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FBM KLCI 1681.90

7.96

KLCI FUTURES 1678.50

9.50

STI 3227.23

12.14

RM/USD 3.4815

CPO RM2127.00

10.00

OIL US$59.57

0.44

GOLD US$1197.30

PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.50

THURSDAY DECEMBER 18, 2014 ISSUE 1863/2014

FINANCIAL
DAILY
MAKE
BETTER
DECISIONS

www.theedgemarkets.com
4 HOME BUSINESS

Nirvanas HK
listing hit by weak
sentiment, but IPO
raises HK$2b for
Msian firm
6 HOME BUSINESS

November CPI
rises 3%
8 HOME BUSINESS

ADB trims growth

forecasts for
developing Asia
22 C O M M E N T

The horror of
Peshawar

23 F E AT U R E

Ruble free fall

throws Russia
into ugly spiral

Penang wants exemption from

GST on bridges
15 H O M E

3.40

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

For breaking news updates go to

www.theedgemarkets.com

ON EDGE T V
www.theedgemarkets.com

Concerns overdone
GST and removal of fuel subsidy will compensate oil losses

High demand
for Axia
helps Perodua
beat 2014
sales target

Kansai
Paints new
product keeps
mosquitoes
away

The Edge Communications Sdn Bhd

(266980-X)

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Editorial
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Joyce Goh, Jose Barrock,
Vasantha Ganesan
Editor, Features Llew-Ann Phang
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BY AHM AD NAQI B I DRI S

KUALA LUMPUR: The concerns surrounding the impact of the retreat

in global oil prices on the Malaysian
market have been overplayed and
exacerbated the volatility in the local market this month, said Franklin
Templeton Investments.
I believe this concern has been
overdone as we believe the reduction in oil revenue as a result of the
drop in oil prices can be compensated by the removal of fuel subsidy in October 2014 and increase in
revenue with the implementation of
the goods and services tax (GST) by
April 2015, said Franklin Templeton Investments executive director
and head of Malaysia fixed income
and sukuk, Hanifah Hashim.
In a statement yesterday, Hanifah said the government has fiscal
tools for manoeuvre at its disposal
should the need arise as the government seems committed to balancing its budget by 2020.
Nonetheless, she expects a challenging year ahead for the fixed-income market in Malaysia amid bet-

Hanifah says the government

has scal tools for manoeuvre
at its disposal should the need
arise as the government seems
committed to balancing its budget
by 2020. The Edge le photo

ter economic growth in the United

States, growth woes in China and
stagnant economic growth in Japan
and the eurozone.
Looking ahead, 2015 will be a
challenging year for the fixed-income market in Malaysia as improving US economic growth, while
it is good news, will eventually lead
to a rise in US interest rate.
A rise in the US interest rate could
introduce some volatility in our local bond market as well, she said.
Going forward, Hanifah said the
Malaysian market could see liquidity
support from Japan and the eurozone.
On Malaysias interest rate, she
expects rates to remain benign as
Bank Negara Malaysia would not
want to risk economic growth and
business and consumer sentiments
by increasing the overnight policy rate
too soon amid low global prices of oil.

While the implementation of

the GST will increase inflation rate,
Hanifah said lower oil prices will
balance the inflation rate post-implementation.
We remain positive on the Malaysian corporate credit and sukuk
assets as the countrys fundamentals
remain strong and our government
has also shown willingness [to build]
a strong fiscal position, especially
[in] introducing unpopular measures that could result in short-term
pain, but long-term gains, she said.

MMC-Gamuda JV firm to
spend over RM100m on TBMs
BY JEFF REY TAN

IPOH: MMC Gamuda KVMRT (T)

Sdn Bhd (MGKT)will spend over
RM100 million on refurbishing and
upgrading its tunnel boring machines (TBMs).
The 50:50 joint venture betweenMMC Corp Bhdand Gamuda Bhd is the underground work
package contractor for the mass
rapid transit (MRT) project Line 1.
MGKT head of tunnelling Ng Hau
Wei said the refurbishment and modification works of the TBMs are in
preparation for its next tunnelling job.
We estimate the amount of direct
works will cost over RM100 million,
he told a media briefing here at their
refurbishment plant here, yesterday.
He said the works included the
storage and preservation of the TBMs
that cost over RM40 million each.
Hence, proper care has to be ac-

corded to ensure they can be used

again to lower our cost in our next
tunnelling work, he said.
According to Ng, MGKT will
partner German firmHerrenknecht AGto undertake the necessary
works for 10 TBMs, the same ones
which were deployed for MRT Line
1. Herrenknecht AG is the designer and manufacturer of the TBMs.
Under the agreement, Herrenknecht will collaborate with local
steel works and heavy engineering specialistWaiko Engineering
Works Sdn Bhdto jointly carry out
the machine refurbishment works.
Apart from restoration and repair,
the used variable density TBMs will
be upgraded, while the earth pressure balance TBMs will be modified
and converted into the former.
As to how many will be converted, Ng said it will depend on the
next job description.

For now, the first equipment for

the first upgraded variable density
TBM has been procured, he said,
noting it is expected to arrive by
the middle of next year.
He said experimental works will
be carried out once the equipment
arrives, including a series of workshop trials to proof test the design
upgrades for the machines.
This is one of our initiatives to
get ourselves ready for any eventualities, so that we can move quickly
and readily for any tunnelling jobs
we may get, he remarked.
Looking ahead, Ng foresees the
tunnelling business in the Southeast Asian region will grow and
he said MGKT is looking for more
tunnelling jobs.
It is definitely growing if you look
at Malaysia and Singapore, and even
at Hong Kong. We hope the trend will
be positive from now on, he said.

Asia central bankers on guard against Russia crisis

JAKARTA: Asian central bankers are
on guard but say they are not overly
concerned that the Russian rubles
collapse will trigger a big sell-off of
their own currencies, saying their
fundamentals are favourable and
their currency defences strong.
Currency and stock markets in
Asia generally firmed yesterday
after a two-day sell-off that saw Indonesias rupiah drop to its weakest level since 1998 and Thailands

main stock index register its biggest

intraday loss since October 2008.
Were still safe, Bank Indonesia spokesman Peter Jacobs said
yesterday. Investors can see that
whats causing depreciation is external factors.
Russias economic crisis should
not have a big impact on Thailand,
said Mathee Supapongse, a senior
official at Thailands central bank.
India also has a current-ac-

count deficit, and the rupee fell to

a 13-month low against the dollar
yesterday though it recovered later.
Still, Asias central banks are
much better placed to deal with
exchange-rate pressures now.
The lessons have been learned,
said Khoon Goh, a currency strategist at ANZ Bank. A lot of central
banks have built up foreign exchange reserves as an insurance
policy. Reuters

IN BRIEF
Russia likely to spend
US$70b to ght rout
LONDON/MOSCOW: The
Bank of Russia will probably
intensify interventions and
spend almost a sixth of its reserves after its emergency increase of interest rates failed
to stem the rubles worst crisis
since 1998, according to a survey of economists. Unlimited
currency interventions are the
most likely response to the rubles freefall, and the central
bank will deploy US$70 billion (RM245 billion) to counter the turmoil, according to
the survey of 18 economists
and the median of estimates
given. Further rate increases
and the imposition of capital
controls ranked as the next
most probable policy actions.
The countrys US$416 billion
reserves are moving back into
the first line of defence against
the crisis. Bloomberg

Fed expected to signal

rate hike on track
WASHINGTON: A sturdy US
recovery was expected to
trump global economic worries as the Federal Reserve
concluded its last policy meeting of 2014 yesterday, with officials expected to signal they
are still on track to raise interest rates next year. With oil
prices in freefall, Japan in recession and the eurozone sputtering, the Fed for a second
meeting running will weigh
the US economys apparent
strength against overseas risks
that now include a potential
currency crisis in oil exporter
Russia. Reuters

Germans warn ruble

plunge will aect us all
BERLIN: A German business
group yesterday cautioned
against Schadenfreude
(pleasure at anothers misfortune) over Russias currency woes, predicting a 20%
drop in German exports to
the country this year and the
risk of worse to come. The rubles sharp drop would further
damage trade, already hurt by
Western sanctions amid the
Ukraine crisis, and slash revenues of foreign companies
operating in Russia, said Eckhard Cordes, head of industry group the Committee on
Eastern European Economic
Relations. AFP

Ikea consolidates ownership of shopping centres

STOCKHOLM: World No 1 furniture retailer Ikea is consolidating the ownership structure of its shopping malls as
it aims to grow the operation
more efficiently, it said yesterday. The Swedish group
owns shopping centres around
some of its Ikea stores. Under
the new arrangement, which
somewhat simplifies a complex corporate structure, Ikea
Group will buy the remaining
51% of the unit that runs shopping centres in Europe and
China from co-owner Inter
Ikea Group. Reuters

4 HOME BUSINESS

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

World Bank cuts

Msia 2015 GDP
forecast to 4.7%
Declines in exports and current account surplus expected
PATRICK GOH

BY L EVI N A L I M

PUTRAJAYA: The World Bank

has cut its gross domestic product (GDP) forecast for Malaysia
next year by 0.2 percentage point
to 4.7%, as it expects the nations
economy to grow at a slower pace
amid tumbling oil prices.
Next year is going to be more
challenging for Malaysia. While
consumption growth has been remarkable up to quarter three of
2014 (3Q14), we expect to see a decline in exports and a decline in the
current account surplus going forward, said World Bank country director for Southeast Asia, East Asia
and Pacific region Ulrich Zachau.
He was speaking at the release
of the banks biannual economic
monitor report on Malaysia, Towards a Middle-Class Society, yesterday. The World Bank has a GDP
growth projection of 5.7% for 2014.
Zachau expects the goods and
services tax (GST), which will be
implemented in April, to dampen
consumption somewhat and that
inflation is likely to pick up to just
below 4%.

The critical risks will be on the

external side, on a weaker external
environment. Overall, the world
economic outlook is not great, he
pointed out, adding that Malaysia
faces downside risks due to falling
oil prices.
He said the international financial institution will continue
to watch the development of crude
oil prices in its continued volatil-

ity, as it is an important factor

for Malaysia.
Low oil prices, in the short term,
will help to stabilise the fiscal position. [However] if it continues to
stay low, there is adverse risk in the
medium term to Malaysias economic position in both current
account decline and eventually,
the fiscal position, Zachau noted.
Nevertheless, he said should
oil prices recover from their current level in the short and medium
term, the impact on the economy
will not be as significant.
World Bank senior economist
Frederico Gil Sander (pic) believes
there is likely to be some recovery
in crude oil prices going forward.
Most likely, the outlook on oil
prices will recover somewhat. Weve
seen a period where crude oil prices
have remained higher than expected and [likewise], they might also go
lower than people think, he said.
Gil Sander added that despite
the challenges, he believes that
Malaysia has learnt much from
previous financial crises and that
its flexible exchange rate will help
it withstand external shocks.

Wahid says 5%-6%

2015 GDP growth
still achievable
BY S UL H I A Z MA N

PUTRAJAYA: Malaysias economic growth target of between 5%

and 6% for 2015 is still achievable,
said Minister in the Prime Ministers Department Datuk Seri Abdul
Wahid Omar, although it is now
expected to come in at the lower
end of the forecast.
He said the structure of the economy is still sound and diversified,
as the government has gradually
reduced its dependency on oil and
gas (O&G) revenue to 31% last year
from 40% in 2009.
As we move forward, and with
the implementation of the goods
and services tax (GST) next year,
that ratio will drop further to 30%
and possibly below. The impact [of
falling oil prices] on the Malaysian
economy will still be manageable,
he told reporters after launching the
World Banks Malaysia Economic
Monitor yesterday.
I believe the countrys economic growth target of between 5% and
6% (for 2015) is still achievable,
albeit [it will come in] at the lower
end of the range, he said.
Meanwhile, Abdul Wahid is of
the view that the negative sentiment toward falling oil prices is a
boon to global economic growth.
Brent crude oil traded below US$60
(RM210) a barrel yesterday, near
5-year lows.
Recent research suggests that
lower oil price will generally be a
boon to the global economy. In fact,
the research also predicted that the

drop in oil price will translate into

growth improvement of 0.4% to the
global economy, he said.
Taking Malaysia as an example,
Abdul Wahid noted that despite the
drop in O&G revenue, the government stands to benefit from savings
of between RM10 billion and RM12
billion per year from the removal
of the fuel subsidy.
He, however, declined to provide
the level at which crude oil price is
at the most comfortable to meet the
governments fiscal deficit target.
You should not react to the daily movement of the oil price, but
you need to look first at the fundamentals of the countrys economy, he said.
As for the countrys fiscal deficit
management, Abdul Wahid said
there is enough momentum to ensure that the country will continue
to have current account surpluses
in 2015 and 2016.
In the first nine months of this
year, we have recorded RM41 billion
in terms of current account surplus,
and we believe that it is already at
4.1%, given the size of our gross
domestic product (GDP) which
stands at RM1 trillion, he said.
Malaysia expects to trim its fiscal deficit to 3.5% of GDP this year,
down from 6.7% in 2009.
Our target to reduce the deficit
to 3% next year remains on track.
This is driven by the broad-based
tax system [GST], subsidy rationalisation measures and other mechanisms that we have set in place,
he added.

Nirvanas HK listing hit by weak sentiment, but IPO raises HK$2.02b for Msian firm
BY ESTHER L EE

HONG KONG: Malaysias homegrown integrated bereavement care

provider Nirvana Asia Ltds maiden
trading day on the Hong Kong Stock
Exchange (HKEx) was hit by the regional weak sentiment yesterday.
The counter opened at a 21.3%
discount to its initial public offer
(IPO) price of HK$3 (RM1.35) at
HK$2.36 per share. Its share price
closed at HK$2.10, down 11% from
its opening price, with 290.44 million shares traded.
It seemed to be a disappointing start for the companys listing,
but group managing director and
chief executive officer Datuk Kong
Hon Kong shrugged off concerns,
saying the weak debut was within
expectations.
Im not worried by the lower
share price. We have 40% of retail
investors and a large number of
margin players, so I expected it.
The fundamentals of the company
have not changed. Im confident
the share price will improve later
on, Kong told reporters after the
listing ceremony yesterday.
We are confident that we will
deliver the financial results that
we have promised to investors and

(From left): Nirvana Asia Ltd executive directors Kong Yew Lian, Soo Wei Chian, Kong Yew Foong, Kong, non-executive directors
William Wesley Barnes II, Gabriel Li, Ang Teck Shang and independent non-executive director Anita Chew Cheng Im at the listing
ceremony in Hong Kong.

the share price should improve by

then. We are happy that we have
managed to raise HK$2.02 billion
from the listing.
Nirvana Asia is the first Malaysian company to have a single listing on the HKEx. The company issued a total of 674.7 million shares
at HK$3 each.
Nirvana Asia has allocated 25%

of proceeds from the listing for expanding the capacity of its existing
cemeteries, columbarium facilities
and funeral homes via land acquisition and new construction. About
40% will be used for expansion in new
markets through greenfield projects
and 10% for working capital. Meanwhile, 25% has been slated for potential mergers and acquisitions (M&A).

Currently, the company has a presence in Malaysia, Singapore and Indonesia where it manages cemeteries,
columbarium facilities and funeral
homes. Nirvana Asia, the largest bereavement provider in Asia by land
bank and revenue, also provides services such as sale of niches and burial plots, and provision of tombstone
designs and construction.

When asked if the company is

in active talks with parties for a potential M&A deal, Kong declined
to comment.
The company recently signed a
memorandum of understanding
with local land owners in Vietnam
and a cemetery operator in Guangdong province, China to establish a
greenfield cemetery. Kong is confident of sealing the deal; however, he did not indicate a deadline.
Post-IPO, the company would
be in a net cash position of about
US$260 million (RM910 million).
For the cumulative six months ended June 30, 2014, the companys
revenue grew to US$70.6 million
from US$66.1 million but net profit contracted to US$14.86 million
from US$17.74 million a year ago.
Currently, more than 80% of
Nirvana Asias revenue is derived
from Malaysia. However, Kong expects contributions from overseas
operations to increase gradually
as the company continues its expansion plans.
Nirvana Asia was previously listed on Bursa Malaysia in 2000 under
NV Multi Corp Bhd. It was taken
private by Kong after 10 years at
78 sen per share amid a lacklustre
interest in the company.

HOME BUSINESS 5

T HU RSDAY D EC E MB E R 18 , 2014 T HEED G E FINA NCIA L DAILY

Hiap Tecks plant to start

mass production in March
It has received orders from local customers, says deputy chairman
BY WEI LY N N TA NG

KUALA LUMPUR: Hiap Teck Venture Bhds RM1.8 billion integrated

steel mill in Kemaman, Terengganu, is completed and undergoing
a trial run, said deputy chairman
Tan Sri Law Tien Seng, who owns
a direct 26.31% stake in the steel
company.
If there are no major problems,
we should start producing before
year-end, Law told the media after the companys annual general
meeting yesterday.
The plant, located in Teluk Kalong Industrial Estate, has a capacity of 60,000 tonnes per month. Law
said mass production should start
in March next year.

While Law declined to divulge

the expected revenue and profit
contribution from the plant just
yet which will kick in next year
he said the plant has received
orders from local customers.
We are looking at 40% sales
from local customers and the remaining 60% from exports (such as
Indonesia, Thailand and some from
Taiwan as well) from this plant,
he said.
The integrated steel mill is a joint
venture (JV) between Hiap Teck
and China Shougang International
Trade and Engineering Corp; the
latter owns 9.03% of Hiap Teck as
atOct 30. The mill is built by Hiap
Tecks 55%-owned Eastern Steel
Sdn Bhd.

Hiap Teck is to supply iron ore to

Eastern Steel. This is made possible
after it subscribed to 55% shares on
Sept 18 this year in Vista Mining Sdn
Bhd which is principally engaged
in mining practices, particularly in
iron ore exploration, mining and
processing operations.
This is so that we can supply
iron ore to Eastern Steel in the future, where we will try to use local
ore as it is cheaper, Law said, noting
that the share subscription marks
the groups first foray into mining.
In its filing with Bursa Malaysia, Hiap Teck said this venture
is to transform the group into a
fully integrated steel player in the
country with mining, upstream
and downstream activities. Vista

Mining is presently the approved

contractor by Jabatan Mineral Dan
Geosains Malaysia, Terengganu.
Hiap Teck, which just released
its first quarter ended Oct 31 of financial year 2015 (1QFY15) results
yesterday, saw an 80% plunge in
net profit to RM2.85 million from
RM14.06 million in the previous
corresponding period.
The group registered a RM4.97
million loss in its share of jointly
controlled entity, compared to a
profit of RM2.93 million in 1QFY14,
primarily due to foreign currency
translation results.
Revenue came in 14% higher
at RM307.46 million, compared
with RM270.45 million, mainly due to a higher sales volume

Law declined to divulge the expected

revenue and prot contribution from the
plant just yet. Photo by Sam Fong

achieved in the trading division.

On prospects, Law said he foresees the demand and prices of steel
which have come under pressure
due to oversupply to stabilise if
the government continues with its
anti-dumping efforts and continues to roll out construction and
infrastructure projects.
Shares in Hiap Teck closed up
1.5 sen or 2.8% to 55 sen yesterday,
giving it a market capitalisation of
RM392.08 million.

6 HOME BUSINESS

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

November CPI rises 3%

Mainly due to higher inflation in alcoholic beverages and tobacco, among others
KUALA LUMPUR: Malaysias inflation rate increased to 3% in November this year, up from 2.8% in
October, largely due to higher inflation in the alcoholic beverages
and tobacco sector, and housing
and utilities sector, the Statistics
Department said.
In a statement yesterday, the
department said the index for alcoholic beverages and tobacco rose to
10.5%; transport (5%); restaurants
and hotels (4.3%); housing, water, electricity, gas and other fuels
(3.5%); health (3.4%); and food and
non-alcoholic beverages (2.9%).
These six groups of goods and
services contributed 96.6% to the
increase in the Consumer Price
Index (CPI) for November.
CPI for the 11 months of 2014
stood at 3.2%.

AllianceDBS Research economist

Manokaran Mottain said for 2015, it
is maintaining its view that inflation
is expected to trend higher on the
back of cost-push price pressures.
Top on our inflationary watch-

list is the implementation of the

goods and services tax in April 2015.
Our full-year 2015 CPI forecast is
4%, higher than the estimated 3.1%
for 2014, he said in a note to clients yesterday.

We expect price pressures to

weigh down on domestic growth
next year. Particularly, private consumption growth is expected to
be slower at 5.7% compared with
6.6% in 2014.
Nevertheless, we expect inflation to show some signs of easing by
end-2015 as the economy adjusts to
the higher prices, said Manokaran.
Going forward, RHB Research
economists Peck Boon Soon and
Shafizal Shafaai said while inflation is set to spike in 2015 when
the 6% GST is implemented, any
potential spillover effects will likely
be subdued by falling retail petrol
and diesel prices.
We expect inflation to pick up
to 3.8% in 2015, from an estimate
of 3.2% in 2014 and a low of 1.6%
in 2012, they added.

Call to withdraw Jimah East award to 1MDB

BY GH O C H EE Y UAN

KUALA LUMPUR: The Association of Water and Energy Research

Malaysia (Awer) has called on Putrajaya to call for fresh bidding for
the RM11 billion Jimah East Coast
Power Plant, which was awarded to
sovereign wealth fund, 1Malaysia
Development Bhd (1MDB), in a
controversial open tender.
This came after 1MDB applied for a six-month extension
for the completion of the two-unit
2,000mw coal power plant recently
(first unit was scheduled to be completed on Nov 15, 2018; second unit
on May 15, 2019), which Awer terms
as a mark of sheer incompetency.
What went wrong? Once a project is awarded, the winner of the
bid has responsibility to deliver the

project on time, said Awer president S Piarapakaran in a statement

yesterday.
It said that Jimah East is still in
its early stages and hence the government should cancel the award to
1MDB and call for a new competitive bidding not for a coal-powered plant but a combined-cycle
gas-turbine (CCGT) one because
it is faster to complete.
A coal power plant takes around
four years to build, while a CCGT
power plant takes only 32 to 36
months, he said.
A new open bidding... will prevent electricity supply security
breaches in 2018 and 2019. If the
bid is called next January, there
is sufficient time to complete the
2,000mw CCGT project in time,
he said.

Alternatively, he said Putrajaya

can make 1MDB bear all additional fuel cost and capacity charges
that will be incurred, due to the
delays in the construction of the
plant should the extension be
granted.
If not, Putrajaya should make
the Cabinet and the top officials
of the Ministry of Energy, Green
Technology and Water (KeTTHA)
and the Energy Commission (EC)
pay for the additional costs that
would be incurred due to the delay
of Jimah East, he said.
The government has imposed a
penalty cap of RM108 million for
every 1000mw for the delay in the
construction of the plants, but Awer
had said there will be additional
cost due to the delay, which it fears
will be translated into a tariff hike

that will directly impact consumers.

[So] the additional cost that
will be incurred after deducting
the penalty should be paid by cabinet members, minister and senior
officials of KeTTHA, as well as the
chairman, commissioners and senior officials of the EC. Do not pass
any additional cost to members
of the public and businesses via
electricity tariff, he said.
Malakoff Corp Bhds 1,000mw
Tanjung Bin coal-power plant,
which was scheduled to be completed by March 2016, is also seeking six to 12 months extension.
Piarapakaran said the additional fuel cost that will be translated
into a tariff for a six-month delay
is about RM321.97 million, and
around RM643.94 million for a oneyear delay.

China-based
Telent Outdoor
seeks listing
on Main Market
BY S UPR IYA S UR E N D R A N

KUALA LUMPUR: Telent Outdoor (Hong Kong) Technology

Co Ltd, which primarily operates in China and is principally
in the design, manufacturing,
marketing, brand management
and distribution of its branded outdoor apparel, footwear
and equipment, is seeking to
list on the Main Market of Bursa Malaysia to raise capital for
expansion.
In its draft prospectus submitted to the Securities Commission, the Bermuda-incorporated firm said it plans to
raise a yet-to-be-specified
amount of money from its initial public offering (IPO) here
to expand its distribution network and retail points-of-sale
(45% of the proceeds) and advertising and branding (10%).
It is also to strengthen product research, design and developmental capabilities (10%).
The remainder will be used
for working capital (25%) and
to cover listing expenses (10%).
Its IPO will entail the issuance of 103.39 million new
shares of US$0.10 (35 sen) each,
which represents 14.2% of its
issued and paid-up capital of
728.1 million.
There will be 30.62 millionshares available for subscription by the Malaysian public, while 72.77 million has been
allocated for private placement
to selected investors.
It was incorporated on Aug
5 last year and registered in
Malaysia as a foreign company onSept 23the same year.
It operates in China primarily
through its indirect subsidiary, Fuxin Telent (Fujian) Outdoor Products Co Ltd. Fuxin is
wholly-owned by Telent (Hong
Kong) Holding Ltd, which in
turn is controlled by Telent.

MOST VIEWED STORIES ON

theedgemarkets.com

Pelikan gets nod to streamline assets

BY SHA L I N I KUM AR

KUALA LUMPUR:Pelikan International Corp Bhdhas received

its shareholders approval for the
proposed business reorganisation scheme at its extraordinary
general meeting (EGM) held
yesterday.
In a filing with Bursa Malaysia, Pelikan said the group is
set to realise an estimated gain
of RM130 million and raise total cash proceeds of RM390
million on completion of the
scheme.
The successful fund raising
will also serve to strengthen
Pelikans balance sheet, where
gearing would be substantially
reduced to 0.38 times.

Its cash per share will also be

raised to RM1 from 22 sen as at
end-2013, and overall net asset
per share improve to RM1.31 from
RM1.06.
One of the key [reasons for]
the exercise is to consolidate the
groups stationery sales and distribution business intoHerlitzto create a clearly defined organisational structure of management and
business, said Pelikan president
and chief executive officerLoo
Hooi Keat.
Together with the brands
Herlitz, Geha and Susycard, the
group would be in a better position to compete and adopt a
multi-brand strategy positioning
each brand for the right products
and markets to maximise sales

potential, he added.
Pelikan on Nov 10 signed a heads
of agreement (HoA) with Herlitz
to inject its subsidiaries and assets into Herlitz for 231.2 million
(RM971 million) in exchange for
the issuance of 231.2 million new
shares in Herlitz.
This consideration value represents a discount of 18 million
or 7.2% to the valuation of 249.2
million byPricewaterhouseCoopers, Berlin.
The HoA also includes the proposed cash issuance of 32.9 million new Herlitz shares at a cash
offer price of 1 per share, and a
proposed offer for sale byPelikan
Groupof up to 60 million Herlitz
shares at a minimum price of 1
per share.

Press Metal jumps 17%

on 500mw PPA
BY S H A L IN I KUMA R

KUALA LUMPUR:Shares in Press

Metal Bhdjumped as much as 17%
yesterday on news that the aluminium smelter had signed a 25-year
power purchase agreement (PPA)
withSyarikat Sesco Bhd, a wholly-owned subsidiary of Sarawak
Energy Bhd.
The 500mw electricity purchase
will enable Press Metal to undertake the Phase 3 expansion of its
aluminium smelter in Samalaju,
Sarawak.
Press Metal rose to its highest at
RM2.76 before reducing gains to
settle at RM2.62 yesterday, giving
it a market capitalisation of RM2.6

billion after some 4.88 million

shares changed hands.
The counter was the fourth-largest gainer on the exchange. For
comparison, the FBM KLCI rose
0.48% to settle at 1,681.9 points.
According to Press Metals Bursa Malaysia filing on Tuesday, the
PPA between Press Metal and Sesco followed a term sheet signed
by both firms last month.
Press Metals Phase 3 smelter
will have a designed capacity of
320,000 tonnes.
With the additional supply of
electricity, Press Metal said it will
be able to raise its total smelting
capacity from the current 440,000
tonnes to 760,000 tonnes.

8 HOME BUSINESS

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

Malindo Air sees booming year ahead

KUALA LUMPUR: Malindo Air, a
joint venture between Malaysias
National Aerospace and Defence
Industries Sdn Bhd and PT Lion
Group of Indonesia, is forecasting
a booming year for the aviation
sector next year amid falling oil
prices, said its chief executive officer Chandran Rama Muthy.
The hybrid airline has ambitious
plans for 2015 where it will look at
aggressively expanding its brand
presence in the region.

By taking delivery of more aircraft orders, were poised to introduce more routes to our widening
network in the coming months,
strengthening air travel demand
within the region, said Chandran
in a statement yesterday.
We will also be introducing strategies to increase ancillary income as
well throughout 2015, he said.
While we very much focused
on expanding ATR (turboprop) operations this year, were looking to

enhance our capacity and route network further to include Boeing (jet)
operations, said Chandran.
Malindo Air will start daily flights
from Kuala Lumpur to Kathmandu,
Nepal, on Feb 6 next year, bringing
its total number of international
destinations to 18.
The new route will be operated using the new Boeing 737-900,
and will depart from klia2 daily at
7.05pm and arrive at Tribhuvan International Airport at 9.30pm local

time. The return flight will depart

Kathmandu at 10.20pm and will
touch down at klia2 at 5.15am local
time, said Malindo Air.
A one-way fare starts from RM399
for economy class and RM649 for
business class. Chandran said the
introduction of the new route and
others planned for 2015 will propel
the carriers position for the new year.
Malindo Air currently operates
a fleet of 11 ATR72-600s and seven B737s.

Swak Oil Palms withdraws

bids for plantation stakes
After vendors failed to get authorities nod for the proposal deal
BY CHEN SHAUA FUI

KUALA LUMPUR: Sarawak Oil

Palms Bhd has withdrawn its bid
to acquire a 60% stake in DD Pelita
Sebungan Plantation Sdn Bhd and
Mutiara Pelita Genaan Plantation
Sdn Bhd from Double Dynasty Sdn
Bhd (DDSB) and Mutiara Hartabumi Sdn Bhd (MHSB) respectively for
RM134.9 million, after the vendors
failed to get the authorities nod
for the sale and transfer of their
sale shares.
DD Pelita and Mutiara Pelita
have collectively planted 9,661ha
of oil palm estates in Sarawak with
an estimated average age profile
of 5 years.
The proposed acquisition was
expected to boost Sarawak Oil
Palms total planted area by 15%
to 73,191ha from 63,530ha as at
Dec 31, 2013.

In a filing with Bursa Malaysia

yesterday, Sarawak Oil Palms said
it was informed by the vendors
(DDSB and MHSB) that the latter
were unable to obtain the consent
from the Ministry of Land Development, Sarawak, for the sale and
transfer of their sale shares, which
was one of the conditions precedent
in the share sale agreement (SSA).
[As such,] the vendors are giving notice to rescind the SSA pursuant to clause 4.5.1 of the SSA. As
the sale and purchase agreement
(SPA) is conditional upon the completion of the SSA, the SPA would
also be rescinded, it said.
Sarawak Oil Palms noted that it
is currently contemplating its next
course of action, which would include the recovery of the deposit
and the cessation of its representative as a director in DD Pelita and
Mutiara Pelita.

When contacted, a Sarawak Oil

Palms spokesman told The Edge Financial Daily that the aborted deal
would have no immediate impact
on the groups earnings.
There will be no immediate
impact on us. We will continue to
expand our plantation acreage if the
opportunity arises. We will have to
work harder to meet our objective,
he said over the phone yesterday.
He added that the group is still
looking to procure new plantation
land for expansion, but there is
nothing concrete so far.
Under the conditional SSA, there
was also an arrangement to contract DDSB and MHSB for their
services to procure the natives
with up to 8,000ha of native customary rights (NCR) land to come
within the Sarawak governments
scheme for the development of this
land into oil palm plantations, at

RM3,500 per ha.

This procurement will be satisfied by the issuance of 473 Sarawak
Oil Palms shares at an issue price
of RM7.40 per additional consideration share.
Once the 8,000ha of NCR land
have been procured by DDSB and
MHSB, a total of 3.78 million additional shares will be issued by
Sarawak Oil Palms to the vendors
as settlement for the rights procurement consideration.
There was also a conditional
SPA with landowners DD Palm Oil
Mills Sdn Bhd, Ting Chek Ing, Lee
Ka Ming and Lee King Ho for the
proposed acquisition of 34.9ha of
land in Bintulu, Sarawak, for RM4.3
million cash.
Shares of Sarawak Oil Palms
closed up 2.08% or 11 sen at RM5.39
yesterday, giving it a market capitalisation of RM2.37 billion.

ADB trims growth forecasts for developing Asia

MANILA: The Asian Development
Bank (ADB) slightly trimmed its
growth forecast for developing Asia
for this year and next, but said sliding prices for oil should help economies in the region push through
with growth reforms.
In its update to the 2014 outlook,
ADB said yesterday developing Asia
was now expected to grow 6.1% this
year, a tad below its 6.2% forecast in
September. Growth in 2015 was seen
at 6.2%, from 6.4% previously.
While growth in the first three
quarters of this year was somewhat
softer than we had expected, declining oil prices may mean an upside
surprise in 2015 as most economies
are oil importers, said ADB chief
economist Shang-Jin Wei.
The ADB cut its 2014 and 2015
growth forecasts for China to 7.4%
and 7.2% respectively, from the the construction sector.
they are extended, should lift growth
7.5% and 7.4% estimates made in
Reforms brought by Indian Prime to 6.3% next year, the ADB said.
September, due to falling property Minister Narendra Modi will help his
Southeast Asia is expected to grow
prices and the spillover effects on country grow 5.5% this year and, if slower than previously thought in

2014 and 2015 due to a slackening in

economies in the region. The region
is seen growing at 4.4% in 2014, down
from a previous estimate of 4.6%, and
5.1% in 2015 instead of 5.3%.
Falling global oil prices present a
golden opportunity for importers like
Indonesia and India to reform their
costly fuel subsidy programmes,
Wei said. On the other hand, oil
exporters can seize the opportunity
to develop their manufacturing sectors as low commodity prices tend to
make their real exchange rates more
competitive.
Since June, Brent crude has fallen 49% to below US$60 (RM211) a
barrel, which means big savings for
Southeast Asias large oil-importing
economies Thailand, the Philippines and Indonesia.
Inflation in the region in 2014 is
now forecast to be lower at 3.2% in
2014 and 3.5% in 2015, compared
with the 3.4% and 3.7% seen in September. Reuters

Chandran: We will also be introducing

strategies to increase ancillary income
as well throughout 2015. Photo by
Reuters

Mah Sing to
appoint Topotels
to run Meridin
BY C H E S T E R TAY

KUALA LUMPUR: Mah Sing

Group Bhd will appoint Topotels Sdn Bhd to run its Meridin
Hotel Suites in Iskandar Malaysia, Johor.
In a statement yesterday, Mah
Sing group managing director Tan
Sri Leong Hoy Kum said its wholly-owned subsidiary Meridin Hospitality Sdn Bhd had signed a letter
of intent with Topotels.
Meridin@Medini is poised to
benefit from its location just right
next door to Legoland Malaysia,
which has drawn more than one
million visitors since its opening.
The project has done very well,
and we are optimistic of a very
good response to Meridin Suites
as well, Leong said.
Meridin Hotel Suites comprises two 27-storey blocks, which
come with studios, besides oneand two-bedroom suites, in phase
2 of Meridin@Medini. Meridin@
Medini, located within the new
Medini Iskandar township in Johor Baru, is within walking distance to the Legoland theme park.

Perodua sales to
exceed 195,000
units this year
RAWANG: Perusahaan Otomobil Kedua Sdn Bhd (Perodua)
expects sales to exceed 195,000
units this year, with the introduction of the Axia model, said its
president and chief executive officer Datuk Aminar Rashid Salleh.
This would be the stretch target for this year, he said, adding
that the figure will be better than
the targeted sales of 193,000 units
forecast earlier.
Bookings for the Perodua
Axia stood at 62,000 units since
the model was launched on Aug
15. This is our best record. The
overwhelming response to Axia
proves that the product we introduced meets demand.
We have registered and delivered 26,000 units of the Axia, and
we are working hard to speed up
production, so customers need
not have to wait very long, he
said at the opening of Peroduas
maiden 3S (sales, service and
spare parts) hybrid centre here
yesterday. Bernama.

T HU RSDAY D EC E MB E R 18 , 2014 T HEED G E FINA NCIA L DAILY

I N V E ST I N G I D E A S 1 1
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 specic 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 AS S TO C K O F T H E D AY

Apex Equity Holdings Bhd

SHARES for Apex Equity have done very
well, rising from RM1.11 at the start of this
year to as high as RM1.59 in late-October
before paring gains amid a broader market
sell off. The gains, in part, reflect the companys improved earnings.
In 2013, revenue surged 35.1% to RM64.0
million while pre-tax profit increased 4.7%
to RM31.2 million. The increase in sales
was mainly due to higher revenue from
the money lending and property development segments.
For 9M2014, revenue rose 26.3% y-o-y to

RM60.9 million, while pre-tax profit jumped

40.5% to RM29.3 million, mainly due to
higher contributions from stock-broking
and money lending business.
The stock is now trading at its book value
of RM1.42. Nevertheless, the companys assets are understated as it holds large tracks
of land acquired at low prices. Apex Equity has 100.1 acres of land in Sepang with
a book cost of RM12.7 million, or RM2.91
psf, and 99 acres in Hulu Selangor carried
at RM10 million, or RM2.31 psf. Both were
acquired in 1995 and 1996, and have not
been revalued since. It also has 5.9 acres
of land in Klang acquired in 2003 with a
book cost of RM30.5 million or RM118.47
psf. Unlocking these values could provide
the next leg up for the stock.
Meanwhile, shareholders can expect to
earn relatively attractive yields. Dividend per
share totalled 8 sen in 2013, translating into
a higher than market average yield of 5.6%.
The companys balance sheet is also improving. Net cash stood at RM87.9 million
or 43 sen per share as at end-Sept 2014,
up from RM36.2 million in 2012. The Edge
Research gives Apex a fundamental score
of 2.7 out of 3.
The stock is trading at a trailing 12-month
P/E ratio of 8.8 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, starting from today onwards, InsiderAsias Stock of the Day will run the same stock recommendation for
two consecutive trading days. As such, the featured stock today is Apex Equity Holdings Bhd, the same as that for Wednesday, 17
December, 2014. We will have a new stock pick tomorrow, on Friday. Thank you for your support.

T O N G S
MOMENTUM
P O RT F O L I O
STOCKS on the local bourse rebounded
somewhat after 4 consecutive days of losses, which wiped out all gains made since
August 2013.
The benchmark index closed 8 points
higher at 1,681.90, though this was well off
its intra-day high. Wednesdays rebound
may well be just a temporary reprieve, as
momentum for oil prices is still biased to
the downside and the ringgit remains vulnerable to more selling pressure.
Global financial markets are likely to stay
volatile. US markets ended lower overnight.
Europe stocks too, opened weaker following
bearish economic outlook, including fallout
from the turmoil unfolding in Russia. The
Russian rouble fell to a record low of 80 to
the US dollar on fears that the tumbling oil
prices will cut the countrys already diminishing revenue caused by sanctions tied to
the Ukraine conflict.
My portfolio returns gained by 0.09% to
RM 100,309.90.
The portfolio started on 8 July 2014 with
a capital of RM100,000. Since then, it has
outperformed the FBM KLCI by 11.4%, and
has registered an annualised return of 0.7%.
Total profits currently stand at RM 309.90.
I am still keeping my portfolio unchanged after selling off most of my stocks
last Thursday, a decision that turned out
to be a good one.

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.

12 B R O K E R S C A L L

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

Shale oil producers come to the fore

Oil & Gas Sector
Maintain neutral: The Organization of the Petroleum Exporting
Countries (Opec) seems ineffective in controlling its members
output and trying to keep prices
high could be dangerous for it
now, as this may result in further technological innovations
in the industry. The oil surplus
is expected to be at around 1.13
million barrels per day in 2015,
but supply may decrease if prices
remain weak.
A new era has come, with shale
oil producers being the new global
market swing producer. As such,
we expect a shorter boom-bust
cycle going forward.
We have revised our base-case
2015 forecast price of crude oil to

US$80 (RM280) per barrel (bbl),

while our long-term price remains
at US$95 bbl. We performed a
sensitivity analysis for a worstcase scenario, in which the price
of crude oil is at US$40 bbl within
our regional coverage.
In this scenario, the price of
crude oil staying at this rate over
a prolonged period of time would
most affect the companies involved in upstream exploration
and production, refineries and
petrochemical players.
These companies are PTT Exploration and Production (buy,
target price (TP): 142.61 baht
[RM15.10]); Bangchak Petroleum
(neutral, TP: 29.52 baht); IRPC
(sell, TP: 3.17 baht); Thai Oil
(buy, TP: 48.04 baht); PTT Global

Chemical (buy, TP: 64.34 baht);

and PTT (buy, TP: 357 baht)
whose earnings would plunge
50% from the base case.
For the service providers, we
assume that some uncontracted
assets may remain idle for an extended period of time (12 to 24
months). The negative impact on

SapuraKencana to see weaker

E&P in FY16
SapuraKencana Petroleum Bhd
(Dec 17, RM2.20)
Downgrade neutral with a target
price (TP) of RM1.65: We downgrade SapuraKencana to neutral
and cut our TP to RM2.20, with 6%
upside, 10 times price-earnings
(P/E) from RM4.02.
Our TP takes into account weaker exploration and production
(E&P) contributions in financial
year 2016 (FY16) (at a lower oil
price assumption) and risks of order book replenishment for services
and rigs internationally.
Our stress test scenario implies
that the stock will continue to face
weak sentiment and downside risks
that could lower our TP to RM1.99.
SapuraKencana provides integrated upstream services and is
involved in E&P. It has four main
units: fabrication, hook-up and
commissioning (HuC) with 125,000
million tonnes per annum capacity;
offshore construction and subsea
services (OCSS); drilling (17 active tender and semi-tender rigs)
and energy/E&P (production sharing blocks, a marginal field and a
brownfield development).
The group has a cumulative
RM26 billion firm order book (and
RM19 billion optional).
Our concerns are the order book
replenishment, given its sizeable
international exposure (around
70% of the order book is for overseas), and security of cash flow from
Petrobras contracts at the V level.
Some 40% of its 17 operational rigs
are up for renewal and first half of
FY16 could see a weaker E&P division if Brent remains at US$65
(RM227.50) to US$70 per barrel
(bbl). We lower our FY16 and FY17
core profit forecasts by 7% and 4%,
which are now 7% to 11% below
consensus.
We expect weaker FY16 E&P
earnings due to lower oil prices,
and a reduced order book replenishment rate for its services. Our
new oil price assumption for 2015

is US$75 to US$85 bbl (maintain

US$90 to US$100 bbl for 2016/2017).
We believe this takes into account its execution risks and outlook for contract wins, when the
feasibility of many global upstream

projects and contracts are at risk

as current oil prices of less than
US$65 bbl versus breakeven costs
becomes a real challenge.
Our sum-of-parts (SOP) comprises: i) E&P: RM0.91 per share
discounted cash flow for Malaysia
and Vietnams producing fields
(from RM0.96 per share), ii) enterprise value to earnings before
interest, taxes, depreciation and
amortisation of 5 times for OCSS
(from 10 times, to reflect significant
counter-party risks) and tender rig
divisions (from 6 times, to reflect
risks of contract renewals) and iii)
eight times P/E for fabrication and
HuC, from 15 times.
In a stress test scenario with
Brent crude at US$40 bbl, a 25%
cut in rig day rates and cancellation of pipelay contracts from Brazil
will derive a RM1.99 TP (implied
9 times P/E).
A scenario of a sustained uptrend of Brent crude to US$90 to
US$100 bbl and recovery in order book replenishment activities could boost our TP to RM4.02
(implied 18 times P/E). RHB
Research, Dec 17

these firms earnings per share

may be 10% to 60% lower than
their base case scenarios.
However, our scenario analysis is based on the assumption
that all other variables remain
constant, unless otherwise stated. Note that companies usually
adjust their operations to mitigate

worst-case scenarios.
We remain positive as the bulk
of the companies under our Asean
oil & gas coverage universe are in
the services segment and would
be relatively unaffected by shortterm crude oil price volatilities.
This is because these players have
short- to medium-term service
contracts.
For our selected companies
under coverage, the weak crude
oil prices would not have any material impact on earnings over the
next 12 to 24 months. They are
PTT, Dialog (buy, TP: RM2.00),
Perdana Petroleum (buy, TP:
RM1.62), Ezion (buy, TP: S$2.65
[RM7.09]) and Nam Cheong
(buy, TP: S$0.61) RHB Research, Dec 16

S P Setia to focus on houses priced

less than RM1m
S P Setia Bhd
(Dec 17, RM3.24)
Maintain neutral with a target
price (TP) of RM3.34: S P Setias
financial year 2014 (FY14) net
earnings of RM406 million came
in line with our full-year forecast
and that of the consensus.
Year-to-date (YTD) net earnings improved 6%. However, overall earnings before interests and
tax (Ebit) margins were down
slightly to 23% from 24% yearon-year (y-o-y), mainly due to
the mismatch between initial
expenses incurred and revenue
recognition in the United Kingdom and Australia, where revenue is recognised at a point in
time when the construction of the
assets is completed and handed
over to the customers.
This was further compounded by the impact of the goods
and services tax (GST), which
the group charged out RM6.8
million in the fourth quarter of

FY14 (4QFY14) which was recognised progressively since 2QFY14.

The total impact for FY14 was approximately 10% of net earnings.
S P Setias 4Q earnings went up
27% quarter-on-quarter (q-o-q)
but were flat y-o-y, while the YTD
net earnings eased 3%.
Going forward, management
has set a RM4.6 billion sales target for FY15 with the key focus on
affordable houses, mostly priced
less than RM1 million.
The group has declared a final
dividend of 5.7 sen per share during the quarter, and an interim
dividend of 4 sen per share totalling 9.7 sen per share for the
year. This translates into a decent
yield of 3%.
We maintain our FY15 forecast
and our TP at RM3.34 based on
a blended price-earnings and
price-to-book value of 15 times
and 1.3 times, respectively. Maintain neutral. BIMB Securities
Research, Dec 17

14 B R O K E R S C A L L

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

Gamuda net profit

within estimates
Gamuda Bhd
(Dec 17, RM4.81)
Maintain neutral with a target price (TP) of RM5.35: In the
first quarter of financial year 2015
(1QFY15), Gamuda posted a net
profit of RM185.8 million (+4.4%
quarter-on-quarter [q-o-q], +12.3
year-on-year [y-o-y]), which was
within our and consensus estimates. The 1QFY15 net profit constituted approximately 25% and
24% of our and consensus full-year
estimates.
The group continued the earnings momentum with profit before
tax and net margins grew by 17%
and 12% respectively, driven mainly by the mass rapid transit (MRT)
billings and other divisions such as
properties and toll road concession.
Separately, we understand that the
new Selangor menteri besar could
revise the offer for Syarikat Pengeluar Air Selangor Holdings Bhd and
the group is expecting resolution
in the coming months.
The construction division, which
is solely driven by the Klang Valley
MRT (KVMRT) Line 1 (Sungai Buloh-Kajang Line) saw the groups
current outstanding order book
lowered by approximately RM200
million to RM1.8 billion in 1QFY15.
The billing was slightly slower
with civil works nearing completion
and the project moving into more
advanced packages. The key milestone to watch is the completion
of tunnelling works in about three
months. The track and systems access works have commenced.
As for KVMRT2, the project delivery partner (PDP) agreement is
expected to be signed by the first
half of 2015 and the major contract
awards for MRT2 (RM25 billion)
will commence only by mid-2016.
The other project Gamuda is eye-

The MRT PJU5 Station.

ing is the Penang Transport Master Plan. It is bidding for the PDP
role and the outcome is expected
by end-2015. The project is said to
cost RM27 billion.
Gamudas property sales
reached RM240 million in 1QFY15,
which is considerably lower y-o-y
as the Iskandar project in Johor
continued to disappoint.Unbilled
sales stood at RM1.5 billion but the
group is likely to revise downwards
the sales target of RM1.84 billion
for FY15 in the coming quarter.
We expect sales for Horizon Hills
in Iskandar may need to be cut by
almost half from RM700 million,
given the difficult trading environment in Iskandar currently.
As for land banking, we understand that Gamuda is still scouting
for more land deals in FY15. With

Weaker revenue from MLM and

wholesale divisions for Hai-O
Hai-O Enterprise Bhd
(Dec 17, RM2.14)
Maintain reduce with a target
price (TP) or RM1.80: Hai-Os
first half of financial year 2015
(1HFY15) results came in way
below our and consensus expectations. This was mainly attributed to the weaker revenues
from its multilevel marketing
(MLM) and wholesale divisions.
In view of this, we are slashing
our FY15 to FY17 estimates further by 20% to 25%.
Hai-Os 1HFY15 turnover and
earnings declined by 10.6% and
30.7% year-on-year (y-o-y) to
RM107.5 million and RM13.4 million respectively. This was mainly due to weaker revenue from
its multilevel marketing (MLM)
division and flat sales from both
its retail and wholesale segment.
MLM revenue dropped by 18%
y-o-y to RM60.3 million which
was mainly attributed to a significant drop in big-ticket items sales
that had offset the better sales
performance from its small-ticket
items. As at 1HFY15, the small
and medium ticket items contribute more than 65% of total
revenue (from 48% in FY14).
While sales from its wholesale
division remained flat, profit be-

fore tax fell 60.2% y-o-y to RM3.3

million mainly due to lower inter-segment sales to its MLM
division as well as lower sales
of its Chinese medicated tonics
and teas.
Meanwhile, the groups
1HFY15 earnings before interests and taxes margin softened
4.9 percentage points y-o-y to
16.8% due to increase in advertising and promotional expenses.
Given the disappointing set of
results, we are cutting our FY15
to FY17 forecasts by 20% 25% to
factor in the weaker-than-expected showing from its MLM
division. We have also assumed
higher operating and distribution
expenses in view of growing inflationary pressures. Following
the earnings downgrade, we are
lowering our 12-month TP to
RM1.80 (from RM2.31) based on
an unchanged target multiple of
11.5 times, in line with its historical three-year mean price-earnings ratio on calendar year 2015
earnings per share.
We do not foresee a significant
improvement in its retail division
given the overall weaker consumer sentiment and we maintain
our reduce recommendation.
Affin Hwang IB, Dec 17

recent land deals totalling RM2.2

billion, the group has now about
4,000 acres (1,619ha) of land with
an estimated gross development
value of RM48.5 billion remaining.
We maintain neutral but TP
revised to RM5.35, after rolling over
our valuations which are pegged
on parity with our sum-of-parts
valuation.
We believe Gamuda, being the
prime beneficiary of the infrastructure spending, should see its earnings underpinned by the current
MRT1 and then MRT2. Job flows for
Gamuda remain good but we opine
the risk-reward is not attractive as
yet. That said, if Gamuda succeeds
in clinching the Penang Transport
Master Plan, we believe the stock
will be further rerated. Public
Investment Bank, Dec 17

GHL subsidiary signs TPA agreement in the Philippines

GHL Systems Bhd
(Dec 17, 62.5 sen)
Maintain add with a target price
(TP) of RM1: GHL Systems announced that its subsidiary, GHL
Philippines, had signed an agreement for a prepaid card transaction
payment acquisition (TPA) arrangement in the Philippines. Omnipay
Inc has appointed GHL to acquire
merchants for UnionPay International and JCB International. This
marks GHLs entry into the direct
merchant acquisition space, consolidating its position as the leading
payment services provider in the
Philippines.
We maintain our financial year
2014 (FY14) to FY17 earnings per
share (EPS) forecasts and reiterate
our add call and TP, still based
on 23.8 times calendar year 2016
price-earnings ratio, 40% premium to the payment sector average,

in view of its strong FY13 to FY16

EPS compound annual growth rate
(CAGR) of 72% and attractive profit-earning growth ratio of 0.57 times.
Stronger TPA earnings and mergers and acquisitions activities in
new markets are potential catalysts.
GHL is our top pick in the domestic
technology sector.
Under the agreement, GHL will
serve as a merchant acquirer for
UnionPay International and JCB
International cards in the Philippines. The company expects to start
deploying its point-of-sales terminals
in first quarter of financial year 2015
(1QFY15), and is targeting to sign up
300 to 500 merchants per month to
accept payments using UnionPay
and JCB cards.
Also, the management is still confident of securing its TPA arrangement in Malaysia this year.
We are positively surprised by

GHLs appointment as a TPA acquirer for UnionPay and JCB in the

Philippines, as we were expecting a
TPA arrangement with a bank which
is still awaiting regulatory approval.

Nevertheless, we believe this

will help GHL to kick-start its TPA
operations in the Philippines. We
understand that about 65% of the
countrys population is not covered

by the banking system, which explains the 27 million prepaid card

issuances versus only eight million
credit cards.
This is positive for GHL as UnionPay and JCB cards are predominantly used for making prepaid payments in the Philippines. Moreover,
Omnipay plans to issue six to eight
million cards under the UnionPay
and JCB brands in 2015, versus 2.7
million currently; this should help
GHLs merchant acquiring process.
Our suggestion is to accumulate
the shares. The stock had a good run
early this year, but is now down 35%
from its year-high of 91 sen. We think
the pullback offers an attractive buying opportunity, in view of its strong
TPA-driven earnings growth. Overall,
we think GHLs growth prospect is
intact and are confident of its execution strategy. CIMB Research,
Dec 16

H O M E 15

THU RSDAY D EC E MB E R 18 , 2014 T HEED G E FINA NCIA L DAILY

Penang wants exemption from GST on bridges

BY HI MA NSHU B HATT

GEORGE TOWN: Driving across

both the bridges to Penang island
will cost 6% more when the goods
and services tax (GST) takes effect
next April 1 unless Putrajaya rescinds the consumption tax, the
state government said.
Penang Chief Minister Lim
Guan Eng said Putrajayas move
will affect millions who depend
on crossing important bridge links

every day in the island state and

also Johor, which also has two
bridges to Singapore.
The bridges which connect
the island and the mainland
Penang Bridge and the Sultan Abdul Halim Muadzam Shah Bridge
which opened in March this year
have toll charges for any vehicles entering the island.
Those who use the 92-yearold Johor-Singapore Causeway
and the Tuas Second Link which

connects Tanjung Kupang in Johor

to Tuas in Singapore, would also
have to pay GST for their journey
to Singapore, in addition to paying
the toll to the Singapore authority
for the trip back.
Lim said all public bridges were
originally exempted from GST,
together with highways.
But during a briefing last month
by the Customs Department, it
was found that the exemption for
bridges had been removed.

Lim said the state executive

council had resolved to object to
this removal of exemption as it
would burden countless people,
especially in Penang and Johor.
We will write officially to the
federal government to ask that
this exemption be reinstated, he
said at a press conference after
the executive council meeting
yesterday.
Lim said he would like to ask
Prime Minister Datuk Seri Najib

Dash highway too close for

comfort, say residents
Flaws in the Environmental Impact Assessment report
BY MOH D FA RHA N DARW IS

PETALING JAYA: The proposed

Damansara-Shah Alam expressway
(Dash) is too close to residential
homes, with some sections barely
30m away, said a group of residents.
Say No To Dash (SNTD) spokesman Michelle Wong said this was
among the flaws the group found
in the Environmental Impact Assessment (EIA) report for Dash.
She said along one of the stretches,
the EIA failed to recognise the consequences of building a 19m elevated
highway which is only about 11.2m
and 14m from two high-density condominium blocks, respectively.
Even (Selangor) Menteri Besar
Mohamed Azmin Ali was shocked
by this, she said after meeting Azmin to discuss the project at his
office in Shah Alam on Tuesday.
Wong said the group was only
against the building of the stretch
in Damansara Perdana and Mutiara Damansara, as both areas were
densely populated and undergoing
rapid development.
Our stand is clear that no highway should cut through residential
areas. We, however, agree that it
should go through Shah Alam as
residents there have no other alternative routes, she said.
The elevated highway should
not go through densely populated
residential areas, said Wong.
She also claimed Damansara
Perdana residents were not consulted in the impact study done
by the developer, Prolintas Bhd.
All the 10 residents groups and

condominium management bodies told us they were not consulted

prior to the project, she said.
Overall, she said only 165 residents, representing three sections
of the highway, were interviewed.
She said this did not represent the
total number of people affected by
the project.
Wong also pointed out the need
for a study on air quality to be conducted at Mutiara Damansara and
Damansara Perdana to determine
the impact of vehicle emissions on
the health of residents, especially
children with breathing difficulties
and asthma.
Dash, costing about RM4 billion,
will be a 20.1km three-lane dual
carriageway expressway. Among
the proposed routes for it are Shah
Alams Puncak Perdana U10, Alam
Suria, Denai Alam, Kampung Melayu Subang, Rubber Research In-

stitute Malaysia, Kota Damansara,

Mutiara Damansara and Damansara Perdana.
It will then link users to Lebuhraya Damansara Puchong (LDP)
and Sprint highways.
When asked about Azmins reaction at the meeting, Wong said the
MB gave a positive response and
assurance that he will meet with
Prolintas Bhd and the Malaysian
Highway Authority over the matter.
He gave us a positive response,
saying it doesnt make sense, especially in the Damansara Perdana area
which has a lot of shoplots, she said.
Wong said Azmin will demand
that a new EIA be prepared and
would issue a statement soon on
the state governments structural
plan for 2035 which had included
Dash, Kinrara-Damansara Expressway and other highways. The
Malaysian Insider

Wong says Selangor Menteri Besar

Mohamed Azmin Ali will meet with
developer Prolintas Bhd and the
Malaysian Highway Authority over the
matter. Photo by The Malaysian Insider

Razak on why the change had been

made. Bridges were exempted before, but now they are not, he said.
This will burden the 1.6 million population of Penang, he
said. Millions will also be affected in Johor. We hope that this can
be corrected, he said.
The GST will be imposed on a
list of goods and services which
will be charged 6% tax at every
stage of the supply chain. The
Malaysian Insider

Community
Tension Index
drops on
peoples maturity
KUALA LUMPUR: The maturity of
the people in tackling controversial
and sensitive issues has resulted in
a better Community Tension Index
(IKM) compared with last year.
National Integration and Unity Department (JPNIN) director-general L Gandesan said he
was optimistic that the IKM for
2014 was below 15% compared
with 18.9% last year.
He said this was based on the
achievement of a reading of 13%
which was recorded for the third
quarter this year.
The improvement in the IKM
reflects the increasing maturity of
the people in facing current issues
and not [quickly] involving themselves in demonstrations to voice
their views or dissatisfaction.
[Instead], they tend to pick the
social media to express their views,
which does not involve fights, he
told Bernama.
IKM is arrived at by taking into
account the cases involving corruption, demonstrations, racial fights,
conflicts and sensitive issues taking
place in the country.
Gandesan also said the JPNIN
planned to improve the index in
future so that sensitive issues discussed in social websites would also
be taken into account in the index.
An accurate IKM index is important because it is an indicator
for us to look at the situation so that
suitable activities can be carried out
to reduce the reading, if the figure
recorded is high, he said.
Gandesan said among the effective programmes to bring down
the index and foster interacial harmony and unity are the Rukun Tetangga, Rukun Negara secretariat programme at universities and
Rukun Negara clubs in schools.
Bernama

Government to announce steps to boost economy

KUALA LUMPUR: The government
is expected to soon announce measures to further bolster the economy,
following the recent fall in the value
of the ringgit, said Deputy International Trade and Industry Minister
Datuk Hamim Samuri.

Without elaborating on the

measures to be taken, he said they
are based on the economys still
strong fundamentals as well as favourable investment trends and
balance of payments.
He said this to reporters after

the launch of the Perdasama Muda

National Committee on Tuesday.
Earlier, he said the government
had experience in handling the
ringgits great depreciation during
the 1997 financial crisis, which was
aggravated by a massive outflow of

short-term capital.
He said the situation this time
around, however, is different in
that it is caused by a fall in commodity prices.
He also urged the public not to
resort to panic-buying, saying this

would hinder the governments

efforts to put in place economy-boosting measures.
An uncontrolled slide in the value
of the ringgit could hurt the economy in the long term, he added.
Bernama

16 H O M E

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

Court throws out Muslim

converts custody appeal
Bound by earlier federal court ruling that Syariah Court had no jurisdiction
BY V A N B A L AGA N

PUTRAJAYA: The Court of Appeal

threw out yesterday an appeal by
a Muslim convert against a High
Court order granting custody to his
ex-wife of the couples two children.
A three-man bench chaired by
Datuk Abdul Aziz Abdul Rahim, in
dismissing Izwan Abdullahs appeal, said the court was bound by an
earlier federal court ruling that the
Syariah Court had no jurisdiction
over parties whose marriage was
registered under the Law Reform
(Marriage and Divorce ) Act 1976.
The religious court could only
confirm that dissolution of marriage had taken place when one
of the spouses had converted, the
appeals court said.
The other judges on the panel
were Datuk Ahmadi Asnawi and
Datuk Tengku Maimun Tuan Mat.
On April 7, the Seremban High
Court granted Izwans former wife,
S Deepa, custody of the couples
two children.
The decision overrode an April

Izwan (left), who was formerly known as N Viran, unilaterally converted the children
without Deepas knowledge in April 2012. Photo by The Malaysian Insider

2012 Syariah Court order granting Izwan custody of the children,

Sharmila (Nurul Nabila), nine, and
Mithran (Nabil), six.
Izwan, who was formerly known
as N Viran, unilaterally converted
the children without Deepas knowledge in April 2012.
But, two days after the High
Court order, Izwan abducted
Mithran from Deepas home in
Jelebu, Negeri Sembilan, and has

retained the boy since.

Deepa then obtained a recovery
order from the High Court on May
21 to get the police to search for
Izwan and Mithran.
Yesterday, the court also dismissed Izwans appeal against a
recovery order obtained by Deepa
to get her son back, and said the
order was correct in law.
The court said it was the civil
court which had jurisdiction to hear

and provide the order as requested

by Deepa.
The argument by the intervener
(Inspector-General of Police Tan Sri
Khalid Abu Bakar) that there were
two custody orders from the civil
court and Syariah Court is also not
sustainable Abdul Aziz said in dismissing Izwans appeal.
Khalid had applied to be a party
in the suit because the order was
also directed at the police to look
for her son.
The order, served on Bukit Aman
on June 26, had stated that Izwan
must return the boy to Deepa, failing which police must locate her
ex-husband to take the child from
his unlawful custody.
However, the police had refused
to enforce the order.
Abdul Aziz allowed yesterdays
ruling to be stayed for three weeks to
allow Izwan to apply for leave to the
Federal Court to appeal the ruling.
This stay will lapse if you do not
do anything, he told lawyer Mohd
Hanif Khatri Abdulla. The Malaysian Insider

IGP cant be forced to arrest convert father

PUTRAJAYA: The Court of Appeal
has ruled that the inspector-general of police (IGP) cannot be forced
to arrest a Muslim-convert father
and return his daughter to his Hindu ex-wife.
In allowing an appeal by IGP Tan
Sri Khalid Abu Bakar to set aside a
mandamus order issued by the Ipoh
High Court to compel him to arrest
Mohd Ridhuan Abdullah and return
his daughter to M Indira Gandhi,
a three-member panel chaired by
judge Datuk Abdul Aziz Abdul Rahim ruled that the court could not
give effect to the High Courts order

as the matter involved a private feud.

The mandamus order should
not have been issued to enforce
private rights, he said.
In a 2-1 majority judgement, Abdul Aziz said that Indira Gandhi had
not exhausted all legal remedies to
locate her ex-husband and to find
her child.
She did not approach the court
bailiff to find her child, said Abdul
Aziz, who presided over the appeal
with Datuk Tengku Maimun Tuan
Mat and Datuk Ahmadi Asnawi.
However, Tengku Maimun, in
a dissenting verdict, said that the

High Court judge had not erred in

issuing the mandamus order.
On Sept 12, this year, the High
Court in Ipoh, Perak, allowed a judicial review application brought
by Indira Gandhi for a mandamus
order to compel Khalid to arrest
Mohd Ridhuan and return their
six-year-old daughter Prasana Diksa to her.
In 2009, the Syariah Court in Ipoh
had given Mohd Ridhuan, who was
formerly known as K Pathmanathan,
custody of their three children, Tevin Darsiny, 17, Karan Dinish, 16,
and Prasana Diksa, six, after he uni-

laterally converted them to Islam.

In 2010, the Ipoh High Court
granted Indira Gandhi full custody of all three children, and Mohd
Ridhuan was ordered to return Prasana Diksa to the mother.
On May 30, the Ipoh High Court
cited Mohd Ridhuan for contempt
and issued a warrant of arrest against
him after he repeatedly failed to
hand over Prasana Diksa to the
mother.
Indira Gandhi had also obtained
a recovery order from the High Court
to compel the police to locate Mohd
Ridhuan. Bernama

Emulate Swiss
drug policy,
says Malaysian
AIDS council
KUALA LUMPUR: The Malaysian AIDS Council (MAC) has
suggested that the new national
drug policy being drafted to address the drug abuse problem
in Malaysia should emulate the
Swiss Drug Policy (SDP).
Its president Datuk Dr Raj
Karim said the SDP comprised a
four-pillar strategy that covered
treatment, harm reduction, prevention, and law enforcement
as a comprehensive approach
to the drug issue.
Having studied the strength
of the SDP, we recommend that
the government take it up as
an example of good practice to
guide our response to the drug
issue as well as HIV infections,
she told reporters at the launch
of the Health, Safety, Public
Order: A Photo Report on Swiss
Drug Policy here.
She said the cornerstone of
the SDP was to offer access to
medicine and health to drug
addicts through institutes such
as the Arud Drug Treatment
Centre in Switzerland that provides holistic drug treatment
and placement of medical professionals in remand centres.
The MAC also suggested that
the new drug policy should establish a special governmental
body called the security, intervention, prevention (SIP) team
such as in Switzerland, she said.
The SIP team in Zurich is composed of 70 social workers, ethnographers and psychologists,
and they are tasked with walking around the city every day to
resolve or mediate public order
issues by approaching individuals respectfully without stigma,
and divert street-based drug
users to voluntary healthcare
services, she said.
Meanwhile, Embassy of
Switzerland in Malaysia deputy head of mission Rolf Ott
said the SDP showed positive
results as drug-related deaths
in Switzerland had decreased,
the health of injecting drug users improved, and the number
of new HIV infections fallen
rapidly. Bernama

Penangs electoral boundary redrawing body presses EC to be transparent

GEORGE TOWN: The Election
Commission (EC) has undermined
its own credibility by refusing to
meet civil society groups in its
boundary redrawing exercise, say
Penangs elected representatives,
describing the process as shrouded in secrecy.
The states representative committee on electoral delineation in a
statement yesterday said the EC has
not been transparent in engaging
stakeholders.
The statement is signed by Tanjong MP Ng Wei Aik, Bayan Baru MP
Sim Tze Tzin and Parit Buntar MP
Datuk Dr Mujahid Yusof Rawa, from
DAP, PKR and PAS respectively.
Until today, the EC has not been

transparent in the delineation process ... the entire exercise is shrouded in secrecy.
This has to change. We call
upon the EC to make the upcoming constituency redelineation process a participatory, accountable
and transparent one, they said in
the statement.
The committee demanded that
the EC engage state governments,
local councils, political parties,
and civil society groups in its preparatory work for the redelineation proposal, rather than limiting
stakeholders participation to the
objection process required by the
13th Schedule of the Federal Constitution.

They also urged the EC to make

a public announcement to ensure
that people could be better prepared
when it informs the prime minister
and the Dewan Rakyat speaker of
the intention to start the exercise.
It is unprofessional for the EC
to make the commencement of the
redelineation exercise a guessing
game and to inform the public only
on the first day of the 30-day display
period, they said.
They also demanded that the
EC display its proposals in both
physical and digital forms, so the
public can download the maps and
study the impact of the proposals
at their convenience.
The EC must also ensure the

inquiries held in the event of objections be carried out professionally and impartially with full media
access, including video recording.
The commission must allow
the objecting parties right to legal
representation, and not limit the
number of participants and the
length of presentation, they said.
The statement from the committee members was in reaction to the
ECs rejection of the committees
call for a dialogue.
The rejection came in form of a
Dec 8 written reply from the EC to
the committees letter asking for
the meeting on Nov 25.
The EC explained that the meeting could not be granted as the

process was still being studied and

had yet to be finalised.
The ECs refusal to meet the
official representatives of a state
government has undermined its
own credibility.
Regardless of the rejection, we
still uphold the principle of positive
engagement and will continue to
seek a meeting with the EC. We will
send in another letter early next
year, the committee said.
We understand that the EC also
has rules to follow but there is also
room for the commission to engage
stakeholders.
The EC is very outdated. It still
follows outdated rules. The Malaysian Insider

18 H O M E

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

Study: Law graduates

becoming poorer in English
Students struggle with lack of confidence in speaking the language with deficient soft skills
KUALA LUMPUR: Malaysian lawyers believe that English proficiency among fresh law graduates is
on the decline, with many worried
about rising grammatical errors in
written documents, according to
a study on communication skills
of law students at Universiti Malaya (UM).
Lawyers interviewed in the oneyear study by the universitys Faculty of Law and Faculty of Language
and Linguistics said those who recently entered the profession lacked
important soft skills.
While some senior lawyers bemoaned the declining proficiency
of English among recent graduates, many legal professionals took
a more practical approach to the
problem, saying that the students
and new lawyers would naturally
improve their spoken English over

time as they gained more experience with their work, said the
studys principal investigator, Dr
Nurjanaah Chew Li Hua, in a summary of the findings made available
to The Malaysian Insider
It was found that many students
struggle with a lack of confidence
in speaking English.
Deficient soft skills among law
graduates were highlighted by the
lawyers interviewed. Many of them
put priority on skills such as public
speaking, politeness, workplace
familiarity and professional etiquette, Nurjanaah said.
The study, completed last
month, involved interviews with
22 academicians at the universitys
faculty, nearly 400 UM law students
as well as 20 pupil masters and new
lawyers in the legal profession.
According to Nurjanaah, the

study found that many of the undergraduates preferred to stick to

the language they used at home,
making them less confident of
speaking in another tongue.
While it was found that the older students are more likely to be
multilingual, the younger students
tend to use the one language that
they feel comfortable with, said
Nurjanaah, who is a senior lecturer
at UMs Faculty of Law.
However, researchers were surprised to see that the vast majority
of students (85%) scored enough to
be considered good or competent
users of the English language in a
test designed to identify their level
of general academic English proficiency, said Nurjanaah.
The students are better at
speaking and listening skills compared to writing skills. This find-

93 NGOs back open letter

by prominent Malays
BY MELATI A JALIL

KUALA LUMPUR: A total of 93 Malaysian non-governmental organisations (NGOs) have pledged their
support for the open letter signed
by 25 retired high-ranking Malay
civil servants who called for an end
to extremism and for a rational dialogue on Islam.
Coordinated by Gabungan Bertindak Malaysia (GBM), the NGOs
endorsed the joint statement, urging
Putrajaya and civil society to widen
the space for rational discourse with
open minds and progressiveness.
GBM chair Tan Yew Sing urged
all Malaysians not to be influenced
by extreme rhetoric or dance to the
tune of populist moves.
Whether at the government level
or grassroots level, or in all sectors
of the society, we should advocate
shared prosperity, mutual respect,
support and progress, he said during a press conference yesterday.
The ruling and opposition political parties in their process of
competing for voters should not
manipulate the sentiments of ethnicity and religion by being chauvinistic and dogmatic.
Tan said the country had to
abide by certain principles if it
wanted to enjoy long-term stability.
To ensure that the rights and welfare of all Malaysians are protected,
the implementation of government
policy should be based on the principles and spirit of the Federal Constitution, Rukun Negara and the United Nations Universal Declaration of
Human Rights 1948, he said.
The people should reject religious and ethnic extremism and the

The ruling and

opposition political
parties in their
process of competing
for voters should
not manipulate
the sentiments of
ethnicity and religion
by being chauvinistic
and dogmatic.
government should take fair and
just action in handling extremism
and not adopt selective prosecution, said Tan.
He urged all parties to respond
positively to the calls of the 25 concerned citizens.
Political parties should openly
and clearly promise to uphold the
best interests of the people, he said.
They should not provoke tensions
over religion and ethnic issues for
their own political gains, said Tan.
Among the NGOs that endorsed
the statement were Pertubuhan
Ikram Malaysia, Suara Rakyat Malaysia, Jihad for Justice, Sisters in
Islam, All Womens Action Society,
Islamic Renaissance Front, Kuala
Lumpur and Selangor Chinese Assembly Hall and National Indian
Rights Action Team.
Ikram vice-president Zaid
Kamaruddin said they applauded
the courageous action of the towering figures to stand up and publicly
address sensitive yet critical issues
plaguing the nation.
We share their sentiment that

there is a real need for a consultative process that will bring together
experts in various fields, including
Islamic and constitutional laws, and
those affected by the application of Islamic laws in adverse ways, said Zaid.
He said all the NGOs had agreed
with the open letter on the use of
the Sedition Act that was seen as a
constant threat to silence anyone
with a contrary opinion.
The prime minister has reneged
on his promise to repeal the act and
announced that the act would be
further strengthened with two additional provisions. We are deeply concerned about this development, Zaid said.
Jihad for Justice chairperson Datuk Thasleem Mohamed Ibrahim
Al-Haj said the 25 eminent personalities did not only represent the
Malay community, but all Malaysians as well.
He said the next move to promote moderation has to be at the
national level.
On extremism on social media,
Tan said more rational people needed to get on to social media and
discuss issues in a rational way.
It is for us to stand up against any
extremism whether it is from Chinese,
Indian or Malays because extremism
is our common enemy, he said.
Suarams Right to Justice coordinator Tarmizi Anuwa said there was
a need for more voices to support
every effort to bring Malaysia to a
healthy and rationale discourse.
He added that Malaysian youth
needed to have the courage to state
their stance and be more open to discussing sensitive issues such as race
and religion. The Malaysian Insider

ing is supported by the fact that

many of the lawyers interviewed
are more worried about the increase in grammatical errors in
written documents than the level
of spoken English.
But Nurjanaah said while UMs
law students were using more English than students of two decades
ago, senior lawyers widely reported a declining level of proficiency
among those recently entering the
profession.
There is, however, no evidence
that the use of English as the main
medium of instruction has significantly improved the students communication skills over the years.
On the contrary, there was a
high probability that the emphasis
on using English as the medium of
instruction would hinder the students ability to use Bahasa Ma-

laysia in their workplace, she said.

New lawyers interviewed in the
study said they struggled in their
job initially as they were unfamiliar
with legal terminology in Bahasa
Malaysia, predominantly used in
the lower courts.
Interview data from young lawyers also suggested that Bahasa Malaysia was the more useful language
in the initial period of employment.
Considering that many legal
firms expect their new lawyers to
be fluent in both English and Bahasa Malaysia, this suggests a need
to reconsider the use of English as
the primary medium of instruction
at the tertiary level.
Nurjanaah said a bilingual
teaching policy at the faculty would
ensure and help the students gain
confidence in both languages.
The Malaysian Insider

Noor Farida shrugs o Rahim Dins

withdrawal, says more joining group
BY E IL E E N N G

KUALA LUMPUR: The group of

prominent Malays asking for a
rational dialogue on Islam might
have lost Tan Sri Abdul Rahim
Din as a signatory but organiser
Datuk Noor Farida Ariffin (pic)
said it was no loss as more have
shown interest in joining them.
She said at least 10 distinguished Malays from both the
civil service and private sector
had wanted to join them since
the publication of the open letter on Dec 9, which had received
tremendous support from Malaysians.
No, it is not a loss. I think he
has been influenced by certain
people who mistakenly see this
as a threat to Islam when all we
called for is a discourse and dialogue to stop hate speeches, Noor
Farida told The Malaysian Insider
in Kuala Lumpur yesterday.
She said all they wanted was a
panel of Islamic and constitutional
experts, as well as other stakeholders, to review unresolved disputes
on the position and application of
Islamic laws in the country.
Pressed further, the former ambassador to the Netherlands said
she did not want to engage in any
public debate on the matter.
Its pointless. We do not want
to engage in any debate. We just
hope that the prime minister will
respond, take up our proposals and
then our work is done, she said.
Abdul Rahim, a retired Home
Affairs Ministry secretary-general, withdrew his support for the
group, citing that the group had
strayed from its objectives.
His son-in-law Azmi Arshad

posted on his Facebook page to say

that Abdul Rahim was concerned
that things seemed to be spinning
out of control, and that he had only
agreed to give support for a letter
to be sent to the prime minister
requesting the appointment of
a panel of experts to resolve any
conflict between enacted Islamic
law and civil law, and the Federal
Constitution in a closed forum and
not to do it publicly.
The handwritten draft to the
group specified that the one and
only task is to urge the PM with
the support of the silent majority
to convene a gathering of experts
to resolve the contentious issues
and that there is not to be any further involvement after the request
regardless if Najib agreed or not.
Noor Farida said the open letter
had captured the publics imagination and was gratified that it
had snowballed into tremendous
support, the latest from 93 NGOs.
As such, she said they would
take a back seat and let Malaysians take up the matter.
The Malaysian Insider

20 FO CU S

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

T HU

The new Mini John Cooper Works

manages to up the power and
performance considerably without
compromising on creature comforts.
Photo by AFP

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New Mini the most powerful yet

Potency with fuel economy revs up its appeal

he new John Cooper

Works edition Mini
manages to up the
power and performance considerably,
but without compromising on creature comforts.
Mini actually introduced this
car in concept version at the Detroit motor show back in January,
so its exterior styling doesnt come
as a surprise. However, what will
make people sit up and take note

is what the companys engineers

have achieved with those parts that
lurk beneath the air-scooped hood
and behind the flared wheel arches.
The John Cooper Works edition
has been a staple of the Mini line-up
for over a decade, and the third and
latest version is the most potent yet.
In fact, it is the most powerful
production Mini ever to roll off
the line. Its two-litre, four-cylinder turbocharged engine offers
231hp, a top speed of 246kph and

a 0 to 100kph time of just 6.1 seconds when mated to the optional

six-speed Steptronic sports transmission.
With the standard six-speed
manual, youll feel more involved,
but the 0 to 100kph time is 0.2 seconds slower. But keen drivers wont
notice this lag. Theyll be too busy
having fun.
Its easy to make a small, frontwheel drive car go fast in a straight
line, but the Mini has always been

about go-kart-like handling, hugging bends and manoeuvrability.

The car has a clever electronic
differential lock control to stop the
engine dictating the direction of
travel. Mini has also gone with an
electromechanical power steering
set-up so that the car is even more
responsive to each turn or twist
of the wheel. And to make sure it
stops as quickly as it goes, the car
gets a newly developed Brembo
brake system.

The Minis interior hasnt been

stripped back to Spartan levels in
order to cut weight or give a sporty
feel. Yes, it does get special John
Cooper Works seats, a slightly
smaller, multi-function steering
wheel, and stainless steel pedals.
But it also gets all of the refinements
of the standard car.
The car, which despite its potency offers a fuel economy of between
5.7 and 6.7 litres/100km will go on
sale in Spring 2015. AFP

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Mercedes prices Maybach S-Class car from 134,100

BY TO M L AV E L L

Attendees looking
at a Daimler
AG MercedesBenz Maybach
S600 vehicle,
the would-be
challenger to
Rolls-Royce
and Bentley, at
the Los Angeles
Auto Show in
November. Photo
by Bloomberg

MERCEDES-Benz set the starting

price of the Maybach S-Class sedan
at 134,100 (RM583,450), including
value-added tax, and began taking
orders for the would-be challenger
to Rolls-Royce and Bentley.
The Maybach, which is longer
than the standard S-Class, will
reach showrooms in February,
the division of Stuttgart, Germany-based Daimler AG said on Monday in a statement.
Numerous exclusive details
underline the cars ambition to
lead the chauffeured-car segment,
Mercedes said.
The manufacturer is reviving
Maybach as a sub-brand to regain

an ultra-rich clientele as Daimler

chief executive officer Dieter Zetsche pushes for Mercedes to overtake BMW and Audi in luxury-car
sales by the end of the decade.
An attempt in 2002 to restore
the 1930s-era Maybach marque as
a stand-alone brand was halted a
decade later after the cars failed to
attract buyers.
Mercedes fell behind Munich-based Bayerische Motoren
Werke AGs namesake brand in
premium-car deliveries in 2005,
and Volkswagen AGs Audi unit
has outsold Mercedes since 2011.
Mercedes is using the Maybach
to target buyers of BMWs RollsRoyce nameplate and Volkswagens
Bentley marque. Bloomberg

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FO CU S 21

T HURSDAY D EC E MBE R 18 , 2014 T HEED G E FINA NCIA L DAILY

Volvo billionaire owner

revamps Chinas Geely brand

een
s in
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ing
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eneen
on

CHINESE billionaire Li Shufu is revamping his flagship Zhejiang Geely

Holding Group Co after setting Swedish automaker Volvo Cars on a fiveyear renewal. His latest move involves
killing three brands.
At the National Aquatics Center
in Beijing on Monday night, Li handed the keys of the carmakers latest Geely GC9 sedan to members
of the Chinese national swimming
team, which the company is sponsoring. The carmaker will replace
its Emgrand, Gleagle and Englon
marques introduced in 2009 and
market all future models under the
single Geely brand.
The Hangzhou, China-based automaker will also concentrate on
creating refined cars instead of
making good-yet-affordable autos
as it seeks to stand out in the worlds
largest auto market, according to
the company. Li is embarking on
the revamp as the carmakers sales
slumped 22% last month from a year
earlier amid a broader slide in market share by home-grown marques
to foreign brands led by Volkswagen
AG and General Motors Co.
Chinese can not only make cars,
but are also capable of making good
cars, An Conghui, chief executive
officer of Zhejiang Geely, told reporters at the event on Monday. We
are using the very best designers the

01

automotive world offers to create a

new global design language.
Geely Automobile Holdings Ltd,
its Hong Kong-traded unit, declined
17% this year through Monday, compared with a 1.2% drop in the benchmark Hang Seng Index.
The GC9 sedan, which comes in
three engine variants starting from
1.8 litres, will begin sales in March
and is crafted by former Volvo Cars
design director Peter Horbury. He
crossed over to Geely after Li bought
the Swedish carmaker from Ford
Motor Co in 2010.
Geely and other local carmakers
have to make a breakthrough and
move up the food chain by introducing more sophisticated models, said
analyst at Guotai Junan Securities
Co Harry Chen, who has a neutral
rating on Geely Auto.

02

It is challenging as the GC9 is targeting a segment dominated by foreign players, but they have to tough it
out. By consolidating the brands, the
company can save costs on marketing and enhance efficiency.
Geely Automobile Holdings on
Monday plunged in Hong Kong trading after saying it expects full-year net
income to fall about 50% because of
the slumping Russian currency and
declining sales.
Geely tumbled as much as 22%,
the most since 2008. Depreciation of

the ruble resulted in an unrealised

foreign-exchange loss from operations in Russia.
The company has fundamental
weaknesses in brand, product and
distribution, said Max Warburton,
a Singapore-based analyst at Sanford C Bernstein & Co, which has an
underperform rating on the stock.
We do not believe Geely is set for a
period of particularly strong growth
or transformed earnings, and it is
our view that cooperation with Volvo remains minimal. Bloomberg

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02. A worker assembling car doors

for Geely Automobile Holdings
Emgrand EC7 sedan on the
production line at the companys
factory in Cixi, Zhejiang Province,
China in 2013.

Gucci seeks revival in company shake-up

BY A ND REW ROB ERTS

ler
etercar

01. Li, chairman of Geely Holding

Group Co, is embarking on the
revamp as the carmakers sales
slumped 22% last month from a
year earlier.

GUCCIs top two executives will

step down from the luxury label
as owner Kering SA seeks to revive growth at its faltering flagship
luxury brand.
Gucci chief executive officer
(CEO) Patrizio di Marco will be
succeeded by Marco Bizzarri,
while creative director Frida Giannini will leave after showing the
fall-winter collection in February,
the Paris-based company said on
last Friday.
The shake-up is the brands biggest since the 2004 departure of
duo Domenico de Sole and Tom
Ford, who were widely credited
with reviving the storied brand
from a loss-making family company to a global fashion house.
More recently, Gucci has
struggled as customers switch
to labels they perceive to be more
exclusive, with sales falling in the

Di Marco, who joined Gucci in 2009, is

stepping down.

most recent quarter.

Gucci will benefit from new
ideas and fresh energy, said Luca
Solca, an analyst at Exane BNP
Paribas in London. The key to
staying relevant in luxury goods
is continuing reinvention.
Kerings shares fell 1.2% in Paris
trading, paring the gains this year
to 2.2% and giving the company a

Giannini will depart after showing her

fall-winter collection, and a successor
will be named later.

market value of about 20 billion

(RM86.8 billion).
Bizzarri, who heads Kerings
luxury-couture and leather-goods
division, will replace Di Marco on
Jan 1. A successor to Giannini will
be named later.
Di Marco joined Gucci in 2009
from Kerings Bottega Veneta
brand. He sought to move Guc-

Bizzarri will take over the running of

Gucci on Jan 1.

ci upmarket by reducing the use

of the labels famous double-G
logo and re-introducing classic
styles in luxurious materials. Giannini had led Guccis creative
team since 2006.
Bizzarri joined Kering in 2005
as CEO of Stella McCartney. He replaced Di Marco at Bottega Veneta
in 2009 and was named head of

Kerings couture and leather-goods

division in April.
Bizzarri is a proven team builder and a very good manager, Solca
said. He could take over the great
work Patrizio had done at BV, and
bring the brand to new heights. I
expect he is setting himself up to
do the same at Gucci.
Kering has been overhauling
management of its luxury brands.
In October, the Paris-based company named new CEOs at Bottega
Veneta, Brioni and Christopher
Kane. Kering CEO Francois-Henri
Pinault will oversee the companys
luxury couture and leather-goods
division until a replacement is
named.
Of Bizzarri, Pinault said: I am
fully confident that he will now
build on Guccis extraordinary legacy to have the 93-year-old house
enter a new momentum and continue to write bright chapters of its
exceptional history. Bloomberg

22 C O M M E N T

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

The horror of Peshawar

Small coffins of towns students are heaviest burden on our conscience
BY PA NKA J MI SHR A

he world seems full of

crises and disasters:
from political stasis
and racial stand offs in
Europe and the United
States, to the classic
conflicts of capitalism in emerging economies (inequality, weakening states, authoritarianism), to
tribal conflicts and sectarian uprisings in the Middle East and Africa.
But the small coffins of Peshawars
students are the heaviest burden
on our conscience.
The murder of children crushes
our soul. It destroys the already frail
hope, without which life becomes
unbearable, that there is justice in
our world. Adults commit unspeakable atrocities against each other in
the name of religion, race, nation,
and profit. But none of our many
competing gods has yet explained
why the innocent young should
suffer for the sins of adults.
The killing of 132 children in
Peshawar violates the shared assumptions that have regulated the
conduct of humanity for millennia.
Some unshakeable tenets, which
the fiercest partisans on the left
and the right both cherished, have
been trampled into the earth. It is
why our grief is not assuaged by
the ritual condemnation of international statesmen and editorialists, the cool analysis of terrorism
experts, or the retaliatory measures
of politicians and generals.
Nor is it alleviated by jeremiads against allegedly anti-modern
Islam, or the unique depravity of
the Pakistani Taliban. The groups
apparent enemy, Pakistans security establishment, has itself
created and sponsored some of

People attending funeral

prayers for two male
students who were killed
in Tuesdays attack on
the Army Public School
which was attacked
by Taliban gunmen
before their burial in
Peshawar, yesterday.
Photo by Reuters

the most vicious militant organisations in South Asia. Demagogues in Sri Lanka and India
demonstrate that civilian rule
is no insurance against extremism. The massacre of children has
occurred in the same fortnight
that a former vice-president of
the worlds biggest democracy
claimed that he would authorise
torture again if need be.
We cannot precisely diagnose a
crisis that seems so all-encompassing the life-denying nihilism that
hangs over the world like smog.
It does hint at insidious decay in

the very institutions and processes

families, education, media and
inherited patterns of culture
through which basic values such as
individual self-restraint are transmitted.
This is true not only of brutalised contestants in an endless war.
There seems to be a pervasive uncertainty in even the worlds relatively peaceful zones about what
one generation should pass on to
the next, or how it should define
the duties and responsibilities of
being human.
Formal education, reduced to

vocational training by anxious parents and teachers, no longer effectively insulates against the mental
confusion and hideously distorted
urge for transcendence that makes
a corporate executive in Bangalore
turn into a fervent tweeter on behalf of Islamic State.
Many of the young today are nurtured by and mature intellectually
in new communities of meaning
on the Internet, where everything
seems permitted. In the resulting
moral vacuum, deracinated and
estranged young men succumb to
a grandiose will to power, and an

infatuation with charismatic figures

and utopian movements.
Something more than just economic and political distress must
explain the worldwide proliferation
of men who espouse spine-chilling
convictions and fantasies of mass
murder.
We cannot afford to renounce
the possibility of achieving a more
democratic, free and just society
through political change.
Yet we can no longer believe that
the enabling conditions of nihilistic
violence or the apocalyptic mindset
can be removed by reform or modification of public policy alone, let
alone by military retaliation.
The blood of innocent children
rouses us to drastic action. But it
is not cowardly to acknowledge
problems to which there are no
stock sociopolitical remedies, and
to grasp the unprecedented nature
of the threats in our time to human
life, freedom and dignity.
Certainly, however deep our
revulsion to atrocities perpetrated
by all sides sectarian or secular, governments or terrorists it
wont help to blame religion for
a phenomenon that is so clearly
rooted in a catastrophic loss of the
religious sense. Bloomberg View

Asia needs to prepare for a possible China crash

BY WILLIAM PESEK

AS Chinas first full year of rebalancing draws to close, how has President Xi Jinping done? Reasonably
well, it seems. Growth appears to be
moderating gently, stocks continue
to soar and most economists still
foresee a soft landing rather than
market-shaking meltdown for the
worlds second largest economy.
Next year, however, Xis team
will have to get to the hard stuff :
taming an opaque, unwieldy financial system. My question isnt
so much whether China will or
wont crash. Its whether the rest
of Asia is ready for the possibility
of 5% or even 4% Chinese growth,
as predicted by pundits like Larry
Summers and Marc Faber. Its almost certainly not.
Historically, hedge funds betting against China havent done

very well. This week, in fact, the

government is expected to revise
2013 gross domestic product figures upward by as much as US$275
billion (RM965 billion), which on
paper should help meet its target
of 7.5% growth for the year.
For anyone who thinks China is
operating even close to that number, though, I have two words: iron
ore. Even more than the precipitous
drop in oil, the halving of prices for
these pivotal rocks and minerals
as well as a 44% plunge in oil and
tumble in coal and other commodities suggests that China may be
braking rapidly.
Its important to remember that
however large, Chinas economy is
no more developed than South Koreas was when it imploded in 1997.
The Chinese financial system is less
evolved than that of the Philippines
and less open than Indonesias.
Beijings US$3.9 trillion of currency reserves are useful when
market turmoil hits, as has hap-

pened in emerging markets this

week. But that stash is dwarfed by
the US$19 trillion in credit extended by the banking system since
the 2008 Lehman crisis, according
to Charlene Chu of Autonomous
Research Asia. And remember:
Chinas vast and opaque shadow
banking system obscures Beijings
true liabilities.
Many policymakers appear to
believe the worst is over. In the
past year, they stress, Chinese
leaders have taken bold steps to
shift growth away from excessive
investment and exports towards
consumption and services. But its
a fantasy to think 10% growth will
soon return or even 7.5%.
With China intent on continuing reform to generate quality
growth at a lower level, the rest
of Asia cannot expect any help in
terms of overall demand, says Simon Grose-Hodge, head of South
Asia investment strategy at LGT
Group in Singapore.

That means Chinas neighbours

can no longer put off the task of rebalancing their own economies
away from dependence on Chinas.
They, too, need to develop vibrant,
diversified domestic economies
that are driven more by services
and innovation than exports.
The to-do list is long. Despite
a flurry of bilateral trade negotiations and talk of a more unified
market in Southeast Asia, trade
barriers within the region are still
far too high. Governments need to
do more to support non-resource
industries like manufacturing, technology and the sciences to make
their economies more competitive
and nimble.
That includes offering incentives
to small- to mid-sized companies
to innovate and enter new markets. Lowering taxes on regionally-made goods would help boost
consumption.
Above all, nations need to draw
up contingency plans for China-re-

lated market turmoil. This may

not come to pass. Chinese wages
and salaries are expected to grow
6.5% in the current quarter, while
productivity is seen growing 4.1%
(numbers of which policymakers
from Washington to Tokyo can only
dream). Even as China ratchets
down growth, its thus continuing to
produce legions of new consumers.
But several years of painful and
unpredictable restructuring lies
ahead. No matter how skilful Xi is,
theres a decent chance the whole
thing will go haywire.
And just as Asia once used to
rise and fall with United States
consumers, the region would be
devastated by a sudden and deep
Chinese slowdown. Nations would
be in a much stronger position if
they started bracing for the worst
now. Bloomberg View
William Pesek is a Bloomberg View
columnist.

F E AT U R E 2 3

THU RSDAY D EC E MB E R 18 , 2014 T HEED G E FINA NCIA L DAILY

Ruble free fall throws

Russia into ugly spiral

Sorry, this is
as good as the
global recovery
gets; 2015 looks
gloomy
BY E D WA R D H A DA S

High borrowing costs will add to the economic pain

BY PI ERRE B RI A N CO N

he Central Bank of
Russia was successful
for about two hours.
Its overnight decision
to hike the main interest rate from 10.5%
to 17% initially shocked markets
enough to arrest the rubles fall
after the currency sank almost
12% on Monday.
But the Russian currency
quickly resumed its slide, smashing record lows as if the central
bank hadnt moved at all.
That leaves policymakers with
few sensible short-term options.
Further out, only an end to the

Ukrainian stand-off and related Western sanctions or sharply

higher oil prices could soothe
markets. Neither is likely to happen soon.
The ruble rout was triggered
by a central bank forecast that oil
prices settling at around US$60
(RM210) a barrel would push Russia into severe recession next year.
Shrinking oil revenue, together
with the sanctions-induced lack
of foreign currency funding, explain why companies have been
hoarding dollars to meet some
US$138 billion worth of debt payments by mid-2016.
Individual depositors, who remained remarkably calm through-

out the year as the ruble fell, may

also have accelerated the conversion of their deposits into dollars in recent days, prompting
the central banks shock-and-awe
approach.
Now that it has neither shocked
nor awed, the question is what the
central bank can do next. It cant
climb down from high rates without weakening the ruble further.
But borrowing costs this high will
add to the economic pain.
More defaults will follow, and
bad loans pile up on the balance
sheets of a weak banking system.
The central bank can also just
wait for the ruble to find its floor.
It has indicated it is willing to in-

tervene in forex markets to defend

the currency if oil prices stabilise
around the US$60 a barrel level.
Thats a big if : Brent crude
was down 3.5% to less than US$59
a barrel on Tuesday.
Some in the Russian government would doubtless be happy
to contemplate more radical options, such as stringent capital
controls. That would risk taking
Russia back to the dark ages of the
Soviet-style command economy.
Such moves have been repeatedly ruled out by President
Vladimir Putin. But with his back
against the wall, and faced with
ruble panic, he may soon feel that
he has no choice. Reuters

Indias smartphone solution

BY D H I RA J N AY YA R

THE Chinese smartphone manufacturer Xiaomi fancies itself a

world-beater. Only four years old,
the company has already cornered
30% of the Chinese smartphone
market, the worlds largest. Until
last week, Xiaomi looked ready to
dominate the huge Indian market,
too. But an order from the Delhi
High Court delivered those hopes a
body blow, forbidding the company
from selling most of its devices in
India at least until February. Its offence: infringing on patents owned
by the more-established Ericsson.
The decision might seem surprising in a country that has long
clashed with drugmakers over its
generic knock-offs. Just last year,
the Supreme Court declined to
recognise Novartis patent on its
breakthrough anti-cancer drug
Glivec. The ruling allowed Indian
companies to keep selling a copycat version for US$150 (RM525)
per month, compared with the
US$2,000 per month charged for
Glivec.
In that case, the courts were
protecting the interests of seriously ill patients, who wouldnt
otherwise have been able to afford
the life-saving drug. Smartphones
are hardly so vital. Yet here, too, a
case could be made that affordable technology is a public good in
an emerging economy like India.
Sophisticated communications
technology can help compensate
for the countrys woeful lack of
physical infrastructure. By enabling
online transactions, smartphones
can make up for the paucity of
bank branches. They can disseminate crucial information about
weather patterns to farmers and
can even be used to promote primary healthcare and education.
The problem is that the latest

Three models of Chinas Xiaomi phones are pictured during their launch in New Delhi on July 15. An order from the Delhi High Court
forbids Xiaomi from selling most of its devices in India at least until February. Photo by Reuters

technology, whether in pharmaceuticals or phones, is hard to produce affordably without cutting

some corners. To its credit, India
has developed a patent regime
more in line with global best standards than Chinas. In the long run,
enforcing those laws will serve the
country better than the current system of picking and choosing which
exceptions might serve the public.
Indian courts are already heading in this direction. Like Xiaomi,
the two most dominant players in
the smartphone market have also
been hit with patent lawsuits. Micromax a local brand that makes
its devices in China and is as cheap
as Xiaomi has been forced to
pay Ericsson royalties for using its
technology; Xiaomi may ultimately
have to do the same. The result will

naturally be higher phone prices.

The only way to develop cheap,
cutting-edge technology is to ramp
up research and development
(R&D) domestically. Indias record
on that front is surprisingly poor.
It spends less than 1% of gross
domestic product on R&D. China spends almost 2%, the United
States 2.8%, Japan 3.4% and South
Korea 4%. Presumably, as courts
more consistently forbid the sale of
copycat technologies, companies
will have no choice but to increase
their internal R&D budgets.
India is at least starting from
a good base. The country already
boasts globally competitive industries in sectors like information
technology, pharmaceuticals and
space technology. It can tap quality manpower at a fraction of the

cost in advanced countries. It has

a good university system the Indian Institutes of Technology are
world-class and a network of
government research laboratories.
Whats needed is closer interaction
between those research centres,
industry and universities.
The potential rewards are huge.
Nearly 700 million Indians remain
poor and are eager for low-cost,
yet sophisticated technology. The
same products could easily find a
market in other emerging economies in Africa and the Middle
East. Even in developed nations,
which are undergoing a lengthy
slowdown, consumers are looking
for high-quality bargains. Theres
no reason Indian companies cant
be the ones to produce them.
Bloomberg View

AT the beginning of 2014, many

people were optimistic about
the world economy. For the fifth
straight year, it had seemed safe
to declare the lingering effects
of the 2008 financial crisis over
and done with. This time is different: 2015 is likely to begin in
a merited atmosphere of gloom.
Investors are looking at the
financial system with increasing dismay. Monetary policy
has never been so loose for so
long in developed economies,
and yet lending, investments
and consumer spending are
still restrained.
A beefed-up banking system
is not yet funding rapid hiring
or strong gross domestic product (GDP) growth.
Abenomics the stimulative policy package of Japanese
Prime Minister Shinzo Abe
seems to be losing its shine,
commodity exporters have big
problems and the United States
may just be bumping along a
bit better than the rest.
Lowflation, basically stable
prices, is set to make everything
worse.
The already-heavy debt
loads of both consumers and
governments will become more
burdensome as nominal GDP
growth slows down.
The sharp fall in commodity
prices may increase spending
power in some countries, but
it could turn lowflation into
outright deflation.
Policymakers have responded to the financial stress with
more hope than action. Governments are reluctant to increase
fiscal deficits and central bankers are trying to minimise or end
their unconventional policies.
The inability to respond
strongly may even have
reached China.
After decades of managing
rapid growth without any significant accidents, the authorities have yet to deal effectively
with a malfunctioning property
market.
Structural reforms, from
easing employment regulation in rich European countries
to strengthening the business
framework in developing economies, might help. But reforms
always face resistance, otherwise they would already have
been enacted.
The opposition is often
strongest when the economic
prospects are doubtful, as they
are now. Besides, reforms work
slowly, so it would take years for
a major drive to deliver results.
For 2015, the monetary authorities probably still have sufficient credibility to prevent a
new financial crisis, barring a
major increase in geopolitical
tension. But another year of
frustratingly slow growth will
be hard to avoid. Reuters

24 W O R L D B U S I N E S S

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

Poised for US$12b windfall

Airlines globally look to big cuts in jet fuel
bills on oil collapse
BY MA RY SC H L A NGENSTEIN,
MI C H A EL SA SSO & DAV ID F ICKLING

DALLAS: Airlines around the

world are poised for a US$12 billion (RM42 billion) windfall as the
global oil crash cuts bills for jet fuel,
the biggest expense in an industry
battered by surging commodity
prices last decade.
The savings promise to produce
fatter profits and, in the United
States, rewards for shareholders
through sweetened dividends or
stock buybacks.
Missing out so far are consumers, because many carriers are still
filling seats without having to resort
to discounts.
Unlike 2008 and 2009, when
sagging travel demand damped
the boost from fuel plunging 51%
from its peak, crudes collapse to
a five-year low is providing a tailwind for airlines posting record

earnings. Profits in 2015 will swell

25% to US$25 billion, according
to the International Air Transport
Association (Iata).
Theyre dancing in the aisles
of their planes, said George Hobica, president of New York-based
ticket-price website Airfarewatchdog.com. All the production in the
United States, shale oil and the fact
that Opec (the Organization of the
Petroleum Exporting Countries)
has not increased production
maybe high oil was an aberration.
Investors are welcoming a respite from Brent crude that averaged
more than US$100 a barrel in 2012
and 2013. Led by China Eastern Airlines Corp and Air China Ltd, the
Bloomberg World Airlines Index
has soared 25% this quarter while
Brent tumbled 37%.
The price slump could hardly have come at a better time for
Southeast Asian airlines, said Peter

GE to distribute US$40b to shareholders

NEW YORK: US industrial conglomerate General Electric (GE) said on
Tuesday it plans to distribute US$40 billion (RM140 billion) to its shareholders in 2015 and 2016 in the form of dividends and share buybacks.
The announcement, made at an investor conference, marks a relatively
ambitious plan for shareholder returns, representing 16% of the companys total capitalisation of US$246 billion at the market close on Tuesday.
GE projected adjusted 2014 earnings per share in a range of US$1.70
to US$1.80. Analysts on average estimated earnings of US$1.79 per
share. Shares in Dow member GE fell 0.4% to US$24.49.
The company said its industrial activities were expected to contribute US$1.10 to US$1.20 earnings per share, while the finance arm
should yield 60 cents. Next year should see the conglomerate increasingly return to its industrial roots as it pares the size of GE Capital.
Considered a bellwether for global industrial activity, GE recently has made several divestments and acquisitions to build on its
sprawling industrial activities.
In the second quarter it won a tough battle to buy the energy activities of French industrial group Alstom for 12.4 billion (RM54.04 billion). Alstom shareholders are scheduled to vote on the deal tomorrow.
GE spun off its retail finance business of the GE Capital division, renaming it Synchrony Financial. In November, it closed the sale of GE Capitals GE Money Bank, serving the Nordic markets, to Spains Santander,
the biggest bank in Europe by market value, for 700 million.
The company agreed in September to sell its appliances business
to Electrolux of Sweden. The US$3.3 billion deal is expected to close
next year. AFP

Led by China Eastern Airlines Corp and Air China Ltd, the Bloomberg World Airlines
Index has soared 25% this quarter while Brent tumbled 37%. Photo by Reuters

Harbison, executive chairman of

Capa Centre for Aviation in Sydney. They have got themselves to a
stage where they can be profitable
with US$100 oil, so for the time being, they will be net beneficiaries.
US carriers strengthened by
mergers since 2008 are also poised
to take advantage of the new era.
American Airlines Group Inc, which
doesnt hedge its fuel purchases,
said it may save more than US$2

billion next year. Even with losses

because of fuel contracts pegged to
higher prices, Delta Air Lines Inc
said it expects to pay about US$1.7
billion less for jet kerosene in 2015
while Southwest Airlines Co forecast savings of US$1 billion.
Industry-wide fuel outlays in
2015 will drop to US$192 billion
from US$204 billion this year even
as consumption rises 4.8%, Geneva-based Iata said. Bloomberg

Oil plunge sets stage

for energy defaults
BY SRIDHAR NATARA JAN

NEW YORK: Bond investors, already

stung by the biggest losses from US
energy company debt in six years,
are facing more pain as the plunge
in oil leads analysts to predict defaults may more than double.
While bond prices suggest traders
see defaults rising to 5% to 6%, UBS
AG said it may actually end up being
as high 10% if prices of West Texas
Intermediate crude approach US$50
(RM175) a barrel and stay there. Debt
research firm CreditSights Inc predicts a jump to 8% from 4%.
A borrowing binge by energy companies in recent years to finance new
sources of oil has pushed a measure
of leverage among the lowest-rated
firms above its 2009 peak, according

to CreditSights. The US$203 billion of

bonds outstanding have lost 14% this
quarter and are poised for their worst
performance since the end of 2008,
Bank of America Merrill Lynch index
data show. More than US$40 billion
of value has already been wiped out,
Bloomberg index data show.
When you transform from a
low-default regime to high default,
the repricing of risk can be pretty
aggressive, UBS AG credit strategist
Matthew Mish said in a telephone
interview from New York.
Energy-sector bonds have delivered 14% losses to investors this
quarter and are on track for the
worst performance since the three
months ended December 2008,
Bank of America Merrill Lynch index data show. Bloomberg

Solar upstarts and utilities head for uneasy truce

BY KEVI N A L L I SON

CHICAGO: Solar-power upstarts

and US electric utilities may reach
an uneasy truce in 2015. The soaring popularity of solar installations
is helping to cut carbon emissions.
But the trend upsets big electricity
providers trying to make a return
on grid investments.
Utilities attempts to slap fees on
solar users sparked uproar in 2014.
Cost-sharing may take some heat
out of the debate.
Solar generation is growing at a
30% annual clip in the United States
as customers respond to an 80% drop
in the price of the technology since

2008. Total installations are approaching 18GW, according to the Solar Energy Industry Association enough
to power a city about the size of Chicago, assuming the sun is shining.
Rooftop solar panels available
without upfront costs from young
companies like the US$5 billion
(RM17.5 billion) SolarCity, chaired
by Tesla Motors founder Elon Musk
only account for a fraction of that.
Yet such installations are already challenging traditional business models.
Rules that require utilities to pay for
electricity fed back into the system
squeeze them at otherwise profitable
times of day. And although domestic solar users benefit from the grid,

they often dont pay for it because

they dont buy all their power from
the utility.
The big, mostly regulated electricity groups have been campaigning to
make solar users pay up. Watchdogs
in states including Wisconsin, Oklahoma and Arizona have allowed special levies on solar panels. Proposals
elsewhere, though, have backfired in
the face of strong public support for
the technology.
A novel way of dealing with the
problem emerged this year in Massachusetts. There, solar advocates
and private utilities in 2014 both
endorsed the idea of minimum
bills for all power users.

IN BRIEF
US slaps hefty duties on
China, Taiwan solar goods
WASHINGTON: The United
States on Tuesday confirmed
steep import duties on solar products from China and Taiwan, in a
decision that could inflame trade
tensions between the two countries. Anti-dumping duties for
Chinese goods were set as high as
165.04% as the US arm of German
solar manufacturer SolarWorld
AG seeks to close a loophole that
let Chinese producers sidestep
duties imposed in 2012. Taiwan
producers face anti-dumping
duties as high as 27.55%. These
remedies come just in time to
enable the domestic industry to
return to conditions of fair trade,
said SolarWorld Industries America president Mukesh Dulani.
Reuters

Japan trade decit shrinks

again in November
TOKYO: Japans trade deficit in
November shrank by nearly a
third from a year ago, helped
by higher exports and falling
oil bills, although the volume
of shipments to foreign markets remained weak, official
data showed yesterday. Prime
Minister Shinzo Abes programme to kick-start growth
had sharply weakened the yen,
a plus for the profitability of
exporters such as Toyota and
Sony, but the currencys dive
has not translated into a big
jump in export volumes. Yesterday, finance ministry data
showed the November trade
deficit came in at 891.9 billion (RM26.57 billion), down
31.5% from a year ago. AFP

Chinas Baidu conrms

investment in Uber
BEIJING: Chinese Internet giant
Baidu Inc confirmed yesterday it
is buying a stake in fast-growing
car-hailing service Uber as the
pair chase growth in one of the
worlds largest transportation
markets. The companies didnt
disclose how big a stake Baidu is
taking, nor how much it is paying
for the investment, announced
jointly in Beijing. Baidu and Uber
said they would collaborate to expand Ubers presence in China,
where it lags far behind Kuaidi
Dache and Didi Dache, two domestic car-hailing apps backed
by Baidus rivals Alibaba Group
Holding Ltd and Tencent Holdings Ltd, respectively. Reuters

Thai central bank holds

key interest rate at 2%
Anyone already paying more
than the minimum wouldnt notice a change. But a solar customer
who ended up selling more energy
back to the grid than they took out
would still receive a bill, covering
basic maintenance of the states
power infrastructure.
Even if widely adopted, the approach might soon become obsolete if, for example, battery technology evolves swiftly enough to enable
households with solar panels to safely
unplug from the grid completely.
As a temporary compromise,
though, it could help disperse a
cloud hanging over a promising
technology. Reuters

BANGKOK: Thailands central

bank left its benchmark one-day
repurchase rate unchanged at
2% for a sixth straight meeting
yesterday as expected. Mathee
Supapongse, secretary of the
Monetary Policy Committee,
said: The committee voted five
to two to maintain the policy
rate at 2% percent per annum.
Two members voted to reduce
the policy rate by 0.25 percentage point per annum. In the
third quarter of 2014, the Thai
economy expanded slowly as
expected, with domestic private spending being the main
growth driver. Reuters

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THU RSDAY D EC E MB E R 18 , 2014 T HEED G E FINA NCIA L DAILY

Russia mess spreads

to Hong Kong
Investors dump Dim Sum debt with average price slumping to the lowest in 15 months
BY DAVI D YONG

SINGAPORE: Russias crisis is being

felt as far as Hong Kongs Dim Sum
debt market with the average price
of yuan-denominated notes slumping to the lowest in 15 months.
Notes issued by Russian lenders
including OAO Gazprombank and
VTB Group have tumbled 1.65% on
average in December as the ruble
plunged to an all-time low, Bank
of America Merrill Lynchs Dim
Sum Corporate Index shows. That
pushed losses on Russian Dim Sum

debt for the year to 2%, the only

negative return out of 22 countries
tracked by the gauge.
A 6.5 percentage-point rate increase by the central bank earlier
this week the most since the 1998
global financial crisis has failed
to stem the run on the ruble, which
sank below 80 per dollar on Tuesday
and is down 29% this month. A 48%
drop in oil prices this half is robbing
President Vladimir Putin of dollars
to support the economy amid sanctions after its annexation of Crimea
and conflict with Ukraine.

Oil is the spark for the big correction in credit markets and Dim
Sum bonds are no exception, said
Steve Wang, the head of fixed-income research in Hong Kong at
BOCI Securities Ltd. Theres no
quick solution to the Russian crisis.
Bank of America Merrill Lynchs
Dim Sum index, which tracks 210
securities, is down 0.04% this
month, set for its worst performance since June 2013. Average
prices have decreased to 99.48%
of par, the least since September that year. Chinas currency in

Hong Kong has weakened 0.6%

this month.
Russias government has pledged
funds to shore up the capital of
lenders including Gazprombank
as higher borrowing costs stoke
concern about their ability to repay debt and as sanctions choke
off access to debt capital markets
in the West.
Funds handled by the worlds
biggest money managers are experiencing their worst month
this year thanks to Russia.
Bloomberg

Shoppers spending less

on gifts this year,
especially for themselves
SINGAPORE: Shoppers have
tightened their budgets when
it comes to buying gifts for the
festive season this year, according to a recent survey commissioned by United Overseas
Bank Group (UOB), The Straits
Times reported. The survey,
which involved 500 people
here aged between 25 and 55,
found that respondents are setting aside S$709 (RM1,905) for
Christmas shopping this year,
down 20% from last year. Consumers are careful and are generally spending less on non-essential items such as presents.
It is heartening to see that people are prepared to spend less
on themselves in favour of their
families, said UOB economist
Francis Tan.

Honda to recall almost

570,000 vehicles in China
from February
SHANGHAI: Japanese carmaker Honda will recall almost
570,000 vehicles in China from
February due to potentially defective airbags, Chinas quality
watchdog said. Hondas two
Chinese joint ventures have
filed their plans with the General Administration of Quality
Supervision, Inspection and
Quarantine to recall 553,264
cars from Feb 28, the government body said in a statement
yesterday. The recall involves
527,136 Accord sedans made
by GAC-Honda, a joint venture with Chinas Guangzhou
Automobile Group, from May
2002 to December 2007. AFP

SpiceJet rescue
is no x for
Indian aviation
industry woes
BY U N A GA L A NI

HONG KONG: SpiceJets

woes are all too familiar. India is cajoling banks to lend
to the countrys second largest single-brand carrier when
the debt-ridden airline needs
more equity.
The governments hope is to
save jobs and prevent a repeat
of the embarrassing high-profile failure of Kingfisher Airlines
which was grounded in 2012.
Even if the rescue works, exorbitant fuel taxes and the lack of
a bankruptcy law will keep the
industry stuck in an air pocket.
The government is doing what
it can to keep SpiceJet flying without directly putting taxpayers
on the hook. The civil aviation
ministry said on Tuesday that it
may request banks to lend up
to US$94 million (RM294 million)
to the carrier in loans guaranteed
by the companys chairman, Kalanithi Maran.
Together with related parties,
the tycoon owns 58% of the struggling airline. State oil companies
and airport operators are also
being asked to play a part by extending credit or giving SpiceJet
longer to make payments.
Finding an outside investor
at this late stage may depend
on Marans willingness to put
his own money to work.
Swapping debt into equity
would make more sense. Even
after efforts to trim costs, the
carrier made a net loss of US$49
million in the quarter that ended Sept 30 and its net debt is
almost five times as large.
SpiceJet could arguably have
been better managed but the
government-led rescue is no
fix for Indias aviation woes.
Reuters

IN BRIEF

Feedback sought on SIA

Engineering-Boeing joint
venture proposal

URBAN MOBILITY... The minimalist-chic Scrooser, an electric-powered, fat-tyred scooter designed for urban cruising, is,
as its maker succinctly describes it, a mini Harley-Davidson for the sidewalk. The creation springs from inventor Jens Thieme and
IFPE, a mobility-solutions rm established by Thieme in Dresden, Germany, in 2011. Thieme and company are optimistic that urban
commuters, weary of burning fuel as they sit in trac jams, will jump at the chance to weave through the urban obstacle course and
park hassle-free on sidewalks and plazas. Photo by Scrooser

Korean Air heiress questioned

over nut rage aboard plane
SEOUL: South Korean prosecutors questioned Korean Air heiress and former senior executive
Cho Hyun-Ah yesterday over her
fit of nut rage aboard a plane
this month, which sparked a national uproar.
The 40-year-old daughter of the
airlines chief executive forced the
chief cabin crew member off a New
York-Seoul flight and compelled
the taxiing plane to return to the
gate after she took exception to
being served macadamia nuts she
had not asked for and in a bag,
not a bowl.
Im sorry, Cho said feebly as
she was mobbed by journalists

and photographers when she appeared at the Seoul Western Prosecutors Office, keeping her head low
and her face covered with shoulder-length hair.
A transportation ministry investigation found that Cho breached
aviation safety laws when she
screamed and hurled abuse at a
flight attendant and the chief purser, Park Chang-Jin, during the nut
rage incident on Dec 5.
Prosecutors will focus on
whether she forced the purser
off the flight, ordered the pilot to
return the plane to the gate and
whether she used violence against
the two crew members, according

to the Yonhap news agency.

Park has claimed that Cho
pushed him into the cockpit door
and jabbed him with a service manual.
She has denied reports she made
him and the flight attendant kneel
and beg her forgiveness, but another passenger in first class has
confirmed she forced both to their
knees.
Cho one of three children
of Korean Air chief executive Cho
Yang-Ho, who is also the patriarch
of business conglomerate Hanjin
Group has publicly apologised
and resigned from all her posts at
the family-run group. AFP

SINGAPORE: The Competition

Commission of Singapore is
seeking feedback on the proposed joint venture between the
Boeing Company and SIA Engineering Company in Singapore,
The Straits Times reported. The
two companies first announced
in July this year their plan to
form a joint venture to offer
comprehensive fleet care services. It will target Boeing-made
aircraft operated by Singapore
Airlines and other third party
customers in Southeast Asia.
The entity will be 51% owned
by the US aviation giant.

Economists cut forecasts

for Singapore growth this
year and next
SINGAPORE: Private sector
economists expect the Singapore economy to grow 3% this
year, down from an earlier forecast of 3.3%, The Straits Times
reported. They also lowered
their forecast for growth next
year to 3.1% from 3.7% previously, according to a quarterly
survey by the Monetary Authority of Singapore released
yesterday. The survey shows
that economists are now expecting slower growth across
most sectors of the economy
compared with a similar survey conducted in September.

26 WORLD

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

Pakistan to end terror-case

death penalty moratorium
Assault on army-run school has triggered widespread revulsion
ISLAMABAD: Pakistan is to end its
moratorium on the death penalty in
terror-related cases, the prime ministers office announced yesterday,
a day after Taliban militants killed
141 people in an attack on a school.
The assault on the army-run
school in the northwestern city
of Peshawar, the deadliest terror
attack in Pakistans history, has
triggered widespread revulsion.
Political and military leaders
have vowed to wipe out the homegrown Islamist insurgency that has

killed thousands of ordinary Pakistanis in recent years.

The prime minister has approved abolishment of the moratorium on the execution of death
penalty in terrorism-related cases, an official from Prime Minister
Nawaz Sharifs office said.
Hanging remains on the Pakistani statute book and judges continue to pass the death sentence,
but a de facto moratorium on civilian executions has been in place
since 2008.

Only one person has been executed since then, a soldier convicted by a court martial and hanged
in November 2012.
Rights campaign group Amnesty
International estimates that Pakistan has more than 8,000 prisoners
on death row, most of whom have
exhausted the appeals process.
Supporters of the death penalty in Pakistan argue that it is the
only effective way to deal with the
scourge of militancy.
The court system is notoriously

slow, with cases frequently dragging

on for years, and there is a heavy
reliance on witness testimony and
very little protection for judges and
prosecutors.
This means terror cases are hard
to prosecute, as extremists are able
to intimidate witnesses and lawyers
into dropping charges.
Even when militants are locked
up, they are often either freed soon
afterwards on bail or able to continue their activities from behind
bars. AFP

New York premiere of

North Korea comedy
cancelled after threats
BOSTON: The New York premiere of The Interview, a Sony
Pictures comedy about the assassination of North Korean
President Kim Jong-Un, has
been cancelled and a source
said one theatre chain had
scrapped plans to show it,
after threats from a hacking
group. The hackers, who said
they were also responsible for
seizing control of Sony Corps
computer system last month,
on Tuesday warned people to
stay away from cinemas showing the film starring James
Franco and Seth Rogen, and
darkly reminded moviegoers
of the Sept 11 hijacked plane
attacks on the United States in
2001. We recommend you to
keep yourself distant from the
places at that time, the hackers
wrote. If your house is nearby,
youd better leave. Reuters

EU court strikes Hamas

from terror blacklist

Six killed in
Taliban suicide
attack on
Afghan bank
KANDAHAR: Taliban militants detonated a suicide
bomb and stormed a bank
in southern Afghanistan yesterday, killing at least six people as the country endures a
rise in violence while US-led
Nato troops pull out.
The attackers forced their
way inside after the bomb exploded at the entrance of the
Kabul Bank branch in Lashkar Gah, the capital of the insurgency-racked province of
Helmand.
The blast at the gate was a
suicide attacker blowing himself up to open the way for others to enter the building, Omar
Zhwak, provincial spokesman
for Helmand, told AFP.
The fighting is still ongoing. Our latest report show six
people, including three police, have been killed and seven
wounded.
One attacker was also killed
and two are still resisting.
It was the government employees payday and they had
all come to get their salaries.
Farid Ahmad Obaidi, Helmands police spokesman,
confirmed the incident, which
comes as Afghanistan police
and army take over security
duties nationwide.
A Taliban spokesman
claimed responsibility for the
attack on Kabul Bank, an institution that nearly collapsed in
2010 in a US$900 million fraud
case that underlined endemic corruption in Afghanistan.
On Dec 31, the Nato combat mission in Afghanistan will
end after 13 years of fighting
the Taliban.
It will be replaced by a
12,500-strong support mission
to advise and assist the Afghan
security forces. AFP

IN BRIEF

LUXEMBOURG: The Palestinian Islamic militant group Hamas must be removed from the
European Unions (EU) terrorism blacklist, but its assets will
stay frozen for the time being,
a European court ruled yesterday. The original listing in 2001
was based not on sound legal
judgements but on conclusions
derived from the media and the
Internet, the General Court of
the EU said in a statement. But
it stressed that yesterdays decision to remove Hamas was
based on technical grounds and
does not imply any substantive
assessment of the question of
the classification of Hamas as
a terrorist group. The freeze on
Hamas funds will also temporarily remain in place for three
months pending any appeal by
the EU, the Luxembourg-based
court said. AFP

Afghan Taliban condemn attack

KABUL: The Afghan Taliban have
condemned a raid on a school in
neighbouring Pakistan that left 141
dead in the countrys bloodiest ever
terror attack, saying killing innocent
children was against Islam.
The Islamic Emirate of Afghanistan (the official name of the
Taliban) has always condemned
the killing of children and innocent people at every juncture, the
Afghan Taliban, which often target civilians, said in a statement

released late Tuesday.

The intentional killing of innocent people, women and children goes against the principles of
Islam and every Islamic government and movement must adhere
to this fundamental essence.
The Islamic Emirate of Afghanistan expresses its condolences over the incident and
mourns with the families of killed
children.
The Afghan Taliban are a jihad-

ist group loosely affiliated to the

Pakistan Taliban, with both pledging allegiance to Mullah Omar.
The Afghan Taliban often distance themselves from attacks
that kill many civilians, but they
also deliberately target non-combatants.
Last week they claimed responsibility for a suicide attack at a
theatre show in the French cultural centre in Kabul that killed
one person and injured 15. AFP

Philippines to get frigates, gunboats, helicopters

BY M ANUEL M O G ATO

MANILA: The Philippines aims to

buy two frigates, two helicopters and
three gunboats for deployment in the
South China Sea where a territorial
dispute with China has lent urgency
to the need to bolster forces, a Phil-

ippine navy officer said yesterday.

Confrontation between the
Philippines and China has been
partticularly tense since June 2012
when China seized the Scarborough Shoal.
The events in the West Philippine
Sea actually gave some urgency to the

acquisition, Rear Admiral Caesar

Taccad, head of the Philippine Navys weapons system, told reporters.
The Philippines has embarked on
a 15-year, 90 billion peso (RM7.01
billion) modernisation programme
to improve its capability to defend
its maritime borders. Reuters

Iran says sees more steps

ahead in nuclear talks
DUBAI: Iranian Foreign Minister
Mohammad Javad Zarif said yesterday nuclear talks with major
powers were being conducted in
a good atmosphere, good steps
had been taken and more would
follow. US and Iranian diplomats began a two-day meeting
in Geneva on Monday to pave
the way for resuming broader
negotiations involving Iran and
six world powers there yesterday.
The discussions were proceeding
in a good atmosphere, Zarif said
on state television. Reuters

Tourist killed in Turkish

hot-air balloon crash
ISTANBUL: A Chinese tourist
was killed and nine others injured when the hot-air balloon
they were travelling in crashed
in the popular Turkish resort of
Cappadocia yesterday, news
channels said. Chinese and
Malaysian nationals were on
board when a sudden gust of
wind caused the balloon to fall
heavily to earth as it was trying
to land, CNN Turks website
reported. Reuters

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Abbott orders
sweeping investigation
To conduct urgent review to identify where the system had failed
BY MATT SI EGEL

SYDNEY: Australian Prime Minister

Tony Abbott yesterday ordered a
sweeping investigation into a deadly hostage crisis after tough new security laws and the courts failed to
stop a convicted felon from walking
into a Sydney cafe with a concealed
shotgun.
Three people were killed, including hostage-taker Man Haron Monis,
when police stormed a Sydney cafe
early on Tuesday morning to free
terrified hostages held at gunpoint
for 16 hours. Police are investigating whether the two captives were
killed by Monis or died in crossfire.
Monis, a self-styled sheikh who
received political asylum from Iran
in 2001, was well-known to Australian authorities, having been
charged as an accessory to murder
and with dozens of counts of sexual
and indecent assault. He had been
free on bail.

Thai junta vows

to hunt fugitive
lese majeste
suspects
BANGKOK: The Thai junta yesterday said it will hunt fugitives wanted under the kingdoms strict royal defamation
law, vowing to press foreign governments to hand over suspects
seeking sanctuary abroad.
Rights groups say cases
breaching Article 112 of the penal code which protects the
monarchy from criticism have
surged since the May coup, as the
military burnishes its reputation
as the defender of the royal family.
Junta chief Prayut Chan-OCha, who is also prime minister,
has said scores of people are living outside the country to evade
legal processes including charges
of lese majeste each count of
which carries up to 15 years in jail.
Yesterday one of his deputies said Thailand will contact
the countries they have fled to.
Lese majeste suspects are
known to be in France and the
United Kingdom among other
nations.
We will hunt and arrest
all of these suspects. We want
to explain to foreign countries that these people have
breached an article of Thai law
that qualifies them for extradition, Prawit Wongsuwan, who
is also defence minister, added.
We focus on violators of Article 112 because these people
have a bad attitude towards the
monarchy, he said, adding that
the issue is crucial. AFP

Australia passed sweeping security laws in October aimed at

stopping people from becoming
radicalised and going to fight in
conflicts such as those in Iraq and
Syria, where scores of Australians
have joined militant groups, as well
as preventing attacks at home.
Despite those new powers, Abbott said Monis was not on any
security watchlist and managed
to walk undetected into the Lindt
Chocolate Cafe with a legally obtained shotgun on a busy workday
morning. New South Wales state
police later contradicted Abbotts
assertion, telling Reuters in a statement that there was no record of
Monis having a gun licence.
Monis was convicted in 2012
of sending hate mail to the families of Australian soldiers killed in
Afghanistan.
Abbott said the national and
state governments would conduct
an urgent review to identify where

the system had failed in order to

understand how attacks could be
stopped in future.
We do need to know why the
perpetrator of this horrible outrage
got permanent residency. We do
need to know how he couldve been
on welfare for so many years. We
do need to know what this individual was doing with a gun licence,
Abbott told reporters in Canberra.
We particularly need to know
how someone with such a long
record of violence, such a long record of mental instability, was out
on bail after his involvement in a
particularly horrific crime. And we
do need to know why he seems to
have fallen off our security agencies watchlist, back in about 2009.
The justice system in New South
Wales, Australias most populous
state, was also under fire.
We were concerned this man
got bail from the very beginning,
said state Police Commissioner An-

drew Scipione. Police had requested

courts refuse Monis bail but were
not paying special attention to him
because his charges were not linked
to political violence and he was not
on any watchlist, he said. Abbott also
raised concern about the bail system.
Greg Barns, a lawyer and a
spokesman for the Australian Lawyers Alliance, told Reuters lengthy delays between arrests and cases being
heard, along with the presumption
of innocence, meant more people
were on bail for longer.
There arent enough courts,
there arent enough judges, there is
not enough legal aid. Every sector
within the criminal justice system is
underfunded by the government,
he said.
New, tougher bail laws have already been passed in the state but
delays caused by the need to train
police, courts and lawyers mean
they do not come into force until
late January. Reuters

BEYONCE SUED BY GYPSY:

A Hungarian singer from the Roma community is
suing Beyonce over the smash hit Drunk in Love,
saying the superstar sampled a folk tune without
permission. The song o Beyonces Grammynominated self-titled album begins with an
Eastern-sounding a cappella voice that gradually
fades out after around 40 seconds as a pop beat,
keyboards and Beyonces voice come in. In a lawsuit
led in a New York court, Monika Juhasz Miczura
who performs under the name Mitsou said
that the snippet was a digitally altered version of
her 1995 recording of Bajba, Bajba Pelem, a song
that she learned from her grandmother. The suit
said that the song was traditional to the Roma, also
known as Gypsies, and was about hopelessness,
when one can no longer trust anyone but her own
mother and God. Photo by AFP

garding his criminal background,

no attention was paid, Rahimpour
told state television late Tuesday.
We provided information and
asked them to watch this person
but unfortunately they did not pay
attention.
The Australian government acted
very poorly as far as security and protective standards were concerned.
Irans police chief, Esmail Ahmadi
Moghaddam, said Monis was known
as Manteghi and managing a travel
agency when he fled in 1996, leaving behind a wife and two children.
He travelled first to Malaysia
and then on to Australia where he
landed as a refugee but later ob-

Church of England
appoints its rst
woman bishop
LONDON: The Church of England appointed its first ever
female bishop yesterday, overturning centuries of tradition in
a Church that has been deeply
divided over the issue. It named
Reverend Libby Lane, 48, as
the new Bishop of Stockport
in northern England. It is an
unexpected joy to be here today (yesterday), Lane said in
her acceptance speech. It is
a remarkable day for me and I
realise an historic day for the
church. She added: I am conscious this morning of countless women and men who for
decades have looked forward
to the time when the Church of
England would announce its
first woman bishop. Reuters

Eleven dead in Mexico

vigilante shootout
MEXICO CITY: Mexican vigilante groups fighting drug
cartels turned on each other
on Tuesday in a shoot-out that
left at least 11 dead, officials
said. The violence happened
in Michoacan state in the west,
one of the regions of Mexico
most torn by drug-related violence. Hipolito Mora, leader of one of the fi rst groups
that rose up in 2013 to fight
cartels, said his son was one
of those killed. The central
governments special commissioner for Michoacan, Alfredo Castillo, said 11 people
were killed in the firefight in La
Ruana, which is 550 km from
Mexico City. Castillo blamed
the fight on a head-on clash
between the two so-called self
defence groups. AFP

Japan nuclear watchdog

approves more reactors

Iran says Australia ignored

warnings about gunman
TEHRAN: Iran repeatedly warned
Australia about the criminal past of
the perpetrator of the Sydney cafe
siege and called for him to be kept
under surveillance, top officials in
Tehran said.
Man Haron Monis, the Iranian-born self-styled cleric who died
along with two of the people he had
taken hostage, was being investigated over fraud charges when he
fled in 1996, police said.
But Irans deputy foreign minister for Asia and Oceania affairs,
Ebrahim Rahimpour, said Australia
ignored the guidance sent.
Despite several notifications
to the Australian government re-

IN BRIEF

tained citizenship. An extradition

request from Tehran in 2000 was
unsuccessful, Moghaddam said on
the Iranian police website.
Last month, he posted a message
in Arabic on his website pledging
allegiance to the Caliph of the
Muslims, which some have interpreted to mean the leader of the Islamic State group, which has seized
swathes of Iraq and Syria. Yet he
was allowed to roam free.
Monis, whom Abbott called a
madman, was well-known to both
state and federal police as well as
the domestic intelligence agency
Asio, but was not on any Australian
counter-terrorism watch lists. AFP

TOKYO: Japans nuclear watchdog yesterday gave the green

light to restarting two more
atomic reactors, days after
pro-nuclear Prime Minister
Shinzo Abe swept to election
victory. The Nuclear Regulation
Authority said it believed the
two units at Takahama nuclear power plant in central Fukui
prefecture met toughened safety standards introduced after
the tsunami-sparked disaster at
Fukushima in 2011. The actual
restarts, however, will be delayed until a month-long public
consultation is held and local
authorities give their blessing.
AFP

Iraqs Kurdistan says to

deepen ties with Iran
LONDON: Iraqi Kurdistan
plans to strengthen its relationship with Iran, the prime
minister of the semi-autonomous region said yesterday in
an acknowledgement of the
deepening ties between Arbil
and Tehran. Prime Minister Nechirvan Barzani said in a statement a new oil deal between
Arbil and Baghdad would not
impact the Kurdistan Regional
Governments ties with Turkey,
or its growing partnership with
Iran. Reuters

28

live it!

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

T HU

WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE

Personal
ASSISTANT

Gao Ming, a hermit in the

Zhongnan mountains,
standing by the gate of her
cottage in the Zhongnan
mountains, north Chinas
Shaanxi province. Photo
by AFP

COMPI L ED BY MAE CHAN

WORK. LIFE. BALANCE

START the weekend with 2014s biggest

pre-Xmas party with Santas PLAY-ground
tonight, starting at 10pm till 3am. An
all-female line-up of DJs will be spinning
at PLAY Club at The Roof, Bandar Utama,
Petaling Jaya, where there will also be
sponsored activities and giveaways. For
reservations, call 014-2530858.

HIT jukebox
musical Mamma
Mia! opens
today at the
Plenary Hall,
Kuala Lumpur
Convention
Centre, playing
for four days
until Sunday.
The popular
West End hit
opened in 1999
and has stayed put since then, also going
on multiple world tours and playing to
over 54 million people globally. Played to
the songs by pop-group ABBA, Mamma
Mia! tells the tale of a daughters quest
to discover the identity of her father on
the eve of her wedding at a Greek island
paradise. Featuring a cast directly from
the UK, tickets are priced between RM190
and RM590. To purchase, visit http://www.
ticketspeople.com or call 03-22872811 for
enquiries.

P
I
t

w
s
i
3

Isolated

o
s
h
h
n

BLISS

Chinas mountain hermits seek a highway to heaven

THE turkey is in the oven at The

Steakhouse KL with its special Christmas
menu (available now till Jan 5), involving
a Herb Crusted Turkey Tenderloin with
chestnut stung and red wine butter
sauce (RM78++), paired with winter
vegetables. Those who prefer something
more indulgent can opt for the king
prawn Provencale and baked cod with
lemon hollandaise (RM88++). Dessert is
a delectable mix of Christmas avours
with whiskey cream in sweet wafer,
blackcurrant-red wine Jelly, gingerbread
cinnamon ice cream and minced pie
(RM26++). Get special promos on whiskey
ights, shots and bottles as well, and
an opportunity to claim a FREE bottle of
house wine on your next visit in January
if you spend above RM400 in December.
For reservations and enquiries, call 0321432268 or visit www.steakhousekl.com.

is unheated hut is half

way up a mountain with
no electricity, and his diet
consists mostly of cabbage.
But Master Hou says he
has found a recipe for joy.
There is no happier way for a person
to live on this earth, he declared, balancing on a hard wooden stool outside his
primitive mud brick dwelling.
Hundreds of millions have moved
to Chinas urban areas during a decades-long economic boom, but some are
turning their backs on the bright lights
and big cities to live as isolated hermits.
Their choice puts them in touch with
an ancient tradition undergoing a surprising modern-day revival.
Hundreds of small huts dot the jagged
peaks of the remote Zhongnan mountains in central China, where followers
of Buddhism and local Taoist traditions
have for centuries sought to live far from
the madding crowds.
The Zhongnan mountains have a special aura, said Hou, who moved to the
hills almost a decade ago and wrapped

Hou says he has found a recipe for joy in his

way of life. Photo by AFP

himself in a long black robe, smiling as

the wind rustled the surrounding woods.
Hou grew up in the bustling coastal city
of Zhuhai, next to the gambling centre of
Macau, but now his days consist almost
entirely of meditation, with pauses to
chop firewood and vegetables.

Cities are places of restless life. Here

is where you can find inner joy, he said.
Now Im happy to be alone.
Winter temperatures can drop below
minus 20 C and deadly snakes lurk under
rocks, but the mountain tops are growing
increasingly crowded amid rising dissatisfaction with materialism.
Hou who looks in his 40s but says
Taoists do not reveal their age was recently joined by two apprentices.
Wang Gaofeng, 26, has a wispier beard
than his master, and said he had quit a
management-level job in Chinas vast
railway system a year ago.
Watching TV and playing video
games are just temporary excitement,
like opium. That kind of pleasure is quickly gone, he said, chomping on some
freshly boiled cabbage.

l
s
m
s
p
a
t
T
P
h
v

live it! 29

T HURSDAY D EC E MBE R 18 , 2014 T HEED G E FINA NCIA L DAILY

WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE

PHOTOS BY AFP

01

Poisonous mushrooms
It is a radically individualistic contrast to
the collectivist mantras of past decades.
But todays hermits are following a
well-beaten historical path, and experts
say quiet types have preferred to live alone
in the mountains of China for more than
3,000 years.
Taoism loosely based on the writings
of a mythical figure named Laozi who lived
some 2,500 years ago calls for an adherence to the way, which practitioners
have long interpreted as a return to the
natural world.
Unlike their Western equivalents, religiously inspired outsiders who often
shunned society completely, Chinas
mountain dwellers have historically been
sought out by politicians.
Hermits played a political role, they
pushed society forward and maintained
ancient ideas, said Zhang Jianfeng, parttime mountain dweller and founder of a
Taoism magazine.
But the officially atheist Communist
Party came to power in 1949, cutting the
hermits political connections.
Anti-religious campaigns reached fever pitch during the decade of upheaval

ere
aid.
ow
der
ing
atays
reard
it a
ast
eo
nt,
ckme

beginning in 1966 known as the Cultural

Revolution, when many of the temples and
shrines in the Zhongnan mountains were
destroyed and their denizens dispersed.
Nonetheless experts estimate several
hundred hermits survived the period unscathed deep in the hills, with some even
said to be unaware the Communists had
taken power.
Their numbers have risen since the
government relaxed religious controls in
the 1980s.
Twenty years ago, there were just a
few hundred people living in the Zhongnan mountains. But in the last few years,
the number has increased very quickly,
said Zhang.
Now perhaps there are too many people blindly moving to the mountains, he
added.
There are incidents every year, people
eating poisonous mushrooms, or freezing
to death ... some people lack common
sense.
Much of the hermit revival can be attributed to American writer Bill Porter,
who in the 1993 published the first book
about the mountain dwellers.
It was a commercial failure in the

PICK OF THE DAY

THE Harrods food hall is an institution on its own, not to mention one of the
British department stores tourist landmarks. The good news is that Harrods is bringing a taste of its gastronomical haven to town with its seasonal
Christmas and New Year Special selections, available from today until Jan 1
(12pm to 9pm). At both the Harrods Caf on ground level and Harrods store
on level 1 of Suria KLCC, Kuala Lumpur, customers can enjoy classic favourites such as roasted turkey breast with chestnut and apricot stung, rib eye
beef Wellington with creamy mushroom sauce, lobster thermidor, pan-fried
cod llet and scallop and pan-fried Australia striploin of wagyu beef. Starters include pan-fried crab cake and pan-fried goose liver with mangoes. The
Harrods Christmas pudding also makes a sweet appearance, along with the
Yule log with strawberry coulis, baked Alaska and mango crumble. Prices
range from RM36 to RM260. Of course, a variety of Christmas goodies are
available with hampers ranging from RM300 to RM1,300. For reservations
and more information, call 03-21666000 (Level 1)/ 03-21651111 (Caf).

02

US, leaving Porter living on government

food stamps. But its 2006 Chinese translation became a hit, selling more than
100,000 copies.
In the 1980s no one paid the hermits
any attention, because everyone had a
chance to make a buck and improve their
lives materially, said the shaggy-bearded
author. People thought it absurd to go in
the opposite direction.
Now he notes more well-educated former professionals among the denizens of
what he calls hermit heaven, and one
who did not want to be named told AFP
he was a government official on sabbatical.
You get a much wider mix, people
who are jaded or disillusioned in the current economy and are seeking something
more, said Porter.
Inner peace
Chinas decades of breakneck economic
growth have created a substantial middle
class, but a few of them now openly question materialist values.
Around a dozen young people from
across China live in a clump of wooden
huts which acts as a testing ground for aspiring hermits, albeit outfitted with elec-

01. Gao Ming chanting prayers in her cottage.

02. Unlike the mass that have moved to Chinas urban
areas during a decades-long economic boom,
some are opting to live as isolated hermits.
.

tricity and a DVD player.

Liu Jingchong, 38, moved in after quitting a lucrative job in the southern city
of Guangzhou this year, and plans to live
completely alone.
I felt life was an endless circle: finding
a better car, better job, a better girlfriend,
but not going anywhere, he said, sitting
cross-legged on a cushion.
When Im alone on the mountain,
I will just need shelter, a pot, and seeds
from the pine trees.
More than half the hermits in the range
are said to be women, and Li Yunqi, 26,
spent several weeks at the cottages.
I like the life of a hermit, living on a
mountain. I came here for inner peace
and to escape the noise of the city, she
said, wearing a puffy pink coat and fiddling with a smartphone as an off-road
vehicle carried her down a muddy path
to civilisation. AFP

30

live it!

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE

Zen TODAY

Always remember that you are absolutely unique.

Just like everyone else. Margaret Mead

South Koreas
SWEET INVASION
Soft-serve ice-cream Milkcow hits Malaysian fields

03
01. Milkcow has opened in Malaysia with its rst outlet in The Gardens Mall, Kuala Lumpur.
02. Some of Milkcows most popular toppings (from left) honeycomb, macaroon and cotton candy.
03. Milkcows premium organic soft-serve ice-cream with a variety of toppings.
01

BY Q UA H SU ANN

t seems as if South Korea has taken the world by storm, a step at a

time. First it was television dramas,
then it was Korean pop singers and
boy and girl bands now, its icecream. Milkcow, a hit soft-serve
ice-cream franchise in South Korea has
opened its first parlour at The Gardens
Mall in Kuala Lumpur.
Its also the brands first outlet in Southeast Asia, and its all due to the efforts of
Yeo Kian Howe, director of Blubites Sdn
Bhd the company responsible for bringing Milkcow to Malaysia.
The Milkcow brand was established
by South Korea-based MCOSTAR Corporation Ltd. The company had started

02

in the apparel industry before venturing

into the food industry.
What makes Milkcow a true standout
from its competitors is that its ice-cream
is made fresh and delivered to the outlet once or twice a day, with each batch
lasting only a maximum of three days
(as opposed to usual ice-cream brands
that have a shelf life of up to three or four
weeks because theyre made from powdered milk). This is because the ice-cream
is made using organic, preservative-free
milk, which is the secret of its delicious
taste and popularity.
We know how Malaysians love food.
And us being Malaysians, we couldnt
help but be drawn by the quality product
that Milkcow was offering when we visited South Korea. So, naturally, we had

to bring it to Malaysia, said Yeo at the

Milkcow launch recently.
We have been surprised by the response that the Malaysian public has
given us since we started operations a
few weeks ago.
It has been overwhelming, not just
because of the positive feedback weve
received at our outlet, but everywhere on
the Internet, from social media to blogs
and by word of mouth, Yeo added.
Milkcow offers only one flavour their
signature milk soft-serve ice-cream, but
has an array of toppings including chocolate, macaroons, organic cotton candy,
marshmallows, and honeycomb. The last
is the most popular in the South Korean
market, and is 100% natural and sourced
from reputable local bee farms.

As a result of the ice-cream being made

without the use of preservatives and only
with organic milk, it melts rather quickly,
so it would probably be a better idea to
order it in a cup.
Milkcows offerings are priced from
RM8 to RM13, each featuring different
toppings and can be served either in a
cone or cup. The brand is so popular that
within the past three weeks alone, Milkcows Facebook page has already amassed
more than 6,500 Likes, and dozens have
left positive reviews.
Milkcow is located at LG-K23, Lower Ground
Floor, The Gardens Mall, Mid Valley City,
Kuala Lumpur, right opposite Cold Storage.
For inquiries, please call (03) 7726 7370.

S P O RT S 3 1

THU RSDAY D EC E MB E R 18 , 2014 T HEED G E FINA NCIA L DAILY

Indian boxer banned for

Asiad medal snub
Still eligible to qualify for the 2016 Olympics in Rio de Janeiro
NEW DELHI: Indian boxer Sarita
Devi was yesterday banned for one
year by the sports world governing body for refusing to accept her
bronze medal at the Asian Games
in protest against judging decisions,
an official said.
Sarita has been ordered to sit
out of competitions until October
2015 and pay a fine of 1,000 Swiss
francs (RM3,644) by the International Boxing Association (Aiba),
the official added.
The year-long ban, however, still
leaves her eligible to qualify for the
2016 Olympics in Rio de Janeiro,
Brazil.
Indias long-time Cuban coach
B I Fernandez was handed a twoyear ban and fined 2,000 Swiss
francs for supporting Sarita during her protest, Boxing India chief
Sandeep Jajodia said, quoting an
Aiba decision.
There was apprehension that
Sarita would be banned for life but
Boxing India worked to get relief for
her, trying to impress on Aiba that
Sarita is disciplined, Jajodia told
reporters in New Delhi.
The one-off incident was an

New Zealand
mulls alcohol
sponsorship ban
WELLINGTON: A New Zealand government review yesterday recommended Frenchstyle measures banning alcohol
sponsorship of sport in a bid to
curb the South Pacific nations
binge drinking culture.
The ministerial review, headed by former national rugby
league coach Graham Lowe,
said it was concerned that alcohol firms used sports sponsorship to reach young people
from an early age and shape their
drinking habits. In New Zealand
there is a strong cultural connection between alcohol and sport
which needs to be addressed,
the Ministerial Forum on Alcohol Advertising and Sponsorship
found after a two-year review.
The forum is concerned that
young people are not protected
from exposure to alcohol sponsorship when viewing sport.
It called for a short-term ban
on sponsorship of all sports that
are broadcast or streamed online, followed by a complete ban
on all alcohol sponsorships within five to 10 years.The complete
ban would involve smaller grassroots clubs, for example barring
pubs from sponsoring local football teams. AFP

Filepic of Sarita Devi reacting during the medal ceremony for the womens light boxing
competition at the Seonhak Gymnasium during the 2014 Asian Games in Incheon,
South Korea in October. She accepted the Asiad bronze medal last week, given to her
by the Indian Olympic Association. Photo by Reuters

emotional outburst. But we have

to appreciate that the international body works under some rules.
I spoke to Sarita and she is very
relieved. We expected a longer ban.
Sarita, 29, who controversially
lost after appearing to dominate her

lightweight (60kg) Asiad semi-final

bout against South Korean boxer
Park Ji-Na in Incheon, tearfully refused to accept the bronze during
the medal ceremony.
The contentious defeat a day
earlier had sparked ugly scenes and

scuffles as Saritas enraged husband

tried to lead a protest, resulting in
him launching an expletive-filled
rant at officials.
At the podium ceremony, Sarita twice refused the medal before
hanging it around the neck of her
stunned Korean opponent who
took silver. Sarita later issued an
unconditional apology to the
Olympic Council of Asia for her
behaviour.
There were protests over a number of judging decisions in favour
of home boxers during the Games,
which were held in the South Korean city in September to October.
Mongolian and Filipino boxers
also suffered controversial defeats
prompting calls from their delegation officials for a review of the
scoring system.
The Incheon organising committee complained about Saritas
behaviour at the time but also said
it had written to Aiba calling on the
governing body to ensure fair play
in competition.
Sarita accepted the Asiad bronze
medal last week, given to her by the
Indian Olympic Association. AFP

Vijays day as India subdue

Aussies at fortress Gabba
BY ROBERT SM I TH

BRISBANE: Murali Vijay made Australias bowlers toil in the brutal Brisbane heat with a defiant century as
India frolicked in the second Test at
the Gabba yesterday.
Vijay profited from two dropped
catches by Shaun Marsh to score his
fourth Test century against Australia
and his first in this country, putting
the tourists in a commanding position after the opening day.
The Chennai right-hander, cruelly out for 99 in the Adelaide series
opener, made it look easy on a Gab-

ba pitch where the Australians have

remained unconquered for 26 years.
Vijay was out late in the day,
caught behind off spinner Nathan
Lyon for 144 equalling Sourav
Gangulys 2003 knock as the highest score by an Indian at the Gabba.
Today was really hot and was
testing us all. As a batsman I could
see a lot of bowlers sulking out there
because it was really hot, Vijay said.
The (post-tea) session was really
important for us and I thought a lot
of people on their team were getting
tired. I wanted to wait until that time
and make use of it.

Vijay batted for 332 minutes and

faced 213 balls with 22 fours. He put
on 124 with Ajinkya Rahane for the
fourth wicket. At the close India were
311 for four with Rahane unbeaten
on 75 and Rohit Sharma not out 26.
The century continued Vijays
impressive start to the four-match
series with scores of 53 and 99 in Indias 48-run defeat in the first Test.
He was helped along the way by two
chances put down by Marsh on 36
and 102, both off Mitchell Johnsons
bowling and by a tiring Australian bowling attack on a sweltering
day. AFP

IN BRIEF
Pakistan went ahead
with match despite
Peshawar tragedy
ABU DHABI (United Arab
Emirates): Pakistan cricket
officials decided to go ahead
with yesterdays fourth daynight international against
New Zealand in Abu Dhabi
despite calls to postpone it
for a day after the carnage
in Peshawar.The Taliban attacks on an army-run school
in Peshawar on Tuesday left
141 dead, 132 of them school
children. The Pakistan Cricket Board (PCB) said it cannot
postpone the one-day international (ODI) due to broadcast
commitments. We tried our
best to postpone the 4th ODI
but were constrained by the
Broadcasters commitment as
well as for cricketing reasons
advised by the New Zealand
management, said a PCB release. AFP

US will bid for 2024

Olympics
LOS ANGELES: The United
States Olympic Committee
(USOC) announced on Tuesday it will bid to host the 2024
Summer Games, but the candidate city wont be selected
until early next year. Los Angeles, Washington, Boston
and San Francisco all made
their final pitches for staging
the four-yearly showpiece to
the USOC board of directors
on Tuesday. The board voted
unanimously to move forward
with a bid, said USOC chairman Larry Probst. We are going to take our time and pick
the city we think has the best
chance of winning the competition from other cities around
the world. AFP

Stolen Red Bull trophies

found in lake
LONDON: Twenty of the 60
trophies stolen in a raid on Red
Bulls headquarters in the British town of Milton Keynes have
been found in a lake, police
said on Tuesday.The trophies
were taken after thieves drove
two vehicles through the front
entrance of the premises during
a late-night burglary earlier this
month, which team principal
Christian Horner described
as devastating.Some of the
trophies were recovered from
Horseshoe Lake near Sandhurst, said a spokesperson
from Thames Valley Police.
AFP

Warne says Clarkes surgery a success

Puma names Rihanna as

womens creative director

BRISBANE: Michael Clarkes hamstring surgery had the best result

possible, former cricketing great
Shane Warne said yesterday, raising
hopes the Australian skipper will
make the upcoming World Cup.
Clarke badly tore his right hamstring last Saturday during the first
Test against India in Adelaide, Australia, a match he went into under
an injury cloud given his long history of back complaints.
The 33-year-old said after the
match that he was unlikely to play

BERLIN: Germanys Puma

named pop star Rihanna as
its womens creative director
on Tuesday, the latest move
by a sportswear firm to tap into
the booming market for female
leisure gear. Puma said in a
statement that the multi-year
deal starting in January would
involve Rihanna becoming the
face of the womens training
category, joining celebrities like
Olympic champion sprinter
Usain Bolt as brand ambassador. Reuters

any further part in the four-match

Test series against India and that
the injury could cut short his career.
But Warne, a close friend of
Clarke, said his future was looking
better after he underwent surgery
on Tuesday, ahead of the World Cup
jointly hosted by Australia and New
Zealand which begins on Feb 14.
It was the best result humanly
possible they could have had for the
operation, Warne said during his
commentary on the current Test
in Brisbane for the Nine Network,

adding that Clarke was looking

forward to trying to make a good
comeback.
Its a better result than expected. Previously the World Cup was
a long shot, now hes more of a
chance given how well the operation went.Earlier Clarke tweeted
that the surgery went really well.
Team physiotherapist Alex
Kountouris said the successful surgery gave Clarke a good chance of
recovery from the hamstring mishap. AFP

3 2 S P O RT S

T HU R SDAY DEC EM B ER 1 8, 2 0 14 TH EEDGE FI N AN C I AL DAI LY

Nicol tempers her Olympic

dream with a warning
Squash will best advance its revived Olympic hopes by taking its progress step by step
BY RI C H A RD EATON

CAIRO: Datuk Nicol David believes her dream of competing in

an Olympic Games may have come
closer after the changes which were
passed at last weeks extraordinary
meeting of the International Olympic Committee in Monte Carlo.
If the highest profile squash
player of all time were able to retire
after competing in the 2020 Games
it would be an ideal conclusion to
a uniquely successful career.
That now seems very possible
according to the World Squash Federation website, which claims that
the outcome of the IOC Session
in Monaco continues to raise the
prospect of a place for squash at
the Olympics in Tokyo.
However the 31-year-old Malay-

Winners of the
2014 Olympians
Of The Year
award
KUALA LUMPUR: Shuttlers Goh
V Shem/Tan Wee Kiong (mens
doubles) and Datuk Nicol David
were crowned Olympians of the
Year in the mens and womens
categories at the Olympic Council
of Malaysia-Coca-Cola Olympian
awards, here yesterday.
V Shem-Wee Kiong were chosen for their success in winning
two gold medals at the Glasgow
Commonwealth Games in Scotland and two bronze medals at the
Incheon Asian Games in South
Korea. Nicol who could not attend
the award ceremony due to her
prior commitments abroad, was
chosen for winning two gold medals in the Asian Games in Incheon,
South Korea and a gold medal
at the Glasgow Commonwealth
Games in Scotland.
The year 2014 was a hectic year
with a number of major competitions. We were under pressure to
deliver and thank god we managed
to contribute a number of medals.
The award and trust placed
by the OCM and Coca-Cola will
further motivate and inspire us
to continue our quest for success,
especially in the 2016 Rio de Janeiro Olympics in Brazil, said Wee
Kiong. Nicol who had also won the
award in 1998, was represented by
the Squash Racquets Association
of Malaysia.
The winners of the award which
was inaugurated in 1993 through a
sponsorship pledge by Coca-Cola,
took home RM10,000 cash and a
medal, presented by OCM president Tan Sri Tunku Imran Tuanku
Jaafar. Bernama

sian legend has tempered the new

mood of optimism with a warning
that squash will best advance its
revived Olympic hopes by taking
its progress step by step.
If creating a cap for the amount
of athletes makes it open for new
sports then its a great step, Nicol
said of the change which has removed the cap on the number of
Olympic sports allowed in Tokyo.
I can see that it will be beneficial for the Games for other sports
to be involved. Then she added:
Of course we mustnt get ahead of
ourselves. We have to see what the
IOC plans to do. This is a new set-up.
Its exciting times to make these
changes, and a positive step forward for future Olympics. I am
sure that there is an opportunity
which squash will have this time

but we will have to wait and see

what they (the IOC) want to do.
Nicol is well aware that
everything depends on whether
some sports already in the Olympics can be encouraged to reduce
the numbers of their athletes, or to
forego an event.
Its difficult for the IOC to make
that step as well, Nicol warned.
Which sport would have to reduce.
Some sports have been there (the
Olympic programme) for a long time.
It is tough for a sport to reduce
its events. It takes a bit of time and
effort, and a desire from IOC. But
we will hope they will look for that.
Nicol, who achieved a record
100 consecutive months as world
number one last month, believes
she may have what it takes still to
be an Olympic challenger at the age

of 36 if the chance were to come

about at Tokyo in 2020.
Having also played a major role
in the presentation of squashs bid
to the IOC in Buenos Aires last year,
she feels that helping squash earn a
place in the Olympics is her greatest remaining ambition.
Even after her bid for an eighth
world title carried her to the quarter-finals she had a rest day yesterday the intensity of Davids
emotions about the Olympics remained too powerful to hide.
I will only be content once I
see squash and the Olympics next
to each other on a piece of paper,
being signed! she asserted. And
then I will be satisfied.
And that still has to take its time.
It all depends it comes back to the
IOC. AFP

Two Malaysians make it to

squash quarterfinals
KUALA LUMPUR: Malaysias squash
queen and world number one Datuk
Nicol David and her compatriot Low
Wee Wern cruised to the quarterfinals
of the 2014 Womens World Squash
Championship at the Wadi Degla
Club in Cairo, Egypt.
The 31-year-old Penangite, who
is gunning for her eighth world title,
took 42 minutes to overcome a tough
challenge before seeing off tactical
young English opponent, Emily Whitlock with 12-10, 11-9 and 11-1 in the
second encounter on Tuesday.
She is a very tactical player, fast
and quick and she keeps going on.
We played a really good match.
With a condition like that, of
course she was going to attack when
she had the opportunity. So, I tried to
take control and dug in, Nicol said as
quoted in the tournaments website
www.squashsite.co.uk.
In the ruthless match, the 20-yearold qualifier pushed the seven-time
champion all the way for the first
two sets.
The English player led for virtually all of the first, only to see Nicol
snatching it 12-10, she led 9-8 in the

Filepic of David
(front) competing
against her
compatriot Low in
their womens single
squash match nal at
the Yeorumul Squash
Courts during the
17th Asian Games in
Incheon on Sept 23.
Photo by Reuters

second but Nicol took set 11-9 and

the challenge ended after Nicol dominated the third.
Nicol will meet Camille Serme,
after the French sixth seed overcame
another Englishwoman, Emma Bedoes with 11-5, 11-13, 11-4 and 11-4.
The national number two, Low
Wee Wern came through a second
successive five game encounter, once
again coming down from 2-1 to win
over Indias Joshana Chinappa 6-11,
11-3, 11-13, 11-7 and 11-8.
On her victory, Wee Wern who was
playing for the first time on the glass
court, said it took her a little while to

adjust to the momentum of the game.

I was not moving freely, my
movement is still impaired, so when
you are not fit, you have to rely on
your mental strength and squash
domination.
Joshana played very well, I think
she really wanted to be the first Indian
to reach the quarters of the worlds
and she played very well indeed giving me a very hard time, Wee Wern
said. Wee Wern will be playing 10th
seeded Egyptian Omneya Abdel Kawy
who beat her compatriot Nouran
Gohar with a 13-11, 11-6 and 13-11
win. Bernama

Five football fans charged for rioting

SHAH ALAM: Five football fans, including two brothers, pleaded not
guilty in the magistrates court here
yesterday, to charges of rioting during the first leg semi-final of the AFF
Suzuki Cup between Malaysia and
Vietnam at the Shah Alam Stadium
on Dec 7.
The five Amirul Akmal Noo-

radzhar, 22, Zulhelmy Akmal Zainol

Abidin, 28, Muhammad Naquiyuddin Sallehuddin, 19, siblings Mohd
Aminuddin Hamdan, 34 and Noor
Hadi Hamdan, 29, were charged under Section 147 of the Penal Code (Act
574) which carries a maximum jail
term of two years or a fine, or both,
if convicted.

They, and a few others who are still

at large, were charged for rioting by
attacking Vietnam supporters who
were seated at the Quadrant A area
in the Shah Alam Stadium at 9.50pm
on Dec 7. Magistrate Ellyana Razali
allowed bail at RM2,800 each in one
surety and set Jan 22 next year, for
mention. Bernama

IN BRIEF
Bayern extend contracts
of Gaudino, Starke
BERLIN: Bayern Munich have
extended the contracts of teenage midfielder Gianluca Gaudino and veteran goalkeeper Tom
Starke, the club 12 points clear in
the Bundesliga said yesterday.
The 18-year-old Gaudino, son of
former Germany international
Maurizio Gaudino, has signed a
three-year extension until 2018,
having made his debut in the
opening league win over Wolfsburg last August. The teenager
came on for the last 20 minutes
of last weeks final group stage
3-0 win against CSKA Moscow
to make his Champions League
debut. Reserve goalkeeper Starke,
33, has extended his stay until
June 2016, but has yet to play a
single minute of this season as
Manuel Neuers back-up. AFP

Turkish football fans put

on trial over coup bid
ISTANBUL: Thirty-five supporters of Turkish top-flight football
side Besiktas went on trial Tuesday facing life imprisonment on
charges of seeking to overthrow
President Recep Tayyip Erdogans
government in 2013 protests.
Hundreds of Besiktas supporters staged a raucous protest outside the Istanbul criminal court,
shouting football chants backing
the accused, who are all members of the clubs main fan club,
the Carsi Group. Prosecutors
have accused all 35 of seeking
to stage a coup to overthrow the
government of Erdogan, who was
then prime minister, during the
unprecedented protests against
his rule last year. AFP

Third-tier Yeovil earn

Man United FA Cup tie
LONDON: Third-division Yeovil
Town earned a dream FA Cup
third-round tie at home to giants
Manchester United after beating
fourth-tier Accrington Stanley
2-0 in a second-round replay on
Tuesday. The game at Yeovils
Huish Park ground, played in
front of 6,373 fans, looked to be
heading to extra time until Simon
Gillett and Kieffer Moore scored
twice in the final six minutes.
Yeovil were relegated from the
second-tier Championship last
season and currently sit in the
League One relegation zone, 62
places below 11-time cup-winners United in the English league
system. AFP

Real cruise into Club

World Cup nal
MARRAKECH: European champions Real Madrid crushed Cruz
Azul 4-0 to cruise into the Club
World Cup final on Tuesday,
totally outclassing their Mexican rivals. Goals from Sergio
Ramos, Karim Benzema, Garreth Bale and Isco saw Madrid
record a 21st consecutive win in
this semi-final at a packed and
noisy Grand Stade de Marrakech,
scene of last years final where
Bayern Munich beat Raja Casablanca 2-0. This team deserves
to win the world title, said Real
Madrids Italian coach Carlo Ancelotti after the easy and impressive win. AFP