The Edge Jan 5 2015

FBM KLCI 1752.
77
8.48
KLCI FUTURES 1745.50
5.50
STI 3370.59
5.44
RM/USD 3.5150
CPO RM2284.00
17.00
OIL US$56.42
0.91
GOLD US$1186.20
2.10
PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.50
MONDAY JANUARY 5, 2015 ISSUE 1872/2015
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
www.theedgemarkets.com
Best car that brand Honda makes

20 F O C U S
4 HOME BUSINESS
Iskandar Waterfront
IPO postponed
indefinitely
4 HOME BUSINESS
Oversea Enterprise
targets 30% cafe
chain contribution
5 HOME BUSINESS
Price war to squeeze

nitrile glove margins
this year
18 C O M M E N T
Could 2015 herald a

new oil order?
19 F E AT U R E
JJapans
cash
helicopter may be
first to take off
by
u
o
y
o
t
t
h
g
u
o
r
b
s
i
y
p
o
c
l
a
t
This digi
FBM KLCI 1752.77
8.48
KLCI FUTURES 1745.50
5.50
STI 3370.59
5.44
RM/USD 3.5150
CPO RM2284.00
17.00
OIL US$56.42
0.91
GOLD US$1186.20
2.10
PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.50
MONDAY JANUARY 5, 2015 ISSUE 1872/2015
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
4 HOME BUSINESS
Iskandar Waterfront
IPO postponed
indefinitely
4 HOME BUSINESS
Oversea Enterprise
targets 30% cafe
chain contribution
5 HOME BUSINESS
Price war to squeeze

nitrile glove margins
this year
18 C O M M E N T
Could 2015 herald a

new oil order?
19 F E AT U R E
Japans cash
helicopter may be
first to take off
Best car that brand Honda makes

20 F O C U S
M ON DAY JAN UARY 5 , 2 0 1 5 TH EEDGE F I N AN C I AL DAI LY
For breaking news updates go to

ON EDGE T V
More AirAsia
wreckage found
But weather thwarts divers attempt to reach 5th underwater object
Research
houses maintain
neutral call on
banking sector
for 2015
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SURABAYA: Divers tried to reach

sunken wreckage from a crashed
AirAsia passenger jet yesterday but
were forced to return to their ship
by bad weather, as Indonesian officials said they had detected a fifth
large underwater object believed
to be part of the plane.
The weather is bad. Theres a
storm. Its windy, said a Reuters
photographer on board a search
and rescue ship in the search area
off Borneo island.
Earlier, four divers were transferred to (Indonesian navy ship)
KRI Banda Aceh but they cancelled
the diving because the sea currents
were too strong.
The head of Indonesias search and
rescue agency, Fransiskus Bambang
Soelistyo, told a news conference in
Jakarta yesterday that a fifth object
almost 10m long had been found.
Air Force Lt-Col Johnson Supriadi, speaking at a briefing for pilots in
Pangkalan Bun, the southern Borneo
town where the search operation
was based, said efforts yesterday
would be divided between recovering bodies and locating wreckage
and the all-important cockpit voice
and flight data recorders.
Until investigators can examine
the recorders the cause of the crash
remains unknown, but the area is
known for intense seasonal storms.
BMKG, Indonesias meteorological agency, said bad weather was
a likely factor.
The flight document provided by
the BMKG office shows fairly worrying weather conditions for the aircraft at cruising level on the chosen
route, the agency said in a report.
A source close to the investi-
Indonesian Search and Rescue crew unloading the body of an AirAsia QZ8501
passenger from a Singapore Navy helicopter at the airbase in Pangkalan Bun, Central
Kalimantan yesterday. Photo by Reuters
gation said radar data appeared

to show the aircraft made an unbelievably steep climb before it
crashed, possibly pushing it beyond the A320s limits.
The objects that are the main
focus of the search were located by
ships about 90 nautical miles off the
coast. The largest object is around
18m long. The suspected wreckage
is lying in water around 30m deep,
which experts say should make it
relatively straightforward to recover
if the rough weather abates.
Efforts to capture images with
remote operated vehicles were frustrated on Saturday by poor visibility.
Meanwhile, an AirAsia plane, flying out of Surabaya, suffered engine
failure shortly after moving on the
runway for takeoff at 9pm on Saturday, reported Indonesias Metro TV.
Flight QZ7633 (registration PKAZC), bound for Bandung had taxied about three metres before the
Airbus A320s engine died. There
was an explosion, which spooked
the 120 passengers on board.
See related story on Page 12
A passenger, Yusuf Fitriadi, told
Metro TV that a pilot told passengers
waiting at the departure lounge the
starter monitor had malfunctioned.
The plane was ready and had
moved when we suddenly heard a
bang. The engine died and the plane
moved backwards. We started panicking, Yusuf told the TV station.
The flight departed about two
hours later, although a number of
passengers reportedly refused to
board the flight. Reuters
Pelaburan Maras equity

investment totals RM260m
KUALA LUMPUR: Pelaburan Mara
Bhd, the investment arm of Majlis
Amanah Rakyat (Mara), said its
equity investment stood at RM260
million as at Dec 31, 2014.
[Thus,] it defies logic for Pelaburan Mara to suffer paper losses of
RM1 billion. Even if all investments
are written off, the losses will only
be to the amount of the initial investment, said its group chief executive officer Nazim Rahman in
a statement yesterday.
He was responding to a news report that Pelaburan Mara was seeing
huge paper losses of as much as RM1
billion, suggesting that they could
stem from its direct major shareholdings in public-listed companies
as well as through its unit trust fund,
managed by PMB Investment Bhd.
The conclusion is not only fac-
tually wrong, but also illogical,

said Nazim.
He said Pelaburan Mara has its
own governance and risk management standards that include strategic asset allocation to achieve
a diverse and balanced portfolio.
Consequently, our investment
in equity market is not more than
40% of total investments in a portfolio that also includes money market, fixed income and alternative
investments, he added.
Nazim also said Pelaburan Mara
has consistently registered a high
return on equity of more than 13%
and profit for its business since its
incorporation in 1967.
It estimates to achieve income
of RM50 million and net profit of
RM30 million for the financial year
ended Dec 31, 2014, representing a
50% year-on-year growth, the highest in its 47-year history.

[On the part of ] PMB Investment, being a licensed entity under the Capital Markets Services
Act, (it) operates separately as an
Islamic fund manager and a unit
trust management company, and is
not a conduit for Pelaburan Mara as
implied by the report, said Nazim.
To date, PMB Investment manages 14 unit trust funds, a wholesale fund and several discretionary
portfolio accounts with investment
mandates in equity, sukuk and
money market.
PMB Investment posted a total
return of 62.7% for the three years
ended December 2013, while its
one-year return for 2013 was 47.9%,
a testimony of its strong governance
and investment process, he added.
IN BRIEF
Pope names new
cardinals
ROME: Pope Francis yesterday
named 20 new cardinals from
around the world to the elite
group at the top of the Roman
Catholic hierarchy, including
15 who can enter a conclave to
choose his successor after his
death or resignation. It is the
second time the 78-year-old
Francis has put his stamp on the
direction he wants the 1.2-billion-member church to move
in, having named 19 cardinals
a year ago. The new cardinals
will be installed at a ceremony
at the Vatican on Feb 14. The 15
new cardinal electors those
aged under 80 come from
Italy, France, Portugal, Ethiopia, New Zealand, Vietnam,
Mexico, Myanmar, Thailand,
Uruguay, Spain, Panama, Cape
Verde and Tonga. It was the first
time cardinals from Myanmar,
Tonga and Cape Verde were appointed, a Vatican spokesman
said, reflecting Francis desire
for the College of Cardinals to
represent the universal nature
of the Church. Reuters
Huawei sales revenue

to rise 15%
BEIJING: Chinese telecoms
equipment maker Huawei Technologies expects advances in
cloud computing and higher demand for smart devices to have
lifted 2014 sales revenue by 15%
to US$46 billion (RM162.38 billion), chief executive officer Ken
Hu said in a new years message
on the companys website. The
Shenzhen-based company said
last year that it would achieve
sustainable growth in 2014. It
had also targeted revenue of
US$70 billion by 2018, or annual
growth of about 10% . Huaweis
smartphone shipments rose by
more than 40% last year, failing
to match its own target and the
performance of faster-growing
rivals such as Xiaomi. Reuters
EU to ght new people

smuggler tactic
BRUSSELS: The European Union has vowed to fight people
smugglers new tactic of abandoning ghost ships full of migrants off European coasts. The
European Commission, the
EUs executive arm, said it was
following closely the events
surrounding the crewless Ezadeen merchant ship, which was
drifting toward Italys southern
shores carrying 450 migrants
when Italian sailors took control of it last Friday. AFP
Nairobi airport shut after

plane lands on belly
NAIROBI: The Kenyan capitals
main international airport was
shut yesterday following the
crash landing of a domestic
flight, airport officials said. The
Kenyan Airports Authority said
a Fokker 50 flying from Wajir in
the northeast and operated by
Skyward suffered landing gear
failure and landed on its belly
at Jomo Kenyatta International Airport, blocking the sole
runway. No casualties were
reported. AFP
HOME BUSINESS 3
M ON DAY JA N UA RY 5 , 2015 T HEED G E FINA NCIA L DA ILY
Century Logistics
major shareholders
seek exit
They are consolidating the groups overseas operations and
shifting its focus to the domestic market to drive value
BY KA NG SI EW L I
KUALA LUMPUR: Century Logistics

Holdings Bhds major shareholders
who collectively hold about 44% are
looking to sell their equity interest
in the supply chain management
and logistics provider, said sources.
It is understood that Century
Logistics major shareholders were
willing to part their stakes at RM3
to RM3.20 apiece the price before the companys bonus issue
and share split. This translates into
RM1 to RM1.06 per share after taking into account a bonus issue and
share split on Oct 9.
The asking price is at a 60% to
70% premium to last Fridays closing price of 62.5 sen.
Century Logistics largest shareholder is its executive chairman
Datuk Richard Phua Sin Mo, with a
26.67% stake in the company. As at
Oct 21, 2014, Phua held a 19.18% direct stake and a 7.49% indirect stake
through his wife Datin Lee Lay Hun
and daughter Pamela Phua Jo Lyn.
Century Logistics Holdings Bhd

RM
1.0
Vol (mil)
20
15
0.8
10
RM0.625
0.6
0.4
Jan 2, 2014
Jan 2, 2015
Other substantial shareholders

include Century Logistics managing
director Steven Teow Choo Hing, who
has an 11.53% stake, while his brother Teow Choo Chuan who is the
groups executive director holds
a 6.03% stake. Both Choo Hing and
Choo Chuan are nephews of Phua.
In the past, they (major shareholders) have been approached by
foreign logistics providers to buy

a stake in Century Logistics, but
the deal didnt materialise due to
valuation issues, a source told The
Edge Financial Daily.
In March last year, The Edge
weekly reported Felda Global Ventures Holdings Bhd (FGV) as being
in talks with Phua to acquire a significant stake in Century Logistics.
In reply to the stock exchanges
query, the group then confirmed
that it was exploring a potential
corporate exercise with the Felda
group, although nothing conclusive was agreed upon at that point.
One source said while FGV had
initially shown interest with an offer
of RM2.95 a share for the stake, an
11% premium to the price of RM2.65
it was trading in March, the talks were
called off by FGVs board of directors.
The groups net asset per share
was at RM2.13 as at Sept 30, 2014.
The major shareholders are still
keen to divest their stakes in Century Logistics, but in the meantime
they are consolidating the groups
Last year, Century Logistics exited

its loss-making oil transportation
operation with the disposal of its
7,119-tonne clean product tanker.
overseas operations and shifting its

focus to domestic market to drive
its value, said the source.
Last year, Century Logistics exited its loss-making oil transportation operation with the disposal of
its 7,119-tonne clean product tanker.
It is also disposing of its distribution centre in Rojana Industrial
Park, Thailand for 320 million baht
(RM32 million), with an expected
net gain on disposal of RM2 million.
We have taken a strategic decision to concentrate on growing our
core domestic operations, while
exiting investments abroad. The
disposal presents the right opportunity for us to realise our property
investment in Thailand, Phua said
in the groups 2013 annual report.
Century Logistics share price has
been on a downtrend since June 30,
following the failed talks. The price
dropped to 66.7 sen on July 2, and
plunged further to 54.5 sen on Dec 16.
Based on last Fridays closing price of
62.5 sen, Phuas 97.63 million shares
in Century Logistics were worth some
RM61.02 million. Its market capitalisation stood at RM228.87 million.
As at Sept 30, 2014, its cash and cash
equivalents stood at RM62.84 million, while its borrowings totalled
RM72.58 million.
According to theedgemarkets.
com, Century Logistics has a valuation score of 3, which suggests the
company gives higher-than-market
average returns and is trading at a
lower-than-average valuation. Its
fundamental score, which measures a companys balance sheet
strength and profitability, stood at
1.8, while the stocks volatility was
2, with 1 being the least volatile.
For the nine months ended Sept
30, 2014, Century Logistics net profit
grew 28% to RM16.25 million from
RM12.68 million a year ago, while
revenue rose 15% to RM209.55 million from RM181.81 million.
In the latest quarterly announcement, Century Logistics said the
group remains confident of its business model and expects to perform
well in the current financial year
ending Dec 31, 2014.
The company started off as a forwarding agent back in 1970, under
the name of Syarikat Wakil Penghantaran & Perkapalan Century, and its
transformation started in 1996 when
it changed to the current name. It has
diversified into third-party logistics,
oil and gas logistics as well as procurement logistics services.
Infrastructure boom for contractors in 2015

BY Y EN N E FOO
KUALA LUMPUR: Thanks to the

governments ambitious infrastructure goals, 2015 will likely be a busy
year for contractors.
Judging by Budget 2015, it is
going to be a good year for the construction sector because the government is ramping upinfrastructuredevelopment. So, the usual
challenges like job prospects and
filling up an empty order book will
not likely be what contractors worry about next (this) year, Kenanga
Research analyst Iqbal Zainal told
The Edge Financial Daily.
Last October, Prime Minister Datuk Seri Najib Razak announced the
construction of the RM5.3 billion
Sungai Besi-Ulu Klang Expressway, the RM5 billion West Coast
Expressway, the RM4.2 billion Damansara-Shah Alam Highway and
the RM1.6 billion Eastern Klang
Valley Expressway.
In addition to the highways, the
RM23 billion Mass Rapid Transit 2
line from Selayang to Putrajaya, the
RM69 billion Pengerang Integrated
Petroleum Complex and the LRT 3
projects are all in the pipeline for
the new year.
As a result, Kenanga Research
has an overweight rating on the
sector. Specifically, Gamuda Bhd

and Muhibbah Engineering (M)
Bhd are the research houses top
picks as they are likely to be beneficiaries of government infrastructure projects.
The only challenge contractors
may face, according to Iqbal, is in
keeping cost structure efficient.
Cost will be challenging for construction players because there will
be intense competition for resources to complete jobs. So, they will
have to balance their order books
against their own budget and resources, he explained.
UOB KayHian Research head of
research Vincent Khoo is similarly
optimistic about the sector and has
an overweight rating on it, citing
building material cost as a main
reason and manpower shortage as
the sectors main challenge.
We are currently overweight on
the sector as medium-term earnings visibility is good, underpinned
by potential lower costs, amid lower
oil prices of several building materials such as bitumen, Khoo said.
Manpower will be a key challenge given there will be many
construction projects undertaken
concurrently. But there is also the
potential of lower development
expenditure by the government
2015
OUTLOOK
amid lower revenue derived from

lower oil prices he added.
IJM Corp Bhd is UOB KayHian
Researchs top pick as the research
house sees the execution of the
West Coast Expressway project is
on the way and will anchor the
companys middle-term earnings
of RM2.8 billion, with a potential
upside of an additional RM22 billion, via open tender.
It noted that IJM also stands to
gain from the Kuantan Port extension project worth approximately
RM1.5 billion.
On the ground, industry players
echoed analysts positive outlook
for the sector but voiced concerns
about completing the projects due
to limited resources such as manpower and machinery.
I think 2015 is a year where
contractors will enjoy themselves
because there will bea lot of work
going around, especially with government projects. But we hope that
this kind of boom in the sector will

be sustainable.
We hope the government will
implement its projects progressively, rather than all at one go,
because there is a real shortage of
manpower and machinery. Everyone is going for the same limited
pool of resources, Master Builders Association Malaysia president Matthew Tee told The Edge
Financial Daily.
We are [already] seeing a real
shortage of manpower at construction sites. The industry is dependent on foreign labour and with the
recent government policies and
crackdowns on migrant workers,
we may face greater difficulty in
completing our jobs, he said.
Tee is also worried that competition among industry players
for resources could drive up costs
and cause bare, single-digit profit
margins to depreciate further.
Contractors are service providers and should be fairly paid
for their services. But, at this point,
competition is so stiff that contractors are more concerned about
securing jobs than profit margin,
he said.
While the outlook forinfrastructure-related construction is upbeat,
property development-cum-con-
struction firm Ken Holdings Bhd

chief executive Sam Tan said the
outlook for private sector construction may be dampened by
persisting cooling measures introduced by the government on the
property sector.
There is always a close link between the property development
market and the private sector construction. When there is a slowdown in property development,
construction firms will also feel
the impact, he said.
There is no question that the
property market has seen softer
growth in transactions and developers have held back or postponed
their property launches. When that
happens, it is inevitable that the
private construction sector will
have fewer jobs, he said.
Despite that, Tan is hopeful that
private sector contractors will benefit from the knock-on effect of the
governmentsinfrastructuredevelopment.
I dont think property developers will be very aggressive this year
with their launches. However, we
hope that the ongoinginfrastructuredevelopment will open up new
areas andcreate [more] opportunities for property development
eventually, he said.
4 HOME BUSINESS
Iskandar Waterfront
IPO postponed
indefinitely
Company had initially targeted to be listed on Bursa Malaysia
by end of 2013 or early 2014
BY Y I MI E YONG
KUALA LUMPUR: Iskandar Waterfront Holdings Sdn Bhd (IWH),

which had postponed what would
have been one of the countrys largest initial public offering (IPO)
once, has decided to put the plan
on the back burner indefinitely,
said sources.
IWH had initially targeted to be
listed on Bursa Malaysia by end of
2013 or early 2014.
The [stock] market is still soft.
The IPO will be delayed again, but
IWH will be listed eventually, a
source close to the company told
The Edge Financial Daily.
IWH, a partnership between
between Johor state government
entity Kumpulan Prasarana Rakyat Johor (KPRJ) and IWH managing director Tan Sri Lim Kang Hoo
through Credence Resources Sdn
Bhd, is the master developer of the
4,000-acre (1,618.7ha) Danga Bay
waterfront city in Johor Baru.
Credence Resources holds a 60%
stake in IWH, while KPRJ owns the
remaining 40%.
Reuters, quoting sources, had
reported in November 2013 that
IWH had postponed a US$300
million IPO to the fourth quarter

of 2014, a year later than initially
planned, on concerns that government measures to rein in property
prices would slow demand from
well-heeled foreigners.
It has always been their plan to
list the company. Its about branding.
Floating the company can benefit
their joint venture partners and also
attract investors as well as property
buyers worldwide, the source said.
The progress of the listing is
around 80%. Most of the procedures
and preparations are in place, said
the source, adding that the timing
of the IPO will very much depend
on stock market conditions.
The current market condition is
unfavourable. The sharp fall in oil
prices has caused the share price of
oil and gas counters to dip, causing
the overall market sentiment to be
weak, the source added.
Last year, the benchmark FBM
KLCI shed 105.71 points or 5.9% to
close at 1,761.25 points on the last
day of trading on Dec 31.
When asked whether the IPO
plan would materialise within this
year, the source said: There is no
timeline fixed yet as much will depend on the market conditions.
It would not look good if the

share price dips right after it is listed. They will wait for the market to
stabilise first, the source added.
Areca Capital Sdn Bhd chief executive officer Danny Wong Teck
Meng said the IPO market for 2015
is expected to remain soft just
like last year.
The IPO market was quite soft
last year. Nine out of the 14 IPOs
dropped below their IPO issue price
last year, he added.
Looking at the statistics, coupled with concerns about falling
oil prices having an impact on the
Malaysian economy and the implementation of the goods and services tax in April, Wong said now
is not a good time to be planning
for an IPO.
He expects the equity market to
remain soft until oil prices stabilise.
IWH would have been one of the
mega IPOs anticipated for 2015,
alongside Edra Global Energy Bhd
(formerly known as 1MDB Energy
Group Bhd), Malakoff Corp Bhd,
Medini Iskandar Malaysia Sdn Bhd,
Weststar Aviation Services Sdn Bhd
and Permodalan Nasional Bhds
planned property trust listing despite overall macro concerns.
C O M PA N I E S I N T H E N E W S
BLands plan to sell stake in Great

Mall of China project aborted
KUALA LUMPUR: Based on
corporate announcements and
news flow last Friday, the companies that may be in focus today
could includeBerjaya Land Bhd
(BLand),Paramount Corp Bhd,
IJM Corp Bhd,LBS Bina Group
BhdandML Global Bhd.
BLand, controlled by tycoon
Tan Sri Vincent Tan Chee Yioun
(pic) with a 73.17% stake, has
aborted a plan to sell its 70% stake
inBerjaya (China) Great Mall Co
Ltd (GMOC), which is developing the RM7.5 billion Great Mall
of China project in
Hebei, China, to
Hong-Kong listedCarnival Group
International Holdings Ltd.
BLand said the
memorandum of
understanding
(MoU) outlining
the disposal of its
70% stake in GMOC
to Carnival Group
had lapsed on Dec
31 last year, hence
the parties are no longer obligated
to proceed with the deal.
Property developerParamount
is buying 12 contiguous parcels
of freehold land in Salak Tinggi, Sepang, Selangor, fromNCT
United Development Sdn Bhdfor
RM227.38 million or RM22 per sq
ft. Paramount said it has signed a
conditional sales and purchase
agreement with NCT last Friday for the proposed acquisition of land totalling 237.3 acres
(96.03ha).
The land, with a gross development value of RM1.1 billion, forms
undeveloped portions of an ongo-
ing mixed development scheme

known as Salak Perdana, that is
currently being undertaken by
NCT. Paramount said the land will
up its total GDV to RM9.1 billion.
IJMs wholly-owned subsidiaryIJM Construction Sdn Bhd
has bagged a construction and
completion of superstructure
works for the proposed mixed
development known as Puteri
Cove Residences in Johor Baru
for RM538.5 million.
IJM Construction has accepted a letter of award from Pearl
Discovery Development Sdn Bhdfor
the job on Plot TR2-2, Mukim Pulai,
Johor Baru, Johor.
The contract is
for 33 months and
involves the building of three blocks
of 32-storey serviced apartments
with 998 units, one
block of five-storey
small office/home
office with 56 units,
serviced apartment facilities, two
multi-storey car parks, two lobbies
and a two-storey retail centre.
Property developerLBS Bina
has declared a special dividend
of 6 sen per share, which is payable on Feb 6, with an entitlement
date on Jan 27. It has also upped
its stake inML Global Bhd, previously known asVTI Vintage Bhd,
a roof-tile steel trusses manufacturer. It bought 260,000 shares
at 43.3 sen on Dec 30 last year,
and another 450,000 shares at
43.6 sen on Dec 31. To date,LBS
Bina owns 19.777 million shares
or 22.06% stake in ML Global.
Oversea Enterprise targets 30% cafe chain contribution

BY Y EN N E FOO
KUALA LUMPUR: Oversea Enterprise Bhd, which owns andoperatesthe Restoran Overseachain,
plans to stepout of its comfort
zoneof operating Chinese restaurants and venture into a casual
dining cafe chain as it looks to
grow its current share of the food
and beverage (F&B) market and
earnings.
Oversea executive director Yu
Tack Tein said it is targeting revenue contribution from the caf
chain business to grow from 5% to
30% eventually, thereby reducing
its reliance on the Chinese restaurant business.
The group has taken the first
steps toward the goal by establishing three types of multi-chain
cafes halal restaurants, burger
restaurants and bakery cafes on
a small scale through joint ventures (JV) with relevant partners
in Malaysia and abroad.
Yu said the rationale for entering into JVs is to allow the ACE
Market-listed company the flex-
ibility of expanding its business

with its limited pool of resources
and to prevent it from incurring
high capital expenditure. Only
60% to 70% of Overseas retained
profits are set aside each year
to expand the multi-chain cafe
business.
Every year, I only have RM2
million to RM3 million to invest.
90% of this budget for the next financial year will go toward these
three concepts, he told The Edge
Financial Daily in an interview.
That is why we needed somebody that has the capacity to
help us grow without needing
the company to spend money to
build a centralised kitchen, Yu
explained.
This is understandable as Overseas earnings growth in the past
four financial years has been somewhat like a yo-yo due to its expansion plan and strategy.
The group recorded a loss of
RM4.5 million in the financial year
ended March 31, 2013 (FY13), after its initial expansion plan was
not successful. It had to discontin-
Yu said the company is venturing into

casual dining cafe chains. Photo by Chu
Juck Seng
ue the operation of one Chinese

restaurant in Malaysia and sold
another in Singapore.
In FY14, the group returned to
profitability, with a net profit of
RM3.35 million after a consoli-
dation exercise and cost control

measures.
For the six months ended Sept
30, 2014, the group posted a net
profit of RM1.37 million.
Yu is confident Oversea will remain profitable in FY15 despite its
current expansion exercise, and is
keeping a modest low single-digit
revenue growth target for the year.
He said Overseas priority now
is to create a strong presence in the
halal restaurant market.
We are originally a Chinese
restaurant [operator], but we found
that the Malay or halal market is
one that we cannot ignore. So we
are venturing into this segment
again and will focus on it over the
next two to three years, said Yu.
Oversea had first tried to penetrate the halal F&B market through
the sale of the groups mooncakes.
The attempt, Yu said, saw limited success as mooncakes are still
viewed as traditional Chinese confectionery and does not appeal to
the Malay audience.
Despite having next to zero
penetration in the halal F&B
segment after the initial attempt,

Oversea is trying again to penetrate the market with its halal
restaurants.
The group counts CNI Holdings
Bhd as one of its JV partners for
this purpose. Together, through a
JV company known as Tunas Citarasa Sdn Bhd, they have already
set up two halal food outlets in the
Klang Valley known as Otak Otak
Caf and Janji Temu @ Marks.
Plans for more outlets under
the Janji Temu @ Marks brand
are in the pipeline.
We will expand [into the halal
F&B market] more aggressively.
We have plans for that once the
business is proven to be profitable.
What we are trying to do now
is to develop the business concept,
build the team and prove that it is
workable before we expand [aggressively], Yu said.
The same, Yu added, applies for
Overseas burger restaurant business in Adelaide, Australia, and
its bakery cafe business in Taipei,
Taiwan, which is due to commence
operations early this year.
HOME BUSINESS 5
Price war to squeeze nitrile

glove margins this year
But strengthening US dollar could lift earnings
BY C H EN SHAUA FU I
KUALA LUMPUR: Malaysian glove

makers expect competition in the
nitrile glove segment to intensify
this year and are bracing themselves for a price war that will result
in thinner margins.
In an increasingly competitive
environment, fully passing on cost
increases is more difficult. But as
it stands, we believe Hartalega is
more efficient than our peers and
will be better able to weather any
cost increases, Hartalega Holdings
Bhd managing director Kuan Mun
Leong told The Edge Financial Daily
in an email.
Nevertheless, the group, which
saw its operating profit for the second quarter of financial year 2015
ended Sept 30, 2014, (2QFY15) decline to 23.17% from 31% a year
ago, has already been warning its
stakeholders that margins will likely
continue to be impacted this year.
The declining margins, together
with lower selling prices, caused its
2QFY15 net profit to contract 24% to
RM48.16 million against RM63.27
millon in the previous year. The
worlds largest glove maker, Top Glove
Corp Bhd, also expects a challenging
business environment in 2015 for the
same reason, though its chairman Tan
Sri Lim Wee Chai believes the companys new capacity for nitrile gloves
will enable it to do more business with
larger multinationals in developed
markets compared with its peers.
Top Gloves net profit in 4QFY14
ended Aug 31, 2014 eased 5.2% to
RM48.42 million from RM45.9 million a year earlier, owing to stiff competition, which resulted in margin
pressure. Nitrile gloves accounted
for 24% of the total volume of Top
Gloves production in 4QFY14 and
its major markets are Europe (31%)
and North America (27%).
Further aggravating the situation is
the knock-on inflationary effects from
last years increases in electricity and
natural gas tariffs, of which Lim said
Top Glove is still feeling the effects.
Also looming on the horizon is the
2015
OUTLOOK
goods and services tax (GST) in April.

Nonetheless, Lim believes the
industrys prospects remain promising. Top Glove expects to deliver
an improved performance in FY15
due to lower raw material prices
and favourable currency exchange
rates against the US dollar. The
global demand for rubber gloves
from developed and emerging markets is still on the uptrend and is expected to continue growing steadily
at a rate of 6% to 8% per annum.
According to RHB Research
head Alexander Chia, competition resulting in average selling
price (ASP) pressure is not the main
concern, yet. But he noted that if
supply grows too fast, price war
may emerge and glove makers may
slash their ASPs more aggressively
to increase sales volumes.
Intense competition within the
industry will exert pressure on margins as glove companies may face
challenges in passing through the
incremental costs [such as labour
costs]. Competition is unavoidable.
Those with superior margins or high
production efficiency will do better,
Chia told The Edge Financial Daily.
In a note dated Dec 31, RHB Research noted that any heightened
compeitition would not bode well
for Top Glove and Supermax Corp
Bhd, as both are margin laggards in
the industry. Nevertheless, it said
the strengthening of the greenback
against the ringgit will benefit the
industry. A 3% increase in the
exchange rate could lift the industrys earnings by approximately
2% to 4%, it said. It maintained its
overweight call on the sector as
it expects global consumption to
remain strong and to expand 8%
to 10% per annum, led by demand
Kuan: We encourage investors to look

beyond FY15. For FY16, we expect
capacity to increase by 43%.
Lim: Global demand for rubber gloves

from developed and emerging markets
is still on the uptrend.
from the healthcare segment.

Its top picks for the sector are Hartalega (target price (TP): RM7.70),
Kossan Rubber Industries Bhd (TP:
RM5.12) and Karex Bhd (TP: RM3.89).
Meanwhile, Hartalegas Kuan
said Malaysian glove manufacturers will have to rise to the challenge
of cost increases by moving up the
value chain in glove manufacturing.
The only pathway is to innovate
in the way that gloves are made and
to come out with innovative products and production technologies,
he said, citing its nitrile glove innovation as an example.
Our nitrile gloves changed the
global landscape of the glove market. Before our lightweight nitrile
glove, the worlds glove market was
dominated by natural rubber gloves
(about 95%). Today, the global market share between the two materials
is approximately 50:50, Kuan said.
Despite a weaker profit for
2QFY15, Kuan is confident Hartalega will continue to deliver growth

in the coming years. But it does not
expect significant growth in its current FY15 ending March as its Next
Generation Integrated Glove Manufacturing Complex (NGC) will only be
operational towards the end of 2014.
We encourage investors to look
beyond FY15. For FY16, we expect
capacity to increase by 43%. With
an average capacity growth of 21%
per annum for the next six years, we
expect continued growth in our earnings per share, said Kuan.
For FY16, Kuan expects Hartalegas output to increase to 18.4 billion
pieces, 43% higher than FY15.
Despite margin compression, our
profit margin is above the industry
average as a result of our high-productivity manufacturing processes,
derived from our advanced manufacturing technologies which were
developed in-house. In addition, we
expect NGC to provide a significant
increase in our productivity. NGC
will be 33% higher in productivity
compared to our existing facilities. In
the long run, this will put us in a very
good position to defend our margins
and maintain our dominance in the
nitrile glove market, Kuan said.
As the developed markets have
matured, both Hartalega and Top
Glove are looking at emerging markets, such as India and China, for
expansion. Kuan said there are vast
untapped markets, especially in
Asia, where hygiene and healthcare
awareness in some countries is still
low relative to the West.
Specifically, due to the low per
capita consumption of gloves in
China and India, Hartalega realised
the enormous potential in these
emerging markets, Kuan said.
For the same reason, Top Gloves
Lim thinks its operations in China will
contribute positively to the groups
revenue in FY15, during which it expects to a volume growth of 10%,
driven mainly by a consistently resilient demand for rubber gloves,
and ongoing quality and automation
improvement initiatives.
New Prasarana
group MD says
committed to
achieving worldclass level
KUALA LUMPUR: Azmi Abdul
Aziz, who was appointed Prasarana Malaysia Bhds group
managing director (MD) effective Jan 1, has pledged to bring
the countrys public transport
service to a world-class level.
He brings with him more
than 25 years experience in
the public and private sectors
in the public transport industry
including serving as chief development officer at the Land
Public Transport Commission
(SPAD).
He took over the duties from
Datuk Seri Shahril Mokhtar,
who was appointed the new
chief executive officer of Mass
Rapid Transit Corp Sdn Bhd
(MRT Corp).
The appointment is a massive trust and a huge challenge
in the efforts to continually
upgrade and champion the
works and good name of the
Prasarana group.
Plenty still needs to be
done to bring the countrys
public transport service to
world-class level, Azmi said
in a statement last Friday.
He listed the LRT Line Extension Project (LEP) and
preparations for managing
the new assets that are due
for delivery as the immediate
assignments.
He was referring to the remaining nine four-car monorail trains currently in the process of delivery, and the supply
of 50 new six-car trains for the
LRT Ampang Line scheduled
to commence this month.
Among the key events for
this are the scheduled midyear opening of the Bus Rapid Transit-Sunway Line; the
opening of Phase One of the
LEP Ampang Line in October;
and the initial works as the
shadow operator of the Makkah Metro, Azmi said.
We also need to ensure
continued efforts in generating income from the nonfare revenue sectors so that
they continue to improve the
financial performance of the
Prasarana group, Azmi said.
Bernama
6 HOME BUSINESS
AFBtargets double-digit growth

Plans to beef up its investment banking ops this year
BY SU L H I A ZMA N
KUALA LUMPUR: The smallest Middle-Eastern bank in Malaysia, Asian

Finance Bank Bhd (AFB), is banking on its relationship with corporate clients to grow its revenue and
funded assets by between 10% and
15% from next year onwards, said its
chief executive officer (CEO) Datuk
Mohamed Azahari Mohamed Kamil.
Our strategy is very simple: relationship, relationship and relationship. Our ambition is high but our
growth target is modest, at double
digits, in line with our current capability and capacity.
The business focus will be providing financing to corporate clients, which will mainly comprise
government-linked companies, as
well as beefing up our investment
banking operations, Mohamed
Azahari toldThe Edge Financial
Dailyin an interview.
He saidAFBs corporate financing
business in the areas of oil and gas,
shipping, aviation, infrastructure
and real estate generates a higher
profit margin, with an average of 2%.
In 2015, Mohamed Azahari expects AFB to expand its investment banking business as it seeks
fee-based income to contribute
at least 20% beginning this year.
The remaining 80% will continue

to be derived from its corporate financing, which includes treasury
business and funded assets.
We currently have the investment banking team but it has not
been formalised. We will start doing so beginning January, focusing
on capital market, where we may
look at arranging sukuk (Islamic
bond) and various other securities
instruments, as well as corporate
advisory. This is especially in the
area of mergers and acquisitions
in which we may bring investors
from the Middle East to participate, he said.
Mohamed Azahari said the
banks focus on two areas corporate financing and investment
banking is expected to increase
its efficiency and profitability, as well
as reduce its cost-to-income ratio to
50% this year from 55% currently.
With our focus on these
high-margin areas, we expectAFBto
post an improved return on equity
(ROE) that should be on par with the
midsized banks market average of
between 10% and 15% in the next
three to five years, he said.AFBs
ROE currently stands at 2.51%.
On the outlook, Mohamed Azahari saidAFBwill maintain its growth
momentum with a double-digit tar-
(From left)
Saminathan,
Toyota Capital (M)
Sdn Bhd president
Kuah Kock Heng
and Citibank region
head for treasury
and trade solutions
business in
Asia-Pacic Amol
Gupte at the award
ceremony.
Citibank bags top direct debit

service award
KUALA LUMPUR: Citibank Bhd
bagged the Top Transaction Volume for Direct Debit Service award
at Malaysian Electronic Clearing
Corp Sdn Bhds (MyClear) inaugural
Bank Recognition Awards recently.
MyClear also recognised four of
Citibanks corporate clients as 2013
Direct Debit Top Merchants. The four
were AIA Bhd, BMW Credit (M) Sdn
Bhd, Toyota Capital (M) Sdn Bhd
and AXA Affin Life Insurance Bhd.
At Citibank, we actively seek to
enable electronic payments for clients
through services integrated with their
business processes, and we are honoured that our endeavours have been
recognised, said Citibank managing
director of treasury and trade solutions Noel Saminathan in a statement.
MyClear, a subsidiary of Bank
Negara Malaysia, offers services
consisting of large value payment
and retail e-payment solutions that

allow corporations and individuals to make payments and transfer
funds effortlessly and safely.
MyClears recognition of Citibank was for its direct debit service.
Direct debit is an interbank collection service for regular and recurring payments enabling automated
collection directly from a customers
bank account at multiple banks with
a single authorisation. The service
facilitates timely settlement of bills
and invoices through pre-agreed
arrangements with banks.
Saminathan said while Citibank
is already a leader in this space, it
wants to do more in e-payments
and digital services, especially since
the bank has a unique, global platform featuring best practice services from around the world for
managing electronic transactions.
get as it has just recently returned to

the black in the financial year ended Dec 31, 2013 (FY13), with a net
profit of RM7.57 million.AFBwas
in the red for three years from FY10,
with cumulative losses amounting
to RM48.18 million.
We have gradually reduced our
exposure to small and medium enterprises, currently at a marginal
level of 5% and below. We will also
maintain our retail banking as it is.
We have no immediate plan to go
aggressive, he said.
Mohamed Azahari said AFBdoes
not expect much growth in the retail
banking sector as it sees heightened
competition and market cannibalisation. The bank currently has a branch
in Kuala Lumpur and Johor, and a
representative office in Indonesia.
AFBbegan its initial operation
with a retail banking service and
slowly branched out to other areas. We currently have three automated teller machines (ATM) that
are not linked to any inter-bank
services and we do not provide
card services (credit card or debit
card). But that does not mean we
are not growing. It just means we
are shifting our business to other
areas, he said.
AFBmay consider listing its bank
in the next five years or more. For
now, it is trying to meet the Basel III

requirements to strengthen its resilience and improve liquidity.
Basel III is a global, voluntary
regulatory standard on bank capital adequacy, stress testing and
market liquidity risk. Bank Negara Malaysia, in a document issued
in December 2011, targets to implement Basel III from 2013 until
2019. The central bank expects that
by Jan 1, 2019, commercial banks
should have a capital conservation
buffer of 2.5%, a minimum Tier-1
capital ratio of 6%, a leverage ratio of 3%, and a liquidity coverage
ratio of 100%.
It is no secret that our shareholders plan to bring the bank to the next
level via new capital attraction, which
will make the bank more liquid. But
as of now, there is no listing proposal. Maybe we will look into this in the
next five years, he said. As atSept
30,AFBhas a Tier-1 capital ratio of
20.25%.
On banking consolidation, Mohamed Azahari agreed it is good to
create a more effective and competitive banking system, but said there
is still room for a midsized boutique
bank like AFBin Malaysia.
I think AFBand other midsized
lenders play a big role in a countrys
banking landscape. We can create
our own niche and edge by offering

strategic value propositions to our
customers, he said.
Mohamed Azahari has been the
CEO of AFB since August 2008. Two
other Middle-East lenders in the
country, on the other hand, have
been changing CEOs in between
one and three years.
CEO Datuk Azrulnizam Abdul
Aziz of Saudi Arabia-backed Al Rajhi Banking & Investment Corp
Malaysia Bhd resigned in October
last year, barely after 2 years at its
helm.Kuwait Finance House Malaysia Bhd (KFH) in late November
made a surprise announcement
on the departure of its CEO Datuk
Seri Abdul Hamidy Hafiz, who has
been in office for a mere 1 years
since March 21, 2013.
Serving a Middle-East bank is
definitely a challenge as I have to
keep both my shareholders and
customers happy. But Alhamdulillah
(praise to God), I have managed to
wade through the challenges, Mohamed Azahari said with a chuckle.
Incorporated in 2005,AFBis
backed by Qatar Islamic Bank
(66.67%), Saudi Arabias RUSD Investment Bank (16.67%), Yemens
Tadhamon International Islamic
Bank (10%) and Financial Assets
Bahrain WLL (6.67%).
Splash refutes ex-Selangor MBs

allegations over water deal
BY Y E N NE FO O
KUALA LUMPUR: Syarikat Pengeluar Air Sdn Bhd (Splash), a 40%

subsidiary of Gamuda Bhd, has
dismissed a call by former Selangor
menteri besar Tan Sri Abdul Khalid
Ibrahim for the current Selangor
state administration to resist any
ludicrous and outlandish demands
from any water concession companies in the states water restructuring exercise.
Splash refuted Abdul Khalids
assertion that the previous state administration made four unchanged
offers to water concession companies, calling the RM2.8 billion
demanded by Splash appalling
and tantamount to gross injustice.
In a statement last Friday, Splash
said it had previously accepted in
principle two earlier offers from the
state based on 1 time book value
in principle. However, later offers
were much reduced by 90% and
were deemed unacceptable.
The water concessionaire said
the states valuation formula based
on 12% return on equity minus historical dividend payout is flawed.
The formula, Splash said, pays
no heed to the companys current
financial position, does not consider actual operational efficiency,
does not value remaining concession terms, favours companies that
Splash is the only one

of four concessionaires
in Selangor that has
yet to agree to the
states takeover oer
totalling RM9.65
billion for the
concessionaires.
operate longer and takes only cash
dividends into account.
It said the RM2.8 billion quoted by
Splash to the Selangor state government was based on discounted cash
flow, a universally accepted method
for the valuation of concession assets.
The states offer to Splash as stated is RM1.83 billion. However, netting off Splash loans of RM1.56 billion, the offer is worth only RM350.6
million, whereas the book value
of Splash after netting off loans is
RM2.8 billion, it said in a statement.
Further, Splash cited that six
other states, namely Melaka, Negeri Sembilan, Johor, Perlis, Penang
and Perak, have all completed their
water industry consolidation exercises based on 1 time book value.
In four of the six states, the assets acquired by Pengurusan Aset
Air Bhd were the same in value as
their liabilities. The obvious result
of the 1 time book value principle

of asset acquisition is that in all the
six states consolidation exercises,
there were no gains or losses reported by the exiting shareholders,
Splash said.
On the issue of delay in the water
restructuring exercise as pointed
out by Abdul Khalid, Splash said
the inconsistency in the offers made
by the state had caused the delay.
Splash also denied that it is less
willing to bring the issue to arbitration to avoid disclosing terms
and conditions of the privatisation
agreement which favours water
concessionaires.
It said that is agreeable to arbitration if the scope of the arbitration is not merely restricted to
the flawed equity value method of
valuation but includes universally
accepted methods of valuation.
It was responding to a letter written by Abdul Khalid that was published in a local daily on Dec 16,
2014, calling for the current state
administration to resist demands
by water concession companies to
prevent any impasse in returning
the water assets to the people, their
rightful owners.
Splash is the only one of four
concessionaires in Selangor that
has yet to agree to the states takeover offer totalling to RM9.65 billion
for the concessionaires.
ST O C KS W I T H M O M E N T U M 7
This column is an analysis done by Asia Analytica Sdn Bhd on the fundamentals of stocks with momentum that were picked up using proprietary algorithm by
Anticipatory Analytics Sdn Bhd and that rst appeared at www.theedgemarkets.com. 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.
HOMERITZ CORP BHD

(ALL FIGURES IN RM MIL)
Homeritz Corp Bhd

HOMERITZ was picked up by our momentum algorithm for the second consecutive
trading day (refer our Stocks with Momentum at www.theedgemarkets.com), after
volume rose 62% to 3.04 million shares.
The stock price has risen 5 sen or 5.8% to
91 sen on Friday.
A net exporter with products exported to
over 40 countries including Asia, Australia,
Europe and the US, Homeritz offers investors exposure to the strengthening US dollar
(USD) with some 97% of its trade receivables
denominated in USD.
Revenue for the company has grown from
RM89.8 million in FY Aug 2011 to RM112.9
million in FY2013. In the same period,
net profit increased an outsized 40% from
RM10.8 million to RM15.1 million while
EBITDA margins expanded from 15.9% to
20% due to economies of scale, increased
productivity and efficiency.
For FY2014, the company posted revenue
of RM127.2 million, boosted by recovery in

demand from its key export markets and the
strengthening USD. Net profit was RM20.2
million, a significant 33.9% increase from
the previous year.
Homeritzs valuations are fairly attractive.
The stock trades at a price-to-book ratio of
1.86 times with a trailing 12-month P/E ratio
of only 8.5 times. Return on equity (ROE) is
high at 24.5%. It has a strong balance sheet
with net cash of RM49.3 million, equivalent to
24.6 sen per share or 27.0% of its share price.
Last but not least, Homeritz offers good
yields. The company has a minimum 40%
dividend payout policy. For FY2014, Homeritz has declared a final dividend of 3.1 sen.
This brings total dividends for the financial
year to 5.1 sen per share up from 3.75
sen in FY2013 or about 50% of net profit. This earns shareholders a substantially
higher than market average net dividend
yield of 5.9%.
Valuation factor *
2.40
Fundamental factor **
1.95
Trailing 12m P/E (x)
8.50
Trailing 12m PEG (x)
0.25
P/NAV (x)
1.86
Trailing 12M Dividend yield (%)
5.52
Market capitalisation (RM mil)
172.00
Shares outstanding (ex-treasury) mil 200.00
Beta
0.98
12-month price range
0.61 - 0.95
*Valuation factor Composite measure of historical return & valuation
**Fundamental factor Composite measure of balance sheet strength &
protability
Note: A score of 3.0 is the best to have and 0.0 is the worst to have
Income statement
Turnover
EBITDA
Depreciation and amortisation
EBIT
Associates
Interest income
Interest expense
Extraordinary gain/(loss)
Pre-tax profit/(loss)
Net profit/(loss) - owners of company
Balance sheet
Fixed assets - PPE
Biological assets
Intangibles & goodwill
Cash and equivalents
Total current assets
ST borrowings
Total current liabilities
Total assets
Shareholders fund
Long term borrowings
HOMERITZ CORP BHD

RATIOS
DPS (RM)
Net asset per share (RM)
ROE (%)
ROA (%)
Turnover growth (%)
Net profit growth (%)
Net margin (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
FY12
31/8/2012
FY13
31/8/2013
FY14
31/8/2014
LATEST 4QFY14
31/8/2014
103.2
20.1
2.5
17.6
0.2
0.2
17.7
14.7
112.9
22.6
2.4
20.3
0.4
0.1
20.6
15.1
127.2
27.9
2.5
25.5
0.0
1.1
0.1
0.0
26.5
20.2
33.2
6.6
0.6
6.0
0.3
0.0
6.2
5.2
35.3
0.5
24.5
55.6
0.3
9.3
82.0
72.8
2.7
33.5
0.5
34.7
69.8
0.4
11.9
91.9
81.4
2.3
33.1
0.5
51.6
82.5
0.5
10.9
105.2
92.2
1.9
33.1
0.5
51.6
82.5
0.5
10.9
105.2
92.2
1.9
FY12
31/8/2012
FY13
31/8/2013
FY14
31/8/2014
ROLLING 12-MTH
0.03
0.36
21.66
19.29
14.94
35.96
14.23
5.95
121.34
0.04
0.41
19.61
17.39
9.36
2.85
13.39
5.85
164.78
0.05
0.46
23.33
20.55
12.64
33.92
15.92
7.57
230.87
0.05
0.46
24.48
21.61
12.64
33.93
15.92
7.57
230.96
8 I N V E ST I N G I D E A S
I N S I D E R A S I AS S TO C K O F T H E D AY
SCGM BHD
(ALL FIGURES IN RM MIL)
SCGM Bhd
SCGM is involved in, primarily, the manufacture of thermo-vacuum formed plastic packing basically, disposal plastic trays for the
food and beverage, electronics & electrical
and medical sectors.
Aside from growing demand, the company will benefit from lower raw material cost
for plastic resin. As an exporter sales to
Asia, Europe, Oceania and North America
accounted for 44% of sales in FY April 2014
SCGM will also gain from the weak ringgit.
The stock is not well known amongst the
investing community, perhaps due to its relatively small market capitalisation, currently
about RM154 million. But the company has
been doing quite well.
SCGMs underlying business looks fundamentally sound. As of 1Q2015, it has a net
cash of RM6.6 million or 8 sen per share. From
FY2010 to FY2014, revenue and net profit grew
at CAGR of 10.3% and 14.6%, respectively.
For 1QFY2015, net profit grew an outsized

13.3% y-o-y to RM3.5 million on the back of 6%
rise in revenue to RM27.3 million. Net margin
widened to 13% from an average of 11.5% in
FY2014, boosted by lower raw material cost,
increased production and economies of scale.
To further drive growth, SCGM will invest
over RM11 million to boost production capacity by 20% for FY2015. The company is adding
a new plastic cup line that will lift capacity
and sales by some 10% this year and planning
further automation to improve efficiency.
The Edge Research rates SCGM a high
Fundamental score of 3 out of 3 and Valuation score of 2.1 out of 3.
The stock is trading at a trailing 12-month
P/E of 12.4 times, low relative to prospective
growth. It has a minimum 40% dividend payout policy. Dividends totalled 10 sen per share
in FY2014, translating into a higher-than-market average net yield of 5.2%.
Valuation factor *
2.10
Fundamental factor **
3.00
Trailing 12m P/E (x)
12.41
Trailing 12m PEG (x)
0.33
P/NAV (x)
2.18
Trailing 12M Dividend yield (%)
6.25
Market capitalisation (RM mil)
153.60
Shares outstanding (ex-treasury) mil
80.00
Beta
0.89
12-month price range
0.84 - 2.44
*Valuation factor Composite measure of historical return & valuation
**Fundamental factor Composite measure of balance sheet strength &
protability
Note: A score of 3.0 is the best to have and 0.0 is the worst to have
T O N G S
MOMENTUM
P O RT F O L I O
THE local bourse fell on the first trading
day of 2015, led by banking and plantation
stocks. Trading was light with some 1.08
billion shares valued at RM0.92 billion
changed hands.
The FBM KLCI index closed 0.48% lower to settle at 1,752.77. However, market
breadth was positive with gainers outweighing losers by a ratio of 1.3 to one.
Already down 7% last year, the ringgit
weakened further against the US dollar. It
is trading at 3.51 per US dollar at the time
of writing. Falling crude oil prices and capital outflows will continue to weigh on the
ringgits performance this year.
Meanwhile, Asian stocks mostly ended higher on low trading volume while
the stock markets in China and Japan are
closed.
US markets extended losses on the last
trading day of 2014 amid weaker consumer confidence data. The Dow and the S&P
closed down 0.89% and 1.03% respectively.
Brent crude and WTI crude are hovering
around $57 and $54 per barrel respectively.
The Euro slumped to a 4 year low on
speculation of further stimulus measures
by the European Central Bank (ECB).
My portfolio started on 8 July 2014 with
a capital of RM100,000. Since then, it has
outperformed the FBM KLCI by 8.2%, registering an annualized return of 1.6%.
I kept the portfolio unchanged.
Income statement
Turnover
EBITDA
Depreciation and amortisation
EBIT
Associates
Interest income
Interest expense
Extraordinary gain/(loss)
Pre-tax profit/(loss)
Net profit/(loss) - owners of company
Balance sheet
Fixed assets - PPE
Biological assets
Intangibles & goodwill
Cash and equivalents
Total current assets
ST borrowings
Total current liabilities
Total assets
Shareholders fund
Long term borrowings
SCGM BHD
RATIOS
DPS (RM)
Net asset per share (RM)
ROE (%)
ROA (%)
Turnover growth (%)
Net profit growth (%)
Net margin (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
QUANTITY
BOUGHT PRICE
RM
9,000
0.789
FY12
30/4/2012
FY13
30/4/2013
FY14
30/4/2014
LATEST 2QFY15
31/10/2014
82.1
12.1
3.8
8.3
0.0
0.3
8.0
5.6
96.9
14.8
4.1
10.7
0.0
0.3
0.1
10.4
7.8
100.3
19.8
4.6
15.2
0.1
0.3
15.0
11.5
26.1
5.2
1.1
4.1
0.0
0.0
4.1
3.0
35.2
2.9
41.0
2.7
10.5
63.9
60.5
0.5
32.1
6.3
43.7
0.4
8.6
70.3
65.9
0.2
33.0
15.8
52.6
0.2
8.3
76.5
73.4
-
33.0
10.2
48.1
0.1
8.3
72.8
70.4
-
FY12
30/4/2012
FY13
30/4/2013
FY14
30/4/2014
ROLLING 12-MTH
0.02
0.76
9.54
8.86
9.38
(11.72)
6.83
3.89
0.62
35.75
0.05
0.82
12.41
11.69
18.00
39.65
8.09
5.06
58.30
0.10
0.92
16.49
15.66
3.52
46.54
11.45
6.31
64.30
0.12
0.88
17.92
17.02
1.70
36.74
12.14
5.80
112.97
BOUGHT VALUE CURRENT PRICE

RM
RM
CURRENT VALUE
RM
GAIN / LOSS
RM
% GAIN / LOSS
6,435.0
(669.3)
(9.4)
Shares held:
Willowglen MSC Bhd
Total
7,104.3
0.715
--------------7,104.3
--------------- --------------6,435.0
(669.3)
--------------7,104.3
--------------- --------------6,435.0
(669.3)
Shares bought:
No shares were bought today.
Total shares held
(9.4)
Shares sold:
No shares were sold today.
Cash balance
94,369.9
Realised profits / (losses)
1,474.3
Total Portfolio Returns

Annualised returns for portfolio
100,000.00
100,804.9
804.9
Portfolio Beta
Risk adjusted returns for portfolio
0.8
1.6
1.166
1.4
Performance Comparison
FBM KLCI
FBM KLCI Emas
At portfolio start
1,892.7
13,163.7
Current
1,752.8
12,035.9
Change
(7.4%)
(8.6%)
Relative portfolio outperformance

8.2%
9.4%
This is a personal portfolio for information purposes only and does not constitute a recommendation or solicitation or expression of views to influence readers to buy/sell any stocks.
Portfolio started on 8 July 2014 with RM100,000.
B R O K E R S C A L L 9
Automotive business said

to contract in first half
Automotive sector
Maintain neutral: We expect first
half 2015 (1H15) total industry volume (TIV) growth to contract 3%
to 5% year-on-year (y-o-y) to approximately 320,000 against a high
base in 1H14 (+6% y-o-y to 333,000
units) before catching up in 2H15
to meet our 2015 target of 660,000
units. This is in view that consumers
will tighten their belts and adopt
a wait-and-see approach as they
brace for higher cost of living and
uncertainties to car prices from the
goods and services tax implementation in April. Nonetheless, shortfalls in the public transportation
system coupled with the normal
replacement for old cars should

sustain the TIV level.
We like auto players with presence in the economical car segments (in view of higher cost of
living) and which are not overcrowded by intense competition
(i.e. in the B-segment). We favour
Perodua for we believe its newly-launched A-segment Axia is a
game changer, timely for potential
trading down by consumers. Globally, we see a shift in consumer
preference to sports utility vehicles
and as such, we laud Honda and
Mazda for their planned model
launches in the smaller and more
economical crossover utility ve-
hicle (CUV) segment (i.e. Honda

HR-V & Mazda CX-3) in 2015.
Auto players import cars/components in either US dollars or Japanese yen, and foreign exchange
has proven to have a material impact on auto players cost of goods
sold and margins. In view of a softer yen and stronger dollar against
the ringgit, we prefer Japanese
importers and avoid US importers.
In the past five months, the dollar
has surged 9% against the ringgit
to US$1 per RM3.50 and our forex
research expects an average US$1
per RM3.50 in 2015. We expect the
yen-ringgit exchange rate to stay
soft, averaging 100 per RM3 in
2015 with recently re-elected Japanese Prime Minister Shinzo Abe

expected to continue the stimulus
and quantitative and qualitative
easing programme.
We favour MBM Resources Bhd
and Berjaya Auto Bhd primarily for
their (i) presence in the economical
car segment (i.e. A and CUV segments respectively), (ii) positive yen
exposure and (iii) undemanding
valuations. Meanwhile, we avoid
raising exposure in UMW Holdings
Bhd and Tan Chong Motor Holdings Bhd for their (i) dependence
in the competitive B-segment and
(ii) negative US dollar exposure.
Maybank IB Research, Jan 2
Automotive sector
STOCK
UMW Hldgs
Tan Chong
BAuto
MBMR
MCap WT avg
REC
SHR
PX
(RM)
MKT
CAP
(RM MIL)
TP
PER (X)
PER (X)
PER (X)
P/BV (X)
P/BV (X)
ROE (%)
ROE (%)
(RM)
CY13A
CY14F
CY15F
CY13A
CY14F
CY14F
CY15F
NET YIELD
(%)
CY15F
Hold
Hold
Buy
Buy
10.96
3.28
3.30
2.90
12,805
2,141
2,781
1,133
11.20
3.50
4.20
3.50
14.8
7.3
25.3
8.2
15.1
15.2
25.6
14.0
10.3
15.9
15.1
15.9
10.7
7.5
14.1
2.0
0.8
9.3
0.8
2.9
1.9
0.8
5.9
0.7
2.3
12.6
3.0
45.7
7.2
16.1
11.9
4.7
43.9
9.3
15.7
3.3
1.8
3.9
3.3
3.2
Telcos to
outperform this
year as investors
seek earnings
stability
Telecommunications sector
Maintain overweight: Mobile service revenue is unlikely
to have registered growth in
2014, owing to monetisation
challenges faced by both Maxis
Bhd (organisational restructuring and fixing its prepaid
business) and Celcom Axiata
Bhd (unstable IT systems). As
we head into 2015, mobile revenue growth should resume as
operators overcome monetisation challenges and potentially benefit from the goods and
services tax (GST).
Meanwhile, the competitive
intensity in the mobile space
would likely increase going forward, as 1) U Mobile Sdn Bhd
maintains its pursuit of revenue
share, and 2) Telekom Malaysia Bhd (TM)-P1 prepares to
roll out long-term evolution
services. For now, the big three
remain cognisant of the need to
not compete on pricing.
Source: Maybank KE
CPO production affected by floods

THE EDGE FILE PHOTO
Plantations sector
Maintain neutral: The government expects crude palm oil (CPO)
production to come down by 15%
to 20% due to the severe flood situation in the East Coast. A total of
7,500 smallholder estates covering
24,000ha and 230 oil palm estates
spanning 160,000ha were affected.
As a result, CPO inventories were
also expected to be reduced to two
million tonnes from 2.2 million
tonnes. It unexpectedly disrupted the CPO supplies in the short
term. The worst flood in the East
Coast due to the monsoon season
affected fresh fruit bunch (FFB)
harvesting and milling activities
as well as transportation.
The flood situation in Kelantan,
Terengganu, Pahang, Perak and
Johor, which collectively account
for 40.8% of Malaysian oil palm
plantation, improved last week.
These five states also contribute
about 44% of total CPO production
in Malaysia. We think that it could
at least take one to two months for
the production to normalise.
Maxis went through operational

hiccups in 2014, and
underperformed its peers. Photo
by Sam Fong
In contrast with other plantation counters, Felda Global Ventures Holdings Bhds (FGV) share
price had unexpectedly tanked
34% over the last month despite
the recovery of CPO prices. Besides
selling pressure from two major
shareholders, the Employees Provident Fund and Kumpulan Wang
Persaraan, the groups earnings
were also clouded by the exposure
of plantation land to flood-hit areas. This is likely to affect its upcoming quarterly results. As of Dec
29 last year, the group estimated
a total loss of RM21 million due
to flood damage and loss of FFB
production totalling 11,000 tonnes,
which is about 0.2% of estimated
annual production.
Based on the current share price,
the company is trading at only 16
times to our financial year 2015

(FY15) forecasts compared with
industry average of 18 to 19 times.
CPO prices are likely to recover
further driven by lower CPO inventories for December 2014. They
have recovered more than 7.5%
since early December. We think that
they could easily go above RM2,400
per tonne in the short term. PublicInvest Research, Jan 2
Plantation sector
COMPANY
PRICE @
DEC 31 (RM)
MKT CAP
(RM MIL)
2.18
10.00
4.80
22.80
9.19
3.88
2.31
7,953.1
7,696.0
30,660.5
24,327.6
55,729.1
1,437.5
3,130.1
Felda Global Ventures

Genting Plantations
IOI Corp
KL Kepong
Sime Darby
Ta Ann
TSH Resources
Source: : PublicInvest Research estimates
EPS (SEN)
2014F
2015F
EPS GROWTH (%)

2014F
2015F
PER (X)
2014F
2015F
11.5
42.4
22.0
95.2
45.5
27.0
9.3
(35.7)
8.4
9.4
13.3
(10.6)
75.3
17.8
19.0
23.6
21.8
23.9
20.2
14.4
24.8
13.6
50.0
21.0
108.1
46.4
33.9
10.8
18.2
17.9
(4.5)
13.5
1.9
25.5
16.5
16.0
20.0
22.9
21.1
19.8
11.4
21.4
P/BV (X)
2014F
2015F
1.2
2.1
5.3
3.1
1.9
1.4
2.6
1.1
1.9
4.8
2.9
1.8
1.3
2.6
ROE (%)
2014F
2015F
8.1
8.8
22.4
13.1
9.3
9.6
10.8
9.4
9.7
21.4
14.0
9.2
11.5
11.5
DIV. YLD (%)

2014F 2015F
3.6
1.3
0.8
2.2
3.3
4.3
0.7
4.3
1.5
0.5
2.2
3.4
5.4
0.9
Sector valuations remain

uncompelling (both DiGi.
Com Bhd and TM set new
enterprise value over earnings
before interest, taxes, depreciation and amortisation [EV/
Ebitda] highs in 2014), but as
we repeatedly noted in the
past, telecoms are increasingly becoming liquidity proxies.
As general risk aversion sets
in, we expect the telecoms
sector to outperform in 2015
as investors gravitate towards
sectors with strong earnings
stability.
Our preferred sector picks
are Axiata Group Bhd and Maxis, essentially the laggards of
2014. Both went through operational hiccups in 2014, and
thus underperformed their
peers. However, operations
for both look set to normalise heading into 2015, and we
expect their share prices to be
rerated. Conversely, DiGi, TM
and Time dotCom Bhd are all
trading near peak valuations
given their strong share price
run-up in 2014. Thus we see
limited near-term upside for
these stocks. Maybank IB
Research, Jan 2
10 B R O K E R S C A L L
Bank loans grew 7.7% YTD

Banking sector
Maintain neutral: As at November
2014, the banking system loans
grew by 7.7% year-to-date (YTD),
which translated into an annualised
loan growth of 8.4%. This was slightly ahead of our 2014 target of 8.2%.
On a month-on-month (m-o-m)
basis, loans grew at 0.8% (vs. +0.9%
m-o-m in October 2014), underpinned by both business loans and
household loans at the same rate
of +0.8% m-o-m. Economic sectors
such as utilities, logistics, real estate, construction and households
underpinned stronger loan growth
against the systems +9.3% year-onyear (y-o-y) as at November 2014.
Overall, November 2014 loan indicators appeared more negative,
with approval and disbursement
declining by 5.8% and 9.4% m-o-m
respectively while new applications
were up 5.6% m-o-m, driven by the
business segment. All in all, the
11-month 2014 (11M14) loan repayments (+14.2% y-o-y) remained
ahead of total loan disbursements
(+12.4% y-o-y), hence pressuring
the systems loan growth (financials,
Banking peer comparison

RATING PRICE (RM)
DEC 31
MKT CAP
(RM MIL)
FYE
AFG
Hold
4.70
4.90 1,548
7,276
AMMB
Sell
6.60
4.80
3,014 19,894
CIMB
Hold
5.56
5.00 8,337 46,351
HLB
Buy
13.98 15.50
1,799 25,147
Maybank
Hold
9.17
8.00
9,151 83,917
PBB
Buy
18.30 20.00
3,852 70,498
RHB Cap
Hold
7.62
6.90 2,573 19,602
Affin
Not rated
2.90
1,943
5,634
BIMB
Not rated
4.07
1,067
4,342
MBSB
Buy
2.43
2.75 2,689
3,783
Banking sector weighted average (ex MBSB & PBB)
Banking sector weighted average
-
Mar
Mar
Dec
June
Dec
Dec
Dec
Dec
Dec
Dec
-
STOCK
PT
(RM)
Note: Pricing as of close on Dec 31, 2014
manufacturing and construction

are key sectors with high repayments on a y-o-y basis).
We believe that higher funding
cost and availability of offshore
financing were the key factors
which suppressed loan growth.
Banks with bigger exposure to
the corporate segment, Malayan Banking Bhd (Maybank) and
SHARES
O/S (M)
PER (X)
CORE EPS (SEN)
P/BV (X)
ROE (%)
NET YIELD (%)
NET DPS (SEN)
CY14E
CY15E CY14E
CY15E CY14E
CY15E CY14E
CY15E FY14E
FY15E FY14E FY15E
12.7
15.5
11.8
12.3
13.0
16.4
9.5
8.8
17.3
7.6
12.36
12.97
12.6 37.0
14.2 42.6
11.9 47.1
11.4 114.1
14.0 70.3
16.4 111.9
10.4 80.3
7.8 32.8
16.6 23.5
7.7 31.8
12.37
12.98
-
CIMB Group Holdings Bhd could

face the risk of weaker than expected loan growth.
In our view, despite the slowing
momentum in the credit market,
outperformers (with above industry loan growth) such as Public
Bank Bhd (group annualised loan
growth at 10% against industry at
8.4%) stands out given its minimal
Revenue
Operating costs
Ebitda
Ebitda margin (%)
Depn & amort
Ebit
Interest expense
Interest & invt inc
Pre-tax profit
Tax
Tax rate (%)
Net profit
Core net profit
EPS (sen)
Core EPS (sen)
Source: CIMB, Company reports
1.6 14.0
1.3 11.5
1.2 11.7
1.5 14.3
1.6 13.2
2.4 16.4
1.0 11.6
0.7
8.9
1.0 12.3
1.3 24.3
1.31 12.38
1.47 13.26
13.0
9.7
10.3
13.6
11.7
15.1
9.7
8.9
13.3
17.6
11.00
11.79
4.3
3.6
3.4
2.9
5.2
2.9
1.3
4.3
1.4
3.8
3.91
3.66
4.3
3.0
3.3
2.8
4.7
3.0
1.3
4.7
1.7
3.9
3.62
3.48
20.0
24.0
18.7
41.0
48.0
53.0
10.0
12.6
5.8
9.3
-
20.0
20.0
18.6
38.6
43.0
55.0
10.0
13.7
6.8
9.4
-
exposure to corporate lending (at

10.9% of portfolio) while simultaneously having a relatively established
franchise in retail lending. Even
Maybanks Consumer Financial
Services division continues to perform well 9M14 loans grew at an
annualised rate of 9.5%, and hence
cushioned the impact of the slowdown in the corporate segment. In
fact, the system household loan

growth remained steady (with YTD
growth of 9.4%, equivalent to an
annualised growth of 10.3%) with
no severe pullback despite Bank
Negara Malaysias macroprudential
measures vis--vis business loans,
which has only grown by 5.5% YTD
(annualised 6%). AffinHwang
Capital Research, Jan 2
Increased newspaper prices may

improve Media Primas margins
Media Prima Bhd
FYE DEC (RM MIL)
Cyparks Pajam solar farm.
Cypark declares dividends post annual general meetings.

We expect more RE projects to
be secured by Cypark in 2015 as the
government aims to increase contribution from RE sources to 10% of
total generation capacity by 2020.
This implies that there will be more
projects beyond the feed-in-tariff
(FiT), which will give opportunities
for Cypark to expand its RE capacity
further. We expect its main focus to

be on solar projects although we do
not discount the possibility of other
types of RE, such as biomass or biogas, which it is currently executing at
Ladang Tanah Merah (LTM).
Cyparks LTM project will add
more RE capacity as it will produce
electricity using biogas and biomass
generated from the waste that it collects. CIMB Research, Jan 2
Cypark Resources Bhd

FYE OCT (RM MIL)
1.7
1.4
1.3
1.6
1.6
2.6
1.1
0.7
1.3
1.4
1.41
1.59
Source: Affin Hwang estimates, Bloomberg
Cypark to expand into green tech

Cypark Resources Bhd
(Jan 2, RM2.08)
Maintain add with unchanged
target price of RM3.09: Cyparks
fourth quarter 2014 (4Q14) revenue
declined 11.8% year-on-year (y-o-y)
as its environmental engineering divisions revenue fell 51% y-o-y. The
decline in revenue was mainly due
to the wrapping up of Phase 1 of one
of its projects while Phase 2 will only
commence in financial year 2015
(FY15). Its other divisions continued
to show improvement, particularly
its renewable energy (RE) division,
where revenues surged 41% y-o-y
to RM8.2 million in 4Q14 as Cypark
continued to expand its capacity.
For the full year, Cyparks revenue
increased by 7.4% y-o-y to RM237
million while core net profit grew
by 11.2% to RM39.9 million, driven by tax savings from RE-related
tax incentives. No dividends were
declared which is unsurprising as
37.2
46.5
46.5
123.0
65.6
111.3
73.4
37.3
24.5
31.4
-
4Q
FY14
4Q
FY13
Y-O-Y %
CHG
3Q
FY14
Q-O-Q %
CHG
4QFY14
CUM
4QFY13
CUM
Y-O-Y %
CHG
PREV
FY14F
50.0
(35.8)
14.3
28.5
(3.4)
10.9
(3.5)
0.4
7.8
(1.4)
18.3
6.4
6.4
3.5
3.5
56.8
(38.8)
16.5
29.1
(2.7)
13.8
(2.9)
0.9
11.8
(2.9)
24.4
8.9
8.9
5.4
5.4
(11.8)
(7.8)
(13.5)
(1.9)
22.8
(20.8)
21.2
(53.2)
(33.6)
(50.3)
(25.2)
(28.2)
(28.2)
(35.8)
(35.8)
66.6
(47.7)
18.9
28.4
(3.4)
15.5
(4.4)
1.7
12.9
(0.7)
5.7
12.1
12.1
7.6
7.6
(24.8)
(25.0)
(24.5)
0.5
0.3
(29.8)
(20.7)
(74.8)
(39.0)
96.6
222.5
(47.2)
(47.2)
(54.2)
(54.2)
237.0
(167.9)
69.1
29.2
(13.0)
56.1
(14.9)
1.8
43.0
(3.1)
7.1
39.9
39.9
21.7
21.7
220.7
(158.1)
62.6
28.4
(7.7)
54.9
(14.3)
2.4
43.1
(7.2)
16.6
35.9
35.9
21.8
21.8
7.4
6.2
10.4
2.8
70.2
2.1
4.6
(24.2)
(0.2)
(57.3)
(57.2)
11.2
11.2
(0.4)
(0.5)
215.6
(124.6)
91.0
42.2
24.8
66.2
(16.4)
3.1
52.9
(6.0)
11.3
45.7
45.7
28.6
28.6
Revenue
Operating Ebitda
Net profit
Core EPS (RM)
Core EPS growth (%)
FD Core PER (x)
DPS (RM)
Dividend yield (%)
EV/Ebitda (x)
P/FCFE (x)
Net gearing (%)
P/BV (x)
ROE (%)
% change in core
EPS estimates
CIMB/consensus EPS (x)
2012A
2013A
2014F
2015F
2016F
1,698
593.2
209.3
0.19
(2.1)
9.03
0.19
10.7
2.68
4.65
(10.0)
1.23
14.0
1,723
591.4
214.2
0.20
0.8
8.96
0.17
9.4
2.78
4.17
(7.1)
1.17
13.4
1,589
493.9
156.2
0.14
(27.7)
12.40
0.09
4.8
3.19
5.02
(11.9)
1.13
9.3
1,628
519.0
178.1
0.16
14.0
10.87
0.12
6.9
2.93
4.84
(14.9)
1.10
10.2
1,661
546.4
202.5
0.18
13.7
9.57
0.14
7.8
2.66
4.48
(18.1)
1.07
11.3
0.00
1.02
2.48
1.01
4.67
1.05
Source: CIMB, Company reports
Media Prima Bhd

(Jan 2, RM1.76)
Maintain hold with lower target
price of RM1.80: Media Prima
raised the cover prices of its Malay
and English newspapers effective
Jan 1. Both the cover prices of Malay-medium newspapers Berita
Harian and Harian Metro (HM)
increased by 20% or 30 sen from
RM1.50 to RM1.80 for Peninsular
Malaysia, while the cover price
of HM was increased by 33% or
50 sen for Sabah and Sarawak. In
addition, the cover prices for its
English newspaper New Straits
Times was raised by 25% or 30 sen
to RM1.50 from RM1.20 for Peninsular Malaysia and by 11% or 20
sen for Sabah and Sarawak.
We are positively surprised by
the companys decision to raise
its cover prices amidst market
uncertainty and soft advertising
expenditure. We estimate that

the price hike could improve the
groups print margin and increase
its financial year 2015 (FY15) and
FY16 earnings per share (EPS) by
5% to 6% if the group can maintain
its circulation volume. Nevertheless, we see a potential 10% to 20%
drop in circulation volume on top
of the already declining trend in
print circulation, which may reduce the positive impact of the
newspaper price hike. The company had also recently completed its mutual separation scheme
which could bring annual savings
of about RM45 million, based on
a 10% headcount reduction.
We maintain our hold rating
due to its attractive FY15 yield of
6.9% and strong balance sheet
position with a healthy free cash
flow generation. CIMB Research, Jan 2
12 H O M E
30 bodies from AirAsia

jet tragedy recovered
Some still strapped in their seats, many more may be in fuselage of aircraft
SURABAYA: Thirty bodies of
mostly Indonesian passengers
and crew on Indonesia AirAsia
flight QZ8501 have so far been
recovered, including some still
strapped in their seats. Many more
may be still trapped in the fuselage of the aircraft, media reports
said yesterday.
Channel News Asia reported
that one more body was found
and recovered yesterday.
The body was spotted by personnel on RSS Persistence at
7.58am and recovered on board
the ship at 8.46am Indonesian
time, the report said, citing a
statement from Singapores Ministry of Defence (Mindef ) in a
statement. The body was found
within the Republic of Singapore
Navys designated search area in
the Java Sea.
It is not clear yet if the victim
was a male or female, according
to a Channel News Asia reporter
on board RSS Persistence.

The Indonesian authorities have
been informed and arrangements
will be made to deliver the body
to the authorities, said Mindef.
Indonesian officials believe
they are close to a major breakthrough after pinpointing four
large objects on the sea floor
thought to be parts of the Airbus
A320-200 that crashed a week
ago with 162 people on board,
Reuters reported.
The suspected wreckage is lying in water around 30 metres
deep, which experts say should
make it relatively straightforward
to recover if the rough weather
that has hampered the search
all week abates, the report said.
Efforts to capture images with
remote operated vehicles (ROVs)
were frustrated on Saturday by
poor visibility.
Speaking at yesterdays morning briefing for pilots, Air Force Lt
Col Johnson Supriadi said efforts

would be divided between recovering bodies and locating wreckage and the all-important cockpit
voice and flight data recorders.
Weather should provide the
search effort with a window of opportunity today (yesterday), with
lower waves expected for the next
two days, Reuters quoted Rukman
Soleh, weather bureau chief in
Pangkalan Bun, as saying in the
southern Borneo town where the
search operation is based.
Until investigators can examine the black box flight recorders
the cause of the crash remains
unknown, but the area is known
for intense seasonal storms and
Indonesias meteorological bureau has said bad weather was
likely a factor.
A source close to the investigation told Reuters radar data appeared to show the aircraft made
an unbelievably steep climb be-
fore it crashed, possibly pushing

it beyond the A320s limits.
The Indonesian captain, a former air force fighter pilot, had
6,100 flying hours on the A320
and the plane last underwent
maintenance in mid-November,
according to Indonesia AirAsia,
49% owned by AirAsia Bhd.
The crash was the first fatal accident by the AirAsia budget airline
group, whose Indonesian affiliate
flies from at least 15 destinations
in the sprawling archipelago.
The airline has come under
pressure from Indonesian authorities, which have suspended its Surabaya to Singapore operations, saying the carrier only
has a licence to fly the route on
Mondays, Tuesdays, Thursdays
and Saturdays.
Indonesia AirAsia said it would
cooperate with the transport ministry while it investigates the licence.
Agencies
Palanivel trying to have MIC deregistered

BY MELATI A JALIL
KUALA LUMPUR: MIC president

Datuk Seri G Palanivel has been
accused of deliberately trying to
deregister the party as there is no
initiative taken towards re-election as requested by the Registrar
of Societies (RoS).
Former MICs central working
committee (CWC) Datuk R Ramanan, who was among key party
members ousted by Palanivel on
Saturday, said the party is at risk
of being deregistered and the party president appeared reluctant to
hold a re-election, and open the
presidents post for contest.
Palanivels move comes in the
wake of a decision by the RoS on
Dec 5 to nullify the election of three
vice-presidents and 23 members of
the central committee at the party

elections in 2013.
The RoS recommended that the
posts be re-elected within 90 days,
following alleged irregularities and
breach of the partys constitution
and the Societies Act.
I was shocked when Palanivel
said in a meeting that he did not
want the presidents post to be contested, Ramanan said.
He said in the meeting, Palanivel promised to meet the RoS with
his deputy president but had gone
there alone instead of two days later after being advised by his wife,
Datin P Kanagam.
He said all this while, it was Kanagam who was responsible for making many party decisions during
Palanivels absence.
This party is being led by Da-
tin Seri Kanagam ... not Palanivel.

Many party decisions were made
in the presidents house without
his presence.
If Kanagam believes she can
run and manage this party, then
she must contest. Dont hide behind her husband, said Ramanan.
In order to resolve the issues
plaguing the party, he urged deputy
president Datuk S Subramaniam and
vice-president Datuk M Saravanan
to step forward and save the 68-yearold party from being deregistered.
On the reason he was dropped
from the CWC, Ramanan believed
it was because he had spoken out
in meetings on the partys need for
fresh elections and change.
Fresh elections are still the best
avenue, he said. The Malaysian
Insider
said Jennifer Stevens, executive

editor of InternationalLiving.com.
Theyre safe, offer good value
and are places you can settle in with
relative ease, she announced the
results in a statement.
Its full report on Malaysia said,
inter alia: Influences from across
Asia and beyond have melded together here to create an extraordinary cross-cultural melting pot
of custom, dress, architecture and
cuisine.
The countrys diverse ethnic
mix makes being a stranger here
easy. Whether you live in bohemian Penang or Kuala Lumpur, the

countrys hip capital, youll meet
friendly locals who are happy to
stop and chat and welcome you
into their home.
People are accepting ... just ask
the international mix of expats all
on the same journey as you ... and
happy to share.
You certainly wont go short
of anything in Kuala Lumpur, or
the other popular expat hangout,
Penang Island.
Malaysia has both public and
KUALA LUMPUR: The KL Car-Free

Morning programme to promote a
greener Kuala Lumpur as well as a
healthy lifestyle and unity among
city folk is to be held twice a month
beginning this year.
The programme, which enters its
second year in 2015, will now be held
on the first and third Sunday, said
Federal Territories Minister Datuk
Seri Tengku Adnan Tengku Mansor.
The programme was held only
on the first Sunday of the month
last year.
Tengku Adnan spoke at the
launch of the KL Car-Free Morning 2015 at the Kuala Lumpur City
Hall Square here.
At the same event, he also
launched the Fly the Federal Territories Flag campaign in view of
Federal Territories Day on Feb 1.
The campaign promotes flying of
the flag for a month.
Tengku Adnan told reporters
that this years Federal Territories
Day would be celebrated without
much fanfare because the country
was still recovering from the severe
floods that had struck several states.
As of yesterday morning, more
than 50,000 people were still at evacuation centres in several states, including Kelantan, Pahang and Perak.
Kuala Lumpur mayor Datuk Seri
Ahmad Phesal Talib said City Hall
was striving to build more bicycle
lanes in the city.
We will also provide bicycle
lanes in areas within the city, such
as Jalan Raja Laut and Bukit Bintang, because we realise that there
are people already cycling in the
city, he said. Bernama
IGP deflects
questions
about report
Ramanan is accusing the party
president of being reluctant to open the
presidents post for contest. Photo by
Nazir Sufari /The Malaysian Insider
Malaysia voted third best place to retire

KUALA LUMPUR: Malaysia has
been voted the third best place
in the world to retire in. The top
spot in the 2014 Retirement Index
went to Panama and Ecuador was
in second spot.
The index was compiled by International Living magazine, which
has been scouring the globe for the
best retirement destinations for
over 30 years.
The worlds top retirement havens for 2015 may dot the landscape
from Asia to Latin America to Europe, but they share certain assets,
KL extends carfree mornings

to two Sundays
a month
private healthcare with medical

expertise on a par with Western
countries.
Most hospitals and healthcare facilities are staffed by English-speaking professionals with
international qualifications. Internet coverage here is on a par with
services in France and Italy the
cost of living is cheap and its easy to
live here (English is widely spoken).
And with some of the worlds
most stunning white-sand beaches,
there are a lot of likes about Malaysia. Bernama
KUALA LUMPUR: The nations top

cop has refused to comment on allegations that police made a mistake
on its report about alleged gambling
kingpin Paul Phua Wei Seng and his
alleged underworld ties.
Inspector-General of Police Tan
Sri Khalid Abu Bakar instead advised Phua to focus on his illegal
bookmaking case in Las Vegas, the
United States.
Since the matter is being heard
in US courts, I do not wish to comment, he told an online news portal.
He said police were in touch
with the Federal Bureau of Investigation, which is handling the case
against Phua.
I can confirm that we are in
communication. My advice to Phua
is to focus on the charges [against
him], Khalid told Malaysiakini.
Phua and his son, Darren Phua
Wai Kit, were arrested in Las Vegas
last June during the World Cup
for conducting gaming activities
without a licence. The Malaysian Insider
14 H O M E
MO
Sluggish response to
floods raises questions
The lack of support for Kelantan victims could turn the disaster into a watershed
moment for the state or the federal government
BY A ZRI L A N N UAR
otal and utter devastation this, in essence,

describes the situation in the East Coast,
which bore the brunt
of the worst flooding to
hit the country in decades. An estimated 150,000 people have been affected, and hundreds of homes lost.
Entire villages have been practically
wiped out in Kuala Krai, Manek Urai
and Dabong, among the worst hit
areas in Kelantan.
Roads and bridges have been destroyed and communication lines
cut. Wireless telecommunication
has been reduced to the most basic levels. Electricity was cut off for
days and treated water supply is
still not back.
The only time I have seen a disaster on this scale was the earthquake
in Padang, Indonesia, about five
years ago. For my editor, Terence
Fernandez, the scenes of houses
piled up on top of one another compare with the scenario in Aceh following the tsunami of 2004.
A scene closer to home with a
similar impact but on a smaller
scale would be the Bukit Antarabangsa landslide that took several
lives during Hari Raya Haji in 2009.
However, the difference between
all these disaster areas and the chaos we have witnessed in Kuala Krai
and Manek Urai is quite simple: The
aftermath of the other disasters was
managed expeditiously.
It would be unfair to make a comparison between Padang and Aceh
and the situation here as the devastation in those two places was more
widespread and they received far
more international aid.
Even so, the response to the two
disasters was still more efficient although the magnitude of the disasters in terms of lives lost and area
affected was bigger.
My comparison is closer to home
the Bukit Antarabangsa landslide.
Comparatively, the tragic incident in 2009 happened on a far
smaller scale than the widespread
chaos of the year-end floods of 2014
which affected nine states.
However, the Bukit Antarabangsa landslide brought out the military engineering corps and a strong
military and police presence. The
authorities were there in full force
to organise everything.
Admirably, the armys engineering corps quickly constructed a ramp to replace a destroyed
bridge in barely a day to facilitate
search and rescue operations.
The police ensured smooth traffic and looked to it that everyone
had shelter. This gave the victims
a sense of security that some-
The oods saw the damage of many vehicles. Photos by Terence Fernandez and Azril Annuar
The Manek Urai rail bridge looking like a scene straight out of a horror ick.
one was in charge and looking out

for them.
As Bukit Antarabangsa is in my
neighbourhood, I saw first hand
how organised the Malaysian military and police force can be. They
are more than capable of organising
this kind of relief effort.
My questions are: Why are Kuala
Krai and Manek Urai in total chaos?
Why are they not managing traffic in
Manek Urai where tourists clog up
the narrowed and destroyed roads,
snapping photos, taking selfies and
impeding relief efforts?
Worse still, these visitors might
put themselves in danger as they
arrive not in four-wheel drives but
in small sedans or motorcycles that
can easily get stuck in the slurry
and mud left in the wake of what
the locals have dubbed the Adik
Tsunami.
Where is the Engineering Corps
to build ramps and replace destroyed or damaged bridges and
roads so that remote areas can have
some access to food, shelter, medicine and basic necessities? Why are
they not deploying their teams en

mass to repair the water utilities so
that folks here can have clean water?
Where are the police? Since arriving in Kuala Krai on Dec 31, I
hardly saw a police officer on duty
throughout the entire town and
its outskirts. Why must business
owners sleep outside their shops
to ward off looters?
Granted, the Kuala Krai police
may have been incapacitated as
the floods inundated the headquarters and adjoining barracks,
destroying many assets including
patrol cars.
However, if an emergency was
declared, the army would be patrolling the streets to maintain law
and order.
Also, why is it that my editor and
I are able to send relief supplies to
remote areas with only a four-byfour pick-up truck, courtesy of a
corporate sponsor, whereas many
victims did not get help from the
authorities although the security
forces are much better equipped
to do a better job?
Flood victims who have lost their homes and have nowhere to go.
This family is sheltering under a tarpaulin.
We came here in an individual capacity to render what small

aid we could as this is Fernandezs
hometown and his parents home
was inundated as well. Yet unlike
the well-equipped authorities, two
journalists with a few friends man-
aged to find some remote areas

which have not received any aid
since the disaster struck.
What happened to the armys
Logistics Corps who should know
which remote outlying areas would
need aid to be sent?
Ku
Mi
Ind
ham
me
wo
H O M E 15
M O N DAY JA N UA RY 5 , 2015 T HEED G E FINA NCIA L DA ILY
A man performing prayers amid the devastation in Kuala Pertangs destroyed mosque.
Where are the police or military needed to organise Manek Urais chaotic trac?
A house in Manek Urai destroyed and washed up on the street.
1Mindef Volunteer
Wave deployed to
assist aid efforts
A scene of devastation in Manek Urai.
Aid nally arriving in Dusun Bunut via a pair of reporters, including Fernandez (left).
eas
aid
mys
ow
uld
Last, I read, before heading to

Kuala Krai was that Jeli MP and
Minister of International Trade and
Industry Datuk Seri Mustapa Mohamed has admitted the governments weaknesses in handling the
worst flooding in decades.
If this is so, why has the prime
minister not declared an emergency in areas like Kuala Krai? After all,
he cut short an important meeting with the US president to return
home in our time of need. He even
recalled members of his cabinet
who were overseas to come home
and do their duty.
Even so, during a national disaster, should these ministers not cut
short their travel and return home
without being told to?
The government has to act impartially to avoid being accused
of focusing assistance on its vote
banks. Have our politicians forgotten their oath of office to serve all
regardless of affiliation?
It is bad enough that the government is accused of being partial in
distributing national development.
Here, there is talk that relief is also
apportioned along party lines, as
some flood victims have alleged.
After normalcy returns, it would
be important to find out if there is
any truth in such talk.
For the PAS-held state for the
last 25 years, it is possible that the
flood havoc may make the people
of Kelantan think about a change.
But, at the end of the day, the
disappointing lack of support for
the victims of the East Coast floods
could turn the disaster into a watershed moment for either the state
or the federal government.
KOTA BARU: The Defence Ministry deployed its team of volunteers

yesterday to assist states entering
the post-flood phase.
Defence Minister Datuk Seri
Hishammuddin Hussein said they
are focusing on Kelantan where
2,500 volunteers comprising National Service trainees, Territorial
Army personnel and ex-servicemen were sent to badly affected
areas.
Our volunteers will help with
the clean-up, which includes
rebuilding houses which were
damaged in the recent floods,
he told reporters after launching
the 1Mindef Volunteer Wave at
the 8th Brigade Camp, Pengkalan
Chepa, yesterday.
Hishammuddin said some of
the volunteers were already in
Manik Urai, Kuala Krai, to help
residents and clean up schools
which will open on Jan 11.
I will also head over to Manik
Urai after this to oversee the situation and join the team of volunteers there, he said, adding that
his ministry will cooperate with
other agencies to facilitate the reconstruction of homes destroyed
in the disaster.
In another development, the
government has assured those
who lost their homes or whose
houses are badly damaged by the
floods in the state that they will
move into temporary settlements
before school starts on Jan 11.
Kelantan Flood Disaster Com-
mittee deputy chairman Tan Sri

Shukry Mohd Salleh said those
currently sheltering in schools will
be housed temporarily at community halls, the Gua Musang civic
centre and army camps.
The government will also provide tents for flood victims, while
trying to identify suitable sites for
the construction of transit houses,
he told reporters after chairing the
committee meeting yesterday.
Shukry, the Prime Ministers
Department Implementation
Coordination Unit (ICU) director-general, said the temporary
settlement would be equipped
with basic necessities, including
clean water.
He said the restoration of power supply to the state was 97%
completed and the remaining
3% would be completed within
the next five days.
Shukry said the restoration
of water supply by Syarikat Air
Kelantan Sdn Bhd was 84.2%
completed as 23 of 35 water treatment plants resumed operations,
while the remaining 12 plants
are still being repaired and are
expected to resume operation
in nine more days.
He said the State Education Department had also decided that all
students affected by flood do not
have to wear uniforms to school.
Right now, he said, more volunteers are needed to help clean
houses and public buildings affected by the floods. Bernama
16 H O M E B U S I N E S S
WEEK
IN FOCUS
1
(From left) Xingquan International Sports Holdings Ltd non-executive director Ooi Guan Hoe,
chief financial officer Teo Cern
Yong and chairman and chief executive officer Datuk Qing QuanWu at the annual general meeting in Kuala Lumpur on Dec 29,
2014. The China-based company
is seeking to double the contribution of its point of sales to its
revenue in the next three to five
years. Photo by Suhaimi Yusuf
GREATER INTEGRATION ... (From left) Bank Indonesia governor Agus DW Martowardojo, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz and Otoritas
Jasa Keuangan chairman of board of commissioners Dr Muliaman D Hadad at the signing ceremony of the heads of agreement on the banking sector in Jakarta on Dec 31, 2014.
The conclusion of the heads of agreement aims to pave the way for the nalisation of the Asean banking integration framework (Abif) guidelines and the subsequent endorsement
of Abif under the Asean framework agreement on services. Abif is an innovative and pragmatic approach that will enable Asean countries to deepen regional banking integration via
mutually benecial arrangements.
F&N Beverages plant in Kuching, Sarawak has emerged as the

winner in the medium industries
manufacturing category of the
Chief Ministers Environmental
Award 2014. (From left, front row)
Sarawak Chamber of Commerce
and Industry president Datuk
Abang Abdul Karim Tun Openg,
Natural Resources and Environment Board controller Peter Sawal, Sarawak Chief Minister Datuk
Patinggi Tan Sri Adenan Satem,
Assistant Environment Minister
Datuk Len Talif Salleh and F&N
Beverages national head of manufacturing Lee Joon Hin (receiving the award) at a ceremony in
Kuching on Dec 15.
Linde ROC Sdn Bhd, part of

The Linde Group of Germany,
launched its regional high-tech
remote operating centre to manage gas operations in Shah Alam
on Dec 16, 2014. Linde Malaysia
Holdings Bhd chairman Tan Sri
Dr Ahmad Tajuddin Ali (right)
and International Trade and Industry Minister Datuk Seri Mustapa Mohamed were at the official
opening of the centre. Photo by
Suhaimi Yusuf
Malaysia Pacific Corp Bhd chief

executive officer Chng Soon
Sen (right) at the annual general meeting in Kuala Lumpur
on Dec 30, 2014. The group is in
the final stages of negotiations
with potential local joint-venture partners to build residential
properties in Johor. Photo by
Suhaimi Yusuf
5
3
(From left) Bank Rakyat managing director Datuk Mustafha Abd

Razak, chairman D Mat Noor
Nawi, Deputy Domestic Trade,
Cooperatives and Consumerism Minister Datuk Seri Ahmad
Bashah Md Hanipah and Domestic Trade, Cooperatives and
Consumerism Minister Datuk
Seri Hasan Malek at the official
launch of Ar-Rahnu Flexi package
in Kuala Lumpur on December
24, 2014. The package is a facility for cooperative bodies to obtain working capital funding for
Ar-Rahnus franchise business,
which offers a maximum withdrawal of 80% of the value of gold
mortgaged and a maximum period of up to five years. Photo
by Shahrin Yahya
18 C O M M E N T
Could 2015 herald a new oil order?

Glut of the commodity and its impact on currencies and economies has been felt across the world
BY HOL LY EL LYATT
ast year was a tumultuous year for oil, with

Brent crude prices declining around 50%
since June on the back
of an over-supplied market and lack of global demand.
From old school oil producers Russia and Saudi Arabia in the
east to shale oil in California and
oil sands in Alberta in the west, the
glut of oil and its impact on currencies and economies has been felt
across the world.
When the Organization of the
Petroleum-Exporting Countries
(Opec) decided not to cut production when it met in November, the
12 major oil producers effectively threw down the gauntlet to the
young guns of US oil to see who
could withstand the fall in prices
and who would blink first and trim
production.
On Jan 2, benchmark Brent crude
was trading at US$57.11 (RM201),
having fallen from a high of around
US$115 a barrel hit in mid-June.
With prices falling fast and hitting five-year lows in mid-December, commodities research teams
at the worlds investment houses and

banks scrambled to
revise their 2015 predictions for oil and
the potential impact
on global economies.
And as wildly fluctuating as the price of
oil has been, so have
the predictions. While HSBC told
investors to prepare for US$95 a
barrel by the end of 2015, other
analysts were far more bearish.
Morgan Stanley cut its 2015 forecast for Brent saying that in a worst
case scenario crude prices could
fall to US$43 per barrel in 2015,
although its base case scenario
was for US$70.
The US shale revolution and its
accompanying rise in oil production has been a decisive factor in
the fall in the price this year.
The newcomer has affronted the
old guard of producers like Saudi
Arabia, the biggest oil exporter in
the Opec group and analysts believed its decision not to cut production was a move to put price
pressure on US producers.
The US might not give up so
easily though, according to Citis
commodities research team who said

in their 2015 outlook
for the commodities
markets that there is
a distinctive underlying Made in America quality that looks
likely to dominate the
commodity complex
through 2015.
Whether US shale oil producers
can withstand the fall in prices into
2015 and dent Opecs market share
is a key matter for debate, however.
Prices are already approaching the danger point for the bulk
of US shale output, so industry
costs would have to fall for prices
to be sustainable at these lower levels, Melanie Debono, economist
at Capital Economics, said in the
consultancys accompanying note.
There was a risk, Debono added,
that an extended period of lower
oil prices would lead to large cuts
in output in both the US and Canada. Companies like ConocoPhillips
which are active in the US shale
industry have already announced
that it would defer significant investment in Canada and the US
as returns looked far less attractive.
Its very clear if oil prices remain below in the region of US$64
per barrel for a sustained period of
time thats about a three-to-sixmonth period at least we would
start seeing increased scale backs in
the US, said Abhishek Deshpande,
oil and gas analyst at Natixis. But
the impact on production would
only start to be felt in 2016 onwards
and not as much as we would like
to see in 2015.
If the oil price continues to fall,
global markets are sure to turn
again to closely watch the next
move from Opec, which produces about 40% of the worlds crude
oil, according to the USs Energy
Information Administration.
While countries like Saudi Arabia
could potentially cope with lower
oil prices for around a year, weaker
Opec members like Venezuela are
on the brink of economic collapse.
Despite watching its fellow
members flounder, Natixis Abhishek Deshpande forecast that
Saudi Arabia was in no hurry to
cut production and would hold out
as long as it takes to retain market
share.
Saudi Arabia will hold out on
low oil prices for two reasons, he
told CNBC, both in order to instill

output discipline on other Opec
members and to inflict collateral
damage on marginal, unconventional producers such as those
in the US.
As such, markets would remain
oversupplied in 2015 according
to Deshpande. We do see that in
the first and second quarters of
2015, which are seasonally low in
demand, we could see more pressure coming on Brent if there are
absolutely no scale backs from the
Opec side.
As for the future of Opec itself,
the latest meeting of the group had
shown strained relations between
the members, with some able to
withstand lower prices and others
like Iran, Ecuador and Venezuela
desperate for a cut to stem the price
fall. Keeping the so-called oil cartel
together could be a decisive factor
if Saudi Arabia agrees to a cut.
The cracks are already showing
in Opec, Deshpande said. Sooner
or later, theyll have no choice [but
to cut] otherwise Opec as a cartel
will break apart. CNBC
For more, visit www.cnbc.com
Break up Citigroup
BY SI MON JOHN SON
AMERICAS presidential campaign

is already well underway. The election is not until November 2016,
and very few candidates have formally thrown their hats into the
ring, but the competition to promote and develop ideas both
behind closed doors and publicly
is in fully swing.
Earlier this month, Citigroup
Inc took advantage of this formative political moment by seizing
an opportunity to score a tactical
victory but one that amounts to
a strategic blunder.
Using legislative language apparently drafted by Citis own lobbyists, the firm successfully pressed
for the repeal of some of the 2010
Dodd-Frank financial reforms. The
provision was then passed after
it was attached to a last-minute
spending bill a tactic that ensured very little debate in the House
of Representatives and none at all
in the Senate.
At a stroke, Citi executives
demonstrated both their continued political clout in Washington
and their continued desire to take
on excessive amounts of financial
risk (which is what this particular
legal change permits).
Lobbying to be allowed to load
up on risk is exactly what Citi did
during the 1990s and 2000s under
Presidents Bill Clinton and George

W Bush with catastrophic consequences for the broader economy
in 2007 to 2009.
As a result, breaking up Citigroup is under serious consideration as a potential campaign theme.
For example, in a powerful speech
watched online more than a
half-million times Senator Elizabeth Warren responded uncompromisingly to the megabanks latest
display of muscle: Lets pass something anything that would
help break up these giant banks.
Defenders of the mega banks
Citi, JPMorgan Chase & Co, Bank
of America Corp, Wells Fargo & Co,
Goldman Sachs Group Inc, and Morgan Stanley dismiss Warren as an
avatar of left-wing populism. But this
is a serious misconception; in fact,
Warren is attracting a great deal of
support from the centre and the right.
Senator David Vitter of Louisiana
is the most prominent Republican
member of Congress in favour of
limiting the size and power of the
biggest banks, but there are others
who lean in a similar direction.
Similarly, the vice-chair of the
Federal Deposit Insurance Corp
(FDIC), Thomas Hoenig, a political independent, consistently
warns about the dangers associated with mega banks. And former
FDIC chair Sheila Bair, a Republican from Kansas, argues strongly
for additional measures to rein in
the biggest banks.
From the perspective of anyone
A group of protesters gathering outside Citis headquarters in New York on Dec 19,
last year, chanting break big banks.
seeking the nomination of either

of Americas political parties, here
is an issue that cuts across partisan lines. Break up Citigroup is
a concrete and powerful idea that
would move the financial system
in the right direction.
It is not a panacea, but the coalition that can break up Citi can
also put in place other measures to
make the financial system safer
including more effective consumer
protection, greater transparency
in markets, and higher capital requirements for major banks.
From the left, the emphasis has
been on the megabanks abuse of
power and the great rip-off of the
middle class.
From the right, the stress is on
the hazards of crony capitalism,
owing to the massive implicit government subsidies that these banks

receive.
But both left and right agree on
the fundamental asymmetry that
the recent Citigroup Amendment
implies: Bankers get rich whether
they win or lose, because the United
States taxpayer foots the bill when
their risky bets fail.
Potential Republican presidential candidates have hesitated to
take up this issue in public perhaps feeling that it will inhibit their
ability to raise money from Wall
Street. Among the Democrats, however, the opportunity seems to be
much more compelling; indeed,
avoiding a confrontation with Wall
Street might actually create problems for a candidate (as Hillary
Clinton may well find out).

The Progressive Change Institute
is currently running The Big Ideas
Project, whereby people can vote
on what they regard as the most
important policy proposals. Three
of the top 10 ideas under Economy
& Jobs are about imposing greater constraints on the big banks
and there is a sharp upward trend
in support for Break Up Citigroup
(full disclosure: I suggested this
item for the website).
This idea would play well in
the Democratic primary elections
(which start in early 2016). And,
because it forms the basis for responsible policies, it would attract support from centrists. And
voters on the right like proposals
that offer a credible way to end the
favouritism if not outright corruption that has come to define
the relationship between the top
levels of government and Wall Street.
Break up Citigroup, end dangerous government subsidies, and
bring back the market. The US
presidential candidate who says
this in 2016 and says it most convincingly has a good chance of
winning it all. Project Syndicate
Simon Johnson is a professor at Massachusetts Institute of Technologys Sloan School of Management
and the co-author of White House
Burning: The Founding Fathers,
Our National Debt, And Why It
Matters To You.
F E AT U R E 1 9
First cash helicopter to take off?

Japan could become the first rich nation to launch final trick in the monetarist playbook
BY A N DY MU KHERJE E
apan could become the first

rich nation to launch helicopter money. Dissatisfaction with deflation and
growing disillusionment
with quantitative easing
might prompt the country
to reach for the final trick in the
monetarist playbook.
Economist Milton Friedman
first conjured up the enticing image of bank notes dropping from
the skies in 1969. Thirty years later, Ben Bernanke proposed a helicopter drop of cash as an antidote
for Japans anaemic demand and
falling prices.
The future Fed chairmans suggestion was too outlandish for
what was then still a conservative
Bank of Japan (BoJ). The central
bank had already cut interest rates
to zero, and subsequently embarked on quantitative easing. But
thats about as far as it has been
prepared to go.
Yet quantitative easing (QE)
is failing to live up to its billing.
The monetary authority is buying staggeringly large quantities

of financial assets from banks
in return for newly-printed yen.
Government bonds worth about
US$1.7 trillion (RM6 trillion) a
quarter of the outstanding amount
have already vanished into the
BoJs vaults.
This bond-buying spree has yet
to launch a self-sustaining cycle
of private demand, or lift inflation
to the central banks 2% target. A
panicky BoJ policy board decided in October to expand its asset
purchases by as much as 60%.
QE makes cheap cash available
to banks to lend, but they cant do
so unless there are willing borrowers with profitable investment opportunities a problem in ageing
Japan. This is where Friedmans
helicopter comes in by giving cash
directly to households.
The mechanics would be relatively straightforward. Assume
each of Japans 52 million households received a debit card with,
say, 200,000 yen (RM58,584) loaded onto it by the central bank. Any
remaining balance on the cards
would disappear after a year, ensuring that recipients spent the
windfall. The move would inject

an extra 10 trillion yen, or 2% of
gross domestic product (GDP), of
private purchasing power into the
economy. This in turn would encourage companies to invest and
pay higher wages. The net effect
would resemble a tax cut, but one
financed by newly printed money rather than government debt.
For Japan, whose government
debt already equals 245% of GDP,
being able to stimulate the economy without having to sell more
bonds would be a major advantage. Consumers could spend
freely in the knowledge that they
would not have to repay the windfall in future in the form of higher taxes.
But if Friedmans helicopter is
such a doughty anti-deflation tool,
why has no central bank used it
yet? The usual answer is that tax
cuts are fiscal decisions that only
elected governments can make.
Monetising the governments debt
is a recipe for a debased currency
and hyperinflation.
Japan has given cash to its citizens in the past and may do so
again. But the cheques have always come from the government,
Friedman rst conjured up the enticing

image of bank notes dropping from the
skies in 1969.
not the central bank. Upsetting

this status quo will mean the finance ministry loses control of
fiscal policy. Politicians wont
let such a thing happen. The BoJ
might also baulk at such a radical
move: its policy board only narrowly approved the recent expansion of QE.
Yet Japan could introduce a
money-financed tax cut by stealth.
Suppose that QE ends in late 2016.
By then, the BoJ will own almost
two-fifths of Japans government

debt. Any attempt to sell those
bonds back to the private sector
could undermine the countrys
economic and financial stability.
Adair Turner, former chairman
of Britains Financial Services Authority, has suggested converting
the central banks government
bonds into perpetual, zero-coupon securities. With one stroke of
its pen, the government would be
free of its obligation to repay the
debt. The pressing need for Japan
to raise taxes would vanish.
The fragile consumer economy,
which buckled under the burden
of a modest increase in the sales
tax last April, would breathe a
sigh of relief. This too will be a
money-financed tax cut by the
back door, without the need for
helicopters or debit cards.
Such an experiment in monetary manipulation would attract
a worldwide audience. Many
rich nations have depleted their
rate-cutting arsenal. If the fight
against long-term deflationary
stagnation becomes a losing battle, Friedmans helicopters might
not just be flying over Japan.
Reuters
Is this Asias new manufacturing hub?

BY N YSH KA CHA ND RAN
THE Greater Mekong Subregion

(GMS) could become Asias new
low-cost production hub as the
region becomes more integrated,
experts say.
The GMS comprises Vietnam,
Myanmar, Cambodia, Laos and
Thailand as well two regions in
China: the Yunnan province and
the Guangxi Zhuang Autonomous
Region.
With Chinas industrial heartland in the coastal regions of the
Pearl River Delta and Yangtze River
Delta facing increasing pressures
on competitiveness due to rising
labour costs, the GMS offers considerable potential as an alternative location for the establishment
of low cost manufacturing, Rajiv
Biswas, Asia-Pacific chief economist at IHS Global Insight, said in
a note last week.
Biswas estimates the regions
combined gross domestic product
(GDP) at US$1.1 trillion (RM3.88
trillion) this year, larger than in
Indonesia, Southeast Asias most
populous country. By 2015, the region is forecast to grow 6.2% and hit
a combined GDP of US$3 trillion by
2024. The area currently accounts
for less than 5% of global manufacturing in value-added terms, but
IHS notes that infrastructure is key
to realising the regions potential.
If infrastructure connectivity
is strengthened in Southeast Asia
to allow high-speed rail networks
and modern roads to link prov-
inces such as Yunnan

in southern China to
the Indian Ocean via
Thailand and Myanmar, this could significantly improve
freight logistics ...
and create significant
opportunities for the
development of major ports and free trade zones in
Thailand and Myanmar, boosting
their economic development as
entrepots.
While China still retains its
reputation as the worlds leading
production centre, its slowing
economy and double-digit wage
increases are causing foreign firms
to look to Asias frontier economies.
Minimum wages increased by
13% in 20 out of 32 Chinese cities
this year, according to data from
non-governmental organisation
China Labor Bulletin. Average factory labour costs are roughly US$7
a day in Vietnam, versus US$28 in
China, official data shows.
While China has many advantages, including a much better developed supply base, advanced
infrastructure, robust manufacturing and engineering capacity,
and a huge domestic market, this
[wage increase] could still create
an opening for Southeast Asian
economies to become the next
factories to the world, global consulting firm McKinsey said in an
October report.
Aside from infrastructure, the
firm identifies three develop-
ments could stimulate growth in the

regions manufacturing sector: the
implementation of
the Asean Economic Community integration plan, attracting production from
multinationals, and
the application of big data and
disruptive technologies.
Beijing doesnt appear concerned about potential competition for manufacturing.
Instead, it recently pledged
US$11.5 billion in financial assistance, including US$1 billion in
infrastructure aid, during the 5th
GMS Leaders Summit earlier this
month. The money comes on top
of Beijings commitment of US$40
billion for financing projects aimed
at improving infrastructure across
key GMS economies, such as Laos,
Myanmar and Vietnam in its establishment of a Silk Road Fund
in November.
So, why exactly is China so interested in the GMS?
Improved connectivity in the
Southeast Asian economies of the
GMS will also assist the economic
development of the inland Chinese provinces in southwest China
such as Yunnan province, which
is already growing more rapidly
than the Chinese national average, Biswas said.
The economic development
of the GMS will therefore help
to realise a key strategic priority
of the Chinese government, for Chinese coastal provinces, he

reducing the economic develop- added. CNBC
ment gap between inland Chinese
provinces and the more advanced For more, visit www.cnbc.com
20 FO CU S
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Acura introduced the

TLX to replace the
TSX and TL models.
Relaxing and modest Acura TLX

It is actually the best car that brand Honda makes
Back to the TLX: Fuel efficiency is 24mpg
in the city and 35mpg on the highway respectably above average for a luxury car of that
size. The car shifts 25% faster than the V6 TL
and is 150 pounds lighter to boot a strong
combination that gives the general affect of a
modern, fresh, new sedan. It was long overdue.
BY HANNAH ELLIOTT
irst the bad news: Last week Honda told US dealers to stop selling
some versions of its 2015 Acura
TLX sedan because of problems
with the transmission.
Apparently 9,500 of the 2015
TLX had errors that could cause the 9-speed
automatic to fail to properly shift into park. The
gear shifter would indicate that the car was
safely stopped and secure when it wasnt.
Poor timing. That problem came after
Acuras October announcement that it incorrectly recorded the gross vehicle and axle
weights on the cars safety labels. Not long
after, the companys president, along with all
Japan-based executives, had to take a 20%
pay cut for three months as punishment for
recalls relating to Honda, according to an
Acura spokesman.
Now, the good news: I drove the 2.4L
4-cylinder version of the TLX recently in
New York and experienced no such problems. In fact I found the TLX perfectly inoffensive, even mildly entertaining. The
US$30,995 (RM109,412) sedan is a capable
if lesser-known option against other entry-level offerings from Infiniti, Lexus and
Volvo. (Like Lexus to Toyota and Infiniti to
Nissan, Acura is Hondas luxury car brand.)
If, that is, you can get past those pesky
recalls.
Bigger and smaller than
predecessors
Acura introduced the TLX to replace the TSX
and TL models. According to the brand, it
was built by a team of Ohio-based engineers
several of whom owned multiple TLs and
wanted to continue that tradition. (I didnt
realise the TL had a tradition, but I suppose
thats beside the point.) Anyway, the TLX has
quickly become Acuras best-selling model
The interior of the Acura TLX looks very futuristic.

The panel is clean and unfettered by too many
distracting buttons. Photo by Bloomberg
after the MDX SUV, even despite the recall,

selling more than 15,000 units since its introduction this year.
The car is indeed wider and longer than the
TSX and current ILX but more compact that
the TL and RLX. Confused yet? I find it difficult
to keep all of these letter combos straight, and
I do this for a living. Itd be great if Acura applied some simplification to these monikers.
Faster and more ecient
I found the TLX relaxing and modest as I
drove it around Manhattan; its interior trim
materials and general look nicely equal its
entry-level premium price and brand image. The car is surprisingly quiet, thanks to
improvements like acoustic spray foam applied throughout, triple door seals, acoustic
barrier panels and something called active
noise control. Its also noticeably stiffer to
drive than its predecessors, which makes
for responsive handling and braking. (I have
read reports that the transmission can jerk
momentarily under lower gears, but I did not
experience this.) Options from BMW, Audi
and Mercedes are quieter and drive better
try the BMW 3-Series or Audi A4 but
they are also more expensive.
Overly attentive technology

Where this car really shines, though, is in its
technological improvements. It starts with
the Integrated Dynamics System, which has
buttons on the centre console that move it
to econ, normal, sport to sport-plus modes.
Acura also gives us collision warning, adaptive cruise control, lane-departure warning,
blind-spot information and the multi-view
rear camera that is becoming de rigueur for
any sedan these days hoping to compete in
the luxury space.
I also noticed that the paddle-shifting on
the TLX is sufficiently quick, though not anywhere near track-ready. The new standard
four-wheel steering system well mitigates
understeering, which is sometimes an unwelcome by-product to front-wheel drive,
and it noticeably helps the car better balance around corners.
There are also some polarising extras. Polarising because it depends whether or not
you like company. One time cruising down
FDR Drive my afternoon reverie was startled by the voice of a polite lady asking me
to please fasten my seat belt. Another time
the lane-keeping assist bossily took effect:
it uses a camera placed near the rear-view
mirror which, if you steer the TLX outside
of the lane without signalling, causes the
steering wheel to gently tug you back toward
the centre of the lane.
It felt a little intrusive. But I could easily
hold course to where I wanted the car to go;
it didnt actually take control of the wheel.
of its front end, from the (standard) slanted

LED headlights and well-sculpted fenders
to the upward slope of its discrete front grill,
looks inviting and capable. It is well proportioned through the long side-body, with a
nice piece carved out along the front and
rear doors and a short rear end that finishes
the look on a strong note.
On the inside, the car reminds me in a
way of the BMW i8. It looks very futuristic.
The centre console touchscreen is a little
too flat for optimal viewing at speed, but
the panel is clean and unfettered by too
many distracting buttons. The steering
wheel is wide and thin, and the digital
gauges are covered by nicely sloped roofs
jutting out from the dash. Everything is
subtly swooped toward the back, like gentle sound waves falling aside the car as it
surges forward.
Options and standards

Bluetooth and a USB connection surprisingly absent in many high-end cars are
standard. So are the power moon roof and
faux-leather heated sport seats. Voice recognition, navigation, traffic and Zagat reviews
are optional, as are rain-sensing wipers and
remote start.
The leather-wrapped shift knob, woodgrain steering wheel and all-weather floor
mats make the car seem pleasant inside.
It feels a little bare and is not as tightly
constructed as a German automobile
but it more than passes muster. This car is
a good value.
And that, really, is the point. The TLX is
neither as beautiful as a Mercedes nor as
cool as an Audi. It doesnt have the swagger
of a Jaguar. But it is efficient and affordable,
a decided improvement over its predecessors. It is the best car Acura makes.
Which, given those recalls, perhaps
doesnt count for as much as it should. But
Winningly nondescript
things can be fixed. And no accidents or
From the outside, the Acura TLX expertly injuries were reported. Myself included.
advances the brand. The welcoming shape Bloomberg
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FO CU S 21
PHOTOS BY BLOOMBERG
The five most expensive

hotel suites in the world
BY JI NN A YA NG
1. From US$65,000 (RM229,450) a night

This 12-bedroom, 12-bathroom suite sprawls
across 18,000 sq ft, taking up the entire eighth
floor of the hotel, which is why nightly rates
start at US$65,000 (and can reach upwards
of US$80,000). Features include armoured
doors, a human-sized safe, bulletproof windows, a private elevator and helipad access
making it a favourite among visiting dignitaries, heads of state, and other VIPs in
need of privacy.
2. From US$47,000 a night

Stay at the Royal Villa, and youll be flown
into Athens on a private jet, courtesy of the
hotel. Youll also have a private chef, personal trainer and personal pianist available
during your stay. Not sure which pool you
want to take a dip in? No problem: The suite
has both an indoor and outdoor pool. If its
good enough for Leonardo DiCaprio or Meryl
Streep, its good enough for us.
Sitting pretty on the 52nd floor, this 4,300-sqft suite features a 360-degree view of Manhattan. It has cathedral ceilings, diamond
skylights and floor-to-ceiling windows, offering the greatest luxury in the city: space.
Inside the dressing room, walls are decorated with soft calfskin leather. This lavish
suite comes with a 24-hour personal butler,
personal trainer and Rolls-Royce chauffeur.
01. The Royal Penthouse Suite at

Hotel President Wilson, Geneva,
Switzerland.
02. The Royal Villa at Lagonissi Resort,
Athens, Greece .
03. Ty Warner Penthouse Suite at
Four Seasons Hotel, New York, NY.
04. Shahi Mahal Suite at Raj Palace,
Jaipur, India.
05. Hilltop Estate at Laucala Island
Resort, Fiji.
01

The Raj Palace really was a rajs palace before it was converted into a hotel, so expect
some major opulence. This six-bedroom
suite has ivory and gold furniture, a private
theatre, a library and a dining room. Guests
also have access to a personal kitchen staff
and a team of butlers.
5. From US$40,000 per night
Billionaire Dietrich Mateschitz owns the
Laucala Island Resort in Fiji and the Hilltop
Estate a suite running US$40,000/night
is only available by application or personal
referral. Youll be spoiled with a private chef
and nanny, plus access to a horse-riding
school, 72-hole golf course and a private
beach. Bloomberg
02
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03
04
Van Gogh or Van Goo matters little to billionaire Berg

absolute fraud; half said its probably something. Theres
still a chance its real.
BY B RENDA N COFF EY
risare
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But
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05
BILLIONAIRE Carl Berg, the Silicon Valley real estate

mogul and venture capitalist, collects rent from Tim
Cook (chief executive officer of Apple Inc), loves asking
stupid questions and owns a suspect van Gogh. Berg
has been included in Forbes Magazines list of the 400
richest people in America numerous times. As of March
2013, his net worth was estimated at US$1.1 billion. He
is married with one daughter and resides in Atherton,
California. Heres an interview with him.
A Van Gogh or
a Van Goo?
Berg bought
this painting,
supposedly by
the Dutch master,
for US$315,000.
Photo by
Bloomberg
Question: What was your best investment?

Answer: Sun Microsystems. Scott McNealy, the founder,
was a manager at one of my venture investments and
wanted me to be the first investor. In 1982, for US$1 get very expensive very quickly. I wasnt comfortable with
million, I got 25% of Sun at 25 cents a share.
that market and saw things going that way.
You also made a fortune on tech real estate. How?
What have you retained?
For decades, if you did anything in a decent location, the The Silicon Valley campuses of Apple and Microsoft. The
question was, will you lease your building today or next combined square footage is about 1.1 million.
week? A market like that just doesnt exist in many places.
You own a possible van Gogh?
Youve sold most of your portfolio. Why?
Its either a van Gogh or a van Goo. I bought it at an auction
I built mostly one- and two-story structures. High-rises in 1997 for US$315,000. Half the art world said it was an
So whats the safer play: Treasuries or a Picasso?

If its a real Picasso, that could be very safe. The art market
has gone up, consistently and dramatically.
More multiple choice: gold, bonds or hedge funds?
Gold. Right now, I think were very close to the bottom, so
its got a relatively small downside and an awful big upside.
Whats been your worst investment?
The battery company Valence Technology. Ive been in
it 22 years, and weve never made a profit. It drives me
crazy. My goal in life is to make that damn company
profitable.
Do you miss owning San Joses soccer team?
It was a lot of fun, but I lost an incredible amount of money.
Ill never touch a sports team again. Youve got to be insane.
Any other lessons from your playbook?
Common sense is more important than anything else. And
Im not afraid to ask a question thats a stupid question.
Bloomberg
22 W O R L D B U S I N E S S
State banks need more leeway

Indian finance minister says public lenders must be given far greater autonomy
BY D EVI DU T TA T RIPATHY
PUNE (India): Indian Finance Minister Arun Jaitley said on Saturday that state-owned banks needed much more autonomy, but he
stopped short of giving any details
of proposed reforms.
Jaitley made the comment at a
two-day meeting of public sector
bankers convened by Prime Minister Narendra Modis government
to suggest a road map for reforms.
The meeting ended on Saturday.
There is a need for far greater autonomy being given to them, Jaitley
said at the meeting, which was also
attended by Modi and Reserve Bank

of India governor Raghuram Rajan.
There are unacceptable levels
of NPAs (non-performing assets)
in some cases. And the banks have
to be given sufficient amount of
leeway ... to deal with commercial
issues with a commercial mindset.
Indias state-run banks recorded
the highest level of stressed loans at
12.9% of their advances in September last year, while the same ratio
for private sector banks was at 4.4%,
according to central bank data.
Modi told the bankers there would
be no interference from the government, according to a statement.
More than two dozen state banks

have been constrained by a pile of
bad loans and governance issues.
They also lag private sector rivals
in profitability.
For years, political interference
and union opposition have thwarted major reforms such as mergers
and lowering of the governments
holding to give more autonomy in
decision-making.
The bankers suggested the government, whose stakes in the staterun banks range from 56% to 84%,
should transfer its holding to a new
investment company and over time
cut its ownership to below 51%.
The bankers also recommended creation of independent high

performing boards that would
drive capital raising and acquisition strategies. They also pitched for
minimum interference by various
government institutions.
Hasmukh Adhia, financial services secretary in the finance ministry, said Jaitley told the public
sector bankers their suggestions
would be looked at very positively. He did not elaborate.
If reformed, Indias big state lenders offer investors the best exposure
to any sustained upswing in the
economy, analysts say. Reuters
Higher revenues for tourism factories in Taiwan

BY HUA NG C H I AO-W EN
& L EE HSI N-Y I N
TAIPEI: Enthusiasm for tourism

factories among both domestic
and overseas tourists has generated
NT$3.32 billion (RM368.32 million)
in revenues last year, the Ministry of
Economic Affairs (MoEA) said Saturday, predicting that the earnings
will reach NT$3.8 billion in 2015.

Thanks in part to nearly 10 million foreign visitor arrivals to Taiwan in 2014, a record high, the tourism factory sector had seen 16.6
million visits, a 38% annual growth,
according to the MoEA.
The ministry is predicting that
tourism factory visits could rise
to 19 million this year as a result
of economic recovery, increasing

revenues by up to 14%.
It has actively promoted the
niche tourism sector since 2003
to provide a new source of income
for manufacturers of traditional
products that have been losing their
competitive edge largely due to
higher labour costs.
The project blends Taiwans in-
dustrial culture and tourism by converting select factories into popular

tourist destinations, the ministry said.
Under the programme, run by
the ministrys Industrial Technology Research Institute, the ministry
screens existing old economy factories and chooses a certain number
every year to be transformed into
tourist attractions. CNA
Europe returns to
Franco-German axis of neurosis
BY P I E RRE BRI AN O N
Filepic of the Melco Crowns City of Dreams resort in Macau. The casino operator
says it is delisting from the Hong Kong stock exchange for reasons of cost and
utility. Photo by Reuters
Melco Crown to delist in Hong Kong

HONG KONG: Casino operator Melco Crown Entertainment, a
joint venture involving Australian billionaire James Packer, plans to
delist its shares in Hong Kong after gambling hub Macau reported
its first-ever fall in casino revenues.
Official figures published by the former Portuguese colony last
Friday showed gaming revenues fell 2.6% year-on-year to 351.52
billion patacas (RM155.29 billion) in 2014 the only drop since
annual figures were first released in 2002.
Hours later, Melco Crown which owns Macaus vast City of
Dreams resort complex said it would delist from the Hong Kong
stock exchange for reasons of cost and utility.
Maintaining the listing ... requires additional ongoing regulatory
compliance obligations and such requirements involve significant
additional costs, the company said in a statement late last Friday,
adding that it did not see opportunities to raise additional equity.
The company will retain its listing on the Nasdaq in the United
States, where its shares closed last Friday down 4.88% at US$24.16
(RM85.28).
Melco Crown is a joint venture between Hong Kong businessman
Lawrence Ho and James Packer, son of the late Australian media
and gambling magnate Kerry Packer. Reuters
PARIS: Europes economic stagnation has a lot to do with its political

paralysis. In 2014, the emphasis
was on what governments should
have done and could still do
to boost the continents potential
after two years of European Union (EU) economic contraction.
In 2015, the crisis at the heart of
Europes malaise, the breakdown
of the French-German partnership,
will take centre stage.
Either Paris and Berlin make the
case for a rejuvenated, reformed
Europe and justify the hopes of the
many countries which still want to
join, or they fail and the European
project is at risk of sinking slowly,
from crisis to crisis, into oblivion.
The EU has always been first and
foremost a political project, kept
in check by economic and financial market realities. If its two main
architects lose interest, or are too
focused on their own problems to
work on their relationship, the undertaking can fast turn sour.
Europes economic disputes are
fading, despite dramatic headlines.
A broad consensus has emerged on
the need for both fiscal discipline and
structural reforms to boost gross domestic product growth, forecast by the
International Monetary Fund to be
an anaemic 0.8% in 2014 and 1.3% in
2015. The disagreement is on timing.
Austerity now partisans
among them German Chancellor
The European Union

has always been
rst and foremost a
political project.
Angela Merkel, looking increasingly

isolated say only fiscal rigour can
foster sustainable growth. Growth
advocates, including France under
President Franois Hollande, dont
disagree but insist on stimulus first
to counter the short-term cost of
reforms.
Another problem is trust, or the
lack of it. Berlin doesnt believe
France is committed to sound economic policies. The Germans remember that Europes pre-euro history was marked by repeated French
franc devaluations. Meanwhile, the
French worry that ageing Germany
has lost interest in the European
project since the Cold War ended.
But cracks are beginning to show
in the German economic model and
France seems at last to have a government that means business. Both
countries have to deal with challenges such as the rise of radical parties
and the crisis in Ukraine, a reminder
that peace on the continent is not a
given. These are opportunities for
leaders on both sides of the Rhine
to remember why they built Europe
in the first place. Reuters
IN BRIEF
Thai debt collection law
to take eect soon
BANGKOK: Thailands first
debt-collection law will take
effect early this year despite
criticism that it gives debtors
so much protection it makes
lenders cringe. The law defines
debt collectors as creditors,
regardless of whether the debts
are legitimate or not, as well as
the persons or entities authorised by them to collect debts on
their behalf. A debt collector
may not contact another person about the debt except the
debtor himself. The exception
is when he needs to get the
debtors contact information.
The collector may not act in a
harassing or threatening manner. Bangkok Post
Independent experts to
help SGX board in probe
SINGAPORE: The committee
of inquiry looking into a major
trading disruption on the Singapore Exchange (SGX) on Nov
5 has confirmed the appointment of independent experts to
assist in its investigations, The
Straits Times reported. The SGX
said in a statement last Friday
the investigations will include
a review of the bourse operators technical, operational
management and communications issues. Work by these
independent experts began
last month and they will submit their findings and recommendations to the committee
of inquiry, made up of four SGX
board directors who are independent of the management.
Ship collision causes

33,000-barrel oil spill
SINGAPORE: An oil tanker and
a bulk carrier collided off Singapore last Friday, causing a
crude oil spill, the Maritime and
Port Authority (MPA) said. The
Libyan-registered oil tanker Alyarmouk collided with the Singapore-registered bulk carrier
Sinar Kapuas about 11 nautical
miles (20km) northeast of Pedra
Branca, east of Singapore. Alyarmouk reported that one of
her cargo tanks sustained damage, resulting in some spillage
of crude oil, the MPA said in
a statement. V Ships UK Ltd,
which manages Alyarmouk, estimated that 4,500 tonnes (33,000
barrels) of Madura crude oil had
been spilled from the tanker, it
added. Reuters
Taiwan bourse to face

more volatility in 2015
TAIPEI: Shares in Taiwan are
expected to be more volatile
in 2015 as concerns over a rate
hike cycle to be kicked off by
the US Federal Reserve later
in the year will make investors
more cautious, market analysts
said on Saturday. David Chu,
chairman of Hua Nan Securities Investment Management,
is one of the cautious analysts
who believe higher interest
rates could impose an adverse
impact on Wall Street and in
turn affect the performance
of other global equity markets,
including Taiwan. CNA
24 W O R L D B U S I N E S S
Germany believes eurozone

could cope with Greece exit
Group has implemented enough reforms to make potential departure manageable
BERLIN: The German government
believes that the eurozone would
now be able to cope with a Greece
exit if that proved to be necessary,
Der Spiegel news magazine reported on Saturday, citing unnamed
government sources.
Both Chancellor Angela Merkel
and Finance Minister Wolfgang
Schaeuble believe the eurozone has
implemented enough reforms since
the height of the regional crisis in
2012 to make a potential Greece exit
Tycoon prince
assails Saudi
scal policy
over decit
manageable, Der Spiegel reported.

The danger of contagion is limited because Portugal and Ireland
are considered rehabilitated, the
weekly news magazine quoted one
government source saying.
In addition, the European Stability Mechanism (ESM), the eurozones bailout fund, is an effective
rescue mechanism and was now
available, another source added.
Major banks would be protected
by the banking union.
if the left-wing Syriza opposition

party led by Alexis Tsipras wins an
election set for Jan 25.
The Greek election was called
after lawmakers failed to elect a
president last month. It pits Prime
Minister Antonis Samaras conservative New Democracy party,
which imposed unpopular budget
cuts under Greeces bailout deal,
against Tsipras Syriza, who want
to cancel austerity measures and
a chunk of Greek debt. Reuters
Frances 75% supertax quietly

dies with few mourners
BY ERIC R ANDO LP H
RIYADH: Billionaire Prince Alwaleed bin Talal has lashed

out at the Saudi fiscal policy
after projecting the largest-ever
budget deficit for 2015 following the slump in oil prices.
We have reached the danger point ... after starting to
withdraw from the reserves,
to meet the budget shortfall,
Alwaleed said in a letter addressed to the finance minister.
Last week, the worlds biggest
crude exporter announced an
expansionary 2015 budget with
the largest-ever deficit of US$38.6
billion (RM136.26 billion).
It projected spending at
US$229.3 billion, a slight rise
from last years estimates, and
revenues at US$190.7 billion,
sharply down from US$228 billion projected in 2014.
Saudi Arabia, the lead producer in the Organization of the
Petroleum Exporting Countries
(Opec), also said it estimates 2014
actual budget deficit at US$14.4
billion as both spending and revenues far exceeded projections.
Alwaleed, a member of the
Saudi ruling family and the
wealthiest Arab private investor, said Riyadh should not have
let spending rise above projections, especially after oil prices
began to decline.
Oil income contributes
about 90% of public revenues in
the Opec kingpin which pumps
around 9.6 million barrels per
day.
As a result of failing to
check rising spending, a total
of US$53 billion will be withdrawn from fiscal reserves, estimated at US$750 billion, in
just two years, he said.
Alwaleed also criticised the
way Saudi reserves are invested,
saying because most of them are
invested in US and European
bonds, they have low yields at
around 2.4% annually. AFP
The German government in

Berlin could not be reached for
comment.
It is still unclear how a eurozone
member country could leave the
euro and still remain in the European Union, but Der Spiegel quoted
a high-ranking currency expert
as saying that resourceful lawyers
would be able to clarify.
According to the report, the
German government considers a
Greece exit almost unavoidable
PARIS: Once a flagship policy of

French President Francois Hollande, the 75% supertax on top
earners limps into its final weeks
this month having sparked plenty
of controversy but few economic
results.
It was no surprise that the policy,
which expires on Feb 1, would be
quietly dropped: it was only ever
slated to last two years and the So-
cialist government has for months

declared it would not be renewed.
The tax had also been watered
down until it was barely a shadow
of the exceptional contribution to
solidarity proclaimed by Hollande
when he came to power in 2012.
Frances top court had declared
as unconstitutional the original
plan to levy the tax on all individuals earning 1 million (RM4.24
million).
The government came back with
a version that made companies pay

the 75% rate only for the portion
of employees salaries above the
million-euro ceiling.
But by then, it had already become a symbol of Frances opposition to big business and attracted
high-profile derision.
Actor Gerard Depardieu stormed
out of the country in a huff over the
tax and took up Russian citizenship
in 2013. It was reported he only paid
6% tax in his new home. AFP
IBM turnaround requires atypical activist fix

BY ROBERT C Y RAN
NEW YORK: IBM requires an atypical activist fix. Big Blues strategy
of cost cuts and debt-fuelled buybacks is no longer working even
though the company keeps trying.
A tarnished balance sheet, lean
staffing and a history of disposals
rule out typical activist wheezes.
Encouraging chair and chief executive Ginni Rometty to invest in
IBMs core businesses could pay off.
For two decades IBM has run the
same playbook. It sells low-margin
businesses, slashes expenses, buys
some profitable software companies, and returns a lot of cash to investors. Over the past four quarters,
the US$152 billion (RM536.56 billion)
company has spent more than US$23
billion on dividends and buybacks.
The snag is that IBM is investing
too little. Big Blue has only spent
about US$11 billion over the past
four quarters in total on research
and development (R&D), capital expenditure and acquisitions. Thats
a problem in tech, where old products soon become obsolete. While
Google spends about 16% of its
sales on R&D, IBM spends 6%.
The effect is becoming clear on
the top line. Revenue has shrunk
for 10 quarters in a row. Costs have
For two decades IBM has run the same playbook. It sells low-margin businesses, slashes
expenses, buys some protable software companies, and returns a lot of cash to investors.
In a good year for stocks, Its shares have fallen more than 15%. Photo by Reuters
been cut to the bone, sending customers fleeing to better service

providers. In a good year for stocks,
IBM shares have fallen more than
15%. That means IBM has overpaid
on its last three years of buybacks.
That has spurred talk of activists. But what could rabble-rousing shareholders demand? Unlike
Yahoo, theres no obvious gem to
dispose of or cash-laden balance
sheet to raid. IBM has been selling
off hardware, like last quarters disposal of the chip division, lessening
the appeal of an HP-style breakup.
IBM hasnt done any big acquisitions recently, so an activist cant
argue it is wasting capital like HP,
which wrote off three-quarters of
the US$12 billion it paid for Autono-
my. And year after year of punishing

cost cuts leave no obvious fat to cut.
A better idea is to invest more in
the business. Assume IBM repurchases US$10 billion of stock next
year. Bought back at current rates,
that would result in a 7% increase
in earnings per share. Meanwhile,
IBMs pre-tax return on its business
assets is 22%. Diverting that US$10
billion into the business could result
in more than US$2 billion of pre-tax
profit. Put this on IBMs low 20% tax
rate and the result is more than a
12% increase in earnings per share.
IBMs focus on financial, rather than product, engineering has
caused low employee morale, falling sales and shareholder dissatisfaction. Its time to invest. Reuters
IN BRIEF
Indonesias faster
ination, weak exports
cloud economic outlook
JAKARTA: Indonesias annual inflation accelerated to its
fastest pace in almost six years
in December, while exports fell
more sharply than expected,
raising concerns about economic growth prospects. Southeast
Asias largest economy has been
wrestling with bringing down
a worryingly large current account deficit, but a move to cut
burdensome oil subsidies has
been countered by weak commodities that have hit the countrys exports. Well be lucky to
get 5.1% growth in the fourth
quarter, said Wellian Wiranto
at OCBC bank in Singapore.
Reuters
US slaps more sanctions

on North Korea
after Sony hack
HONOLULU/WASHINGTON:
North Korea was hit with more
sanctions last Friday designed
to impede access to the US financial system in the wake of a
cyberattack on Sony Pictures Entertainment, which the Obama
Administration has said was supported by the reclusive country.
The US government named three
entities, including North Koreas
military intelligence agency, and
sanctioned 10 people with links
to weapons sales and proliferation. Financial sanctions have
had limited impact on North Korea which has been sanctioned
by the United States for more
than 50 years. Reuters
Brazil minister recants

minimum-wage plan
aimed at cutting budget
RIO DE JANEIRO: Brazilian
President Dilma Rousseff s
promise to cut spending during
a second term that began last
Thursday got off to a rocky start,
as her new planning minister recanted a pledge to change how
the countrys minimum wage is
calculated. Minister Nelson Barbosa told reporters, last Friday
on his first day in the post, that
he planned to send Congress
a bill changing the formula to
be used to adjust the minimum
wage starting in 2016. But a day
later he published a note on
the ministry web site saying the
current formula will be maintained. Reuters
South Sudan oil revenue

at US$3.38b, hit by
conict and price falls
JUBA: South Sudans oil revenue last year was hit by reduced
output because of conflict in the
African republic and the rapid
decline in oil prices, petroleum
minister Stephen Dhieu Dau said
in a statement seen by Reuters on
Saturday. Oil is the main source
of cash for South Sudan, but total
oil income was US$3.38 billion
(RM11.9 billion) last year from
the sale of 36.6 million barrels
as output was hit by the fighting
that began in December 2013
in the wake of a power struggle between President Salva Kiir
and former Vice-President Riek
Machar. Reuters
26 WORLD
More homes destroyed in

major S Australia bushfire
Officials warn of threat to lives even as weather conditions improve
ADELAIDE: More than 30 homes
are feared destroyed as firefighters
battle the worst bushfire in South
Australia for three decades, with
officials warning yesterday of a
threat to lives even as weather
conditions improve.
The states Country Fire Service
said the intense fire, which broke
out last Friday in the Mount Lofty
Ranges east of Adelaide, was continuing to burn in all directions at
Sampson Flat, threatening lives.
But a cool change yesterday
helped to contain the fire ahead
of a forecast rise in temperatures
again on Wednesday.
I can confirm that 12 homes
have been destroyed and its feared
that a further 20 homes have also
been lost, South Australian Premier Jay Weatherill told reporters.
However, the conditions for
firefighting have improved. The
weather is cooler and the weather conditions will permit aerial
firefighting.
This is important because it
Five arrested
in India over
Japanese tourist
gang rape
Embers glowing
against the smokelled sunset near
Gumeracha in the
Adelaide Hills on
Saturday. More
than 30 homes are
feared destroyed.
Photo by AFP
is forecasted that we will have

worsening weather conditions
on Wednesday so its critical that
we make headway on reducing
the active edges of this fire front.
Weatherill said following a visit
burnt in the Adelaide Hills, an area

in the Mount Lofty Ranges with a
population of about 40,000, dotted
with scenic villages and known
for its farming produce and wineries. AFP
Singapore gives 15 more trees

heritage status
BY KASH CHEO NG
BY SA I L EN D RA SIL
KOLKATA: Five men have been

arrested over the gang rape and
extortion of a Japanese tourist
held as a sex slave for nearly a
month in a basement close to
a famous Buddhist shrine in
India, officials said yesterday.
The 22-year-olds ordeal began in Kolkata, capital of West
Bengal state, where she was
befriended by three local men
shortly after arriving on Nov
20, one of the citys top police
officers told AFP.
The men, one of whom
spoke Japanese, first managed
to persuade her to withdraw
around US$1,200 (RM4,236)
in cash before travelling with
her to the holy shrine of Bodh
Gaya in the neighbouring state
of Bihar.
There she was then handed over to two brothers who
locked her in a secluded underground room and repeatedly
raped her for nearly a month.
The two brothers, who were
working as tourist guides, were
arrested last Friday and taken
to Kolkata where they appeared
in court late Saturday. A magistrate ordered that they be remanded in custody until Jan 9
so the victim can take part in an
identification parade. AFP
to the site of the bushfire yesterday

afternoon that he had seen many
burnt-out houses and also fires
licking at the edges of a number
of houses.
More than 11,000ha have been
SINGAPORE: Tall and majestic,

more than 200 trees have made
the Heritage Tree list in the past
13 years, The Straits Times reported. The special title is conferred
by a panel consisting of National
Parks Board (NParks) staff as well
as landscape and plant experts
in recognition of a trees historical or ecological significance to
Singapore.
NParks takes special care of
these heritage trees, equipping
them, for example, with lightning

conductors to prevent them from
being struck, the daily reported.
Perhaps most well loved among
the heritage trees is a Tembusu
tree at the Singapore Botanic
Gardens. The 150-year-old giant
is featured on Singapores S$5
(RM13.25) bills.
Recently, 15 new trees joined
the league, which according to The
Straits Times include: (i) Tamalan
tree (Fort Canning) native to Myanmar and Thailand, the tree was
exclusively planted at Fort Can-
ning in the early part of the 20th

century; (ii) Buah Keluak tree (Botanic Gardens) the fruit of this
tree is used in Asian cuisines, most
notably the Peranakan dish ayam
buah keluak; (iii) Giant Cola tree
(Botanic Gardens) with spectacular large leaves and a dense
spreading crown, this tree is the
only one of its type recorded in Singapore; and (iv) Teak tree (Botanic
Gardens) this tree dates back to
1884 and was first recorded by the
gardens director Isaac Burkill in
his 1927 guide book.
Bangladesh police lock opposition leader in office

BY SHAF IQU L ALAM
DHAKA: Bangladesh police

banned all protests in the capital
from yesterday and locked main
opposition leader Khaleda Zia in
her office in Dhaka as tension rose
before the first anniversary of an
election her party boycotted.
Zia had threatened to hold mass
rallies in Dhaka to mark Democracy Killing Day today the first
anniversary of the polls that her
Bangladesh Nationalist Party
(BNP) and its Islamist allies refused to join on the grounds that
they would be rigged by the ruling party.
Weve not detained her

only her security
has been enhanced.
She has been confined in her

office. Police have cordoned off
the area and barricaded [the] road.
She wanted to see a sick party colleague around midnight, but they
did not let her out, Zias aide SR
Shimul Biswas told AFP.
Police banned all protests,
meetings and demonstrations in
the capital from 5pm (1100 GMT)
yesterday until further notice to

prevent violence after the ruling
party announced rival rallies.
We imposed the ban as rival rallies by the political parties
raised fears of clashes, Dhaka police spokesman Masudur Rahman
told AFP.
Zia was forced to spend the night
at the party office despite attempting to leave by car, the aide said.
Police inspector Firoz Kabir denied that Zia was being forcibly
detained in her office.
Weve not detained her only
her security has been enhanced.
She is not leaving her office, he
told AFP. AFP
IN BRIEF
Source: Libya Islamists
abduct 20 Egypt
Christians
BENGHAZI: Islamist militants
have abducted 20 Egyptian
Christians in Libya in recent
days, a source close to the government said on Saturday. The
Ansar al-Syariah militia kidnapped 13 of them on Saturday
in the coastal city of Sirte and
the rest of them there over the
past few days, the source said.
Their identity was not immediately clear, except that they
were said to be Coptic Christians. Thousands of Egyptians
work in Libya, mainly in the
construction and craft sectors,
and they have been targeted
as the country descended into
chaos. AFP
Man jailed for molesting

teenage girl during
exorcism
SINGAPORE: A 52-year-old
man who performed a ritual
on a teenage girl to rid her of
spirits has been sentenced to a
years jail after she accused him
of touching her inappropriately
under her clothes, The Straits
Times reported. Mohamed Said
Mohamed Sani, a technical
officer who treats people with
spiritual disturbances for free,
is appealing against his conviction and sentence for outrage
of modesty. He is out on bail.
The girl, whose name has been
withheld as there is a gag order
on her identity, was 17 when
he treated her at her uncles
Marsiling flat in June 2011.
First CoE bidding

exercise for January
starts at noon today
SINGAPORE: This first Certificate of Entitlement (CoE) open
bidding exercise for January
2015 starts at noon today, the
Land Transport Authority was
quoted by The Straits Times in a
statement. The total quota for
tender is 2,024, including 704
CoEs in Category A, for cars
up to 1,600cc and 130bhp; and
571 CoEs in Category B, for cars
above 1,600cc or 130bhp. For
Category E, which can be used
for any vehicle type, there are
272 CoEs for tender, and in Category D, for motorcycles, there
will be 321 CoEs. The bidding
will end at 4pm on Wednesday.
Vigilance stepped up in
Narathiwat
BANGKOK: Security units in all
13 districts of Narathiwat province were put on high alert yesterday on the 11th anniversary
of the attack by separatist insurgents on the 4th Development
Battalion at the Kromluang Narathiwat Ratchanakarin military
camp in Cho Airong district on
Jan 4, 2004. Military, police and
civilian forces set up security
checkpoints on main and secondary roads, searching people
and vehicles for armed militants
to prevent possible attacks. A
number of insurgents launched
a surprise attack on the headquarters of the 4th Development
Battalion in 2004, killing four
soldiers. Bangkok Post
W O R L D 27
Palace issues fresh denial

over Andrew sex claims
Report: Accuser says she refuses to be unjustly victimised again
REUTERS
BY ROB I N MI L L A RD
LONDON: Buckingham Palace issued a fresh denial yesterday of

allegations an American woman
kept as an underaged sex slave by
a Wall Street billionaire was forced
to have sexual relations with Britains Prince Andrew (pic).
The woman, identified in legal
documents only as Jane Doe #3,
has alleged in a US court filing that
she had been kept as a sex slave
by financier Jeffrey Epstein, a friend
of the prince.
Andrew, the Duke of York, and
prominent US attorney Alan Dershowitz, one of Epsteins defence
lawyers, have both vigorously denied the allegations.
In a strongly-worded response
Canadian who
killed eight
spared two
infants police
MONTREAL: A Canadian who
murdered eight people including his wife spared two infants
during his deadly rampage, police said, while reports emerged
on Saturday that he had previously threatened his family. Police are still investigating the motive behind the killing spree last
week in Edmonton by 53-yearold Phu Lam. But the new details
shed some light on what may
have prompted the killings that
shocked the northern capital of
the oil-rich province of Alberta
at the end of December.
Last Sunday, Lam killed his
wife Tien Truong, 35, her eightyear-old son, her parents, her sister, her three-year-old niece and
an acquaintance of Truongs. At
a different location the next day,
Lam killed a 37-year-old woman
who police say was a friend of the
family. Lam threatened to kill
the whole family after learning
through a biological test that he
was not the father of Elvis Lam,
the eight-year-old victim.
Lam also had a record of sexual assault and drug use with
Edmonton police. Two years
ago, Lam threatened to kill his
family, according to a legal complaint filed by his wife. Truong
accused Lam of repeated violence over the years, according
to court documents reported by
the local press.
Police said last Friday there
were two young children that
Lam spared, leaving them at a
relatives house before killing
again. The children were aged
one and eight months old. AFP
last Friday, Buckingham Palace said

that any suggestion of impropriety
with underage minors is categorically untrue.
But the palace took the even more
unusual step of issuing a second

statement after British Sunday newspapers printed details of interviews
the plaintiff has given in recent years.
It is emphatically denied that
the Duke of York had any form of
sexual contact or relationship with
the woman, the palace said. The
allegations made are false and without any foundation.
The Mail on Sunday and the Sunday Mirror newspapers both published details of interviews given
by the woman in recent years, in
which she discusses three alleged
encounters with Andrew.
Meanwhile, the Sunday Express
reported that the prince was due to
fly back into Britain after taking a ski
trip to Switzerland. A royal source
confirmed Andrew had been away
on a private holiday abroad.

Following the denials from the
prince and Dershowitz, Jane Doe
#3 told The Guardian newspaper
that she refuses to be unjustly victimised again.
Epstein, a known friend of
Queen Elizabeth IIs second son,
was convicted in 2008 of soliciting
an underage girl for prostitution
and served a prison term.
The woman claimed she was his
sex slave from 1999 through to 2002.
In a statement to The Guardian
she said: These types of aggressive
attacks on me are exactly the reason
why sexual abuse victims typically
remain silent and the reason why
I did for a long time. That trend
should change. Im not going to be
bullied back into silence. AFP
NYC mayor, commissioner

saluted when entering wake
NEW YORK: New York City police
officers saluted as Mayor Bill de
Blasio and his police commissioner
entered a Brooklyn funeral home
on Saturday for the wake of a policeman killed in an ambush last
month that deepened a rift between
the mayor and the NYPD (New York
City Police Department).
Ahead of the wake for Wenjian
Liu, Commissioner Bill Bratton told
officers to refrain from the act of
disrespect seen at the funeral of
Lius partner, Rafael Ramos, when
thousands of officers turned their
backs on de Blasio.
A heros funeral is about grieving, not grievance, Bratton wrote
in a memo to be read on police roll
calls over the weekend. The funeral
was to take place yesterday.
Liu, 32, and Ramos, 40, were shot
to death on Dec 20 as they sat in
their squad car in Brooklyn. Their
killer, Ismaaiyl Brinsley, who killed
himself soon after, had said he was
seeking to avenge the deaths this
summer of two unarmed black men
at the hands of white police officers.
On Saturday, a few hundred
mourners, most of them police of-
US healthcare worker
under watch after
Ebola exposure
WASHINGTON: An American
healthcare worker who has
been in Sierra Leone will be
placed under close observation at a Nebraska hospital after
high-risk exposure to the Ebola
virus, doctors said on Saturday. The unnamed patient was
scheduled to arrive yesterday
aboard a private air ambulance
for observation and possible
treatment. Two of the previous
three Ebola patients at the facility were treated and released
but the third a surgeon who
was infected while working in
his native Sierra Leone died
in November. Ebola has killed
7,890 people in the past year,
out of 20,171 cases, according
to the latest tally by the World
Health Organisation. AFP
Nine choke to death

on Japanese New Year
delicacies
TOKYO: Nine people have
choked to death in Japan after eating traditional glutinous
mochi rice cakes to celebrate
the New Year, an official and
local media said yesterday. In
Tokyo alone, 18 people were
sent to hospital due to suffocation after eating the New Year
delicacy, and three of them
died, a fire department official said. The Yomiuri Shimbun newspaper said the death
toll from rice cake accidents
had reached nine by last Friday across the nation and 13
others were in a serious condition. AFP
Two Filipinos dead, 16

missing in ship sinking
A police ocer saluting De Blasio as he walked in to attend slain New York Police
Department ocer Wenjian Lius wake in Brooklyn on Saturday. Photo by Reuters
ficers in dress blue uniforms, lined

up outside the funeral home on a
frigid, snowy afternoon.
De Blasio and Bratton entered
the funeral home together shortly
after it opened, with officers standing guard by the entrance saluting
both men as they went inside. The
wake was closed to the public.

The killing of Liu and Ramos
has frayed the already strained relations between the police force
and De Blasio, who sharply criticised the NYPDs stop and frisk
tactics when he ran for mayor in
2013. Reuters
US drone strike kills 6 in NW Pakistan

PESHAWAR: A US drone strike targeting a Taliban-linked warlord killed
at least six militants in Pakistans
restive tribal region near the Afghan
border yesterday morning, Pakistani security officials said. The strike
aimed at the stronghold of prominent warlord Hafiz Gul Bahadur, as
well as the nearby base of an Uzbek
IN BRIEF
commander in North Waziristan,

one of seven semi-autonomous tribal districts that border Afghanistan.
The area has been a hub for al-Qaeda and Taliban militants since the
early 2000s. Washington pressed Islamabad for years to wipe out militant sanctuaries in North Waziristan,
which have been used to launch at-
tacks on Nato forces in Afghanistan.

Bahadur, once seen as pro-Pakistani, is unhappy with the military
offensive in North Waziristan. He is
aligned with the feared Haqqani network, which is frequently accused of
sending fighters and suicide bombers against US and Nato troops in
neighbouring Afghanistan. AFP
MANILA: Two Filipino sailors

have died and 16 others are missing after their cargo ship sank in
waters near Vietnam, the Philippine foreign department said
yesterday. The cargo vessel Bulk
Jupiter went down on Jan 2 off the
coast of Vung Tau City and so far,
only one Filipino crewman has
been rescued alive, the department said in a statement, without
specifying why the ship sank. Vietnamese authorities are leading
the rescue operations and have
recovered two bodies and are still
searching for the other 16 crew,
the statement said quoting the
embassy in Hanoi. AFP
UK nurse in critical
condition
LONDON: A British nurse who
contracted Ebola in Sierra Leone was in a critical condition
yesterday, locked in isolation
inside a specialist London hospital. Pauline Cafferkeys health
has taken a turn for the worse in
recent days, the Royal Free Hospital said in a statement. The
condition of Pauline Cafferkey
has gradually deteriorated over
the past two days and is now critical, the Royal Free Hospital in
London said in a statement. Last
Wednesday, doctors had said the
39-year-old Scot was sitting up in
bed, reading and talking to staff
from inside her isolation tent in
the hospital. AFP
28
live it!
MO
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Personal
ASSISTANT
An employee checking
the quality of sturgeon
caviar. Photo by AFP
COMPI L ED BY QUAH SU ANN
WORK. LIFE. BALANCE
THE Maskini
Theatre Company,
for the rst time
ever, is bringing
us Wayang
Malaysian stories.
Its a collection of
performances by
local performers
that are set to not
only entertain,
but amaze us with
their unique style
of presentation of music, dance and stories.
Chan Ming Lye, a well-known Malaysian
singer who is based in New York will be
opening the night. Chan was involved in the
famed musical, Miss Saigon, for seven years.
This show will consist of actors sharing
legendary stories of Qixi, Narashima, and
Ulek Mayang using self-made puppets.
Show dates are at 8.30pm from Jan 7-10 and
at 3pm on Jan 11 at the DBKL Auditorium in
Kuala Lumpur. Tickets are priced at RM55
for adults and RM35 for students and senior
citizens, and can be purchased at http://
www.theatreantics.com/ticket.php.
GISELLE, a ballet
presented by
Dance Space is
a tale of love,
betrayal, revenge
and forgiveness.
It begins with a
mystical legend
of girls who had
been deserted
and have become
ghostly visitants
in the moonlight,
dancing to entice
men to breathe their last as retaliation.
Haunting and poetic, Giselle tells the story
of a peasant girl who falls in love with a
prince, and the heartbreak and despair that
follow. Giselle oers both the promise of
young love and the tragedy of it slipping
away. It is the fourth full-length ballet of
Dance Space after the great success of The
Swan Lake in 2013. Giselle will be playing
at the Damansara Performing Arts Centre
(DPAC) in Petaling Jaya from Jan 9 to 11, at
8.30pm. Tickets are at RM58 for adults and
RM48 for students and senior citizens, and
can be purchased at DPAC by calling (03)
4065 0001.
ENJOY a relaxing,
charming time
at The Verandah
for a traditional
English favourite
of ne teas, ovenfresh scones with
clotted cream,
uy cakes,
golden pastries,
and scrumptious
savouries. This
English Afternoon Tea special is priced at
RM75. The Verandah is located at Carcosa
Seri Negara in Taman Tasik Perdana,
Persiaran Mahameru in Kuala Lumpur. For
reservations and additional information,
please call (03) 2282 1888.
01
Poland takes on
BLACK CAVIAR
02
Trickiest part of the production process is seasoning the eggs
M
1
giene mask, nurse cap and scrubs. The air No ready-made recipe
is swapped out 20 times an hour, and the Traditionally, caviar was made from eggs
oodies, take note: After flood- room is sterilised for six hours every night. from wild sturgeon in the Caspian and Black
ing the global market with its
seas with the best known producers in Rusvodka, apples and berries, Po- Crystal clear water
sia and Iran.
land has gone gourmet and Outside, thousands of sturgeon swim around
Years of overfishing and pollution
is trying its hand at making in fish canals fed by the crystal clear water of have left the sturgeon at risk of extincblack caviar.
the Lyna River.
tion. The fish is protected under the 1973
Dressed from head to toe in sterile
The fish are slim and muscular, with a Convention on International Trade in
clothing, a worker leans over a sieve con- pointed mouth for the Siberian sturgeon Endangered Species of Wild Fauna and
taining roe from Russian and Siberian and a rounder one for the more covet- Flora (CITES).
sturgeon. She uses tweezers to remove ed and expensive Russian variety.
Yet demand continues and caviar pricany leftover bits from the ovary sack anEach female weighs between 10 and es have skyrocketed, now retailing from
ything to ensure the quality of the caviar. 20 kg and carries roe totalling around around 1,700 (RM7,201) per kg and
Nor is hygiene to be trifled with at 12% of its weight.
prompting many a country to try to cash
the fish farm in the northern Polish vilBefore winding up in Rus, the sturgeon in on the luxury food.
lage of Rus.
spend the first seven or eight years of
In 2012, caviar producers made 260
We produce unpasteurised, fresh their lives on a parent farm in Goslawice, tonnes of the fishy delicacy in countries
caviar, so we have to make sure it doesnt central Poland. It extends across nearly including France and Italy but also Israel,
come in contact with even the smallest 5,000 acres (2,000 ha) of lakes and 500 ha Uruguay and even Vietnam, according to
speck of bacteria, says farm head Marek of ponds heated by a nearby power plant. the World Sturgeon Conservation Society.
Szczukowski.
We are the biggest fish farm in Poland
The trickiest part of the production
The taste of caviar largely depends on and one of Europes three main sturgeon process is seasoning the eggs. Many years
the quality of the air, the water, its tem- producers, says marketing and sales of experience go into determining just
perature, the feed, but also the method manager Agata Lakomiak-Winnicka.
the right amount of salt.
used to obtain the eggs.
We began farming sturgeon in 1992 and
Making caviar is an art. Theres no
Everything here is up to hospital stand- have been supplying Europes top caviar ready-made recipe, Szczukowski says.
ards. Employees handle the precious eggs, producers with it since 2008, she tells AFP.
The whole operation takes no more
whose colours vary from a golden brown
Theyve been a huge hit, so it was just than 15 minutes: from carving out the
to olive to black, in a room fit for surgery. a matter of time before we launched our roe-filled ovaries to vacuum packaging
All the equipment, the walls, the floor own brand, Antonius.
the caviar in elegant black and white
and even the ceiling are stainless steel.
Today, the two farms have more than boxes with the Antonius label.
As for the staff : no shower, no entry. 1,000 tonnes of sturgeon swimming
We want Poland to have its own
The same goes for anyone without a hy- throughout their waterways.
caviar brand recognised around the
e
l
BY BE RNARD O S S E R
live it! 29
01. A sh farm worker in the

northern Polish village
of Rus weighing a tub
of sturgeon before it is
sealed. Photo by AFP
02. Agata Lakomiak-Winnicka,
marketing and sales
manager for Antonius
caviar, with two cans of the
Polish product. Photo by
AFP
03. Female sturgeon
swimming in a tank at a
sh farm in the northern
Polish village of Rus
which is the rst in Poland
to begin producing the
coveted delicacy. Photo by
AFP
01
R
ggs
ack
us-
02
03
world, says Lakomiak-Winnicka.

The potential is there, says French chef
Michel Moran, who has lived in Poland for
15 years.
Poland makes really good vodka for
example. Were able to raise great quality
livestock, we have great fish, says the chef
at Warsaws Bistro de Paris.

I dont mean the Baltic Sea unfortunately, but if we get our fish from fresh water,
were able to raise some really good stuff,
he tells AFP.
And now, a caviar like this, Im convinced
theres a place for it on the market. AFP
TIMEPIECE
Breguet ends 2014
with a serious update
to tradition
BY S TE P HE N PULV IR E N T
well as the black finish on the bridges

and plates, gives this Tradition a very
non-traditional look. No images of the
rose gold 7097 have been released yet,
but were still betting white gold will be
the way to go here.
Cocktail Party Fact: The (extremely
long and cumbersome) name of this
watch nods to the retrograde seconds
and automatic winding system, but
theres a lot more technology packed
into this watch than just those two
things. The escapement is a straightline inverted lever (enjoy, nerds!) and
the silicon balance spring is shaped
with a Breguet overcoil to ensure accuracy. Theres also a unique Breguet-invented device called a parechute hanging over the balance that
protects the sensitive staff mechanism from shocks. Its innovation, but
18th-century style.
AS 2014 wound down, watch nerds are

anxiously awaiting the flood of new
wristwear to come at SIHH 2015 which
starts on Jan 19. Not to be outdone,
Breguet has offered up a small peek
at its 2015 collection to stoke the fires
as we look forward to bonus season.
The Tradition Automatique Seconde
Rtrograde 7097 is as impressive as it
is a mouthful. It has all the little antiquarian flourishes you expect from
Breguet while feeling thoroughly like
a watch for the future.
First Thoughts: This isnt necessarily
a 10th anniversary watch, but it does
come a decade after the first Tradition
models, now the basis of Breguets collection. This means the 7097 has certain
boxes to checkthe floating smaller
dial, the exposed movement components, and the fluted caseband are all
there. But the brushed silver finish on The basics
the dial and retrograde seconds, as Case diameter: 40mm
Case materials: White gold or rose gold,
both with fluted case band
Dial: Solid gold with silvered finish and
engine-turning decoration
Strap: Leather strap with white gold
buckle
Complications: Retrograde seconds
display
Reference number: 7097
A closer look at the outstanding nishing.
The movement
Caliber: 505SR1
Power reserve: 50 hours
Winding: Automatic
Finishing: Black bead-blasted plates and
bridges, circular graining, blued hands
and solid gold winding rotor.
Bloomberg
on
nc973
in
and
ricom
nd
ash
260
ies
ael,
g to
ety.
ion
ars
ust
no
ys.
ore
the
ing
hite
wn
the
PICK OF THE DAY

THIS holiday season, bebes Winter in Wonderland collection presents
an enchanted, fantasy-inspired take on holiday style. Dreamy exclusive
prints, whimsical feather details and glittering sequins dene the look and
adds a signature glam that is essentially bebe. The collection embodies
the readiness of the season with standout cocktail dresses, from t and
are silhouette, bodycons and long-sleeved designs, making these special
pieces the anchor of the collection. Other sophisticated pieces include
desk-to-drinks suiting, silky blouses, dramatic jumpsuits and embellished
denim, as well as accessories and shoes. The price range for clothes is
RM200 to RM2,000, bags are from RM200 to RM700 and shoes are from
RM200 to RM800. bebe stores are located at Pavilion Kuala Lumpur and at
Highstreet, 1 Utama Shopping Centre, Petaling Jaya. Visit www.facebook.
com/bebemalaysia for latest product information and updates.
30
live it!
Zen TODAY
Gossip is when you hear something you like about

someone you dont Earl Wilson
From new Windows to
GOOGLE GLASS
Eight technologies to be introduced this year
four tablets under the Kindle Fire product
family. Theyll come in various colours and
new year also means new specifications such as differing screen sizes
technologies to look forward and Bluetooth connectivity.
to. Every year, we all wait in
anticipation of some of the Samsung Galaxy S6
most exciting new gadgets, The successor to 2014s Galaxy S5 is expected
software and electronics to to be announced at the Samsung Unpacked
be unveiled. This year is no different. From event, which will be running from March 2-5
iPhones to Google Glass, 2015 is set to be an and the rumour is that the Galaxy line plastic
interesting one.
build quality is finally going to be upgraded,
in line with its rivals.
BY QUA H SU A N N
Sony Xperia Z4
The Sony Xperia Z4 is slated to be announced
in March this year, and although the specifications have yet to be confirmed, industry
experts are predicting that itll run on Android
Lollipop and sport a Quad HD screen.
iPhone 7 or 6s
Obviously, no year is complete without a new
addition to Apples flagship iPhone brand.
Theyve always been announced in September, and this year is no different. This time
around though, the brand new iPhone will
be running on iOS 9.
Apple Watch
While so many others have failed in their
bid to popularise smart watches, the world
is looking intently at Apple this year to see if
itll succeed where others have failed. The
Apple Watch is scheduled to be released early this year, and is compatible with iPhones Google Glass
running on iOS 8.2.
Google Glass has been one of the most highly
anticipated wearable technology for a while
Amazon Kindle Fire 2015
now but it still hasnt been released to the
The Kindle Fire was released in 2011, and in public. Those interested can only obtain one
2012 it became the second bestselling tablet in from Google through its Explorer Program
the world. This year, Amazon is set to release (a prerequisite is that you must have a US
mounted display that is set to be released

this year and will be perfect for gamers who
want to step inside their favourite games and
virtual worlds while allowing one to seamlessly look around the virtual world, just as
one would in real life.
shipping address). There are rumours that Windows 10
2015 is the year that itll finally be available After 8, comes 10. Wait, what? Yes, according
to the masses!
to Bill Gates, 10 comes after 8. Windows 10 is
the successor to Windows 8.1, and is schedOcculus Rift
uled to be released within the year. Windows
Virtual reality is no longer a thing of the fu- 8 haters will be very happy to note that the
ture. The Occulus Rift is a virtual reality head desktop Start menu is being brought back!
S P O RT S 3 1
Gerrard begins goodbyes

amid echoes of 1988
The original Wimbledon stunned champions Liverpool 1-0 at that memorable match
BY TOM WI L L I A MS
LONDON: Steven Gerrard will begin his farewell tour of English

football today, when Liverpool
visit fourth-tier AFC Wimbledon
for an FA Cup third round tie rich
in historical significance.
Recalling as it does the 1988 final, when the original Wimbledon
stunned league champions Liverpool 1-0, the match was a captivating fixture even before Gerrards
announcement last Friday that
he will leave Anfield at the end of
the season.
The FA Cup gave Gerrard one
of his greatest triumphs when, in
2006, he inspired Liverpool to victory on penalties over West Ham
United with a brace that included
a sensational 32m equaliser in
stoppage time.
Gerrard also lifted the trophy
in 2001, when Liverpool came
from behind to beat Arsenal 2-1,
and victory in Mays final would
go some way towards healing the
pain of last seasons spectacular
Barca transfer
ban gives youth
chance to
ourish
BY TI M HA NLON
BARCELONA: Barcelona coach

Luis Enrique believes the clubs
transfer ban is an invitation
for players from their famed
youth academy to push for a
place in the first team. The Catalan club have been renowned
for their development of young
talent through the Masia
since the arrival in the late
1980s of coach Johan Cruyff,
who put a special emphasis on
nurturing home grown players.
Now they will have to rely
on youth to replenish the first
team after losing an appeal last
Tuesday against a FIFA sanction
for an alleged breach of rules on
the transfer of foreign under-18
players. That means they are unable to buy during the coming
two transfer windows.
Enrique told a news conference: The squad is sufficiently
strong and this is a stimulus for
the youth players. It is an invitation for them to show what
they can do.
Barca B is set up to feed the
first team with players and I am
happy with the way things are
going and what they are offering us. Reuters
Gerrard has been used sparingly by manager Brendan Rodgers

over the opening months of the
campaign and may start on the
bench at Wimbledons 4,800-capacity Kingsmeadow stadium in
south-west London.
A place in the League Cup final
is closer for Liverpool, who are
scheduled to face Chelsea in a twoleg semi-final later this month, but
Gerrard will not want a shock FA
Cup exit to tarnish his swansong.
Asked what Liverpools visit represents for the club, AFC Wimbledon chief executive Erik Samuelson, who was present at Wembley
in 1988, told Britains Press AssoGerrard in action in a Champions
ciation: Dreams.
League Group B match against FC
He added: Thats what it is
Basel at Aneld in Liverpool last
all about. It is a chance to dream
month. Photo by Reuters
about what might happen and
fond imaginings of the end result.
I want people to come away
thinking this is a decent club, they
collapse in the Premier League league Jordan Henderson believes know how to do things properly
title race.
lifting the FA Cup would be the and theyre respectful, but they
Gerrard will turn 35 on the day perfect way for the clubs inspira- gave them a hard time on the
of the final and his midfield col- tional captain to sign off.
pitch. AFP
Pulis hails four-goal Berahino

after West Brom romp
LONDON: Tony Pulis watched Saido Berahino (pic) score four goals
in his first match in charge of West
Bromwich Albion on Saturday and
dampened speculation about the
strikers future by saying he is looking forward to working with him.
Media reports have suggested the new manager is prepared
to sacrifice Berahino and use the
funds from a 20 million (RM107
million) transfer to shore up his
new clubs fight for Premier League
survival.
However, after seeing the player shine in the 7-0 drubbing of
minor league Gateshead in the
FA Cup third round, Pulis told
reporters: Saido Berahino is a

very talented boy.
I look forward to working with
him as a player for however long I
am here as manager.
Berahinos moods had been of
concern at The Hawthorns in the
past and he did not even celebrate
his goals against Gateshead.
Pulis said: There is always going to be transfer speculation and
you can see why. He has great pace,
great balance and scores goals.
When I came here the chairman had not received any offer for looks as though hes got the pohim and we will try our damnedest tential to be a good player.
to try and improve him.
West Brom are fourth from botHe can score a goal and he tom in the league. Reuters
Evans told to rule out Malta move

LONDON: Convicted rapist Ched
Evans was warned on Saturday that
he wont be allowed to resume his
career overseas.
Evans has been looking for a
new club following his release
from prison last year and the former Wales and Sheffield United
striker was offered the chance to
join Maltese side Hibernians last
Friday until the end of the season.
But the Ministry of Justice (MoJ)
moved quickly to rule out that
possibility, pointing out that, as a
convicted sex offender on licence,

the 26-year-old is effectively barred
from working abroad.
We are determined to have
one of the toughest regimes in the
world for managing sex offenders,
to stop them re-offending and to
protect victims, a MoJ spokesman said.
Probation officers must give
permission for sex offenders on licence to take up new jobs and this
includes ensuring they hold regular
face to face meetings this effec-
IN BRIEF
UAE, Kuwait call o
friendly over dispute
GOLD COAST (Australia): A disagreement over the recording
of a pre-Asian Cup friendly between the United Arab Emirates
and Kuwait led to a last-minute
cancellation of the match on Saturday, robbing both teams of vital match practice before the Jan
9 to 31 tournament. The players
had lined up in the tunnel ahead
of the game on the Gold Coast
but it was called off after the
UAE refused to agree to Kuwaits
request to record the match. In
a statement on its website, the
UAE Football Association said
both sides had agreed to play
the friendly behind closed doors
without recording, broadcasting
and the presence of the media
or public. Reuters
Podolski meets Inter

boss, leaves Arsenal
MILAN: Lukas Podolskis transfer to Inter Milan moved closer
on Saturday when the Germany forward met coach Roberto
Mancini at the Serie A sides
training ground and said his
goodbyes to Arsenal. The
World Cup winner was at the
Centro Sportivo Angelo Moratti today (Saturday) to get to
know his new training ground
and meet the Nerazzurri coach,
an Inter statement said as media reported that a medical had
been passed and he would soon
sign. The 29-year-old has become a bit-part player at Arsenal despite injuries to Olivier Giroud and Theo Walcott,
with Arsene Wenger appearing
to better trust the speed and
skills of younger players such
as Danny Welbeck and Alex Oxlade-Chamberlain. Reuters
Trimmed Cerci can help

Milan trim gap
MILAN: New AC Milan signing
Alessio Cerci has been half-jokingly ordered to shave off his
scruffy beard by owner Silvio
Berlusconi who believes the improving Rossoneri can do little
more to better their squad. Cerci
will officially join Milan on loan
from Atletico Madrid as part of
the swap deal with Fernando Torres when the Italian transfer window opens today (Saturday) and
trained with the seventh-placed
Serie A side on Saturday. We
have been following Cerci for
three years. Finally he has arrived
and he has already promised
me he will cut off his beard for
his first match, Berlusconi told
Milan Channel. Reuters
West Ham secure signing

of defender Henry
tively rules out working abroad.
The announcement is a further
setback to Evans who has been
seeking to return to action following his release from prison in
October after serving 2 of a fiveyear sentence for rape.
Evans was jailed in April 2012
for raping a woman in a hotel room
in Rhyl, North Wales. The player denied the offence, saying the
sex was consensual, but he was
found guilty by a jury at Caernarfon
Crown Court. AFP
LONDON: West Ham United

have signed Canadian defender Doneil Henry from Apollon
Limassol of Cyprus, the English
Premier League club announced
on Saturday. Henry, 21, arrives
for an undisclosed fee on what
West Ham have described as
a long-term contract. Henry
started his career at Toronto FC
and spent time training with
West Ham in 2013 before being
signed by Apollon Limassol and
loaned back to Toronto. AFP
3 2 S P O RT S
Nadal, Djokovic, Federer

set for gripping season
All three are chasing their own personal goals
BY RI C H A RD EATON
DOHA: Rafael Nadal and Novak

Djokovic lead the Qatar Open field
from today while, 12,000km away
in Brisbane, Roger Federer starts
his 18th year on the tour as tennis
heads for another gripping season.
The details of Nadals plan to
preserve his hopes of one day becoming the most successful player of all time may become clearer
when he starts his title defence at
Qatar.
Although the Spaniard is almost
five years younger than Federer, and
is only three Grand Slams behind
his all-time record of 17, changing
his goals and his schedule will be
vital if he is to surpass the Swiss
genius.
After an appendectomy cut short
a 2014 season which also brought
problems with his back and wrist,
Nadal has accepted that stringent
compromises are required.
The wear and tear of more than
850 matches has left Nadal unable
to sustain intense physical pressure
for long periods, and has caused
him to give up ambitions of ever
again being world No 1.
Preserving his physical condition is a precondition for Nadal preserving his career as well, though
he has mental repair work as well.
Sri Lankan player

reconsidering retirement
after Bradman record
WELLINGTON: Sri Lankan
great Kumar Sangakkara is reconsidering retirement plans
after his 203 against New Zealand yesterday put him one
behind Australian legend Don
Bradman for the most double
centuries. The 37-year-old had
indicated the second Test in
Wellington could be his last
with the intention of retiring
from all international cricket after the World Cup which
starts next month. But after a
match-changing innings of 203
to lead Sri Lanka out of trouble
and put them in control of the
Test at the Basin Reserve, Sangakkara said the lure of overtaking Bradman meant he may
extend his career. AFP
Johnson out of nal Test

against India
(From left) Nadal, Djokovic and Federer are ready for more exciting tennis. Photos by AFP
After missing the whole of the

2014 American hard court season
and not competing since October
24, the effect of these absences is
important.
The Doha seedings suggest he
should face world No 1 Djokovic
in this Saturdays final, but a fever caused Djokovics withdrawal from the final of the weekend
exhibition event in Abu Dhabi.
It remains to be seen whether he
recovers enough to make his first
appearance in Doha.
Djokovic, who picked up his
seventh major at Wimbledon in
2014, became a father only three

months ago and has been taking
advice from Federer on how best to
cope with having a family on tour.
The only thing which has prevented the 27-year-old Serb from
joining Federer and Nadal in the
career Grand Slam club is the absence of the French Open title, the
rectifying of which has become his
biggest career goal.
He will try again at Roland Garros in May and June by which time
both Djokovics state of mind and
Nadals physical fitness may be
better understood.
Federer, meanwhile, continues

to confound the doubters.
The Swiss great was runner-up
to Lleyton Hewitt in last years final
in Brisbane and should he win four
more matches this week and lift
his 74th tour-level title, he would
become just the third player in the
Open Era to reach the 1,000 match
wins milestone after Jimmy Connors (1,253) and Ivan Lendl (1,071).
World No 2 Federer compiled an
ATP World Tour-best 73-12 match
record in 2014, including five titles,
and helped Switzerland win a first
Davis Cup crown. AFP
tralia this week as the 18-time grand

slam singles champion bids for a
sixth title at the Melbourne showpiece later this month.
Temperatures in Perth are expected to reach 41C and Williams,
who won the last of her Australian
Open titles in 2010, said she was
looking forward to the warm feeling
in todays opener against Italy after
a cool winter at home.
If anything its going to help

me for Melbourne, Williams told
reporters yesterday. Perth is one
of the most hottest places Ive ever
played, so it will be really good for the
preparation in Melbourne, which is
always super hot.
I havent won in Australia for
several years, but theres also a lot
of other people who want too. Ill
just have to do my best.
SYDNEY: Australia fast bowler Mitchell Johnson has been

ruled out of next weeks fourth
Test against India because of
the injury he sustained to his
right hamstring during the third
game in Melbourne. We have
been closely monitoring his
recovery since that match but
feel he has not fully recovered,
team physio Alex Kountouris
said in a statement yesterday.
He will not play in the upcoming Sydney Test match. We
expect him to recover in time
to play a part in the upcoming
tri-series against England and
India. The rescheduled fourth
Test begins on tomorrow before the international tri-series
starts 12 days later. Reuters
Bangladesh recall Nasir

for World Cup
Williams welcomes Perth heat

PERTH: World No 1 Serena Williams backed the searing Perth
conditions as perfect preparation
for her Australian Open title bid
but the weather proved too hot
for Canadian Eugenie Bouchard,
who was thrashed in yesterdays
Hopman Cup opener.
Williams will pair up with John
Isner for the United States in the
mixed-team event in Western Aus-
IN BRIEF
With Flavia Pennetta, Czech Lucie Safarova and Bouchard as opponents in the round robin matches, Williams will have no dearth of
quality opposition.
The womens field is excellent
here. Its going to be great, the
33-year-old said. More than anything its a great time to get match
play and not get stressed out too
much. Reuters
Sangakkara gives Sri Lanka

advantage in second Test
White o to winning start as

Montpellier stuns Toulon
WELLINGTON: Kumar Sangakkara completely changed the complexion of the second Test against New Zealand with an outstanding double century as the visitors finished the second day with a
113-run lead. Sangakkara, who scored just seven runs in the first
Test loss in Christchurch, made 203 in Sri Lankas 356 and held
together four important partnerships that rescued his side from a
precarious 78 for five at the start of play yesterday.
The visitors, who need to win the Test to level the two-match
series, were dismissed with about an hours play remaining to
give Sri Lanka a 135-run lead after New Zealand were bowled out
for 221 on the first day. The hosts finished the day on 22 without
loss, with Tom Latham on nine and Hamish Rutherford 12 not out.
Sangakkara, who became the fastest man to score 12,000 Test
runs last Saturday, dominated the days play. The 37-year-olds 11th
Test double century moved him to within one of the record held
by Australias Don Bradman. Reuters
PARIS: South African World Cup winning coach Jake White got off
to a winning start at Montpellier as the Top 14 strugglers beat European and French rugby champions Toulon 16-12 last Saturday.
White was brought in as a consultant to replace the suspended
Fabien Galthie in an aim to stem the tide of eight losses in their last
nine matches in European and domestic action. And powered by
a second-half Alex Tulou try converted by Ben Lucas, Montpellier grabbed a determined victory in front of their home crowd to
move up to seventh with 35 points, a point behind Bordeaux (36)
and ahead of Toulouse (33) who played in Clermont yesterday.
Benoit Paillaugue had put Montpellier ahead with two early
penalties as the score was balanced 6-6 at half time while all of Toulons points came off the boot of Welsh full-back Leigh Halfpenny.
Jake White told the players to get back to basics and what we
repeated throughout the week was produced on the pitch, said
Montpellier president Mohed Altrad. AFP
DHAKA: Bangladesh yesterday

recalled batsman Nasir Hossain
and picked all-rounder Soumya
Sarkar in their 15-man squad
for this years cricket World Cup
in Australia and New Zealand.
Nasir missed the recent home
series against Zimbabwe but
returned to form in the domestic 50-over league. All-rounder
Soumya, 21, was chosen ahead
of the experienced Imrul Kayes
and Shamsur Rahman despite
having played just a single oneday international so far. The
return of Nasir will add depth
in our batting, chief selector
Faruque Ahmed told a press
conference. AFP
De Villiers takes South

Africa closer to lead
CAPE TOWN: AB de Villiers
remained undefeated as South
Africa edged towards a first innings lead on the third day of
the third and final Test against
the West Indies at Newlands
yesterday. South Africa were
313 for five at the interval, 16
runs behind the West Indian
first innings total, with their
hopes resting largely with De
Villiers, who was on 84 not out,
the highest score of the match.
AFP

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