take action.
Yet on the other, it’s likely to
mean a bumpier ride for investors. They may want to put some
history books on the economic
fallout from previous crises on their
Christmas list.
Here are four of the key themes
likely to worry investors next year.
Russian rumblings
Russia’s relationship with the West
is at its worst since the fall of the
Berlin Wall a quarter of a century ago, and its economy is teeter-
ing on the brink of full-scale crisis.
Trapped by an oscillating ruble oscillates and plummeting oil price,
President Vladimir Putin may lash
out — or choose to negotiate.
Unfortunately, the lessons of
2014 suggest that it is probably
safer to be pessimistic about the
chances of Putin choosing a more
diplomatic path.
There can be some wisdom in
“going against the crowd and ignoring the short-term ‘noise’” as
Alan Higgins, chief UK investment
officer at Coutts, who has suggested buying Russian equities as an
anti-consensus play, told CNBC.
Islamic State and the Taliban
The rise of Islamic State of Iraq
and Syria, now believed to be the
richest terrorist group in the world
after plundering banks and capturing oilfields in Iraq, was one of
the most important international
stories of 2014.
In December, just after a gunman claiming to be allied to Isis
was shot in Sydney, Australia, rival
Islamic extremists in the Taliban
The geopolitical storms which rocked markets in 2014 are unlikely to calm in this year.
Photo by AFP
stepped up their campaign in Pakistan, with a horrifying attack on
a school.
History suggests that it will be
difficult to defeat either group by
airstrikes, such as those currently
being carried out by a US-led coalition, alone, and that further attacks
by both groups are likely.
Add into the mix the declining
oil price, which by limiting economic prospects will make the Middle
East’s oil producing countries more
vulnerable to popular protest, and
the cauldron of the Middle East
looks set to seethe for longer.
Lebanon, Jordan, and Turkey
have the greatest spillover risks
from the conflict in Iraq and Syria, according to Ana Jelenkovic, an
analyst at the Eurasia Group, who
also highlighted the potential for
violence on Israeli borders.
European elections
Just as populations across the European Union are getting more restive and far right groups are gaining
greater support, the people of the
UK, Spain, Portugal, Greece, Finland and Poland will head to the
polls in 2015.
And don’t rule out the possibility that Irish Taoiseach (Prime
Minister) Enda Kenny will bring
voters to the polling booth sooner
than planned.
In the case of the UK and Spain,
two of the region’s most important
countries economically and politically, neither is expected to result in
a majority government, and anti-establishment parties may even end
up holding the balance of power.
This flight to nationalism, and
growth in anti-European Unionsentiment, may ultimately be the
greatest threat to the EU since the
eurozone debt crisis. — CNBC
Chinese borders
It’s not just Russia who’s facing trouble over boundaries. The possibility
of territorial conflict between China and either Japan or India — or
even both — was highlighted by
Alastair Newton, senior political
analyst at Nomura, as one of the
most worrying issues for next year.
Disputes over the Sino-Indian
border are centuries-old, with Indian-controlled Arunachal Pradesh,
where India is building new border
posts, the most likely imminent
flashpoint.
China’s maritime disputes with
Japan in the South and East China
Sea are also potentially concerning. Yet leaders in all three countries are in the middle of ambitious economic reforms, and may
want to focus on those instead of
engaging in expensive disputes For more, visit www.cnbc.com
W O R L D B U S I N E S S 21
S’pore GDP drops to 2.8%
Slower growth in 2014 compares with expansion of 3.9% in 2013
BY SHA RON C H EN
& M I CHA EL H EAT H
SINGAPORE: Singapore’s economic growth cooled in 2014 and the
nation will experience slower expansion than it’s used to, Prime
Minister Lee Hsien Loong said.
Gross domestic product (GDP)
rose 2.8% last year, Lee, 62, said in
his New Year message on Wednesday. That compares with a November forecast of about 3%, and an
expansion of 3.9% in 2013.
“Our economy has performed
moderately well in 2014,” Lee said.
“However, our productivity performance has been disappointing”
and the country must intensify efforts to help companies and workers upgrade, he said.
New smart TV
platform for
Samsung
SEOUL: South Korean electronics giant Samsung Electronics
said yesterday it will release
smart televisions equipped
with its new platform built
around the Tizen operating
system this year, as it seeks to
lower its reliance on Google.
Samsung said all of its new
web-connected TV sets would
be run by Tizen, and it would
unveil its first-ever Tizen smart
TVs at a consumer electronics
fair in Las Vegas next week.
“Building our smart platform around Tizen is a groundbreaking step towards a much
more intelligent and integrated
system,” Samsung executive
vice-president Lee Won-jin said
in a statement.
Samsung, the world’s largest
mobile phone producer, has focused on developing the Tizen
operating system along with
companies led by Intel to lower
its reliance on Google’s Android
operating system. — AFP
Export-dependent Singapore
is experiencing the effects of a faltering global economy, with China
set to record its weakest growth in
almost a quarter century and the
economies of Europe and Japan
struggling to gain momentum. Government efforts to curtail the inflow
of cheap foreign labour have also
pushed up business costs.
“Our growth will be slower than
we are used to,” Lee said. “One reason for this is that we have been
tightening policies, including on
foreign workers, to get our economy onto a path of sustainable,
productivity-driven growth.”
Singapore’s trade ministry will
release preliminary fourth-quarter
GDP figures at 8am local time today. The economy expanded an an-
nualised 3% from the previous three
months, according to a Bloomberg
News survey.
The government has forecast an
expansion of 2% to 4% in 2015 as China, its largest trading partner, seeks
to deleverage its economy without a
hard landing. In contrast, the United States, among the top markets
for Singapore’s exports, grew at the
fastest pace in more than a decade
in the third quarter as consumer and
business spending surged.
Real median incomes in Singapore have risen 10% during the
past five years, and the nation isn’t
facing concerns over unemployment and stagnant wages that are
confronting many developed countries, Lee said.
Lee’s administration will spend
about S$4 billion (RM10.6 billion)
in the next five years on subsidies
and financial support for a new universal health insurance plan called
MediShield Life, to be implemented
at the end of 2015, according to the
Ministry of Health. It also plans to
spend S$9 billion on health care and
other benefits for the elderly as part
of a Pioneer Generation Package.
While economic growth is slowing,
it is important to still create expansion, the prime minister said.
“Growth also gives us the resources to improve social well-being and
sustain our social safety nets,” Lee
said. “Because of these new schemes,
social spending is rising steadily. We
have been prudent in the past so we
can afford the new programmes we
are launching.” — Bloomberg
China December factory PMIs
suggest economy cooling further
BEIJING: China’s factory activity
sputtered in December, underlining
the challenges facing the country’s
manufacturers as they fight rising
costs and softening demand in a
cooling economy.
After a rough 2014, the world’s
second-largest economy looks set
to start the new year on a weak
note, reinforcing expectations that
Beijing will roll out more stimulus
to avert a sharper slowdown which
could trigger job losses and debt
defaults.
A property slump is expected to
last well into 2015, companies will
continue to struggle to pay off debt
and export demand may remain
erratic, leaving only the services
sector as the lone bright spot in
the economy.
China’s official Purchasing Managers’ Index (PMI) slipped to 50.1 in
December from November’s 50.3,
a government study showed yesterday, its lowest level of the year
and clinging just above the 50-point
Filepic of workers
making stuffed toys
for the Europen
and US markets
at a factory in
Lianyungang,
Jiangsu province,
China. Export
demand may remain
erratic in 2015.
Photo by Reuters
level that separates growth from
contraction on a monthly basis.
Analysts polled by Reuters had
forecast a reading of 50.1.
“This indicates that industrial
growth is still in a downward trend,
but the pace [of declines] is slowing,” Zhang Liqun, an economist at
the Development Research Centre,
said in a statement accompanying
the report.
“The current economic situation
is in the process of returning to stability from slowing down.”
A similar private survey on
Wednesday showed activity shrank
for the first time in seven months
in December. That survey focuses
on smaller companies, which are
facing greater strains, notably higher financing costs and problems
getting loans. — Reuters
Banks will make asset managers pay for regulation
BY D OMI NI C EL L I OT T
LONDON: Asset managers are
about to find life more expensive.
After years of mounting regulatory costs and low interest rates,
investment banks are attempting
to charge clients more. The trend
looks likely to accelerate over the
coming 12 months.
Only three of the world’s 10 biggest investment banks are expected
to make a return on equity in excess
of 10% next year, Eikon SmartEstimates show. A steady stream of
fines has wiped out the efficiency
gains from cutting operating ex-
penses. Banks will struggle to make
their cost of capital, estimated by
McKinsey to be around 11% to 12%.
That leaves pricing as the next
source of added return. The areas
where profitability has been hit
hardest are fixed income trading
and prime broking, the business
of servicing hedge funds — this is
where new regulation on liquidity
and leverage really bites.
Rules forcing banks to hold
enough high-quality assets to get
through a 30-day market crisis restrict lending. These constraints are
already widening bid-offer spreads
on longer-dated derivatives, and
raising rates on loans. Leverage
requirements for banks make it
costlier to provide finance to equity hedge funds seeking to gear
up their portfolios. The same dynamic is at work for fixed income
repurchase agreements, or repos,
a type of collateralised lending that
enables hedge funds to bet on falling bond prices.
Banks may offer some of these
services as loss leaders. Barclays, for
example, is taking a holistic threeyear view of client relationships in
some cases, says one person familiar with its working. This approach
will work only where clients are big
enough to offer multiple revenue
opportunities. Many banks are aiming for fewer overall relationships
with more relevant clients. That
may spur consolidation, particularly among hedge funds.
The simpler alternative is to
raise prices where products are
becoming uneconomic. Credit Suisse is talking to clients about raising prime broking charges, says a
person familiar with its activities.
JPMorgan chief executive Jamie Dimon has said revolving loans and
repos need repricing. The persistence of low returns will spur others
to follow. — Reuters
IN BRIEF
Second Chance posts
56% drop in 1Q net profit
SINGAPORE: Property and apparel company Second Chance
has reported a 56% drop in its
net profit for the first quarter
from the same period a year
ago, to S$1.7 million (RM 4.49
million), The Straits Times reported, as revenue dropped
across its apparel, gold and securities business. Revenue fell
4% from a year ago to S$8.8 million, after the company closed
six of its retail outlets in Singapore and Malaysia. The firm
also suffered a loss of rental
income as a result of the sale
of three investment properties.
However, this loss was partially
offset by the rental income from
a newly acquired property in
Malaysia, a 10-storey commercial building earmarked as the
flagship store for the company’s
First Lady apparel business.
Keppel Shipyard wins
US$705m conversion deal
SINGAPORE: Keppel Shipyard
has secured a US$705 million
(RM2.47 billion) ship conversion deal from Nasdaq-listed
Golar LNG, The Straits Times
reported. It will repurpose a vessel meant to transport liquified
natural gas (LNG) into a floating
LNG conversion plant, or “floating liquefaction vessel”, it said
on Wednesday. The new ship
will have added capabilities in
tapping gas fields in the seabed
and shorten time taken to convert unprocessed gas into LNG.
This was Keppel Shipyard’s second such contract from Golar in
six months. In July, it clinched
a contract for a first-of-its-kind
conversion of a vessel into a
floating LNG conversion plant
for US$735 million.
Soilbuild awarded $128m
HDB contract
SINGAPORE: Soilbuild Construction Group has been
awarded a S$128 million
(RM338.43 million) contract
by the Housing & Development
Board (HDB) for building works
in Sembawang, the firm said in
a statement on Wednesday, The
Straits Times reported. The contract comprises the construction
of six blocks of 16-storey and
17-storey residential buildings
with a total of 1,178 units. It also
includes the construction of a
multi-storey car park, commercial and community facilities,
precinct pavilions and a park.
Bank lending rose 0.6%
in November to S$608.2b
SINGAPORE: Bank lending
picked up in November thanks
mostly to an increase in loan
businesses, after three straight
months of flat performances, The
Straits Times reported. Overall
lending in November stood at
S$608.2 billion (RM1.61 trillion),
a 0.6% increase from the S$604.4
billion logged in October, preliminary data from the Monetary Authority of Singapore out
yesterday showed. Bank loans
had plateaued around the S$604
billion mark for the three months
from August to October.
22 W O R L D B U S I N E S S
Lithuania joins eurozone
as tensions with Russia rise
Polls show half the population still not convinced the move a good idea
Lithuania’s prime minister
says the euro would
‘become a guarantor of
both economic and political
security’. Photo by Reuters
BY A ND RI U S SY TAS
VILNIUS: Lithuania joined the eurozone at the stroke of midnight
yesterday, hoping to anchor itself
in Europe as its former master Russia flexes its military muscle in the
region.
The first Soviet republic to declare independence, in 1990, Lithuania is the last of the three Baltic
states to join the currency union
and will be the last country to do
so for the foreseeable future, with
remaining European Union members at least two years, and probably
much more, away.
“Myself, and I think, many of
you feel sad that [Lithuania’s currency] the litas, which has served
us well for more than two decades,
becomes history, but we have to
move forward,” Lithuania’s Finance
Minister Rimantas Sadzius told the
euro launch ceremony.
The common currency remains
a divisive issue, with polls showing
half the population of three million
still not convinced dumping the
litas is a good idea.
Lithuania’s Prime Minister Algirdas Butkevicius, who became
the first person in the country to
withdraw a 10 euro banknote from a
cash machine, said the euro would
“become a guarantor of both economic and political security”.
The government hopes that by
becoming the 19th member of the
euro bloc, Lithuania’s trade will
get a boost and borrowing costs
will fall to help the country to re-
cover from a 15% contraction in
2009 at the height of the global
financial crisis.
Central bank governor Vitas
Vasiliauskas has also stressed the
“geopolitical” significance of the
move which puts the former Soviet state firmly in the sphere of
what used to be considered Western Europe.
“You live where you live. You
have to keep that in mind,” he told
Reuters when asked about benefits of eurozone entry, referring to
the recent flare-up in tensions in
the region.
Russia’s role in the Ukraine crisis, which included the annexation
of Crimea, has awoken fears in the
Baltics, which have sizable ethnic
Russian minorities, that they could
be next. — Reuters
Modi in brainstorm for state banks
BY A NTO A NTON Y
MUMBAI: India’s state-run lenders will probably be the focus of a
historic two-day gathering of bank
chiefs and regulators as they seek to
reverse the companies’ lowest profitability rates in at least nine years.
Prime Minister Narendra Modi,
Reserve Bank of India (RBI) governor Raghuram Rajan, Finance
Minister Arun Jaitley and heads of
government lenders will assem-
BoJ: Plenty of
tools left
to ease policy
TOKYO: Bank of Japan (BoJ)
governor Haruhiko Kuroda said
the bank has various tools left if
it were to ease monetary policy
again, stressing its determination
to hit its inflation target in the
next fiscal year.
“There are plenty of ways to
adjust monetary policy,” Kuroda said in an interview with the
Mainichi daily that ran yesterday, reiterating that the BoJ was
ready to expand stimulus again
if needed to meet its 2% price
target.
Kuroda ruled out the possibility of watering down the bank’s
commitment to hit its inflation
target in the fiscal year beginning
in April. — Reuters
ble in Pune, a city near Mumbai,
to thrash out policies to help boost
earnings and capital ratios, according to Reliance Securities Ltd. The
session starts today and Modi will
take part tomorrow.
The meeting could help Modi’s
efforts to bolster the economy by
improving the health of lenders that
account for more than 75% of loans
in India. Higher amounts of soured
debt and slower credit growth than
private banks dragged state lenders’
return on assets to 0.5% in the year
to March 31, the lowest since at least
2005, central bank data show.
Delegates at the retreat, known
as “Gyan Sangam” or “confluence
of knowledge”, will discuss ways to
improve the efficiency and recovery
of non-performing loans, the government said in a statement posted
on its website last Wednesday. The
state-run banks require reforms to
“improve and consolidate” their position, according to the statement.
Stressed assets at the government banks, which include soured
debt and restructured loans, rose
to 12.9% of total lending as of Sept
30, the highest since 2001, RBI data
show. The ratio stood at 4.4% for
privately owned banks.
Loan growth at government
lenders fell to 8% in the 12 months
to September, two percentage
points lower than the country’s
banking system, the data show.
— Bloomberg
Tesco will have to fight for its independence
BY ROBERT CO LE
LONDON: Tesco will have to fight
for its independence in 2015.
The UK grocer’s equity value fell
from £33 billion three years ago
to £15 billion (RM81.89 billion) in
mid-December. The group will start
the year by unveiling a new strategy and, probably, a new chairman.
Neither provides solid protection
against a bid.
Tesco’s pre-tax profit could be
less than £1 billion in the financial
year to the end of February, data
from Thomson Reuters’ SmartEstimate shows. Net debt is around
£7.5 billion. The £22.5 billion enterprise value may put it beyond the
reach of a financial buyer, especially
factoring a premium on top. A club
deal is conceivable to break it up,
but these are notoriously hard to
put together — and keep together.
A strategic buyer from overseas
could yet be tempted by a one-off
opportunity to jump straight into
a leading position in the United
Kingdom. China Resources Enterprise, the Hong Kong-based
conglomerate with which Tesco
has a 20% stake joint venture, is a
plausible suitor. Tesco would be
a mouthful for other acquisitive
retailers. France’s Carrefour and
Canada’s Loblaw are still smaller in equity value and would risk
flowback proposing an all-paper
merger. But Tesco could become
a more digestible and less risky
acquisition if it sold off non-core
assets in the UK, Asia or Eastern
Europe and used the proceeds to
cut its borrowings.
Tesco already trades on a forward enterprise multiple of 7.6
against 5.5 for European peers. A
30% premium would cost a bidder
£4.5 billion, implying an exit enterprise value of £27 billion, or 8.8
times forecast Ebitda in 2016. That
is nearly twice the valuation of rival
J Sainsbury. But Sainsbury is not
such an easy target: the Qatar Investment Authority has a potential
blocking stake with its 26% holding. Tesco offers a market-leading
position and turnaround potential.
Even a modest recovery in operating performance would see the
take-out valuation fall.
Much will depend on who replaces Richard Broadbent, who said
in October that he would step down
when a successor could be found.
If Tesco fails to deliver a clear and
credible standalone plan, fed-up
shareholders might jump at the
chance to trade. — Reuters
IN BRIEF
More than 2,300 jobs to
go at collapsed British
courier firm City Link
LONDON: A total of 2,356 employees of collapsed British
courier and parcel firm City
Link will be made redundant
after talks over a potential
life-saving bid for the company fell through, administrators
said on Wednesday. Coventry-based City Link, which
pest control-to-hygiene group
Rentokil Initial sold to private equity firm Better Capital for £1 last year, had long
been losing money. Joint administrator Hunter Kelly said
earlier this month the losses
reflected a combination of
intense competition in the
sector, changing customer
and parcel recipient preferences, and difficulties for the
company in reducing its cost
base. — Reuters
Snapchat raises
US$485.6m to close
big fundraising year
NEW YORK: Snapchat Inc,
among a pack of elite technology start-ups that has attained a valuation of US$10
billion (RM35 billion) or
more, capped the year with a
filing that disclosed it raised
US$485.6 million. The Los Angeles-based company, which
makes a mobile application
for sending annotated photos
that disappear within seconds,
said in the filing that it raised
the money from 23 investors.
Snapchat, led by chief executive officer Evan Spiegel, didn’t
disclose the investor names or
the company’s valuation. The
filing is the first disclosure by
Snapchat about its fundraising, which has been in process
for months. — Bloomberg
Russia assists
sanction-hit bank
Gazprombank
MOSCOW: Russia’s third
biggest bank Gazprombank,
weakened by the falling ruble and Western sanctions
over the Ukraine crisis, said
on Wednesday it has received
more than half a billion dollars in state aid, part of efforts
to recapitalise the country’s
battered banks. The bank
founded in 1990 by oil giant
Gazprom, which still holds
a 35% stake, received 40 billion rubles (RM2.3 billion)
from the state in the form of
purchase of preferred stock,
Gazprombank said in a statement. — AFP
Consumers sue Apple
over size of iOS 8
operating system
NEW YORK: Apple Inc’s new
iOS 8 operating system, used
in iPhones and iPads, takes
up too much space and the
company misled its customers, two Florida users said in
a lawsuit that seeks to represent consumers nationwide.
— Bloomberg
W O R L D 23
Shanghai families look
for loved ones
New Year’s Eve revelry turned to fatal stampede
SHANGHAI: Cao Sihao had just finished high school and was looking
forward to celebrating New Year’s
Eve with friends at Shanghai’s historic riverside Bund district. Instead,
the 19-year-old may be among the
casualties after a night of revelry
turned into a deadly stampede.
“He went to the Bund last night
and I was unaware that he was missing until I got call from his father
at 4am to 5am,” said resident Hu
Wenying, who was looking for her
younger brother at the Shanghai
No 1 People’s Hospital, the largest
near the Bund. “We still haven’t
found him,” said Hu, whose eyes
were bloodshot from crying.
Thirty-six people, many of them
students, were killed and at least 48 A woman placing flowers yesterday near the site of a New Year’s Eve stampede at the
injured after a stampede occurred Bund in Shanghai. Photo by AFP
about 11:35pm on Wednesday at
Chen Yi Square as thousands pre- it has been reported, but the Ma- der investigation, staff at the Shangpared to welcome the new year.
laysian Consul General could not hai government media office told
At least two Malaysians are be- confirm the information.
Bloomberg News, but it has been
lieved to be among the injured,
The reason for the accident is un- reported by Singapore’s The Straits
Times quoting Shanghai publication
The Paper that coupons resembling
US dollars were thrown out the 18th
floor window of a high-rise building
for about three minutes.
Guan Jingdi, who was also at
Shanghai No 1 People’s Hospital,
was looking for her 17-year-old son
Zhong Xin, a middle-school student.
She said she had no luck so far and
planned to visit other local hospitals
where the injured were sent.
“The hospital hasn’t given out
a list on the injured people, so we
don’t know whether he’s here or
not.” Guan said.
At the same hospital, a colleague
of 25-year-old Li Xiang wrote down
his information and submitted to
the police. The Fujian-native, who
went out with a friend last night,
said the person surnamed Wang.
“They got split up, and we can’t
get in touch with Li now,” Wang
said. Li’s family hasn’t been notified
yet, he said. — Bloomberg
Tropical storm leaves 54 dead
as it exits Philippines
MANILA: Tropical storm Jiangmi
exited the Philippines yesterday,
leaving at least 54 dead and 13 missing from floods and landslides as
officials admitted that more extensive warnings could have saved
more lives.
The storm’s death toll was nearly
triple that of the last major storm
— Super Typhoon Hagupit, which
hit the Philippines last month and
wreaked less havoc than expected thanks to timely precautionary
measures.
Jiangmi, which at one point
packed winds of 80kph, weakened
into a low pressure area as it moved
west into the Sulu Sea with winds
of about 30kph, the government
weather station said.
Civil defence chief Alexander
Pama admitted yesterday that
more frequent warnings could
have been aired in broadcast
media.
“Probably we did not put
[enough warnings] out in the media,” he told DZMM radio.
Egypt court hears jailed Jazeera
reporters’ appeal
He said some people had ignored the warnings and refused to
evacuate or went out to sea despite
the storm.
“Maybe this will drive home
the point to our countrymen that
things are different now. Maybe
now, when people are asked to
evacuate, they will not resist,” he
said.
Jiangmi hit the southern and cen- disturbances that batter the country.
tral Philippines earlier this week,
The storm affected more than
affecting areas that were once un- 120,000 people, more than 80,000
touched by the frequent weather of whom were evacuated. — AFP
Family in shock after US toddler
shoots mom in Walmart
BY H A I THA M EL-TABEI
BY V E RO NI QU E DU P O NT
CAIRO: Egypt’s top court began hearing an appeal yesterday by three
jailed journalists of Al-Jazeera television as hopes for their release grew
amid thawing relations between Cairo and Qatar, where it is based.
Australian Peter Greste, Egyptian-Canadian Mohamed Fahmy
and Egyptian Baher Mohamed of the broadcaster’s English service
were jailed last December in a case that triggered global outrage.
Journalists waiting in the courthouse were not immediately allowed
into the hearing but court officials said the session was under way.
The Al-Jazeera reporters, who authorities say lacked proper accreditation, were jailed in June on charges of spreading false information aiding the Muslim Brotherhood after the army ousted
Islamist president Mohamed Morsi in 2013.
Fahmy’s lawyer Negad al-Borai said ahead of yesterday’s session that
all options were open to the court. Fahmy’s fiancee, Marwa Omara, told
AFP: “We hope they are freed on bail, that would be a positive step.”
Greste’s parents told Australia’s ABC they had “confidence in the
integrity of the Egyptian appeals system” and that the journalists
would soon be released. — AFP
LOS ANGELES: The accidental fatal shooting of a US woman by her
own two-year-old son at a Walmart
store has left her family devastated
and again raised questions about
gun safety in America. Veronica
Rutledge was shopping with her
son and three nieces on Tuesday
in Hayden, Idaho when the child
unzipped her handbag — specially designed to carry a concealed
weapon — and the gun went off.
The 29-year-old nuclear research
scientist, who held a concealed-carry permit, got the bag last week as
a Christmas gift from her husband
Colt Rutledge.
“An inquisitive two-year-old boy
reached into the purse, unzipped the
compartment, found the gun and
shot his mother in the head,” her father-in-law Terry Rutledge told The
Washington Post. “It’s a terrible, terrible incident.” He added that his son,
the victim’s husband, now is grappling
with how to break the news to the
youngster, the couple’s only child.
“He has a two-year-old boy right
now who doesn’t know where his
mom is and he’ll have to explain
why his mom isn’t coming home,”
Rutledge said. “And then, later on
[in] his life, as he questions it more,
he’ll again have to explain what
happened, so we’ll have to relive
this several times over.” — AFP
IN BRIEF
Jeb Bush quits board
posts ahead of possible
White House run
SAN FRANCISICO: Potential US
Republican presidential candidate Jeb Bush has resigned from
all of his corporate and non-profit board member positions, The
Washington Post reported on
Wednesday, as the former Florida governor explores a run for
the White House. The Post, citing a statement emailed to the
paper by one of Bush’s aides late
on New Year’s Eve, said he even
stepped down from the board of
his education foundation. The
statement added that he was still
evaluating next steps for businesses for which he serves as an
owner or principal partner, the
Post reported. Reuters could not
independently verify the report.
Bush representatives were not
available for comment. — Reuters
Afghan army mortars kill
20 civilians at wedding
LASHKAR GAH: Afghan army
mortar rounds killed at least 20
civilians and wounded scores
attending a wedding party in
Afghanistan’s volatile southern
Helmand, provincial officials said
yesterday. General Mahmoud,
the deputy Commander of the
Afghan 215 corps in the province,
said artillery was fired from three
directions at a village in Sangin
district where the wedding was
held on Wednesday. Gul Pasha
Bakhtiar, deputy provincial police chief, said 26 civilians, including women and children,
were killed and 41 wounded by
mortar shells fired from the army
side. — Reuters
N Korea leader says open
to summit with South
SEOUL: North Korean leader
Kim Jong Un said he is open to
a high-level summit with neighbouring South Korea, days after
a proposal from Seoul to resume dialogue. “If South Korean authorities sincerely want
to improve relations between
North and South Korea through
talks, we can resume stalled
high-level meetings,” Kim said
in a New Year’s address broadcast by state media yesterday.
The address by Kim, who took
power after his father Kim Jong
Il died in 2011, was his third
televised New Year’s speech as
leader of the country. — Reuters
Hong Kong ‘graffiti’
teenager released on bail
HONG KONG: A teenager who
was arrested and sent to a children’s home after she drew a
flower on a wall famous for
pro-democracy messages has
been released on bail, authorities
said yesterday. The announcement came after the 14-year-old
girl’s lawyers accused authorities
of “disproportionate” measures
against teenage protesters seeking fully free leadership elections. The girl was arrested last
week for chalking a flower on
the “Lennon Wall” and sent to a
children’s home on Monday for
three weeks as a court considers
whether to remove her from her
father’s care. — AFP
24
live it!
FR I
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Personal
ASSISTANT
COMPI L ED BY VICHITRA NADES
WORK. LIFE. BALANCE
01
CALLING all jazz fans! Don’t miss Dasha
Logan live at Ril’s Bar tonight from 10pm
onwards. The 26-year-old, whose father is
legendary Alleycats songster Loganathan,
will perform alongside a talented trio consisting of Jack on the guitar, Laura on the
bass and Jimmy on the drums. Treat your
ears to the performances as you enjoy
sipping your drinks. Ril’s Bar is at 30 Jalan
Telawi 5, Bangsar Baru, Kuala Lumpur,
and can be reached at (03) 2201 3846.
IF you’re wondering how to spend the first
Saturday of 2015, head on over to The
Bee, Publika, at 9.30pm tomorrow to hear
Shakey Shakey belt out some familiar
tunes. This band consists of top-notch
musicians that love nothing more than
to perform their favourite numbers and
entertain audiences, who can feast on the
eatery’s delicious food. It’s the perfect way
to spend the evening. The Bee, Publika, is
at 36B, Level G2, Publika, Solaris Dutamas, Jalan Dutamas 1, Kuala Lumpur. For
details, call (03) 6201 8577, or log on to
http://thebee.com.my/
Colour your
way into
2015 at the
“Energy Mapping 2015”
workshop
at Lostgens’
Contemporary
Art Space
at 8C Jalan
Panggong, Kuala Lumpur, tomorrow.
Organised by the International Academy
of Colour Consciousness, this workshop
— which starts at 10am — will teach you
how to decipher the imagery code of your
own destiny in 2015, as well as demonstrate how to draw an energy profile for
each month from January to December
using the “ColourFool” methodology. The
entrance fee for the workshop is RM250
per person or RM50 off per pax if you
come in a group of four. For enquiries, call
Cornelius Chan at (016) 220 2189, or visit
https://www.facebook.com/InternationalAcademyofColourConsciousness.
No sugar-coating
01.
02.
Filmmaker Geetu Mohandas’ gritty portrayal of India’s rural-urban migrants
BY C ARM E L DO M I NI C
T
he Hindi movie genre brings
to mind an over-two-hour
flick of song and dance, and
stories of love and happy
endings — quite like the
Deepavali release of Happy
New Year (HNY), which was directed by
Farah Khan and produced by Gauri Khan,
wife of one of the seven Bollywood stars
cast in the movie, Shah Rukh Khan.
HNY told a story similar to the Ocean
trilogy, which starred George Clooney,
with the added elements of a typically
good Bollywood masala — catchy songs
with colourful wardrobes, elaborate stunts
and all of these elements coming together (albeit with some drama) at the end.
On the other end of the spectrum is
Geetu Mohandas’ Liar’s Dice. Her directorial debut hits viewers with its no-frills,
cold-water-in-your-face horrible reality
about the social issues that plague India.
The 103-minute film forces the audience
to deal with issues such as migrant labourers and the human exploitation involved
in migrating to cities.
In an exclusive interview with The
Edge Financial Daily recently, Mohandas shared her desire to give a name to
the statistics.
“In this era of globalisation when life
is in the fast lane, materialism is important and instant gratification has become
India’s mantra. Poor people only get the
nation’s attention when a crime or tragedy befalls them. They are on the back
pages of newspapers.
“Nobody is held responsible [for their
plight]. Their lives are usually valued at
50,000 rupees (RM2,754.79) if you are
injured, and maybe one lakh (100,000)
if you are dead.
“That is the value of a human life. I’m
talking about displacement, the nameless
men in the country. I wanted to give them
a name in the film, an identity and a background. I think that’s where the whole
story stems from,” the actress-turned-director said.
Liar’s Dice follows the journey of a
young mother, Kamala, and her audacious three-year-old daughter Manya,
who leave their home in a small village
on the mountains of the India-China
PETRATARA STUDIOS
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A FILM BY
GEETU MOHANDAS
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border called Chitkul. They are searching
for Kamala’s husband, Harud, who has
been missing for five months. Kamala
and Manya find themselves in New Delhi, city of big dreams. At the start of their
journey, they encounter Nawazuddin, or
Nawaz, who seems to be going the same
direction. Nawaz sometimes plays the
role of a protector. Otherwise, he is an
opportunist.
Kamala realises very early on in her
journey that she is unprepared for the
perils of travel, and comes to rely on
Nawaz for guidance and protection for
her and Manya. The film also explores
the relationship between a man and a
woman and manages to avoid stereotyped depictions that occur, more so now
because of India’s current economic and
socio-political conditions. This is one of
the few Hindi movies that have very little dialogue. The audience will need to
pick up cues, some subtle and some not
so subtle, and have an understanding of
migrant issues in India.
This independent film beat thousands
of other entries when it was picked as
the country’s official entry for the Best
Foreign Picture nomination at the 87th
Academy Awards (also known as the Oscars) that will take place on Feb 22 at the
Dolby Theatre in Los Angeles.
live it! 25
F R I DAY JA N UA RY 2, 2 015 • T HEED G E FINA NCIA L DA ILY
01
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01. A still from Liar’s Dice shows Manya, Nawaz
and Kamala on the bus heading towards
New Delhi.
02. (From left) Rajeev Ravi, who is director
of cinematography for Liar’s Dice and
Mohandas’ husband, Mohandas and Sekhar
at a recent press conference in Kuala
Lumpur. Photos by PetraTara Studios
02
Mohandas’ first feature film premiered at
the Mumbai Film Festival in October 2013,
and had its world premiere at the Sundance
Film Festival in January 2014. It was also
screened at the International Film Festival
Rotterdam 2014. Liar’s Dice was accorded
a special jury award at Sofia International
Film Festival and took home the Best Actress and Best Cinematography awards at
the 61st National Film Awards in India in
early December.
Mohandas admitted that she felt “overwhelmed” when the news broke that Liar’s
Dice would represent India at the Oscars.
The success of the film so far offered her the
validation she had looked for ever since she
started to market the idea for the film six years
ago. Mohandas was rejected by Bollywood
production houses. “They turned it down,
saying that while it’s a well-written script,
they didn’t have a marketing strategy for a
film like this.”
Fortunately, her uncle, who is PetraTara
Studios chairman Datuk Vinod Sekhar, told
her to just “make your film”, which pushed
her to get the cameras rolling.
Sources close to the production team
said that the studio invested close to RM1
million to produce the movie and in doing
so, the Malaysian studio has an opportunity
to share in the glamour of being represented
at the Oscars for the first time.
“Liar’s Dice is now up against 83 other
foreign films and if the Academy chooses it
to be in the top five for the foreign film category, then we have a shot at that coveted
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gold statue,” Mohandas said.
The idea for the script was conceived eight
years ago when Mohandas read a newspaper report about a prominent industrialist in
India. He had killed seven people, but there
was no mention of the victims’ identities.
“These lives were turned into statistics. I
wondered who they were and if their family members knew about their deaths. Because, like I said earlier, no one wants to
take responsibility for these lost lives and
the financial compensation is only given
to those who come looking for their loved
ones,” she said.
“I [hoped] that as responsible Indian citizens, they would question why no names
were given, why there was no follow-up of
who they were, and if the victims’ families
had been informed of their deaths,” Mohandas said of the message she wanted to
send across.
The film is truly a labour of love for the
production team, cast and post-production crew.
The lengths to which the actors — Nawazzuddin Siddiqui as Nawazuddin, Geetanjali Thapa as Kamala and Manya Gupta as
Manya — went to portray the characters
leave the audience moved, while the international audience gets a glimpse of what
India is about, besides the razzle-dazzle of
Bollywood.
In the closing credits, Mohandas stated:
“I dedicate this film to the vast magnitude
of nameless people who are remembered
as mere statistics.”
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live it!
Zen TODAY
Don’t be so humble — you are not that great. — Golda Meir
LOOKING EAST
Who will be the next GEM?
Singapore’s Kit Chan among I Am a Singer contenders; global search for K-pop talent
BY L K TA N
T
his isn’t only an invite to a reality show that boasts sky-high
ratings and fuels raging netizen
discussions. It is also a ticket to
a multibillion show business industry, a chance to increase your
popularity and get closer to endorsement deals.
Welcome to China’s third season of the
reality television show I Am a Singer — a
duplicate of South Korea’s programme of
the same name — that makes its debut on
Hunan TV today (Jan 2). Tongues were wagging among Chinese netizens as to which
seven seasoned vocalists would be invited
to compete this time, and the list is in.
Singaporean songbird Kit Chan, 42, Hong
Kong balladeer Leo Ku, 42, and Taiwan vocal
powerhouse A-Lin, 31, are set to pitch their
skills against four Chinese talents — Han
Hong, Jane Zhang, Sun Nan and Anson Hu
— all of whom have their respective strong
followings in China.
Chan, also an actress and a musical performer, is looking forward to bringing her
acts to the Chinese audience, saying this to
the Singapore’s The Straits Times: “I’m not
here to try and win the competition. To me,
it is really a performance platform.”
Chan was reportedly reluctant to
participate but was convinced by a long-time
Taiwanese good friend. She then realised how
deep-pocketed Chinese TV stations are, esti-
Kit Chan readies herself in Changsha, Hunan, where
the competition is being recorded.
mating the station allocates a staff strength of
300 people for the programme alone.
I Am A Singer shies away from the format
of getting laymen to compete in singing onstage. Instead, it involves veteran singers battling it out, live, in front of a selected studio
audience. The one with the lowest audience
votes gets booted out each week and then
replaced by a new singer.
Previous contestants Terry Lin Zhixuan,
48, from Taiwan, Malaysia’s Shila Amzah, 24,
and Hong Kong’s GEM, 22, saw a boost in
popularity after participating in the hit show.
A handful of Lin’s and GEM’s performances
wowed the audience enough to garner a few
million hits on China’s video-sharing sites.
Despite losing out to Chinese peer Han
Who isn’t swooning over Super Junior? Photos from Facebook
Lei in the last season, GEM enjoyed her limelight and saw her Weibo followers surging
to eight million from 1.5 million after the
show. The young Hong Kong talent subsequently made it into “2014 Forbes China
Celebrity 100 list”, which ranks as the year’s
most influential entertainment and sports
celebrities in terms of media exposure and
annual income from Mainland China, Hong
Kong and Taiwan.
GEM’s earnings last year were a whopping
10.9 million yuan (RM6.2 million).
Junior” or “Girls’ Generation”.
News reports say SM plans to hold a largescale global audition with agency representatives venturing into nine countries (including its homeland) and 28 cities across Asia,
Europe and North America. These include
Mongolia, Kazakhstan, Canada, Singapore,
Indonesia, Thailand, China and Russia.
In addition to the star search, SM will host
local auditions for singers, dancers, actors,
models and composers looking to make a
splash in the Korean industry.
SM — home to some of K-pop’s biggest
Wanna be the next Super Junior?
and most internationally recognised acts
South Korea’s largest record label SM En- like TVXQ and EXO — is taking auditions
tertainment is launching a worldwide talent to Russia for the first time, where K-pop has
search in January to scout for the next “Super taken on a life of its own, reports added.
S P O RT S 2 7
Time to deliver for
Socceroos on home soil
Manager Postecoglou handed just one goal — make Australia the No 1 team in Asia
BY N I CK MU LVENN EY
SYDNEY: After a year of sometimes
painful transition and an encouraging yet ultimately pointless World
Cup campaign, Australia enter 2015
knowing that promise no longer
counts for anything and only results matter.
Ange Postecoglou, who has
managed the overhaul of the Socceroos squad, was handed just one
concrete results-based goal when
he took over as coach on a five-year
deal in October 2013 to make Australia the No 1 team in Asia.
The 49-year-old has his chance
to deliver that objective on home
soil in Sydney on Jan 31 and much
of the success of the 16th Asian
Cup will depend on how close he
comes to doing it.
Gone are all but three of the
“golden generation” squad that
got the Socceroos to the last eight
of the Asian Cup in 2007 soon after
Australia switched from the Oceania confederation in search of more
competitive football.
Little more than a handful of
players also now remain from the
New look South
Korea hope to
turn the page at
Asian Cup
BY PETER RUTHERFORD
SEOUL: After 55 years without
continental football success and
on the back of a dire World Cup
campaign in Brazil, all the talk in
South Korea has been of a “Time
for Change” in the build-up to
the Asian Cup this month.
The South Koreans, who last
won the region’s showpiece tournament in 1960, arrive in Australia with a new coach, new faces and fresh legs hoping to show
some of the sparkle that took
them to the semi-finals of the
2002 World Cup on home soil.
However, Song Chong-gug,
South Korea’s flying wingback from that 2002 Guus Hiddink-coached side, believes the
South Koreans have much rebuilding still to do and should
view a third-place finish as success at the Jan 9 to 31 Asian Cup.
“Of course, becoming champions would be the best result
but we still haven’t found our
best team and there’s a lot of
instability, so I think the best we
can do is to finish third,” Song,
who now works as a television
pundit, told Reuters. — Reuters
Ron Vlaar (left) and Bruno Martins Indi of the Netherlands fighting for the ball with
Australia’s Cahill (centre) during their 2014 World Cup Group B match in June last year.
Photo by Reuters
squad which got to the final at the
second attempt in Qatar in 2011,
only to lose in heartbreaking fashion to a Japan goal in extra time.
Postecoglou has a clear vision
of the sort of pressing, attacking
football he wants his young team
to play but the results so far have
been less than impressive.
One win in 11 matches this year
— even if two defeats came after
brilliant performances against Chile
and the Netherlands at the World
Cup in Brazil — makes pretty stark
reading for Socceroos fans.
Starker still is the fact that eight
of the 12 goals Australia have netted
since Postecoglou took over have
come from all-time leading scorer
Tim Cahill.
Even if Cahill looks anything but
on the wane even at the age of 35,
reliance on one player for such an
important element of footballing
success opens up the hosts to the
vagaries of injury and form in what
is a short tournament.
Postecoglou’s job is among the
toughest in world football given
a majority of his players ply their
trade in Europe and he will certainly relish having them together, and
time-adjusted, in the pre-tournament training camp.
There is also home advantage,
which can be a double-edged sword
but will surely work in Australia’s
favour if they can build up some
momentum in their opener against
Kuwait on Jan 9 and second Group A
outing four days later against Oman.
The draw was not kind to the
Australians, however, and their
blockbuster showdown with South
Korea in Brisbane on Jan 17 could
go a long way to deciding whether
they can be the first host nation to
win an Asian Cup since Japan in
1992. — Reuters
Youthful China bid to shake
off years of underachievement
BY BEN BLANCHARD
BEIJING: Global football officials
have long waited for China to start
punching its weight on the world
stage but the decade since the national team’s run to the 2004 Asian
Cup final has been marked by serial underachievement and a battle
against corruption.
Local leagues remain tarnished
by an anti-corruption drive that
swept up dozens of players and officials in recent years, and fans remain
wary of a team dumped in the first
round of the last two tournaments.
All that aside, the youthful na-
tional squad competing in Australia has provided genuine cause
for optimism, stringing together
encouraging results in the lead-up
under French coach Alain Perrin.
Perrin’s first match in charge was
an uninspiring 3-1 loss to Iraq in
March which, ironically, was enough
to secure their place in the Asian Cup.
Since then, 97th-ranked China
have lost only one of their 10 matches, albeit against a succession of
similarly modest opponents.
They face a difficult group, drawn
with North Korea, Saudi Arabia and
Uzbekistan, but not an insurmountable one and can reasonably be tipped
as a dark horse to make the last four.
Whether the very raw squad can
get any further than that will be the
real test. Captain and 2013 Asian
Player of the Year Zheng Zhi is the
only player aged over 30.
Zheng, a midfielder from south
China’s powerful Guangzhou Evergrande, is joined by six of his
club team mates for the Jan 9 to
31 tournament.
They include striker Gao Lin, who
will also be expected to guide the
youthful line-up and provide a key
path to goal for a side that failed to
score in recent draws against Palestine and Honduras. — Reuters
Asian Cup too soon for improving young N Korea
BY PETER RUTHERFORD
PYONGYANG: North Korea’s traditional goal at the Asian Cup has
been to show heart, determination
and perhaps spring a shock win
over neighbours South Korea and
Japan to trumpet to fans back home.
However, with the country’s
leader Kim Jong Un pushing hard
for sporting excellence on the global
stage, glorious failure may not be
enough this time around.
Replacement coach Jo Tong Sop
knows that while his side are unable to compete with the big guns
of Asian football in terms of talent,
the typical North Korean traits of
aggression, work rate and organisation could get them through the
group stage. The North have been
placed in Group B for the opening
round of the Jan 9 TO 31 tournament in Australia alongside Uzbekistan, Saudi Arabia and China.
North Korea’s job has been made
harder thanks to a 12-month ban
meted out to regular coach Yun
Jong Su for his behaviour after
their loss to South Korea in the
Asian Games final in October. Jo
was called in to lead the side in
late December.
The North first entered the Asian
Cup at the 1980 tournament in
Kuwait, where they qualified second from their group and lost 2-1
to South Korea in the semi-finals.
— Reuters
IN BRIEF
Tevez does not intend to
extend Juventus contract
BUENOS AIRES: Argentina
striker Carlos Tevez, quizzed
over the chances of him returning to Boca Juniors, has no
plans to sign a contract extension with Juventus. The Italian
champions reportedly want
to offer Tevez, whose contract
runs until June 2016, a deal to
stay in Turin to 2018. “I’m not
thinking of signing an extension because that’s not how I
feel at the moment,” Tevez told
reporters in Buenos Aires on
Wednesday. Tevez, who has
been in fine form since joining
Juventus from City last year and
earned an Argentina recall in
October after a three-year international absence, said it is
too soon for him to think of returning to his first club Boca.
— Reuters
Lampard to stay with Man
City till end of season
LONDON: Former England
midfielder Frank Lampard will
stay with Manchester City until
the end of the season, the Premier League champions said
on Wednesday. Lampard initially joined City on loan for six
months from the New York City
Red Bulls after leaving Chelsea
at the end of last season. “Manchester City can confirm that it
has extended Frank Lampard’s
contract up to the end of [the]
season, enabling his continued
participation in both domestic
and European campaigns,” City
said in a statement on their website. The 36-year-old Lampard
has scored six goals for City this
season. — Reuters
West Brom name Pulis
as head coach
LONDON: West Bromwich Albion have named former Stoke
City and Crystal Palace boss
Tony Pulis as their head coach,
the Premier League club said
yesterday. The 56-year-old Pulis replaced Alan Irvine who
was sacked on Monday following a run of seven defeats in
nine games. Pulis managed
Stoke from 2006 to 2013 before
joining Palace and he guided
the south London club to 11th
place in the top flight in his one
season in charge. He quit the
job two days before the start of
this season amid reports of a
falling out with Palace co-chairman Steve Parish. — Reuters
Blackpool end loan spell
of joker Murphy
LONDON: Blackpool have
ended Jacob Murphy’s loan
spell at the English Championship club after the 19-year-old
winger made a joke on social
media mocking his own team.
Murphy, on loan from Norwich
City, posted a picture of himself on the photo messaging
site Snapchat accompanied
by the caption: “We are going
to lose ... Again.” Blackpool are
six points adrift at the bottom
of the Championship (second
tier) table and the joke was not
appreciated by the club’s fans.
— Reuters
2 8 S P O RT S
Final squad expected to be named next week
Malik playing a shot during the ICC
World Twenty20 tournament between
India and Pakistan at The Sher-e-Bangla
National Cricket Stadium in Dhaka in
March past year. Photo by AFP
Fromula E driver
Montagny tests
positive for
cocaine
PARIS: French Formula E driver Franck Montagny (pic) revealed yesterday he was tested
positive for a cocaine derivative
during an ePrix race in Putrajaya, Malaysia last November.
The former Formula One
driver did not request a B-sample and will be suspended from
racing until a sanction is handed down.
The 36-year-old said he was
“ashamed” after the test and
admitted that his career was
probably over now.
“Auto sport is perhaps over
for me,” the Andretti driver told
French sports daily L’Equipe.
“After the event I saw the
guy who tests signalling me.
There, in my head, I knew immediately. I knew it was over.
I made a mistake, I’m guilty.”
The inaugural FIA Formula
E championship — involving
single-seater, electrically powered cars — got underway last
September in Beijing.— AFP
KARACHI: Discarded former Pakistan captain Shoaib Malik said
on Wednesday he wants to play in
the World Cup this year, but needs
clarity on his role and must be told
what is expected of him.
The 32-year-old played the last
of his 216 one-day internationals in June 2013, but was
included in Pakistan’s 30man preliminary squad
for the upcoming tournament.
Pakistan’s selection
committee is likely to announce
the final 15-man squad on Jan 7 after watching some of the probables
in the Pentangular Cup competition, which started in Karachi on
Wednesday.
Australia and New Zealand co-
host the World Cup from Feb 14 to
March 29.
“The World Cup is a big event
and every cricketer wants to play
in it,” Malik told the media. “It was
portrayed that I don’t want to play,
I was frustrated over being left out
but I always wanted to play.”
Malik said he is not happy with
the selection process.
“I have a problem with the system because we cricketers want
clarity [on selection] and want to
know what is expected of us and
how many matches we are going to play because it increases
confidence when a player knows
how many matches he is going
to play.”
He continued: “I am of the opinion that players who know the con-
ditions of Australia and New Zealand can play well there.”
Malik is also due to play for Hobart Hurricanes in Australia’s ongoing Big Bash Twenty20 league.
“I am waiting for my visa and
if I get it I will leave for Australia,
but if I get clarity on my selection I
can leave any league for Pakistan.”
Malik termed Australia, South
Africa and India favourites for the
World Cup.
“I want to see Pakistan win but
lately Pakistan’s combination is
disturbed because of Saeed Ajmal
and Mohammad Hafeez being
suspended over illegal bowling
action, so in my opinion Australia, South Africa and India are top
teams for the mega event,” he predicted. — AFP
White relishing tough start
against Toulon
REUTERS
BY BAR NABY C HE S TE RM AN
PARIS: South African World Cup
winning coach Jake White (pic)
faces a baptism of fire when he
takes charge of Montpellier this
weekend against European and
French champions Toulon.
White was brought in by president Mohed Altrad, ostensibly as a
consultant, to replace the suspended Fabien Galthie with the aim of
stemming the tide of a rapidly unravelling season.
Montpellier have lost eight of
their last nine matches in European and domestic action, being
knocked out of the Champions
Cup in the process and dropping
to eighth in the Top 14.
White, who also coached the
Sharks and Brumbies in Super
Rugby, will be tasked with trying
to overcome a Toulon side reeling
from their abject showing at Stade
Francais last time out, where they
lost 30-6.
But he is far from daunted.
“People say Toulon are champions, Heineken [European] cham-
pions, fantastic, they’ve got a great
team, great players,” said White.
“My talk to the players and to the
coaches is that’s why we’re involved
in rugby: we want to play Toulon
on Saturday, surely.
“If we want to play Montauban
on a field with five people watching and a dog, then we’re not interested.
“It’s something I’ve felt since
I’ve been a little boy: this is what
we get challenged for, and I mean
how nice is it to challenge yourself
against a top team at home in front
of your home crowd.
“I’ve got respect for them [Toulon], they’ve done well and obviously it’s a great challenge, but
that’s what makes us get up in the
morning: we want to be part of this
challenge.” — AFP
Del Potro out of Brisbane International
AFP
SYDNEY: Former US Open winner Juan Martin del Potro (pic) has
withdrawn from the Brisbane International, officials said yesteday,
further delaying his return to the
court from an injury-blighted 2014.
The Argentine had been scheduled to play in the Jan 4 to 11 Brisbane event, ahead of defending his
title in the Sydney International
from Jan 11 to 17 in the lead-up to
the Australian Open.
But Brisbane International officials said del Potro “was forced
to withdraw with a persistent left
wrist injury”.
After winning the US Open in
2009, Del Potro’s career was ham-
pered by surgery on his right wrist
in 2010 before he fought his way
back into the top 10 again.
Pain in his left wrist first flared
up at the Australian Open last Jan-
uary. He retired from his opening match in Dubai the following
month and then withdrew from
tournaments in Indian Wells and
Miami, undergoing surgery in late
March. He has not played since.
Del Potro’s withdrawal from
Brisbane follows that of 2014 US
Open winner Marin Cilic who was
forced to pull out earlier this week
with a shoulder injury. Cilic’s noshow has opened the way for Australian world No 75 Marinko Matosevic to join compatriots Lleyton
Hewitt, who beat Federer in this
year’s final, Bernard Tomic and
Thanasi Kokkinakis in the men’s
draw. — AFP
Button marries long-term
girlfriend
LONDON: British former world
champion Jenson
Button (pic) confirmed via Twitter
yesterday that he
has married his
long-term girlfriend, Japanese-Argentine
lingerie model Jessica Michibata. The pair were pictured
at a New Year’s Eve ceremony in Maui, Hawaii in several
British newspapers. “Happy
New Year from Mr & Mrs Button!!” Button tweeted. “We’re
excited to see in the New Year
with family and loved ones,
we hope you’re too!” The marriage capped a turbulent year
for 34-year-old Button, whose
father, John, died in January.
Button, who won the world
championship with Brawn in
2009, was recently confirmed
as one of McLaren’s drivers
for the 2015 season alongside
the returning Fernando Alonso. — AFP
Street basketball presses
for Olympic place
PARIS: Basketball has become the latest sport wanting an extra event in the 2020
Tokyo Olympics, while at the
same time battling to keep
Japan in the Olympic tournament. International Basketball Federation president
Horacio Muratore told AFP
that new International Olympic Committee reforms had
made street basketball, three
players against three, a prime
candidate for 2020. Baseball,
squash and the likes of karate
are already lobbying furiously
in the race for a place. — AFP
Wales hooker Phillips set
to miss Six Nations
LONDON: Wales hooker Emyr
Phillips could miss the entire
Six Nations after his club Scarlets announced that he is due
to undergo surgery on a dislocated shoulder. The 27-year-old
forward, who has won three
caps, sustained the injury
during Scarlets’ 17-15 Celtic League loss to Ospreys on
Saturday and will be sidelined
for up to three months. Wales
launch their Six Nations campaign at home to England on
Feb 6 and finish the tournament against Italy on March
21. — AFP
Nibali named champion
of champions in Italy
PARIS: Tour de France winner
Vincenzo Nibali was named
champion of champions for
2014 by Italian newspaper
La Gazzetta dello Sport on
Wednesday. The Sicilian had
been named top Italian the
previous year when he won the
Giro d’Italia. For this title, he
beat MotoGP champion Marc
Marquez into second with Formula One winner Lewis Hamilton taking the third spot. Nibali took over the mantle from
Jamaican sprint king Usain
Bolt. — AFP
REUTERS
Pakistan ex-captain Malik
voices World Cup hopes
IN BRIEF

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