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FBM KLCI 1726.73
0.53
KLCI FUTURES 1727.50
0.50
STI 3353.45
14.59
RM/USD 3.8044
CPO RM2190.00
5.00
OIL US$57.10
0.41
GOLD US$1131.90
PP 9974/08/2013 (032820)
PENINSULAR MALAYSIA RM1.60 (INCLUSIVE OF 6% GST)
MONDAY JULY 20, 2015 ISSUE 2005/2015
FINANCIAL
DAILY
MAKE
BETTER
DECISIONS
www.theedgemarkets.com
4 HOME BUSINESS
Exciting times
ahead for Taliworks
4 HOME BUSINESS
Signature
International
growing from
strength to strength
67 HOME BUSINESS
10 stock picks
in current
weak market
8 HOME BUSINESS
Win a RM1m cash

voucher to buy a
Mah Sing dream
home
26 W O R L D B U S I N E S S
Greek banks to
reopen, PMs new
cabinet takes over
Sarawak Report blocked

PA G E 2
12.00
M ON DAY JU LY 2 0 , 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
Sarawak Report blocked

Decision taken due to complaints from the public
Analysts see
limited upside
for Maxis
earnings
CYBERJAYA: The Malaysian

Communications and Multimedia Commission (MCMC)
has admitted to instructing local Internet service providers to
block access to whistle-blower
site Sarawak Report, claiming
that the site was disrupting national stability.
In a statement posted on its
Facebook page, the commission

said the decision was taken due
to complaints from the public.
The site was blocked under
Section 211 and Section 233 of
the MCMC Act, it said.
The site has displayed information that is yet to be verified,
and information that is still under investigation, it said.
The site has not been accessible from Malaysia since yesterday evening, though it could
still be accessed through proxy
servers.
Sarawak Reports editor and
founder Clare Rewcastle-Brown
was planning to issue a statement on the matter at press time.
The Malaysian Insider
Malaysian police to speak to Justo

over disclosure of classified info
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KUALA LUMPUR: The Malaysian

police, upon getting permission
from the Thai police, will speak to
Xavier Andre Justo (pic) over his
claim he had met with key Malaysian opposition politicians with the
intention to sell classified information, Deputy Home Minister Datuk
Seri Dr Wan Junaidi Tuanku Jaafar
said yesterday.
He said it is necessary for the
Malaysian police to meet the former executive of PetroSaudi International Ltd (PSI) to get first-hand
information on the disclosure by
the Thai police following their investigation of Justo.
Inspector-General of Police Tan
Sri Khalid Abu Bakar will meet Justo
upon getting permission from the
Thai police, and only then can the
investigation be carried out, including calling up the Malaysians
involved over the disclosure, he
said when contacted by Bernama.
Bernama had reported Khalid as

saying that the Malaysians involved
would be asked to give statements
on the latest disclosure by the Thai
police following their investigation
of Justo.
Last Thursday, Thai police confirmed that Justo, a Swiss national, had met with key Malaysian
opposition politicians at a hotel
in Singapore to sell confidential
information on PetroSaudi.
Wan Junaidi said the Malaysian

police should be allowed to question Justo before any action is taken
against him.
He said he believed that the Malaysians who had been identified
would offer their full cooperation
in the matter.
He also said that the case should
be handled carefully so that it does
not have any implication for Malaysians as it could undermine democracy and the countrys leadership.
The Thai police arrested Justo on
June 22 on charges of blackmailing PSI, an international company
based in Saudi Arabia linked to a
controversy surrounding 1Malaysia
Development Bhd (1MDB).
Following the alleged sale of
the documents, several emails and
documents were published by the
Sarawak Report news portal that
led to allegations against 1MDB.
Bernama
German minister in Iran with business leaders

BY DEBORA H CO LE
BERLIN: German Economy Minister Sigmar Gabriel flew to Iran

yesterday, becoming the first top
Western official to visit the country since world powers and Tehran
reached a historic nuclear deal.
Gabriel, who is also Chancellor
Angela Merkels deputy and energy
minister, embarked on the threeday trip with a small delegation of
representatives from companies,
industry groups and the sciences,
his ministry said in a statement.
Gabriel is due to hold talks with
Iranian President Hassan Rouhani,
three ministers, the head of the
central bank and the chamber of
commerce following last Tuesdays
landmark nuclear agreement, German news agency DPA reported.
After Tehran, he will travel to the
southern city of Isfahan.
The long-delayed nuclear pact
lays the foundation for normalising economic ties with Iran on the
condition that the steps set out in
it are now implemented, Gabriel
said in the statement.
The head of the German Chambers of Commerce and Industry,
Eric Schweitzer, accompanying

Gabriel, called the trip an encouraging sign for companies that lost
ground to Chinese and South Korean firms in the resources-rich Gulf
state due to Western sanctions.
Iran and the P5+1 group Russia, the United States, China, Britain, France and Germany struck
the agreement with Iran after a
13-year stand-off over its disputed
nuclear programme.
The international agreement
finalised in Vienna aims to ensure
the Islamic republic does not obtain nuclear weapons.
In exchange, the country of 78
million people will be given stepby-step relief from crippling international sanctions.
Schweitzer called for German
companies to be given legal protection for upcoming investments
made in Iran in case Tehran violated
the terms of the nuclear deal and a
trade embargo were imposed again.
Such a framework would give
companies the necessary legal security to return to Iran, he told DPA.
Gabriel later told the Bild newspaper in an article to be published
today that long-term ties with Teh-
ran would depend on Iran recognising Israel.

Israels right to exist must no
longer be questioned. Truly strong,
stable relations will only develop
when this is acknowledged by Iranian policymakers, he said.
I will repeatedly make this clear
during my visit.
Iran and Germany were historically close trade partners but
business dropped off as a result
of the sanctions, declining to 2.4
billion (RM9.89 billion) last year
from around 8 billion in 20032004, according to German figures.
Schweitzer said bilateral trade
could quadruple in the next two to
three years to around 10 billion.
German business leaders have
pointed to pent-up demand in
modernising Irans industrial infrastructure, particularly in the oil
sector, as presenting lucrative opportunities.
Engineering, chemical, pharmaceutical, car parts and railway companies are all eyeing big contracts.
Iran has the worlds fourth largest oil reserves and the second in
gas, meaning it has the biggest combined energy deposits. AFP
IN BRIEF
Taiwans KMT picks
pro-China Hung for
presidential race
TAIPEI: Taiwans ruling Kuomintang (KMT) officially endorsed pro-China candidate
Hung Hsiu-chu yesterday to
run for president next year, as
the deeply divided party faces
a battle to regain public support. Known as xiao-la-jiao
or little hot pepper for her
straight-talking style, Hung is
one of two main female presidential candidates, in elections
likely to see the countrys first
woman leader voted in. But
Hungs conservative views fly
in the face of voter sentiment as
fears grow over increased Beijing influence. Concern about
the islands warming ties with
China was one reason behind
the Beijing-friendly KMTs rout
in November local elections, a
barometer for the presidential
vote next January. AFP
Netanyahu urges US
to hold out for a better
Iran deal
WASHINGTON: Israeli Prime
Minister Benjamin Netanyahu
urged US lawmakers to hold
out for a better Iran deal and
said there was no way to compensate Israel if the nuclear
agreement goes through. I
think the right thing to do is
merely not to go ahead with this
deal. There are many things to
be done to stop Irans aggression and this deal is not one
of them, Netanyahu said on
CBS Face the Nation as he
continued a string of US media
interviews denouncing the deal
reached last Tuesday between
Iran and six major powers. The
deal must be reviewed by Congress, where lawmakers will
have up to 82 days to decide
whether to reject it. AFP
Myanmars Suu Kyi

invokes fathers sacrice
ahead of elections
YANGON: Myanmars Aung
San Suu Kyi invoked the memory of her assassinated father
yesterday, describing upcoming elections as an opportunity
to continue his legacy and bring
real change to the former junta-ruled nation. The Nov 8 poll
will be the first general election in a quarter of a century
to be contested by her National
League for Democracy, which
is expected to make huge gains
at the ballot box if the vote is
free and fair. AFP
Saudi king takes over

entire French beach
VALLAURIS (France): Beach
lovers on the French Riviera
expressed their anger yesterday over the imminent arrival
of the Saudi royal family, who
have ordered a long stretch of
beach to be closed off to the
public. Nestled in the rocks between the coastal railway and
the translucent waters of the
Mediterranean, the grounds of
the royal familys immense villa stretches across a kilometre
of Riviera coastline between
Antibes and Marseille. AFP
4 HOME BUSINESS
Exciting times ahead for Taliworks

Company eyeing assets in waste management, toll roads and power generation
BY L EVI N A L I M
KUALA LUMPUR: Taliworks Corp

Bhd, which has a high-powered
board, is in for an exciting time
ahead. The companys joint venture with the Employees Provident
Fund (EPF), TEI Sdn Bhd, will be
the platform for Taliworks to spread
its wings in the local infrastructure
and utilities scene. It, indeed , aims
to gain a presence in the power
generation sector.
Taliworks executive director Ronnie Lim Yew Boon said the group is
eyeing assets in waste management,
toll roads and power generation.
Lim is excited about TEI Sdn
Bhd, in which Taliworks holds a
51% stake and the EPF 49%.
Taliworks is currently grouping
its mature and stable operating infrastructure assets with predictable
cash flows to be injected into TEI.
We are leveraging on our deal
structuring and sourcing abilities
and TEIs shareholders financial
muscle to bid for big projects. We
have big plans in the areas of waste
management, toll roads, power
generation, be it in Malaysia or other developed countries including
Australia, he told The Edge Financial Daily in an interview.
To date, Taliworks (fundamental: 1.3; valuation: 2.4) has injected
RM546 million worth of assets into
TEIs wholly-owned subsidiary,
Cerah Sama Sdn Bhd.
These are mature operational
infrastructure assets, yielding revenue with minimal uncertainties
as the EPFs mandate to us is that
their hurdle rate is a minimum 12%
equity IRR (internal rate of return)

and 6% dividend yield.
Together with EPF, we will go
and acquire more assets, said chief
investment officer Kevin Chin, adding that the size of each of the assets Taliworks is eyeing could be
anywhere between RM500 million
and RM1 billion.
Taliworks is now evaluating
these projects and hopes to secure
them within the next six months.
Taliworks has gathered a
high-powered board in its pursuit
of new assets. Two of its directors,
for example, are experts in power
generation former Malakoff Corp
Bhd managing director Ahmad Jauhari Yahya and former investment
banker Vijay Vijendra Sethu, who
was previously a board member
of Malakoff.
Taliworks surprised investors
with the recent appointment of Ahmad Jauhari and former Economic Planning Unit director-general
Raja Datuk Zaharaton Raja Zainal
Abidin as non-executive directors
of the company.
The addition of these corporate
and public sector heavyweights
strengthens Taliworks already impressive board which includes
former housing and local government minister Tan Sri Ong Ka Ting
as Taliworks chairman.
We hope to achieve double-digit net profit growth moving forward
through organic growth and future
acquisitions, said Lim, adding that
its merger and acquisition activities
will enable the company to yield a
stronger net cash flow, hence more
generous dividends.
Lim (left) and Chin. Lim says the company hopes to achieve double-digit net prot
increase through organic growth and future acquisitions. Photo by Patrick Goh
Taliworks aims to be a company

that offers good dividend and growth
prospects. It has a dividend policy
of distributing 75% of its net profit
(normalised earnings) to shareholders. Year-to-date, it has announced
a total dividend of 10 sen per share.
Also a boon to Taliworks is the
positive progress in Selangors water consolidation efforts.
We are optimistic the Selangor and federal governments will
move on with their water projects
projects we are eyeing include
various water infrastructure improvement and flood mitigation
projects, Lim said.
He noted that Taliworks had successfully clinched one third of the
water projects it bid for in the past,
thanks to its strong track record as
a water treatment specialist.
Its parent company, LGB Bhd,
has its beginnings as a specialist in
water construction projects, from

solid waste management to water
operations and hospital services.
Most of the water supply projects in Selangor were at one point
either built or operated by the LGB
group, said Lim.
He added that Taliworks is also
keen on bidding for non-revenue
water projects in the various states.
It currently has a construction tender book of RM1.2 billion to RM1.5
billion.
The resolution of Selangors water impasse means that Taliworks
would be able to hasten the recovery of the outstanding amount of
RM373 million owed to it by Syarikat Pengeluar Air Sungai Selangor
(Splash), which was deferred as a
result of the impasse.
Taliworks wholly-owned subsidiary Sungai Harmoni Sdn
Bhd manages, operates and
maintains Splashs Sungai Selangor

Phase 1 water treatment facilities.
In the first quarter ended March
(1QFY15) Taliworks net profit
jumped more than four times to
RM15.03 million from RM3.75 million, mainly due to the reversal of
provision for discounting on the
deferred payment by Splash.
Revenue was 28.3% higher at
RM97.02 million from RM75.60 million in the previous corresponding quarter, on higher contribution
from both its construction and waste
management segments, as well as
consolidation of financial results
from the Cheras-Kajang Highway.
Taliworks is also involved in the
highway management business, with
concessions for both the Cheras-Kajang Highway and the New North
Klang Straits Bypass Expressway. It
is looking at an annual 2.5% to 3.5%
traffic growth for its highways moving forward, barring toll rate hikes.
According to Lim, the completion of upgrades of its wastewater
treatment plants in China would
improve the utility divisions performance, as tariff rates would almost triple upon the completion
of each of its plants.
As for its water treatment business, he said Taliworks is looking
to expand the capacity of its plants
in Selangor and Langkawi due to
rising demand for treated water in
the two states.
Taliworks share price has been
on a steady climb since August last
year. The stock has nearly tripled
from RM1.10 a year ago to RM3.08
last Thursday, bringing a market
capitalisation of RM1.32 billion.
Signature International growing from strength to strength

BY GHO C H EE Y UAN
KUALA LUMPUR: Signature International Bhd is set to end its financial year ended June (FY15) with
a record net profit, having already
surpassed earnings for the whole of
FY14 in the second quarter ended
December 2014 (2QFY15).
Analysts expect the kitchen system designer and distributors net
profit to continue to gain traction
over the next two years on the back
of a tender book totalling some
RM400 million.
An analyst at a local brokerage
said Signature is currently bidding
for RM400 million worth of jobs,
including Phase 2 of the Battersea Power Station project (BSP2)
in London and Chinas Country
Garden condominium project in
Iskandar Malaysia, Johor.
The tender bid winner for the
BSP2 kitchen work job, which is estimated to be worth around RM20
million to RM30 million, is expected to be known by the middle of
next year.
The kitchen job contract for the
Country Garden condominium
project which is scheduled for

delivery in the next two years
is estimated to be worth at least
RM100 million. The kitchen jobs
may be broken down into two to
three jobs and should be awarded
by the end of this year.
As per managements guidance,
the groups success rate on its tender book is around 40% to 50%.
Therefore, I believe that Signature
stands a high chance of securing
some of the contracts, the analyst
told The Edge Financial Daily.
He noted that Signature has also
proven its capability to deliver its
projects on time, thus enabling it to
establish a good relationship with
property developers.
Signature saw its net profit for
3QFY15 surge more than 3 times
to RM32.25 million from RM9.06
million a year ago, surpassing the
RM17.84 million net profit posted for
the full FY14. Revenue for 3QFY15
grew 94.9% to RM217.97 million
from RM111.83 million in 3QFY14.
The group attributed the improved performance to higher revenue recorded from its project and
retail division of the kitchen and
wardrobe segment and white goods,

as well as an overall improvement in
margins due to economies of scale.
The analyst expects the project
division of the kitchen and wardrobe segment will continue to be
a major contributor to the groups
results going forward.
Signatures current outstanding
order book is around RM160 million, which will keep it busy for the
next one to two years.
The analyst said should Signature clinch the kitchen job contracts for both BSP2 and the Country Garden condominium project,
it would keep the group busy for at
least five years.
The analyst also sees the development boom in high-rise buildings in the country spell opportunity for Signature to grow further.
The [property development]
trend now is that most of the property developers would choose to
build high-rise buildings priced
from RM500,000 to RM1 million
and above.
Normally these iconic developments will come equipped with
kitchen and wardrobe and other
basic necessities, he added.

CIMB Research senior analyst
Nigel Foo said even after the share
price outperformance this year,
Signatures valuation is still attractive at 5.9 times its FY16 forward
price-earnings.
The stocks valuation could rise
further if the group secures the
Country Garden and the BSP projects over the next few months, he
said in a report dated July 13.
Year-to-date, Signatures share
price has risen 46.3%, outperforming the FBM KLCIs 1.96%
decline. In addition, a new substantial shareholder, Hong Kongs
Value Partners Group, emerged in
mid-June. Value Partners Group
currently owns a 5.6% stake in the
company, said Foo.
Foo believes Signature has the
potential to register record net profit over the next few years even without the Country Garden and the
BSP projects.
He estimates that Signature will
generate a net profit of RM52.3
million in FY16 and RM56.6 million in FY17.
Our current earnings forecasts
do not include any potential earnings from [the] Country Garden

and BSP [projects]. If we assume
that Signature wins 100% of the two
contracts, its order book would rise
by RM340 million.
Based on our earnings sensitivity analysis, Signatures FY16 and
FY17 net profit would rise by 71%
and 76% respectively if the group
secures 100% of the Country Garden and the BSP jobs, he added.
Signature (fundamental: 2.3;
valuation: 2.1) shares closed six
sen or 2.23% higher at RM2.75 last
Thursday, bringing a market capitalisation of RM329.88 million.
The Edge Researchs fundamental
score reflects a companys profitability and balance sheet strength, calculated based on historical numbers.
The valuation score determines if a
stock is attractively valued or not,
also based on historical numbers.
A score of 3 suggests strong fundamentals and attractive valuations.
Go to www.theedgemarkets.com for
more details on a companys financial dashboard.
8 HOME BUSINESS
Win a RM1m cash voucher

to buy a Mah Sing dream home
After the closing date, 21 selected finalists will battle it out in the grand finale
PHOTO BY KENNY YAP
BY TA N A I L EN G
t may sound too good to

be true but with just a
few clicks, you could be
on your way to winning a
RM1 million cash voucher
to purchase your Mah Sing
dream home.
A collaboration between The
Edge Media Group and Mah Sing
Group, the online contest will close
on July 31. Thousands of participants from Malaysia and Singapore
have taken part since the contest
started on June 20.
After the closing date, 21 selected finalists will battle it out in
the grand finale, dubbed Survivor Challenge a mix of simple
knowledge and physical games
at Mah Sings Southville City@KL
South in Bangi, Selangor, on Aug 22.
The Edge-Mah Sing Millionaire
Contest web page features a list of
interesting online activities, which
participants can take part in to gain
tokens. The higher the number of
tokens they have, the higher their
chances of being selected as one of
the finalists. The finalists will be revealed on Aug 14.
Mah Sing chief executive officer
(CEO) Ng Chai Yong says, This contest is about making someones dream
of owning a premier lifestyle property
come true. And that is exactly what it
From left: Mah Sing commercial COO Andy Chua, The Edge Communications managing director Au Foong Yee, Mah Sing marketing and
special projects deputy general manager Rachel Leong, Ng, Ho, Mah Sing corporate communications general manager LyannaTew and
The Edge Media Group senior managing editor Azam Aris during the ocial launch of The Edge-Mah Sing Millionaire Contest.
is there are no strings attached

one does not need to be a customer of
Mah Sing or The Edge to participate.
He emphasises that participation
in the contest is free of charge. Basically, anyone can be a millionaire.
We are also hopeful that through
this contest, we will be able to make
a positive change and difference in
someones life. I think the highlight
for us will be seeing the smile on the
winners face, he says.
The Edge Media Group publisher
and group CEO Ho Kay Tat concurs.

We are very excited about the overwhelming response we have been
getting for this contest. The grand
prize voucher for a Mah Sing dream
home has definitely attracted a
sizeable number of participants,
making it THE contest of the year.
We have also seen that through
this contest, more and more people
are learning about the vast array of
proprietary news, research, data,
analytics and tools available on
theedgeproperty.com.
The contest is open to all Malaysians and permanent residents in
Malaysia as well as Singaporeans
and permanent residents in Singapore aged 21 years and above.
Participants must register at theedgeproperty.com and use the
Fair Value tool before moving on to
the dedicated contest page on Mah
Sings website, where they will have
to take part in several online games
and activities to collect tokens.
While most participants are awed

by the main prize, some are sceptical
about their chances of winning and
they think that the prizes would be
won only by those who have close
relations with Mah Sing employees.
However, the terms and conditions of the contest clearly state: Employees of The Edge and Mah Sing
Group and their immediate family
members as well as representatives
and service providers of both companies are not eligible to participate.
The contest marks the 21-year
business relationship between the
two companies. It is also creating
greater awareness of what Mah
Sing has to offer.
With an established presence
of more than 20 years in the property development industry, Mah
Sing has a wide range of residential
projects in the Klang Valley, Johor
Baru, Penang and Sabah for the
winner to choose from.
The contest will also provide
participants with the opportunity
to try out theedgeproperty.com
Fair Value tool to find out the
fair value of any property based on
actual transacted prices.
This comprehensive online
property platform offers a full range
of analytical tools, including indicative valuations, past transactions,
rental rates, trends and hot spots
and new project launches.
Showcase of Mah Sings million-ringgit dream homes

Icon Residence, MontKiara,
Kuala Lumpur
Icon Residence is strategically located in one of the Klang Valleys
most sought-after locations and
a symbol of an unparalleled urban lifestyle. Offering excellent
accessibility, the development
comprises three towers and 1 to
4+1-bedroom units with different
layouts to suit different lifestyles.
Aspen@Garden
Residence, Cyberjaya
Aspen@Garden Residence is the
fourth precinct of the Garden Residence. The 69 limited edition 3-storey bungalows are
designed as dream homes for multi-generational families
and come with 9+1 bedrooms and 9 bathrooms. With a
built-up of 7,796 sq
ft, each home has
open plan interiors. Residents are
also provided with
a luxurious dedicated entertainment floor with a
rooftop garden and
an outdoor Jacuzzi.
Ambrosia@Kinrara Residence, Puchong
Ambrosia@Kinrara Residence offers exclusive 66 three-storey superior semi-detached bungalows with a built-up of
3+1-bedrooms, with builtups of 1,378 to 1,680 sq ft.

The Meridin@
Medini, Johor
Meridin Suites Residences is
part of The Meridin@Medini development, located in
the heart of Medini in Iskandar Malaysia. The project is a
stones throw from Legoland
and the upcoming financial
hub, Medini Business. It offers
flexible spaces with choices
from 1 to 4+1-bedroom lay4,468 sq ft each and 79 three-storey executive bungalows outs with built-ups of 521 to 2,134 sq ft.
with built-ups of 5,688 sq ft onwards. Kinrara Residence
is a mixed-use development located in the fast-growing The Residences@Sutera Avenue, Sabah
Puchong township. It is also situated next to the pristine The ResidencAyer Hitam Forest Reserve.
es comprises
contemporary
Icon City, Petaling Jaya
serviced apartIcon Residenz is one of the components of Icon City an ments atop
integrated development comprising a retail mall, shopof- the 2-storey
fices, office towers and a hotel. Located at the intersection Festive Retail
of Federal Highway and Lebuhraya Damansara-Puchong, Mall. It offers
Icon Residenz offers residents the opportunity to live in three types of
the tallest residential tower in Petaling Jaya.
layouts 1+1,
2 and 2+1 bedThe Loft@Southbay City, Penang
rooms with built-ups of 726 to 1,220 sq ft. Sutera Avenue
Strategically located in Bayan Lepas, Penang, The Loft@ sits on 4.26 acres (1.7239ha) of prime land in Kota KinaSouthbay City has 156 serviced suites in two towers. balu, fronting Kota Kinabalus Coastal Highway and just
The freehold luxury suites offer six layout types of 3 and 3.9km from the Kota Kinabalu International Airport.
P R O P E RT Y S NA P S H
M O N DAY J U LY 20 , 20 1 5 T HEED G E FINA NCIA L DA ILY
T 9
Source: theedgeproperty.com
Self-sufficient Subang Jaya
Subang Jaya non-landed residential average price
This week, we focus on the non-landed residential properties in the

well-established neighbourhood of Subang Jaya, originally developed by
Sime UEP Bhd in the 1970s. The areas referred to in this study also include
Taman Wangsa Baiduri, Taman Mutiara Subang and Taman Bukit Pelangi.
Subang Jaya is a highly sought-after address given the abundance of retail
and commercial, healthcare and educational amenities in the vicinity.
The township comprises mostly terrace houses, with condominium
developments mainly concentrated around the retail belt of SS16 and the
Subang Jaya lake in SS12. There are also a few apartments clustered around
the tertiary institutions in SS15.
Prices in Subang Jaya have grown steadily. Based on theedgeproperty.
coms analysis of transactions, the average transacted price per square foot
(psf) of non-landed residential properties was RM581 psf in 3Q2014, up
15% y-y from RM506 psf in 3Q2013.
Total transaction volume for the 12 months to 3Q2014 fell 28.9% from
277 to 197 units. Transaction activity is likely to pick up to reflect the
completion of Isola at the end of 2014. Also, transaction data received
has yet to reflect the sales of Pandora Serviced Residences at Tropicana
Metropark, reportedly priced between RM600 and RM 800 psf.
The landscape in Subang Jaya is set to change with the upcoming 88-acre
Tropicana Metropark integrated development.
Another catalyst is the Kelana Jaya LRT extension to Putra Heights, due for
completion at end 2016. The Kelana Jaya Line will intersect the Port Klang
Line at the existing Subang Jaya station. There will also be two new stations
at SS15 and SS18, improving connectivity within Subang Jaya.
Subang Jaya non-landed residential volume
The Analytics are based on the data available at the date of publication and may be subject to further revision as
and when more data is made available to us.
For more of such information across Malaysia and Singapore, log on to the
theedgeproperty.com. The one-stop portal for all your property needs,
theedgeproperty.com oers price and transaction records, trend analysis,
research classieds, and more all for FREE!
Source: theedgeproperty.com
Why investors think Japan has some hot property

BY L ESL I E SHA FFER
TOKYO: Japans economy is barely growing, its

population is falling and wages have long been
stagnant, but investors both inside and outside
the country see surprisingly big opportunities
in its property market.
It has become difficult for general households to keep up with rising housing prices
while employment and income are stagnating,
Deutsche Bank said in a June note, citing data
showing Tokyo condos cost more than nine
times annual household income.
In demographic terms, we expect the nationwide housing demand to remain weak, it
said, citing the steady decline of people in the
25- to 44-year-old age bracket.
But that hasnt stopped property prices from
marching higher. Japans residential property
price index for March rose 1.5% from a year
earlier, while the Tokyo index was up 4.7%.
Tokyo condominium prices were up 8.9% over
the same period. The Tokyo condo prices may
be getting at least some of their boost from an
ageing Japanese population, particularly as
inheritance taxes have been increasing.
There are many high-net-worth individuals
who invested in expensive city centre condos
(particularly tower condos) as a tax-saving
measure, Deutsche Bank said. Investment
in rental apartments has been also increasing.
We view this to be the result of inheritance tax
countermeasures. Thats because properties
get taxed at the governments assessed valuation, which is generally lower than the purchase price, while cash would be taxed at the
full value, noted Ku Swee Yong, an international property adviser at Century 21 Singapore.
They will buy at full price, Ku said, noting
hes had clients lose out on transactions because they were competing with buyers who
werent seeking discounts.
Despite the competition for deals and a 10%
in the year ahead. That compares with some

analysts expectations for the yen to remain
relatively rangebound.
In addition to rental yield and capital appreciation, [Taiwanese investors] look at whether they can get profit from a strong currency
when disposing of a [property], So said. He also
noted Taiwan investors tend to prefer mature
property markets when venturing overseas.
That lines up with one of the attractions of
investing in Japan property that Ku highlighted: the costs in Japan tend to be transparent
and well-documented.
To be sure, not everyone sees an investment case for residential property in Japan.
Top locations for residential investment are
probably reasonably safe for rental returns,
said Alexander Karolik Shlaen, an economist and chief executive officer of Panache
Management, a luxury brands and real estate investment adviser. But everything else
is probably to forget about it, because theres
no real demand coming from the local market.
Theres no population growth. Theres population reduction, he said. If you are looking
for the yield, it could be interesting. If you invest for capital growth, then I would say dont
expect much.
But Shlaen, who said he lived in Japan for
more than 10 years, added that hes looking at
investments related to tourism and hospitality to take advantage of the uptick in tourism.
But has the interest in Japan property inflated
a bubble? Not yet, according to Century 21s Ku.
We dont have a lot of credit going into the
property market, he said. The banking system
is still very closed off to foreigners, with just
two banks in Tokyo willing to lend and then
usually only around half the purchase price,
Ku noted. CNBC
to 20% rise in prices over the past two years, he

still sees the market as a good one for foreign
investors, noting the increases have come after
more than 20 years of declines.
For one thing, the yens 18% drop against
the US dollar since the beginning of 2014
makes properties in Japan better value for
foreign investors. Ku also noted that Japans
rental yields remain competitive, and rental
cash flow is likely to remain positive even as
interest rates normalise because of the countrys long history of low rates.
Ku is also positive on the governments
moves to relax rules on employment passes,
allowing in more foreign workers, as well as
offering long-term visas for potential retirees
over the age of 60. My colleagues in Hong
Kong are pushing Japan properties, Ku noted. Rich Chinese buyers ... are coming in to
shop for properties too.
Investors in Taiwan, formerly a Japanese
colony, are also interested in Japan property.
Taiwans own property market has cooled recently and rental yields there have fallen, Cliff
So, executive director at REPro Knight Frank, a
property agency in Taiwan, told CNBC in May.
In addition to cultural ties with many
Taiwanese speaking Japanese investors
there are also interested in Japan property because of the exchange rate. The Taiwan dollar
hasnt lost a lot of ground against the US dollar its down around 2.7% so far this year
but some analysts expect it to fall further For more, visit www.cnbc.com
A row of houses in central London. The BoE is

maintaining policies aimed at restricting riskier
mortgage borrowing . Photo by Reuters
UK house prices
jump 1.7%
BY J IL L WA R D & S COT T H A MILTO N
LONDON: House prices in the United

Kingdom surged the most in five months in
June as a shortage of property for sale continued to put upward pressure on values.
The average cost of a home rose 1.7%
from May to an average 200,280 (RM1.18
million), mortgage lender Halifax said earlier this month. From a year earlier, prices
jumped 9.4%.
Supply remains very tight, said Martin Ellis, an economist at Halifax. This
shortage has been a key factor maintaining house price growth at a robust pace
so far in 2015.
On a less volatile quarterly basis, prices rose 3.3% in the three months till June,
up from 2.7% in the first quarter. Ellis said
rising employment and real wage growth,
coupled with low borrowing costs, are also
fuelling the market and there has been a
recent modest pick-up in demand.
Nevertheless, Bank of England (BoE)
governor Mark Carney isnt taking chances.
Citing momentum in the market, he said
this month the central bank is maintaining measures aimed at restricting riskier
mortgage borrowing. Bloomberg
10 ST O C KS W I T H M O M E N T U M
M ON DAY JU LY 2 0 , 2 0 1 5 TH EEDGE FI N AN C I AL DAI LY
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.
DENKO INDUSTRIAL CORP BHD (-ve)

THE thinly-traded shares of Denko (Fundamental: 0.8/3, Valuation: 0.9/3) saw renewed
trading interest last week, gaining 21.2% in
just 4 days to close at 31.5 sen on Thursday.
Johor-based Denko operates in two segments: manufacturing of plastic injection
moulding and high precision plastic parts
as well as wholesaling of foodstuff and consumer goods. Over the past 5 years, it alternated between profit and loss.
Denko returned to the black in FYMar2015
with a net profit of RM 3.1 million, thanks to
DENKO INDUSTRIAL CORP BHD
increased contribution from manufacturing,

especially from the plastic parts sub segment.
Gearing stood at 21% as at end-March, down
from 46% a year ago.
The company is disposing an underutilised warehouse in Penang for RM7.7 million which will be used to repay borrowings and for working capital purposes.
Upon completion of the transaction, Denko
will realise a disposal gain of RM5.4 million and reduce its accumulated losses to
RM2.4 million.
Valuation score*
0.90
0.80
Fundamental score**
9.45
TTM P/E (x)
TTM PEG (x)
0.55
P/NAV (x)
TTM Dividend yield (%)
29.25
Market capitalisation (mil)
104.47
Shares outstanding (ex-treasury) mil
0.76
Beta
0.18-0.33
12-month price range
*Valuation score - Composite measure of historical return & valuation
**Fundamental score - 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
HOCK SENG LEE BHD (-ve)

HSL (Fundamental: 2.4/3, Valuation: 1.2/3)
saw renewed investor interest last week,
rising 3.8% to close at RM1.90 on Thursday.
The Sarawak-based infrastructure company is seen as a beneficiary of increased
government spending on infrastructure projects, including the RM27 billion Pan-Borneo
highway and roadworks for Sarawak Corridor
of Renewable Energy (SCORE).
HSL is mainly involved in civil and marine engineering, construction works, and
property development. The company has
HOCK SENG LEE BHD
a solid track record of over 30 years, having

completed about 800km of roads in Sarawak.
At end-March 2015, it has outstanding
orderbook of RM870 million.
Meanwhile, its property arm currently
accounts for only 5% of total sales, but is
expected to be a significant contributor going forward. The companys latest property
development is La Promenade a 200-acre
mixed development with potential GDV of
over RM2 billion strategically located along
Kuching-Samarahan Expressway.
Valuation score*
1.20
2.40
Fundamental score**
13.03
TTM P/E (x)
(5.47)
TTM PEG (x)
1.70
P/NAV (x)
1.47
1,044.08
Shares outstanding (ex-treasury) mil 549.52
0.98
Beta
1.60-1.97
& protability
NCB HOLDINGS BHD (-ve)

NCB (Fundamental: 2.05/3, Valuation: 0.8/3)
closed up 3.5% to a one-year high of RM4.15
last Thursday, after its major shareholder,
MMC Corp, announced that it is acquiring
KWAPs 9.08% stake in NCB for RM186.5
million or RM4.37 per share.
Upon completion of the acquisition, MMC
will hold 30.13% stake in NCB, up from 21.05%.
This came after MMC Corp acquired a 5.3% stake
in NCB, last month, from the Port Klang Authority for RM86.2 million or RM3.45 per share.
NCB HOLDINGS BHD
Sharing similar ports and logistics assets,

NCB and MMC are exploring a synergistic
collaboration between their ports and logistics business.
MMC owns Johor Port, Penang Port and
Port of Tanjung Pelepas in Johor as well as
land transport company JP Logistics Sdn Bhd.
NCB operates Northport in Port Klang and
owns logistics provider Kontena Nasional Bhd.
MMC is 51.8%-controlled by tycoon Syed
Mokhtar whereas NCB is 53.4%-owned by PNB.
Valuation score*
0.80
2.05
Fundamental score**
88.78
TTM P/E (x)
(8.83)
TTM PEG (x)
1.33
P/NAV (x)
1.75
1,885.71
Shares outstanding (ex-treasury) mil 470.25
0.47
Beta
2.07-4.01
& protability

(ALL FIGURES IN MYR MIL)
Financials
Turnover
EBITDA
Interest expense
Pre-tax prot
Net prot - owners of company
Fixed assets - PPE
Total assets
Shareholders' fund
Gross borrowings
Net debt/(cash)

RATIOS
DPS ($)
Net asset per share ($)
ROE (%)
Turnover growth (%)
Net prot growth (%)
Net margin (%)
ROA (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
HOCK SENG LEE BHD

Financials
Turnover
EBITDA
Interest expense
Pre-tax prot
Fixed assets - PPE
Total assets
Shareholders' fund
Gross borrowings
Net debt/(cash)
HOCK SENG LEE BHD

RATIOS
DPS ($)
ROE (%)
Turnover growth (%)
Net prot growth (%)
Net margin (%)
ROA (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
NCB HOLDINGS BHD

Financials
Turnover
EBITDA
Interest expense
Pre-tax prot
Fixed assets - PPE
Total assets
Shareholders' fund
Gross borrowings
Net debt/(cash)
NCB HOLDINGS BHD

RATIOS
DPS ($)
ROE (%)
Turnover growth (%)
Net prot growth (%)
Net margin (%)
ROA (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
FY12
FY13
FY14
FY2015Q4
31/3/2012
31/3/2013
31/3/2014
31/3/2015
78.3
0.4
2.3
(9.4)
(9.2)
55.1
55.1
35.0
23.2
21.1
87.0
9.1
1.4
1.1
0.8
49.4
50.6
39.3
20.8
19.3
74.4
4.1
0.9
(4.5)
(3.6)
44.4
45.6
36.3
17.1
16.8
22.8
3.3
0.2
1.9
2.8
54.3
69.4
53.5
13.7
11.3
FY12
FY13
31/3/2012
31/3/2013
31/3/2014
0.33
(23.23)
(31.03)
(11.74)
(14.86)
0.82
60.21
0.18
0.38
2.11
11.06
0.90
1.48
1.04
49.08
6.50
0.35
(9.55)
(14.39)
(4.85)
(7.50)
1.04
46.16
4.84
FY14 ROLLING 12-MTH
0.51
7.91
7.71
3.86
6.23
1.48
21.16
8.90
FY12
FY13
FY14
FY2015Q1
31/12/2012
31/12/2013
31/12/2014
31/3/2015
603.3
124.4
0.6
121.1
90.7
113.9
495.4
479.9
(198.8)
548.4
118.6
0.4
114.0
85.2
123.5
552.6
537.0
(157.8)
604.7
109.5
0.4
103.2
76.9
120.3
611.5
596.0
(149.4)
186.5
28.0
0.1
26.3
19.6
121.8
630.7
615.6
(85.0)
FY12
FY13
31/12/2012
31/12/2013
31/12/2014
FY14 ROLLING 12-MTH
0.03
0.82
20.40
3.74
3.93
15.03
19.70
1.85
213.37
0.03
0.98
16.76
(9.09)
(6.05)
15.54
16.26
2.07
272.47
0.03
1.08
13.58
10.26
(9.71)
12.72
13.22
2.55
280.93
0.03
1.12
14.33
27.54
(2.38)
11.87
13.94
2.98
292.54
FY12
FY13
FY14
FY2015Q1
31/12/2012
31/12/2013
31/12/2014
31/3/2015
978.8
252.6
1.4
154.2
125.8
865.8
1,443.4
1,383.9
56.9
(242.3)
919.4
195.9
4.1
94.1
51.7
1,087.7
1,498.3
1,407.3
208.6
52.2
831.0
126.0
5.3
18.6
27.9
1,077.9
1,809.3
1,404.6
580.9
123.9
198.0
43.7
1.4
18.1
11.6
1,055.6
1,906.6
1,416.2
474.9
3.4
FY12
FY13
31/12/2012
31/12/2013
31/12/2014
FY14 ROLLING 12-MTH
0.66
2.94
8.34
5.47
(20.87)
12.85
8.00
1.76
180.45
0.08
2.99
3.70
(6.07)
(58.90)
5.62
3.51
0.79
3.71
47.80
0.07
2.99
1.98
(9.61)
(46.10)
3.35
1.68
1.39
8.82
23.64
0.07
3.01
1.49
(6.64)
(10.05)
2.55
1.33
1.77
0.24
24.22
1 2 I N V E ST I N G I D E A S
Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own
judgment or seek professional advice for your specic investment needs. We are not responsible for your investment
decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.
I N S I D E R A S I AS S TO C K O F T H E D AY
POWER ROOT BHD

POWER ROOT BHD

POWER Root (Fundamental: 2.8/3, Valuation: 2.1/3) is one of the countrys top three
instant coffee maker and is best known
for its Alicafe, Ah Huat and Pearl coffee
brands. We like the company for its longterm growth potential, capable management, strong fundamentals and decent
dividends, although near-term earnings will
be affected by weaker consumer sentiment.
For FYFeb2012FY2014, net profit more
than doubled to RM38.8 million, fuelled by
strong growth in both strong domestic and
export markets. During the same period,
dividends increased from 4.5 sen to 9 sen.
Power Root ended its FY15 with a strong
4QFYMar15 results, boosted by the timely
completion of a small property development
project in Johor. The project contributed
RM40.0 million in revenue and RM10.3
million in net profit.
As a result, it declared a special dividend
POWER ROOT BHD
of 2.5 sen, bring up total dividends for FY15

to 10 sen. This translates into a payout ratio
of 70%, or an attractive yield of 4.6%.
Excluding the one-off contribution from
property development, Power Root posted
RM343.2 million in revenue for 13MFYMar15, compared with RM306.9 million
for 12MFYFeb14. Normalised net profit,
however, fell to RM36.2 million, from 39.7
million in FY14.
Core net margin for FY15 contracted
by 2.4 percentage points, reflecting the
softening consumer sentiment and the intensifying competition in the local coffee
premix market.
Nonetheless, it has a sturdy balance sheet
with a net cash position of RM54.2 million
(equivalent to 18 sen per share) to support
dividends and tide it over bad times. Going
forward, Power Root plans to grow its market share in the Middle East where instant
coffee penetration is still low.
The stock trades at fairly reasonable valuations, at an ex-cash normalised trailing
12-month P/E of 16.9 times and P/B of 2.7
times vis--vis the F&B industry average
P/E of 17 times and P/B of 3.8 times.
Insider Asia will feature a new stock pick on every alternate day.
Income Statement
Turnover
EBITDA
Depreciation
EBIT
Associates
Interest income
Interest expense
Extraordinary gain/(loss)
Pre-tax prot
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
POWER ROOT BHD

RATIOS
DPS ($)
ROE (%)
Turnover growth (%)
Net prot growth (%)
Net margin (%)
ROA (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
FY12
FY13
FY14
FY2015Q4
29/2/2012
28/2/2013
28/2/2014
31/3/2015
217.0
25.6
6.4
19.1
0.5
0.3
0.1
19.4
15.8
279.4
46.6
6.1
40.5
(0.1)
0.7
0.5
1.3
42.0
34.4
306.9
54.7
5.5
49.2
(0.0)
0.6
0.7
0.9
50.0
38.8
100.4
23.7
1.6
22.2
0.1
0.3
0.2
(0.4)
22.0
19.2
72.1
5.4
29.7
149.9
7.1
43.9
189.5
185.5
1.6
75.0
5.3
38.3
202.0
10.7
73.2
211.7
204.0
2.8
74.1
5.3
47.5
241.5
12.4
99.4
223.3
220.7
1.0
80.2
4.9
67.5
226.6
12.5
76.8
238.0
230.9
0.8
FY12
FY13
29/2/2012
28/2/2013
28/2/2014
FY14 ROLLING 12-MTH
0.05
0.62
8.67
17.43
29.73
7.30
8.47
3.42
83.96
0.07
0.68
17.66
28.71
116.99
12.31
17.14
2.76
95.06
0.09
0.73
18.28
9.84
12.89
12.65
17.84
2.43
79.32
0.10
0.77
19.23
24.89
11.14
11.24
18.76
2.95
87.49
14 B R O K E R S C A L L
Maxis takes
conservative
dividend approach
AirAsia Bhd
FYE DEC (RM MIL)
Revenue
Ebitda
Ebit
PBT
Net profit
Core net profit
Core EPS (sen)
Core EPS growth (%)
PER (x)
Net dividend (sen)
2014
2015F
2016F
5,415.7
1,358.9
639.4
22.7
82.8
355.6
12.8
0.4
10.1
4.6
5,621.1
1,857.6
1,042.7
738.7
561.4
561.4
20.2
57.8
6.4
7.0
5,923.2
2,175.8
1,332.7
789.3
599.9
599.9
21.4
6.3
6.0
8.0
Source: Company, MIDFR
Maxis Bhd
(July 16, RM6.51)
Maintain hold with an unchanged
target price (TP) of RM7.19: Maxis Bhd continued to show a positive turnaround in the second
quarter of financial year ending
Dec 31, 2015 (2QFY15), but took
a conservative approach to dividends with a second interim dividend per share (DPS) of five sen
(1QFY15: five sen). We maintain
our hold rating on the stock as
we believe earnings forecast reratings are unlikely due to a more
competitive environment.
Maxis first-half (1HFY15) results
were within our and consensus expectations, as its core net profit of
RM922 million accounted for 47%
of our and consensus full-year estimates, respectively. Maxis declared
a second interim DPS of five sen
(85% payout), bringing year-to-date
(YTD) DPS to 10 sen (88% payout).
We maintain our FY15 (estimate)
DPS of 26 sen, in anticipation of a
special DPS in 4QFY15.
Maxis had a decent 2HFY15, as
service revenue grew 3.3% yearon-year (y-o-y) to RM4.22 billion,
mainly on good growth traction in
prepaid. Service revenue growth
would have been higher at 4.5%
y-o-y if not for three months or
RM50 million worth of free voice
and SMS given to prepaid users as
part of the goods and services tax
(GST) implementation. 1HFY15
net profit, however, was flattish
y-o-y at RM923 million due to
higher interest expense (+15.2%
Maxis Bhd
FYE DEC (RM MIL)
Revenue
Ebitda
Pre-tax profit
Net profit
EPS (sen)
PER (x)
Core net profit
Core EPS (sen)
Core EPS growth (%)
Core PER (x)
Net DPS (sen)
Dividend yield (%)
EV/Ebitda (x)
Affin/Consensus (x)
2013
2014
2015E
2016E
2017E
9,084.0
4,573.0
2,496.0
1,765.0
23.5
27.7
2,097.0
27.9
2.3
23.3
40.0
6.1
12.4
-
8,389.0
4,296.0
2,436.0
1,721.0
22.9
28.4
1,910.0
25.4
(8.9)
25.6
40.0
6.1
13.5
-
8,607.9
4,312.5
2,665.5
1,968.4
26.2
24.8
1,968.4
26.2
3.1
24.8
26.0
4.0
13.4
1.0
8,724.9
4,353.7
2,760.1
2,038.5
27.2
24.0
2,038.5
27.2
3.6
24.0
27.0
4.1
13.3
1.0
8,831.0
4,415.5
2,934.3
2,167.4
28.9
22.5
2,167.4
28.9
6.3
22.5
28.0
4.3
13.1
1.0
Source: Company, Affin Hwang estimates
y-o-y) and higher depreciation

(+5.4% y-o-y).
1HFY15 earnings before interest, taxes, depreciation and amortisation margin improved by 0.8
percentage point (ppt) to 51.9%
mainly due to lower direct costs
as a result of not absorbing the
prepaid service tax.
Amid an intense price competition, management said it is comfortable with its existing product offerings and intends to offer customers
a superior network and better customer experience at its distribution
network. Maxis already leads the
industry with a long-term evolution
population coverage of 41%, and
targets 50% by year-end.
Post-paid revenue is still stagnant due to the impact of repricing

pay-per-use data rates in 3QFY14.
Nonetheless, Maxis is seeing a
good traction from its MaxisONE
Plan (15% of post-paid base).
We maintain our hold rating
on Maxis with an unchanged discounted cash flow-derived TP of
RM7.19. While we are positive on
Maxis turnaround efforts, we believe that earnings forecast reratings are unlikely due to the more
competitive environment. Any
disappointment in future dividends could trigger a de-rating of
the stock, while earnings forecast
reratings would surprise positively. Affin Hwang Capital, July 16
Bursas 2QFY15 results in line, buoyed by derivatives

Bursa Malaysia Bhd
(July 16, RM8.07)
Maintain hold with an unchanged
fair value of RM8.90: We maintain
our hold recommendation on Bursa Malaysia Bhd with an unchanged
fair value of RM8.90 per share, based
on financial year ending Dec 31,
2015 forecast (FY15F) price-earnings ratio (PER) of 23 times.
Bursa reported second-quarter
FY15 (2QFY15) net profit of RM49.5
million (quarter-on-quarter, q-o-q:
+5.2%) to extend its first half FY15
(1HFY15) earnings to RM96.5 million. The results were within expectations, accounting for 47% of
our and 48% of market estimates.
Management declared an interim dividend of 16.5 sen, which is
equivalent to a payout ratio of 91%.
No special dividend is expected in
the near term. Despite the pared
down market sentiment due to the
difficult domestic and global environment, Bursas performance in
1HFY15 is commendable, slightly
buoyed by growth in its derivatives

and Islamic products.
Derivatives trading revenue in
1HFY15 grew 11.9% year-on-year
(y-o-y), mainly attributed to volatile palm oil prices in the quarter,
which spurred crude palm oil futures (FCPO) trades. FCPO makes
up 81% of average daily contracts
(ADC). This was due to hedging
and speculation activity by market
participants. ADC stood at 50,612
contracts.
Its Bursa Suq Al Silas trading
revenue (Islamic product) also doubled due to the higher conversion
of deposits to murabaha, and the
introduction of tenor-based pricing.
Equities trading revenue, which is
Bursas key contributor, was unchanged at RM116 million.
However, Bursas securities market statistics disappointed slightly,
with the average daily traded value
lower at RM2 billion (y-o-y: -8%).
Also, trading velocity dropped two
percentage points to 28%. We be-
lieve that this is due to the poor

retail participation and market sentiment, as reflected by the FBM
KLCI dipping below 1,700 points
twice this year.
On another note, stable revenue
had enhanced slightly from higher depository services and market
data. Operational expenditure in
1HFY15 was also unchanged generally. Looking ahead, the market
environment for the remaining of
FY15 will be challenging.
However, we believe the growth
of its derivatives and Islamic products, as well as further initial public
offering revenue will negate any
negativity felt in the equities market. Bursa earlier last week loosened its regulations for the ACE
Market to attract more listings. We
leave our FY15F (forecast) to FY17F
earnings estimates unchanged.
The stock is currently trading at 21
times FY15F PER, slightly below its
5-year PER average of 22 times.
AmResearch, July 16
AirAsias valuation
remains attractive
AirAsia Bhd
(July 16, 18.5 sen)
Maintain buy with a lower target price (TP) of RM1.82: Since
December, AirAsia Bhds share
price has been languishing on
a barrage of bad news, most of
which we believe is caused by
external factors out of managements control. It started with the
unfortunate crash of QZ8501 in
December 2014, which we opine
is the worst thing that could happen for an airline.
When things were turning for
the better, the department of civil
aviation of Thailand came under
scrutiny by the International Civil Aviation Organization, which
prompted a review of flight permits imposed by countries like
Japan and South Korea.
Then came the earthquake
in Nepal, the Middle East respiratory syndrome outbreak in
South Korea, a review by the Indonesian ministry of transport
on airlines with negative equity
positions and ash cloud troubles
within the Indonesian archipelago causing a temporary closure
of several airports. Add in to the
mix a report by a foreign research
firm drawing attention to AirAsias receivables, and we arrive at
todays share price lower steeply by 52.6% year-to-date (YTD).
While not all of these events
had an impact on AirAsias operations directly, we believe that
both investor and customer sentiment has been dented for AirAsia
which was still recovering from
an intense competition from Malaysia Airlines (MAS).
Financial year ending Dec
31, 2015 (FY15) core earnings
forecasts have been reduced as
we impute a slower recovery in
yields and lower load factor. We
have reduced our yield growth
forecast for FY15 to -2% (from flat
growth). In addition, we are revising our load factor assumption
down to 78% (from: 81%) as the
impact of fuel surcharge removal
was milder than expected. As a
result, we have reduced our FY15
core earnings to RM561 million.
Value emerged from the selldown. AirAsia is currently trading
at an attractive valuation of 6.4
times forward FY15 price-earnings ratio (PER) and 0.79 times
price-to-book value. We believe
that the current share price has
priced in most of the negative
factors. At this juncture, we opine
that the major risk faced by AirAsia is an impairment of its receivables from associates amounting to RM1.2 billion which are
overdue.
However, we believe that the
possibility of a write-down is unlikely and will only be used if all
other options have been exhausted as impairment tests have been
conducted and the associates
remain a going concern.
Nevertheless, management is
actively working to alleviate this
risk through a sale and leaseback of 16 of its aircraft fleet
owned for RM1.5 billion, which
we believe should be completed
in the second half of 2015; and
issuance of convertible bonds
amounting to RM1 billion followed by the initial public offering of Indonesia AirAsia and
Philippines AirAsia.
We expect jet fuel prices to remain low in line with our house
view of crude oil prices of between US$60 (RM228) per barrel and US$70 per barrel for this
year. Additionally, the anticipated
rationalisation of routes by MAS
is starting to take shape with frequency reductions of between
20% and 50% to begin in August
on popular destinations such
as Kuala Lumpur (KL) to Hong
Kong, KL to Manila and KL to
Ho Chi Minh City, which would
benefit AirAsia through pricing
fares more profitably and securing higher load factors.
We maintain our buy call
on AirAsia as its business prospects are on the mend. Most
notably, forward ticket sales as
at July for the third quarter of
FY15 (3QFY15) and 4QFY15 have
been brisk at +18% year-on-year
for the group while forward load
factors are estimated at 80%, in
line with our latest forecasts for
the year.
Fuel expenses have come
down 9.2% y-o-y in 1QFY15 and
we are further expecting an improvement of 21% for FY15. Our
TP of RM1.82 is based on 9 times
forward PER to FY15 earnings
per share.
We have reduced our forward PER to 9 times (from 10
times) due to external factors.
In the worst-case scenario, we
believe that the floor price of
AirAsia should be at 1 times its
FY14 book value translating into
a share price of RM1.68 MIDF
Research, July 16
16 B R O K E R S C A L L
Hartalega has been

increasing operating
productivity
Hartalega Holdings Bhd
(July 16, RM8.60)
Maintain neutral with a higher target price (TP) of RM9.12: We recently hosted Hartalega Holdings Bhd
on a regional non-deal roadshow.
Capacity expansion at its next-generation integrated glove manufacturing complex (NGC) remains on track
with better-than-expected operating
productivity.
Hartalega has been commissioning two lines per month since January 2015 and management expects
the 14th line to be operational by
end-July. All 24 lines of Plant 1 and
2 are expected to be commissioned
by December this year, bringing total
capacity to 20 billion pieces (Decem-
ber 2014: 14 billion pieces).

NGC has recorded a 33% jump in
productivity to 2.6 workers per million gloves per month (wpmgpm),
compared with the pre-NGC setup
of 3.9 wpmgpm. Management is exploring ways to incorporate further
automation and lean manufacturing
practices to bolster productivity to
two wpmgpm
Hartalega is cautious about
the outlook for the average selling price (ASP) of gloves due to
increased competition, especially
in the nitrile glove segment. We
lower our average nitrile glove ASP
assumption to US$24 (RM91.20
per 1,000 pieces) for financial year
2016 (FY16) from US$26 previous-
Zhulian comes in within expectations

Zhulian Corp Bhd
(July 16, RM2.05)
Maintain underperform with an
unchanged target price (TP) of
RM2: Net profit of RM23.7 million
(-7% year-on-year) is deemed
within expectations, accounting
for 45.1% of our full-year forecast. A consensus comparison is
not available as the stock is not
widely tracked.
The group has proposed a
dividend of 1.5 sen per share,
bringing year-to-date (YTD) dividend per share (DPS) to three
sen, which is below our expectation of 10 sen in the financial year
ending November 2015 (FY15)
due to the lower-than-expected
payout ratio.
Y TD, first half of FY15
(1HFY15) revenue fell 16.2% to
RM110.5 million due to the lower
sales in the local market on the
back of persistent weak consumer
sentiment. Operating profit grew
14.2% despite lower revenue as
1HFY14 was dragged down by
higher expenses incurred in marketing plans and higher start-up
costs for the Myanmar operations.
Profit before tax (PBT ) declined marginally by 0.6% to
RM31.9 million due to the lower contribution from Thai associates (-19.1%), but net profit fell
by a greater quantum of 7% due
to the higher effective tax rate
(25.8% versus 20.7%).
Quarter-on-quarter (q-o-q),
revenue for the second quarter (2Q) of FY15 was flattish at
RM55.3 million while operating
profit fell marginally by 1.3% to
RM10.1 million. However, contribution from associates slumped
by 34.6% to RM4.6 million due to
the weak market conditions in
Thailand. That brought net profit
down by 11.5% to RM11.1 million.
Moving forward, the group is

aiming to attract more distributors, particularly young entrepreneurs who are looking for low
entry cost ventures by adopting
a small ticket items strategy.
Although the strategy may be
able to attract a higher core distributor force (CDF) in the long
run, we foresee that earnings will
be dragged down by the transition period in the short term,
based on the experience of another local multilevel marketing
players.
All in, we maintain our cautious stance on the company in
view of the tough operating environment in Malaysia as consumer sentiment succumbed to
a six-year low in 1QFY15. With
the goods and services tax (GST)
being implemented in 2Q, we
do not expect the sentiment to
recover quickly.
Meanwhile, the Thailand
market is still weak judging
from the lacklustre contributions from associates. We make
no changes to our earnings forecast, but we revise downwards
our DPS forecast from 10 sen
for both FY15E (estimate) and
FY16E to seven sen and 7.5
sen, respectively, by assuming
a more conservative payout ratio
of about 60% to be in line with
the YTD payout trend.
We roll over our valuation
base year from FY15E to FY16E.
We also switch our valuation
methodology from blended
price-earnings ratio/price-to
book value (PER/PBV) valuation to PER valuation in view of
its stabilising earnings trend. Our
TP is unchanged at RM2, based
on 16.1 times FY16E PER, which
is close to -0.5 standard deviation over the three-year mean.
Kenanga Research, July 16
Hartalega Holdings Bhd

FYE MAR (RM MIL)
2014
2015
2016F
2017F
2018F
Total turnover
1,107
1,146
1,454
1,889
2,187
Reported net profit
233
210
263
352
422
Recurring net profit
233
210
263
352
422
(0.2)
(9.9)
25.4
33.8
19.9
Recurring net profit growth (%)
0.31
0.27
0.32
0.43
0.51
Recurring EPS (RM)
0.15
0.12
0.14
0.19
0.23
DPS (RM)
27.5
31.9
26.7
20.2
16.8
Recurring P/E (x)
6.86
5.46
4.77
4.24
3.85
P/BV (x)
25.8
32.4
14.7
14.3
14.3
P/CF (x)
1.7
1.4
1.7
2.2
2.7
Dividend yield (%)
18.1
21.7
16.3
12.4
10.3
EV/Ebitda (x)
27.3
19.0
19.1
22.2
24.0
Return on average equity (%)
Net cash Net cash Net cash Net cash Net cash
Net debt to equity (%)
Our vs consensus EPS
(7.6)
5.6
14.8
(adjusted) (%)
Source: Company data, RHB
Nitrile glove.
ly. Nevertheless, we expect the

improvement in productivity to
more than offset the ASP decline
and boost operating margins going forward.
After updating our assumptions

on productivity and ASP, we adjust
our earnings forecasts by -9% to
7% for FY16-24F. The key downside risk to our forecasts remains
the execution of NGC, while the
upside risk includes further weakening of the ringgit.
Hartalega has proposed a one-forone bonus issue which is expected to
be completed sometime in September to December 2015. The corporate
exercise would improve Hartalegas
trading liquidity.
While Hartalegas growth pros-
pects are intact with 24% earnings per

share compound annual growth rate
for FY16 to FY18, we believe this has
been well reflected in current price
levels. The stock currently trades at
26.7 times FY16 price-earnings ratio (PER), close to its historical two
standard deviation trading band of
27 times PER.
We reiterate our neutral call with
a revised discounted cash flow-based
TP of RM9.12, implying 28 times
FY16F PER. Our TP would adjust to
RM4.56 post-bonus issue. RHB
Research Institute, July 16
TNB submitted bids for

1MDBs power assets
THE EDGE FILE PHOTO
Tenaga Nasional Bhd

(July 16, RM12.36)
Maintain add with an unchanged
target price (TP) of RM15.27: TNB
and several local and foreign companies have separately submitted
non-binding offers to acquire 1Malaysia Development Bhds (1MDB)
power assets.
Crucial information, such as
the proposed acquisition price
and earnings impact, was not disclosed. However, TNB believes that
1MDBs assets are strong fits for its
growth strategy, and stressed that
any transaction needs to be value
accretive.
We believe the proposed acquisition, if it proceeds, will likely be
neutral to slightly negative to TNBs
valuation in the near term. The acquisition could be negative because
1MDB acquired its power assets for
RM18 billion (includes RM6 billion
inherited debt) but has since written down about RM1.18 billion of
acquisition-related goodwill.
The transaction could be perceived negatively if TNBs bidding
price implies an enterprise value
of more than RM16.82 billion. We
think it will have a neutral impact if
TNB pays a fair price for the assets.
However, the transaction is unlikely to be significantly positive
because the chances of TNB buying the assets at a significant discount to their fair values are slim
as other parties are also bidding
for the assets.
Nonetheless, an acquisition
should be positive for TNB in the
long run as the exit of 1MDB from
the Malaysian power sector will
reduce the competition for future
power plant projects.
Tenaga Nasional Bhd

FYE AUG (RM MIL)
2013A
2014A
2015F
2016F
2017F
Revenue
35,857
Operating Ebitda
10,446
Net profit
5,356
0.96
Core EPS (RM)
19.9
Core EPS growth (%)
13.17
FD core PE (x)
0.25
DPS (RM)
1.97
Dividend yield (%)
8.01
EV/Ebitda (x)
53.5
P/FCFE (x)
35.1
Net gearing (%)
1.90
P/BV (x)
14.4
ROE (%)
CIMB/consensus EPS (x)
40,859
12,054
6,467
1.09
13.0
11.65
0.29
2.29
7.34
na
39.9
1.65
15.2
-
43,490
13,381
6,242
1.11
1.8
11.45
0.30
2.41
6.91
na
44.4
1.50
13.7
0.96
40,323
14,643
6,574
1.16
5.3
10.87
0.32
2.53
6.42
501.6
43.6
1.36
13.1
0.98
43,170
15,398
6,684
1.18
1.7
10.69
0.34
2.65
6.16
72.1
41.5
1.25
12.2
0.95
Source: CIMB, Company reports
Maintain add. We believe the

risk of an unfavourable transaction is partially mitigated by the
minority shareholders approval
requirement. Also, even with the
assumption that TNB will acquire
the assets with RM18 billion of bor-
rowings, it will still need to raise

its borrowing level and increase
its dividend payout to optimise its
capital structure. We believe a higher dividend payout is still possible
and may rerate the stock. CIMB
Research, July 16
18 H O M E
Claim IGP asked for

RM20,000 being probed
Khalid denies asking Papagomo for bribe to settle Low Yat case
KUALA LUMPUR: The inspector-general of police has denied
allegations in a circulated WhatsApp
conversation that he purportedly
solicited a RM20,000 bribe from
Umno blogger Papagomo, who was
detained by police over his involvement in a brawl at Low Yat Plaza last
weekend, The Star reported.
Tan Sri Khalid Abu Bakar said
investigations have started into the
Papagomo Original Facebook page,
where the alleged screen grab of the
conversation between the blogger and
Khalid to settle the case was posted.
Khalid is reported to have said the
bloggers lawyer had filed a police
report saying the page does not belong to Papagomo, whose real name
is Wan Mohd Azri Wan Deris.
A report has been lodged to facilitate investigations, Khalid said,
according to the report.
The Facebook page had also post-
New Hope
Movement is PAS
internal problem,
says Azmin
BY RA M A N A ND
SHAH ALAM: PKR has yet to discuss and come to any conclusion
about Gerakan Harapan Baru
(GHB), the splinter movement
from PAS, party deputy president
Mohamed Azmin Ali said. Mohamed Azmin, who is Selangor
menteri besar, told reporters at
the state governments open house
yesterday that he considers GHB
to be PAS internal affair and
refused to weigh in with his own
opinions on the matter.
This is not an issue about personal opinions. The party hasnt
discussed it, he said.
The splinter movement, formed
with the aim of starting a new political party, is led by progressive
PAS leaders who were axed in the
partys fractious muktamar last
month. Mohamed Azmins statement comes despite PKR secretary-general Rafizi Ramli saying
previously that he would support
GHB and speak at their roadshows.
Although Pakatan Rakyat has
ceased to exist at the national level,
the Selangor government has continued to function with the former
Pakatan framework. However, DAP
has said it will make a decision on
its state government participation
after discussions with Mohamed
Azmin, with no resolution to date.
I am confident the PAS leadership can resolve this matter amicably, so the people can see a
change through Pakatan Rakyat
in the next elections, he said.
The Malaysian Insider
ed rumours of supposed meetings

between Malay non-governmental
organisations and plans for a massive
armed brawl in Low Yat on Saturday.
It was put up after the bloggers arrest.
The bloggers lawyer, Ahmad Shuaib Ismail, reportedly said Papagomo could
not have been updating the Facebook
page while he was in custody.
The blogger allegedly posted a
picture of an injured Malay robbery
victim on his social media, claiming
he was a victim of the Low Yat Plaza
brawl. Police then arrested him for
allegedly fanning racial tensions.
The drama at Low Yat Plaza unfolded on July 11 when two youths
visited a handphone outlet to buy
a Lenovo S860 smartphone worth
RM799. The salesman who attended
to them told police the youths ran off
with the phone as he turned away to
get a free gift. A chase ensued and
mobile-phone dealers in another
Khalid: A report has been lodged to

facilitate investigations. The Malaysian
Insider le photo
shop caught the suspects and assaulted them before handing them
over to the plazas security guards
who called the police.
One of the suspects was later released and it was believed that he
returned to the plaza with his friends
and attacked the store where the employees had helped detain the suspects earlier.
The next day, some 200 people
congregated at the plaza, forcing
authorities to order businesses at
the premises to close early. Police
cordoned off the area, but a crowd
gathered again after midnight and
fights broke out. At least five people,
including media personnel, were
reportedly injured in the incident.
So far, Bagan Umno division head
Datuk Shaik Hussein Mydin, Papagomo and army veteran Mohd Ali Baharom, popularly known as Ali Tinju,
have been arrested.
Papagomo and Shaik Hussein
were released last Friday by police,
while Ali was charged with sedition
over racially charged comments
made before the brawl. He claimed
trial to the charge. The Malaysian
Insider
MH17 victims son sues MAS

SYDNEY: The son of a passenger on
flight MH17, who was forced to sell
the family home after his mother
died in the Boeing 777 shot down
over the Ukraine, has filed legal action against Malaysia Airlines (MAS)
in Australias Supreme Court, The
Sydney Morning Herald reported.
Tim Lauschet, who also had to give
up his job after losing his mother
Gabriele Lauschet, has received
US$50,000 in compensation but his
lawyers said that under international
law, all families of loved ones should
have received an initial payment
of US$113,100, and accepting this
sum would not preclude them from
making further claims.
In his claim, the first legal papers
filed against MAS in Australia, Lauschet, 24, stated among others that
he suffered a recognised psychiatric and/or psychological injury as
a result of the death of his mother,
the report said. He also claimed in

the suit that he was not able to work
after losing his mother.
On July 17 last year, flight MH17
was shot down over rebel-held eastern Ukraine during heavy fighting between Ukrainian forces and pro-Russian separatists. All 298 passengers
and crew members on board the
Boeing 777 flying from Amsterdam
to Kuala Lumpur, including 38 Australians, were killed. The majority of
the victims were Dutch nationals.
Lauschet reportedly said that he
was forced to initiate legal action as
MAS had not responded to questions
sent by his lawyers in January.
What choice do I have? Roll over
and play dead? ... Im trying to put
my life back together but its really
hard and Malaysia Airlines is not
helping, he reportedly said.
He said that he had read that MAS
did not have a robust way of pick-
ing flight paths. If thats true, its unforgivable and so, yes, this is about
getting justice.
Lawyer Jerry Skinner from Sydney
law firm LHD Lawyers, acting for the
plaintiff and other victims families,
said they were asking the court to
define the list of what categories of
damages were available to make up
at least the US$113,100 in compensation. We are suggesting there is a
gap in the law which is what we are
seeking to fill, he reportedly said.
He also said MAS will not state
how they are calculating what they
offered to our client and the figures
are all low. The SMH said that MAS
did not appear to know the summons had been served. The airline
reportedly said in a statement: Malaysia Airlines has not been served
with any writ allegedly filed in the
NSW Supreme Court. The Malaysian Insider
A-G files defence against malicious prosecution suits

BY V. ANBALAG AN
KUALA LUMPUR: Attorney-General

(A-G) Tan Sri Abdul Gani Patail and 10
others who are being sued for abuse
of power and malicious prosecution
have finally filed their defence, some
18 months after a corporate lawyer
and a retired senior police officer
filed two lawsuits claiming combined
damages of some RM176 million.
Parvinder Kaur Cheema, appearing for lawyer Rosli Dahlan, said the
six-page document was filed in the
Kuala Lumpur High Court registry
on July 10.
On May 28, High Court Judge Vazeer Alam Mydin Meera told Abdul
Gani and the other defendants to file
their defence within 30 days. Abdul
Ganis counsel Tan Sri Cecil Abraham
had asked for more time and was
given until July 6. A second extension
given by Rosli expired on July 13. The
document sighted by The Malaysian
Insider revealed that the defendants
submitted the defence of bare denial.
Rosli and former commercial
crime investigation department chief
Datuk Ramli Yusuf filed lawsuits in
November 2013 against Abdul Gani
and the rest for, among others, al-
leged malicious prosecution over

corruption charges, of which they
had been cleared. In April last year,
Vazeer Alam dismissed an application to strike out the suits, saying the
A-G could not escape lawsuits which
involve allegations of abuse of power.
Ramli, in his RM128.5 million suit,
named ex-inspector-general of police
Tan Sri Musa Hassan and 10 others
for wrongfully bringing two charges
against him. Rosli is claiming more
than RM47 million for conspiring to
arrest and charge him over an alleged
failure to declare his assets. The
Malaysian Insider
IN BRIEF
Over 30,000 attend Sabah
CM, Cabinet open house
KOTA KINABALU: More than
30,000 people called at the Aidilfitri open house hosted by
Sabah Chief Minister Datuk
Seri Musa Aman and the Sabah Cabinet yesterday. Sabah
Yang Dipertua Negeri Tun Juhar
Mahiruddin and his wife Toh
Puan Norlidah RM Jasni also
attended the open house, held
from 10am to 1pm, at the Kota
Kinabalu Sports Complex. Musa
handed out Aidilfitri goodies
to orphans and the disabled
from welfare homes in the city.
He told reporters that a festival
open house provides the opportunity for the people to meet
their leaders and for the leaders to get closer to the people in
an atmosphere of goodwill and
harmony. Bernama
Heavy rain triggers

oods in Janda Baik
KUANTAN: Heavy rain early
yesterday triggered flash floods
in Janda Baik and washed away
a bridge to a private property as
well as a water main, cutting
piped water supply to several
village homes. Several houses and nine recreational areas
were flooded after three rivers
burst their banks following almost five hours of continuous
rain. Janda Baik Youth acting
chairman Mohd Azman Abu
Naim, 34, said the rain, which
started at about 5am, caused
the water level of the Cheringin,
Lampin and Kuali rivers to rise
suddenly.The floodwaters affected the recreational areas
near the rivers and also several village houses. Bernama
Kedah plans bazaar

for youth entrepreneurs
ALOR SETAR: The Kedah government plans to establish a
bazaar here for youths to trade
various products on Friday, Saturday and Sunday. Plans are
for the bazaar to be set up at
the Dataran Balai Besar and
the five-foot way of the State
Art Gallery, said State Tourism
and Heritage Committee chairman Datuk Mohd Rawi Abd
Hamid. The youths can trade
food, clothing and handicraft
produced by themselves and
portraying the identity of the
rice bowl state, he told Bernama. The bazaar would also promote Kedah to foreign visitors
to the state, particularly during
the school holidays, he said.
Bernama
Woman dies after car rams

tree, plunges into canal
JITRA: A mobile phone seller was killed when her car
rammed a tree, broke into two
and ended up in a canal along
Jalan Sungai Korok early yesterday, police said. Norshuhada Mansor, 26, died on the spot
in the accident which occurred
at 5.40am as she was driving
towards Jitra from Sungai Korok, said Kubang Pasu Police
chief Supt Abd Rahim Abdullah. She was driving alone and
lost control of the car, he said
in a statement. Bernama
FO CU S 19
M ON DAY J U LY 20 , 20 1 5 T HEED G E FINA NCIA L DA ILY
How Jho Low & PetroSaudi

schemed to steal money from the
people of Malaysia via 1MDB
Why we say the
US$1.83 billion
1 Malaysia
Development Bhd
invested in Petro
Saudi International
between 2009 and
2011 was a scheme to
defraud Malaysia
Key Points:
1. The joint-venture agreement was
signed on Sept 28, 2009. The terms
include 1MDB contributing US$1.0
billion cash for a 40% stake in the
JV Co called 1MDB PetroSaudi Ltd.
PetroSaudi Holdings Cayman will
put in assets worth US$2.7 billion.
The JV Co will be valued at US$2.5
billion with PetroSaudi Holdings
60% stake derived from assets it
will inject into the JV Co.
2. The valuation of the assets that
PetroSaudi Holdings will put in
was done by one Edward Morse
who was hired by PetroSaudi and
work was done within days. Morse
was issued his appointment letter
on Sept 20, 2009 and submitted his
report on Sept 29, 2009 a day
after the JV was signed. He valued
the Turkmenistan assets at US$3.5
billion and the Argentinian assets
at US$108 million.
3. PetroSaudi Holdings never
owned the Turkmenistan assets
that were to be injected into the
JV Co. Those assets were owned
by Buried Hill Energy (Cyprus) Co
Limited. PetroSaudi Holdings was
only in negotiation to buy the assets from Buried Hill. They signed
a negotiation agreement on July 4,
2009 and this was eventually terminated on Nov 23, 2009.
4. 1MDB did not hire its own independent valuer to do the valuation.
1MDB management did not comply with a decision of its own board
of directors to do an independent
valuation.
5. PetroSaudi Holdings committed
FRAUD by selling assets which it
did not own into the JV Co.
6. Lawyers for 1MDB, Wong & Partners, as well as the 1MDB board of
directors were not given the valuation report by Edward Morse until
after Sept 30, 2009 two days after
the JV agreement was signed.
7. When the deposit money of
US$7.1 million paid to Buried Hill
was returned after the negotiation
was cancelled, the cash was not

returned to the JV Co but to PetroSaudi Holdings. This deposit money
should have been returned to the
JV Co as it formed part of the assets sold by PetroSaudi Holdings
to the JV Co.
8. There was also FRAUD in the
creation of a fake US$700 million
loan from PetroSaudi Holdings to
the JV Co. These are the evidence
of fraud:
a) There was no corresponding
cash in the JV Co or any of its subsidiaries on or after Sept 25, 2009
(the date the loan agreement was
signed). But a letter of demand dated Sept 29, 2009 from PetroSaudi
Holdings was sent to the JV Co to
pay the loan.
b) From the US$1 billion cash
that 1MDB remitted for the JV,
US$700 million was paid directly
from 1MDB to Good Star Limited
instead of the supposed lender
PetroSaudi Holdings.
c) The scheme to scam US$700
million from 1MDB was discussed
as over payment in various email
exchanges and attachments be-
tween Jho Low and his associates

Seet Li Lin, Tiffany Heah, with PetroSaudi executives Patrick Mahony
and Tarek Obaid between Sept 11,
2009 and the signing of the JV on
Sept 28, 2009.
d) Timothy Buckland (from the
UK law firm of White & Case which
represented PetroSaudi Holdings)
admitted in an email to Charlie
Sparrow of PetroSaudi Holdings
and copied to Mahony that the
letter of demand for repayment
of the US$700 million loan was
not needed but only necessary
for your docs to legitimise prepayment.
e) The board of directors of
1MDB was not told about this
loan prior to the signing of the
JV on Sept 28, 2009.
9. The remittance of the US$700
million from 1MDB to Good Star
at its bank account at RBS Coutts
(Zurich) approved by then 1MDB
CEO Sharol Halmi was done without the consent of the 1MDB board
of directors which had approved
payment of the entire US$1 billion
directly to the bank account of the
JV Co at JP Morgan Suisse (SA). Two

directors of 1MDB Mohd Bakke
Salleh and Azlan Zainol resigned
because of this payment of US$700
million to Good Star.
10. This transfer of the US$700
million was also a breach of the
approval given by Bank Negara
Malaysia for 1MDB to remit US$1
billion for the JV. BNM approved
payment to the account of the JV
Co at JP Morgan Suisse (SA) and
not to anyone else.
Why we say Good Star

was controlled by
Jho Low at the time
1MDB transferred
US$700 million
they were all part of the same

company. He lied.
2. 1MDB had on Sept 29, 2009
remitted US$700 million to account number 11116073 at RBS
Coutts Zurich. The Malaysian
remittance bank was Deutsche
Bank Malaysia. RBS Coutts risk
and compliance unit wanted to
know the beneficial owner of the
account and then 1MDB CEO
Shahrol Halmi replied that it was
Good Star Limited.
3. Email communication between
the banks and 1MDB on this payment was forwarded to Jho Low by
1MDB executive director Casey Tang.
4. Good Star executed an agreement

on Sept 30, 2009 to pay PetroSaudi Holdings executive and shareKey Points:
holder Tarek Obaid US$85 million
1. 1MDBs lawyers Wong & Part- as broker fee. If Good Star was part
ners, had questioned why the of PetroSaudi why was there a need
US$700 million was to be paid to do this?
to Good Star Limited and not to
the lender PetroSaudi Hold- 5. Good Star signed a draft investings Cayman. Patrick Mahony, ment management agreement
the CEO of the JV Co, said that
CON T I N UES ON N EX T PAGE
20 FO CU S
F RO M P RE V I O U S PAG E
with another PetroSaudi executive Patrick Mahony on Sept 29, 2009. The chief
investment officer of Good Star in the
agreement was Seet Li Lin, an employee of
Jho Low at Jynwell Capital. The metadata
of this document in an email attachment
showed Jho Low to be the last person to
save this file on Oct 1, 2009.
6. On July 21, 2010, Jho Low emailed to Mahonys Good Star bank account details at
RBS Coutts in Zurich to receive part of the
US$500 million that was to come from the
Murabaha notes 1MDB was to subscribe.
7. On Sept 13, 2010, Jho Low emailed again
to Mahony asking him to remit the money
to Good Star.
Key Findings:
1. Good Star Limited received in total
about US$970 million from the US$1.83
billion that 1MDB invested with PetroSaudi Holdings Cayman between 2009
and 2011. From this amount of US$970
million, US$529 million went to the bank
9. Jho Low has been identified as the bene- account of Abu Dhabi Kuwait Malaysia
ficial owner of that bank account which was Investment Corp (ADKMIC) at BIS Bank
closed in February, 2014.
in Singapore. Jho Low was the beneficial
owner of that account.
10. Jho Low had declared himself as a shareholder of ADKMIC when he was involved 2. Javace Sdn Bhd, the company that Jho
in the acquisition of the then Bursa Malay- Low used in the 2010 takeover of UBG Bhd,
received US$260 million via a loan from
sia-listed UBG Bhd in 2010.
PetroSaudi International Seychelles. That
money was transferred from the JP MorWho got what and the trail of
bank account of Tarek Obaid which
international money laundering gan
he received from the US$500 million Mu8. Between June 2011 and September 2013,
Good Star remitted a total of US$529 million
in several transfers to a bank account at the
Swiss private bank BSI in Singapore that
belonged to Abu Dhabi-Kuwait-Malaysia
Investment Corp (ADKMIC).
MO
rabaha notes subscribed by 1MDB in Sept,

2010. (See The Money Trail Flow Chart)
ah
Kin
3. Besides the US$260 million, Tarek Obaid

received in total another US$240 million
from 1MDB. From this, US$77 million was
paid to his partner at PetroSaudi, Prince
Turki, US$33 million to Patrick Mahony and
US$1.0 million to Nawaf Obaid. (See Money
Trail Flow Chart).
6.
an
1M
Sw
the
an
4. Various PetroSaudi companies received

around US$330 million, of which US$185
million was used to buy a drill ship.
5. Some of the money received by these
individuals were used for their personal
investments. For example, Mahony used
US$10 million (6.5 million pounds) to buy
7. W
no
al
inv
Kin
Glo
Cre
Ba
ne
THE MONEY TRAIL INVOLVING GLOBAL BANKS

1Malaysia Development
Berhad
Sep 30, 2009

US$300 million
via Deutsche Bank
Malaysia
Sep 14, 2010

US$500 million
via AmBank (M) Bhd
Sep 30, 2009

US$700 million
via Deutsche Bank Malaysia
Total: US$330 million

May, 2011
US$110 million
via Deutsche Bank Malaysia
US$30 million
US$65 million
US$125 million
via AmBank (M) Berhad
Total: US$529 million
Good Star Limited

(Seychelles)
RBS Coutts Zurich
A/C 11116073
1MDB PetroSaudi
Ltd (BVI)
JP Morgan (Suisse)
A/C 7619400
Sep 16, 2010
US$300 million
UBG buyout
June 28, 2011 (US$55 million)

Apr 5, 2012 (US$20 million)
Jun 8, 2012 (US$120 million)
Sep 4, 2012 (US$38 million)
Nov 2, 2012 (US$153 million)
Dec 27, 2012 (US$142.5 million)
Sep 4, 2013 (US$0.46 million)
Account closed Feb 18, 2014

Oct 5, 2009
US$85 million
"Brokerage Fee"
Dec 21, 2009

US$50 million
Jan 12, 2010
US$250 million
Abu D
Inves
Sep 16, 2010

US$100 million
Kampac Oil
PetroSaudi
International
(Cayman)
JP Morgan (Suisse)
A/C 7601900
Dec 30, 2009

US$10 million
Jan 4, 2010
US$1.5million
Dec 21, 2009

US$5 million
Sep 14, 2010

US$25 million
Jan 15, 2010

US$185 million
Purchase of drill ship
May 5, 2010
US$50 million
PetroSaudi
Holdings
(Cayman)
JP Morgan (Suisse)
A/C 7625400
May 4, 2010
Aug
9, 2010
US$50
million
US$5.5 million
PSA Energy Services

Ltd.
HSBC (UK)
A/C 31679163
Mar 4, 2010
US$10 million
Sep 15, 2010

US$15 million
Offshore Services
Managment
Feb 1, 2010
US$5 million
BSI Ban
Tarek Obaid
JP Morgan
A/C 7573800
Sep 13, 2010

US$25 million
Aug 9, 2010
Ashmore Cayman SPC

The Northern Trust
Company
Sep 24, 2010

CHF82 million
Mar 4, 2010
US$6 million
May 5, 2010
U$50 million
Mashreq Bank PSC (UAE)
Oct 26, 2010, 2009

US$1.5 million
Jan 13, 2010

US$68 million
Sep 16, 2010

US$100 million
PetroSaudi Oil
Services Ltd.
(Cayman)
JP Morgan (Suisse)
A/C 7649600
Sep 16, 2010

US$260 million
UBG buyout
100% Shareholder
`
Javace Sdn Bhd

AmBank (M ) Bhd
A/C 12012032628
Sep 29, 2010

RM658.3 million
UBG General Offer
Majestic Masterpiece
Sdn Bhd
Total US$11.5 millio

Nov 3, 2009 US$1.5 m
Nov 30, 2009 US$10 m
Jan 20, 2010

US$40.5 million
Jan 20, 2010

US$120 million
Neptune Marine
Invest SA
PDVSA Petroleo SA
Jan 29, 2010

US$7.8 million
Servicios Mercantiles
Mercantile CommerceBank
N.A. (New York)
Jul 13, 2010

US$2.25 million
Rig Services
International
May 4, 2010 GBP3 million

Jul 23, 2010 US$3.7 million
Oct 11, 2010 US$1 million
PSI UK
HSBC (U.K.)
Aug 18, 2010

US$13 million
Saturn Drillship Pte

Ltd
Aug 11, 2010

US$13 million
Pegasus
Investment Pte Ltd
Other Transfers
FO CU S 21
M O N DAY J U LY 20 , 20 15 T HEED G E FINA NCIA L DA ILY
pt,
rt)
a house in his home country the United

Kingdom. (See Money Trail Flow Chart)
aid
on
was
nce
nd
ney
6. All these point to a clear case of fraud

and international money laundering.
1MDBs money went from Malaysia to
Switzerland via US clearing banks and
then to the United Kingdom, the UAE
and Singapore.
ved
185
ese
nal
ed
buy
7. What happened to 1MDBs money is

no longer a domestic issue but is a global fraud and money laundering matter
involving the United States, the United
Kingdom, Switzerland and Singapore.
Global banks like JP Morgan, RBS Coutts,
Credit Suisse, HSBC, Citibank, Deutsche
Bank, BSI and others have all been channels for the money flow.
Covering the US$2.23

billion hole (Original
US$1.83 billion cash &
US$400 million paper
profit) hidden as units in
the Cayman SPC via the
US$2.23 billion payment to
retire the Aabar options
2. By 2012, all the US$2.23 billion was captured as Murabaha notes issued by PetroSaudi. It was later redeemed for a 49%
stake in PetroSaudi Oil Services Ltd (PSOSL).
3. On Sept 12, 2012, 1MDB sold this 49%
interest in PSOSL to Bridge Partners International Investment Ltd for US$2.32 billion.
Bridge Partners International did not pay
cash but issued promissory notes as payment.
Key Findings:
1. With the US$1.83 billion cash 1MDB
invested with PetroSaudi Holdings Cayman all gone, how then can it cover the
hole plus the so-called US$400 million
in declared profit that it was supposed
to have made?
4. On the same day, 1MDB through its subsidiary Brazen Sky Ltd, invested these US$2.32
billion of promissory notes in a fund called
Bridge Global Absolute Return Fund SPC
which was managed by Bridge Partners Investment Manager (Cayman). According to its
prospectus, the fund makes high risk investments and investors can lose all its money.
5. The actual value of the US$2.32 billion kept in

the SPC was unverifiable and the dispute 1MDB
had with its then external auditor over this was
the reason why KPMG was sacked for refusing
to sign off the accounts for FY March 31, 2014.
6. Throughout 2013 and 2014, 1MDBs
board of directors had pressed its management to redeem the money from Cayman,
because it was getting worried over the
increased scrutiny by its external auditors.
7. Disputes and disagreements between
1MDB and Ernst & Young and then KPMG
were primarily over the inability of 1MDB
and Bridge Partners Investment Manager
to provide enough proof that the fund was
worth the US$2.32 billion ascribed to it
CON T I N UES ON N EX T PAGE
Low Taek Jho
million
Shareholder
$55 million)
20 million)
120 million)
38 million)
153 million)
42.5 million)
.46 million)
Almamlaka Limited
BSI Bank
(Switzerland)
Banque Saudi
Fransi
(Riyadh)

Nov 30, 2009 US$1 million
Feb 22, 2010 US$1 million
July 2, 2010 US$1 million
eb 18, 2014
Interstate
Investment N.V.
HSBC Bank (US)
A/C 003029-215
Abu Dhabi Kuwait Malaysia

Investment Corporation
(BVI)
BSI Bank Limited (Singapore)
A/C 6C02395
Tarek Obaid
Banque Saudi Fransi
(Riyadh)
Palantir
Technologies
Oct 20, 2009

US$1.5 million
Jan 27, 2010 US$5 million
Mar 11, 2010

US$2 million
Nov 18, 2009 US$5 million
Nawaf Obaid
HSBC (U.K.)
A/C 01444182
Jan 19, 2010

US$1 million
Justwin
BSI Bank
(Switzerland)
Samer El Haje Ibrahim

Mashreq Bank PSC (UAE)
A/C 0797294983
Sep 14, 2010

US$350,000
Oct 5, 2010
US$1 million
Total = US$77 million

Oct 28, 2009
US$10 million
Oct 20, 2009

US$33 million
Tarek Obaid
Credit Suisse (Zurich)
A/C 0835 969428 82
Patrick Mahoney
JP Morgan (Suisse)
A/C 7619300
der
ece

Jan 18, 2010 US$14 million
Mar 2, 2010 US$3 million
May 4, 2010 US$25 million
Sep 13, 2010 US$25 million
HRH Prince Turki

Samba Financial
Group (Riyadh)
Feb 10, 2010

US$200,000
Graff Diamonds
Total US$11.5 million

ov 3, 2009 US$1.5 million
ov 30, 2009 US$10 million
Nov 10, 2009 GBP620,000

Deposit for house at 27, Ladbroke Square, UK
Other Transfers
Aubrey David, Solicitor

RBS (UK)
A/C 10090589
Dec 18, 2009 GBP6.2 million

Purchase of house at 27, Ladbroke Square , UK
Patrick Mahoney's
'House' Account
Mika2 Limited (BVI)

JP Morgan (Suisse)
Jan 27, 2010

US$9.55 million
Credit Suisse
Mar 14, 2010

US$5 million
Apr 27, 2010

US$1 million
Tarek Obaid
Morgan Stanley
(Zurich)
A/C 051-57777
Celestial
Citibank (US)
A/C 36921581
May 7, 2010
US$2.5 million
Peninsula International Pte Ltd

JP Morgan (US)
Tarek's Bank Account

UBS AG (Geneva)
US$ A/C: CH35002402405761766DY
CHF A/C: CH830024024057617671A
Beneficiary: 0240/576176
Oct 18, 2010

US$15 million
Tarek Obaid
EFG Private Bank Ltd, Curzon Street
April 5, 2010
US$12.5 million
Zink Imaging
Bank of America
22 FO CU S
Sdn Bhd) which also set up other companies that Jho Low owned. These include
Javace Sdn Bhd, Majestic Masterpiece
Sdn Bhd and Wynton Private Equity Sdn
Bhd. All five companies have registered
offices at the Petronas Twin Towers and
they have the same company secretary
Lim Poh Seng.
F RO M P RE V I O U S PAG E
or that they were readily realisable to be

categorised as Available-For-Sale Investments in the audited accounts.
8. Subsequent to this, Aabar Investments
stepped in to guarantee Bridge Partners
Internationals US$2.32 billion debt to
1MDB held as units in the Cayman SPC.
7. B&M Consultancy is tied to Wong & Partners, the principal legal firm of Jho Low
and 1MDB.
Covering The Hole:

1. In 2012, the International Petroleum Investment Corp (IPIC) of Abu Dhabi was
given an option to subscribe to 49% of the
future listing of the power assets owned by
1MDB. This 10-year option, which was later
transferred to IPICs associate Aabar Investments, was for co-guaranteeing two bonds
totalling US$3.5 billion that 1MDB issued.
8. The buyers of Putrajaya Perdana and

Loh & Loh made a gain of RM510 million
at the expense of UBG. Tabung Haji subsequently bought a 30% stake in Putrajaya
Perdana in 2014 for an undisclosed sum.
9. In 2014, Javace and UBG were wound up
and Javace wrote off its entire investment in
UBG after paying the RM700 million bank
loan.
2. In May, 2014, 1MDB and Aabar signed

an agreement to terminate the options. This
was stated in Page 172 of 1MDBs FY2014
accounts but no details were given.
10. The impairment of RM750 million taken

by Javace is the same amount as the US$260
million of 1MDBs cash from the murabaha
notes issued by PetroSaudi. The impairment
allowed the de-linking of 1MDBs money
with gains enjoyed by the new shareholders
of Putrajaya Perdana and Loh & Loh. Who
are these people?
3. In page 169 of the FY2014 accounts,

it was stated that 1MDB had obtained a
bridging loan of US$250 million to buy
back the options.
4. In page 171, it was stated that on Sept
2, 2014, Aabar had written to 1MDB that
it wished to terminate the options according to the terms set out in the agreement signed in May. Again, no details
were given.
of IPIC (which owns 100% of Aabar) as

income or revenue. There were no such
entries in IPICs accounts. This reinforces
our analysis that the termination fees paid
to Aabar were in reality used to cover the
5. 1MDB has never given out enough de- hole at the Cayman SPC.
tails of the terms and costs of terminating
the Aabar options. But 1MDB appeared How Jho Low & associates
to have paid Aabar the following as termade RM1.0 billion through
mination costs:
i) US$250 million paid in May, 2014
a series of transactions
ii) US$975 million paid in September, 2014 involving Putrajaya Perdana
via a Deutsche Bank loan
iii) US$993 million paid in November, 2014 Bhd, Loh & Loh Corp Bhd
via a partial redemption of the Cayman and UBG Bhd financed
SPC funds.
partly by using US$260
6. This adds up to a total of US$2.22 billion.
million of 1MDBs money
Key Findings:
1. Between 2008 and 2010, Jho Low (pic)
made RM166 million entering and exiting
listed companies like Putrajaya Perdana
Bhd, Loh & Loh Corp Bhd and another
RM350 million through the injection of a
piece of land he owned in Medini, Iskandar to UBG Bhd via an asset management
8. The termination fee totalling US$2.22 company called Unity Capital.
billion that 1MDB paid to Aabar between
May and November, 2014 was, however, 2. In September, 2010, a Jho Low-connot reflected in the FY December, 2014 trolled company called Javace Sdn Bhd
7. The scheme to cover the US$2.32 billion
hole at the Cayman SPC is by paying Aabar
US$2.22 billion as option termination fee.
Aabar then passes the money to the Cayman SPC from which 1MDB would then be
able to redeem the money, thus covering
the money that was already gone.
. sm
g
un
yo
u
rt .
ns
to
a
pp
L
N
O
IS
ble
made a RM1.4 billion offer to take over

UBG. This was financed by a RM700 million bank loan and a US$260 million loan
from PetroSaudi International Seychelles
through Tarek Obaids bank account. That
US$260 million came from the subscription by 1MDB to murabaha notes totalling
US$500 million issued that same month
by PetroSaudi.
3. After the takeover by Javace, UBG had
these assets (i) Putrajaya Perdana that
was worth around RM680 million (ii) Loh
& Loh which was worth RM330 million,
(iii) Unity Capital with a carrying value
of RM315 million and (iv) cash of RM82
million.
4. In September, 2012, UBG sold Putrajaya
Perdana to Cendana Destini Sdn Bhd for
RM240 million (a discount of RM440 million).
It also sold Loh & Loh to Selesa Produktif
Sdn Bhd for RM260 million (a discount of
RM70 million).
5. It wrote down the cash and investment
totalling RM397 million to RM200 million.
6. Cendana Destini and Selesa Produktif
were set up by the same secretarial services company (B&M Consultancy Services
E
IN
Note from the publisher:

We have in this report, which is possibly
the last on this subject, laid out all the key
facts about what happened during the
three-year business ties between 1MDB
and PetroSaudi International especially
what happened to the US$1.83 billion of
real cash invested by 1MDB.
Our report is based on evidence corroborated by documents that include
bank transfers and statements. There is
no space to publish everything and, indeed, some material cannot be published.
We will now be handing over these
printed documents and the hard disk
that contains them to the investigators.
We will assist the investigators in any way
we can to get to the bottom of what had
happened.
We have a duty to find and report the
truth. Our reports on 1MDB had exposed
how a group of individuals Malaysians
and foreigners schemed a multi-billion ringgit fraud against the people of
Malaysia.
How can the work that we have done
be deemed as a political conspiracy?
http://edgy.my
COMMENT 23
China learns it is easier to

manipulate financial markets
The countrys resolve to overawe stocks into rising seems to harden daily
BY JAMES SAFT
hinamaybethrowingits
all at the stock market
not because that is its
most important problem, but its the one
Beijing can most easily, if ham-handedly, control.
Intimidating short sellers is, after
all, a lot easier, and cheaper, than
breathing life into a sagging housing
market suffering chronic (and worsening) oversupply.
Allowing people to pledge their
houses as collateral for the purchase
of more shares is easier than managing the transition from over-investment to, well, whatever comes after.
Suspending trading in major issues, trapping investors, is easier, and
quicker, than addressing the ways
in which pledged shares are part of
the expanding web of indebtedness
in China.
Chinas resolve to overawe markets into rising seems to harden daily.
Chinese media reported last Friday that the state-run China Securities Finance Corp (CSF) had received 1.3 trillion yuan (RM796.52
billion) in loans from banks, money
which in turn will be made available
for stock-purchase loans through
brokers.
Last week the CSF, not satisfied
with rules that since last year have

allowed brokers to issue short-term
debt to fund margin loans for stock
purchases, took the decision to allow those loans themselves to be
securitised and sold to free up more
capital for yes thats right more
margin loans.
All of this is most impressive, and
though as policy it is deeply flawed
and will have very high longer-term
costs, in the shorter term it seems
to be achieving something close to
its aim. The Chinese stock market, if
such it can still be called, has stabilised, with the Shanghai Composite
Index closing last Friday at 3,957. That
counts as an improvement, being up
13% from Julys lows, though down
well over 20% from Junes peak.
But given the power China has put
into the exercise, this hardly counts
as a rousing success. Two weeks ago,
21 brokers, presumably under inducement from authorities, pledged
to continue to buy shares until the
Shanghai index regained 4,500. But
it remains below 4,000.
Chinas effort to control its stock
market is best seen in the context
of the difficulties it faces in controlling the rest of its economy, which
presents problems just as deep but
requires solutions that may be much
more difficult to engineer, or to endure.
In our opinion, Chinas combination of a triple bubble (with the
third-biggest credit bubble, the big-
An investor smiling as she walks past an electronic board showing stock information at
a brokerage house in Fuyang, Anhui province. The Chinese stock market has stabilised,
with the Shanghai Composite Index closing at 3,957 last Friday. Photo by Reuters
gest investment bubble and second-biggest real estate bubble of all

time) remains the biggest risk to the
global economy, Credit Suisse strategists led by Andrew Garthwaite wrote
in a note to clients.
Take housing. Despite falling prices and despite sky-high valuations,
with Beijing and Shanghai buyers
paying average prices that are more
than 20 times average incomes, supply continues to flow unabated. Housing starts in China are running at 12%
above demand, according to a Credit
Suisse estimate, and 18% of completed homes become vacant.
Investment as a per cent of output

is now running at 44%, compared
with the peak of 36% in Japan in the
early 1970s when it was rapidly industrialising. China recognises that
investment-led growth is a process
with a finite limit, and that its economy must transition into one with
higher consumption and services as
opposed to exports and the laying of
concrete over ground.
Given the excesses in Chinas
economy, and the opaque but undoubted links between its banking
system, its web of private, public and
quasi-public debts and the stock market, a plunge must have been nothing short of terrifying for authorities.
Debt-fault lines, as weve seen in other
economies, run deeply but can cause
much damage.
The reaction to the stock market
crash may not be so much a matter
of injured prestige, but of looking
at the moving pieces and moving
those over which China has most
control.
If there is one lesson of the last
financial crisis, it is that it is easier
to manipulate financial markets
and hope reality conforms than
to try and change reality and wait
for financial markets to catch up.
China has learned this point
well. Reuters
It is not at all surprising that a

housing bubble has gone hand-inhand with a credit bubble, one that
Credit Suisse calls the third-biggest
theyve seen, behind only Spain and
Ireland during the last lamentable
excess.
The ratio of private sector debt to
gross domestic product is not only
nearly 200%, but the rate of ascent
has risen very steeply since 2011,
taking it 40% above trend. Bank for
International Settlements research
has found that many financial crises
are proceeded by credit rising by only James Saft is a Reuters columnist.
10% above trend.
The opinions expressed are his own.
Europe makes its taxpayers gamble on Greece

BY
MOHAMED A EL-ERIAN
EUROPEAN Central Bank (ECB)

President Mario Draghi last Thursday reiterated that his institution
has always acted on the assumption that Greece is and will be a
member of the euro area. He also
provided stark data about the huge
involvement in the Greek banking
system of the euro central banks,
whose deposits now exceed those
of all others combined.
The larger truth is that European taxpayers, both implicitly and
explicitly, have substituted for all
sorts of private creditors, depositors and investors in Greece. This
European socialisation of private
liabilities will continue, forcing the
eurozone closer to one of two extreme outcomes: a fiscal union or
the exit of Greece from the single
currency. Either would be unpleasant for several of the European Unions other members.
In hopes of offsetting large-scale
deposit outflows from Greece, the
ECB has used its Emergency Liquidity Assistance (ELA) facility to pump about US$100 billion
(RM380.48 billion) into the Greek
banking system. Even so, the injection of funds has proved insufficient
to avoid a shutdown of the banking
system that has lasted three weeks.
As a result, the ECB is now under significant political pressure
to increase the banks access to
the ELA, despite clear evidence
that the Greek institutions are experiencing problems of solvency,
not liquidity.
This substitution of public money for private funding isnt a new
phenomenon. It has been happening on a large scale since 2010 for
Greek public finances. As the country sought to avoid bankruptcy, the
exodus of private creditors has been
met by growing exposure on the
part of official European entities
and the International Monetary
Fund (IMF).
Even on the investment side,
what little real economic activity
has occurred has been driven more
by public institutions than private
investors.
the deal to be reached today.

The prevailing approach to
Greece, which is increasingly recognised as extend and pretend, is
proving increasingly hard to sustain
and not just because of questions
about Greeces will and capacity to implement the measures
required by the latest bailout agreement, as Draghi correctly noted.
There are also strains among the
creditors, including unresolved
issues regarding burden sharing.
With time, the impasse will yield
to one of two opposite outcomes:
Europe will be forced into embracing wholeheartedly an even greater
financial incorporation of Greece,
thereby setting the precedent for
Draghi addressing a news conference after a monetary policy meeting at the ECB
the type of fiscal integration that
headquarters in Frankfurt last Thursday. He notes that the prevailing approach to
Germany and some other countries
Greece, which is increasingly recognised as extend and pretend, is proving increasingly
have consistently opposed.
hard to sustain. Photo by Reuters
Or official creditors will need to
accept a write-down of their claims
This wouldnt matter as much namics, and isnt on track for such on Greece, a solution that is equalif a growing and financially viable a happy outcome.
ly unpalatable to some eurozone
Greek economy within the euroGiven this set of circumstances, members. Bloomberg View
zone was on the cards. But as was official creditors are getting ever
stressed again by the IMF this week, closer to a critical fork in the road
Greece is encumbered by huge debt as they prepare for another injec- Mohamed El-Erian is the chief ecoand structurally weak growth dy- tion of debt-creating funds under nomic adviser at Allianz SE.
24 F E AT U R E
A tale of two ousted bankers

In this new world, universal banks have to remain competitive in every area
BY LEONID BERSHIDSKY
hat kind of
chief executive officer
(CEO) does a
big modern
bank need?
Apparently not a traditionally hyper-competitive investment banker
like Anshu Jain, who lost his co-CEO
job at Deutsche Bank last month
but evidently not a quiet retail
banker like Antony Jenkins, Barclays freshly ousted chief, either.
Perhaps the reason its so hard
to find a leader who can credibly
run all the diverse parts of a big
universal bank is that such institutions are doomed. Jain and Jenkins
had opposite ideas about which
businesses were core to the crisis-racked banking empires they
inherited.
True to his high-octane Wall
Street personal history, Jain concentrated on investment banking
and scorned the retail part. In his
April presentation on Deutsches
strategy, there were four slides titled
Reshape Retail, but two of them
dealt with divesting Postbank, the
omnipresent German main street
lender that Deutsche acquired in
2010, and one of them focused on
making Deutsches retail operation
more like its investment banking
Jains (left) investment banking focus looked obsolete and dangerous while Jenkins management style seemed too timid when it
came to cutting costs. Photos by Reuters
one, turning it into a leading advisory bank.

Jenkins, who had only ever
worked in retail and corporate
banking, declared that the investment bank built up by his flamboyant predecessor Bob Diamond
would be a smaller part of the
group going forward.
In an interview last year, he
said 85% of the assets he wanted to exit or run off over time
were from the investment bank.
The United Kingdom retail bank
remained his favourite, and he
took an obvious pleasure in its
technological rearmament.
So the investment banking part
of Barclays business struggled,

providing 12% less net revenue in
2014 than it had in 2013, while the
retail and corporate part showed
the kind of placid growth this business is capable of, 1% in the same
period.
Neither banks board was happy. Jains investment banking focus
looked obsolete and dangerous
as the bank paid one multibillion-dollar fine after another for
all sorts of trading shenanigans.
Saint Antony Jenkins love of
commercial banking, for its part,
appeared to hamper profit growth,
and his management style seemed
too timid when it came to cutting
vices that smaller companies would

otherwise be forced to source from
different banks. Jain told his audience of students:
Jenkins, in contrast, unequivocally declared last year that the
universal banking model is dead.
To him, it was a matter of technology: With more and more banking
done over the Internet and with
mobile devices, Jains picture no
longer made sense.
The modern customer can easily maintain multiple accounts at
banks without much physical infrastructure, investing savings with
the likes of Lending Club, using an
online-based institution like Germanys Fidor Bank for business and
personal debit card spending, making international transfers through
TransferWise, and otherwise taking advantage of the way the tech
industry is slicing and dicing the
traditional banking business.
In this new world, universal
banks have to remain competitive
in every area, and thats a superhuman task. There are probably executives out there who can handle it,
but theyre so rare that the banking
behemoths set up before the technological revolution are struggling
to recruit them. The departures of
Jain and Jenkins vividly illustrate
the challenge. Bloomberg View
costs and too consensus-oriented

for quick progress.
Both chief executives, however,
could probably have survived in
more specialised institutions.That
was the Barclays of old, the bank
that installed the worlds first cash
machine and launched the UKs
first debit and credit cards.
Deutsche Banks former co-chief
executive paid lip service to universal banking. Two years ago, Jain
argued that universal banks were
uniquely placed to finance the
economy. He noted that theyre
diversified, they provide essential
liquidity to financial markets, and Leonid Bershidsky is a Bloomberg
they provide a broad range of ser- View columnist.
Oil crushed by worries on Europe, Iran

BY PATTI DOMM
OIL is expected to spiral even

lower, as concerns about global
growth collide with record production and the potential for more
supply from Iran.
West Texas Intermediate (WTI)
crude futures plunged 7.7% on
July 7 and were in official correction territory, with a decline
of more than 11.5% since July 1.
Brent was more than 6% lower.
Oil plummeted on fresh worries that Greeces anti-austerity
referendum could lead to its exit
from the eurozone, creating negative fallout across the regions
economy.
The drop in oil is going to stop,
but not for now, said Francisco
Blanch, head of global commodities and derivatives research at
Bank of America Merrill Lynch.
Youve got every cylinder pointing south. You dont want to try
to grab this falling knife.
Other factors that contributed
to the drop were apparent movement in Irans nuclear negotiations and new focus last weekend
on Chinas stock market collapse.
The stronger dollar could also add
pressure, as the euro skids.
Strategists see the floor for WTI
oil at around US$50 (RM190), but

some say it could continue to fall
toward the lows of about US$42
from mid-March. WTI crude futures settled down nearly 8% on
July 6, down US$4.40 at US$52.53
per barrel.
This [last] week is a huge
week. We have two things that
people in the markets have been
worried about literally for years,
and theyre both happening at the
same time, said Michael Wittner,
head of commodities research
Americas at Societe Generale.
The oil market is a little twitchy.
So far, its the stock

market. The argument
is whether the Chinese
government is worried.
Strategists say the market is
worried about potential Greek
contagion that would impair the
European economy. But the situation is unclear, and the uncertainty could stretch on for weeks,
which could also dampen economic activity and keep the market on edge.
On the Iran deal, I think people are waking up to the fact that
Iran is ... saying it wants to double
its exports once the ban is lifted,
said John Kilduff of Again Capital.
Blanch said while there is no
agreement yet, the deal over Irans
nuclear programme appears closer and the market is beginning to
price in the flow of Iranian oil.
If a deal gets done this week,
maybe its a few more dollars
down. That may be a buying opportunity, Blanch said. Blanch
said the 30 million to 40 million
barrels Iran currently has in floating storage could be on the market
fairly quickly.
Negotiators have set a deadline for the talks between Iran,
the United States and five other
powers. Iran is reportedly pushing for a complete lifting of the
United Nations arms embargo.
Views vary on how quickly Iran
will start to get more oil out onto
the world market if there is a deal.
I think oil markets understand
very well, depending on what gets
decided one way or the other, its
going to be months, said Wittner.
The only thing fast is the floating
storage, but again, thats going
to have to wait until restrictions
are lifted.
Blanch said another catalyst

for lower prices will come with
the Feds interest rate hikes, expected to begin later this year
or early next year, because they
could have a negative impact on
emerging market economies.
Blanch does expect some relief with a pending slowdown in
US oil production, so far holding
near 40-year highs of 9.6 million
barrels a day. He said the lower
prices could make production to
decline by 500,000 barrels a day,
before picking up again some time
next year.
Strong US production has also
been met by a pickup in Saudi
Arabian production, also believed
to be near record highs.
Gene McGillian, an analyst
with Tradition Energy, said the
market is waiting for new data
on traders positioning. As of two
weeks ago, longs outnumbered
shorts by a wide margin.
The question is, does the market hold US$50 and do we pivot
back to the US$40s? he asked,
adding at some point the longs
could start bailing, adding further pressure on prices. CNBC
Analysts agree it will take time

for Iran to reach its potential.
Youre going to have 600,000 barrels a day of incremental supply
heading into the middle of next
year, Blanch said. All of that in
my view creates a very negative
backdrop for the oil market.
As for China, traders have been
watching its high-flying stock
market melt down.
So far, its the stock market.
The argument is whether the Chinese government is worried. Are
they acting aggressively on the
stock market because they are
worried about the real economy?
said Wittner. Thats the issue.
Its too early to say on that one.
But markets have been worried
about slower Chinese growth,
and the China stock market collapse has the potential to hurt the
broader population of individual
investors.
For more, visit www.cnbc.com
H O M E B U S I N E S S 25
WEEK
IN FOCUS
Photos by Sam Fong
1
1
(From left) Perwaja Holdings Bhd

director and Kinsteel Bhd group
managing director Tan Sri Pheng
Yin Huah, Perwaja director Datuk Alan Ong, and Tianji Zhi
Yuan Investment Group Co Ltd
chairman Zhang Zhong at the
signing ceremony among Perwaja, its wholly-owned subsidiary Perwaja Steel Sdn Bhd and
China-based Tianji Zhi Yuan in
Kuala Lumpur last Wednesday.
Popular cartoonist Datuk Lat

(back row, extreme left) and AmBank Group corporate communications and marketing head/
president of Kelab AmBank
Group Syed Anuar Syed Ali
(back row, second left) helping
children from Kampung Pasir
Era in Kuala Krai, Kelantan to
select songkok in Kubang Kerian in preparation for Hari Raya
Aidilfitri last Monday. Yayasan
Azman Hashim and AmBank
Group contributed an additional
RM250,000 to repair the houses of flood victims of Kampung
Pasir Era.
CIMB CHEQUE PRESENTATION ... (from left) Malaysia Wakaf Foundation chief executive ocer Professor Datuk Dr Sudin Haron, Minister in the Prime Ministers
Department Datuk Seri Abdul Wahid Omar, Prime Minister Datuk Seri Najib Razak, Minister in the Prime Ministers Department Datuk Seri Jamil Khir Baharom, and CIMB Islamic Bank
Bhd chairman Datuk Dr Syed Muhamad Syed Abdul Kadir at a mock cheque presentation by CIMB Islamic to the foundation at the launch of the National Wakaf Corp Bhd and the
Corporate Wakaf Programme in Putrajaya last Tuesday.
(From left) Asian Finance Bank

Bhd (AFB) treasurer Azidy Daud,
chief executive officer Datuk Mohamed Azahari Kamil, chief financial officer Abdul Latif Bujang Masli, and chief risk officer
Sharifah Normah Syed Harman
at the banks press conference
after announcing AFBs 2014
financial year performance in
Kuala Lumpur last Tuesday.
Bursa Malaysia chief regulatory

officer Selvarany Rasiah (left)
and director of securities market
Ong Li Lee at the Bursas media
briefing on the ACE Market in
Kuala Lumpur last Monday.
Allianz Life Insurance (M) Bhd

chief sales officer Ong Pin Hean
(left) and chief executive officer
Rangam Bir at the official launch
of FlexiSaver, a life savings plan,
in Kuala Lumpur last Thursday.
6
3
F&N Dairies Manufacturing

(M) Sdn Bhd general manager
Ooi Peng Hock mingling with
children from the Opah Hasnah
Childrens Home during F&N
Dairies (M) Sdn Bhds Iftar celebration for the home in Klang
on July 3.
26 W O R L D B U S I N E S S
Greek banks to reopen,

PMs new cabinet takes over
But most capital controls concerning withdrawals and money transfers will remain
BY EL EN I CHREPA
ATHENS: Greek banks will reopen today as Prime Minister Alexis

Tsipras rebuilds his government
to shore up support for a bailout
agreed with the countrys creditors.
The banks, which have remained
closed since June 29, will open today, the government said on Saturday. Most capital controls concerning withdrawals and money
transfers will remain, and while the
daily limit was held at 60 (RM247),
a cumulative limit of 420 a week
was set, it said.
Lenders will reopen a week after
Tsipras and creditors agreed to a
bailout programme and Greek lawmakers approved legislation needed
to release funding for the country.
Hours after the vote, the European
Central Bank approved emergency
financing for the countrys lenders
and the European Union finalised a
bridge loan last Friday to provide a
stop-gap until a full three-year res-
Fiat Chrysler
mulls auto parts
unit sale
BY PA MEL A B AR BAGLIA
& AGNI ESZK A F LAK
LONDON/MILAN: Fiat Chrysler

Automobiles (FCA) is considering whether to sell its auto parts
maker Magneti Marelli after receiving interest from potential
buyers, according to sources
familiar with the matter.
At least two US private equity funds are looking to team
up with industry players and
submit joint bids for Magneti
Marelli, which supplies all major
carmakers in Europe, the Americas and Asia, three sources told
Reuters.
A recent offer, by a group including a US buyout fund and
valuing the business at less than
2.5 billion (RM10.3 billion), was
rebuffed in June as FCA would
not agree to sell for less than 3
billion, one of the sources said.
Gualberto Ranieri, a USbased spokesman for FCA, said
Magneti Marelli is not for sale.
Debt-laden FCA could sell
the unit either in parts or in entirety, the sources said, adding
that no final decision on a disposal had been taken.
Magneti Marelli has often
been touted as a takeover target. While FCA has always denied any interest in selling, the
sources said the Italian-American carmaker had recently told
interested parties it may reconsider its plans. Reuters
cue programme, worth as much as

86 billion, is settled.
This will improve the image of
the economy for Greeks inside the
country, said Aristides Hatzis, an
associate professor of law and economics at the University of Athens.
Its just the beginning and a more
ambitious option wasnt possible.
The prime ministers office said
Panagiotis Skourletis will replace
Panagiotis Lafazanis, who heads the
Left Platform fraction of Tsipras Syriza party, as energy minister. George
Katrougalos will succeed Skourletis
as labour minister. Nadia Valavani,
Dimitris Stratoulis, Kostas Isichos
and Nikos Chountis, who also, as Lafazanis, voted against the legislation,
were removed from the government.
Tsipras told his associates that he
would be forced to lead a minority
government until a final deal with
creditors is concluded. In all, 64 of
the parliaments 300 lawmakers voted
against the bill. Half of the no votes
came from Syriza. Bloomberg
A security worker leaving after bringing money to a National Bank branch in Athens,
Greece last Friday. Following last Thursdays vote, Tsipras told his associates that
he would be forced to lead a minority government until a nal deal with creditors is
concluded. Photo by Reuters
Jacques Delors idea about euro

government, with the addition of
a specific budget and a parliament
to ensure democratic control, Hollande said.
His remarks touched on what
analysts have seen as a major flaw
in the euro.
Under the 1992 Treaty of Maastricht, countries which share a common currency must obey rules on
borrowing and deficit spending.
But the Greek crisis saw one of
the 19 eurozone members notch
up successive worsening deficits
and amass a mountain of debt.
The problems were only addressed
by bailouts from the European
institutions and the International
Monetary Fund (IMF).

Critics say the problem stems
from a lack of centralised control
over national fiscal policies, which
today are jealously guarded areas
of sovereignty.
In 2011 Delors said the crisis
facing the euro required member
states either to accept greater economic cooperation or a transfer of
more national powers to the European Unions centre.
Hollande did not spell out his
proposals in the interview but said
it was time to overhaul the euros
governance.
Sharing a currency is far more
than wanting [economic] convergence, he said. AFP
Most Germans feel planned Greek deal bad poll

BERLIN: More than half of Germans think the planned deal with
Greece is bad and many would have
preferred that the crisis-stricken
country left the eurozone rather
than getting the chance for further
aid, according to an opinion poll.
Lawmakers in Germany, the biggest contributor to eurozone bailouts, last Friday gave their go-ahead
for the currency bloc to negotiate a
third bailout for Greece that could
total 86 billion (RM354.37 billion)
over three years.
Jurong Islands
chemical romance
SINGAPORE: Jurong Island
the cornerstone of Singapores
petrochemicals industry is
looking to the speciality chemicals field to keep it ahead of its
global competitors, The Straits
Times reported. The government is behind the push, with
the Economic Development
Board setting its sights on significantly growing the sector,
said Eugene Leong, its director of energy and chemicals.
Speciality chemicals refer to
niche chemicals and polymers
which are usually higher up in
the value chain as they have
unique functions that enhance
a products performance. They
include automotive-related
chemicals, which can be used
to produce fuel-efficient cars,
and agro-chemicals to raise
farm efficiency.
Greek bank shutdown cost

economy 3b report
Hollande: France willing to

strengthen euro governance
PARIS: France favours a stronger
organisation behind the euro led
by a vanguard of countries, French
President Francois Hollande said in
an interview published yesterday.
In the past week the European spirit prevailed in addressing
the Greek crisis, he told the weekly
Journal du Dimanche.
But we cannot stand still, Hollande said, in the interview published alongside a profile of Jacques
Delors, the former head of the European Commission.
Delors, a former French economics and finance minister who
turns 90 today, is one of the architects of the euro.
I have proposed taking up
IN BRIEF
In the YouGov survey seen by

German newspaper Welt am Sonntag, 56% of respondents said they
thought the plan for such a deal
with Greece was bad, with just over
one fifth of those saying it was very
bad.
Only 2% deemed it to be positive while another 27% said they
thought it was somewhat positive.
The poll of 1,380 Germans
showed there was a lack of enthusiasm in Europes largest economy
about the result of last Fridays vote,
Welt am Sonntag said yesterday,

adding that the poll showed 48% of
Germans would have liked to see
Greece quit the eurozone.
Only a third clearly said they
wanted the country to remain a
member of the single currency bloc,
the newspaper said.
A separate survey by pollster
Forsa published last Friday showed
that 53% of German voters had
wanted parliament to back the negotiations, with 42% against.
Reuters
ATHENS: The three-week shutdown of Greek banks has cost

the countrys struggling economy some 3 billion (RM12.36
billion) not counting lost tourism revenue, a report said on
Saturday. Citing commerce
groups, the Kathimerini daily
said the retail trade alone had
suffered a 600 million loss,
with apparel taking the main
blow. Exports also suffered a
240 million hit, the exporters association said. According to the Athens Chamber of
Commerce and Industry some
4,500 containers with raw materials and finished products
are blocked at customs. And
with a significant backlog of
cheques and bills of exchange
that cannot be paid, business
transactions worth an estimated 6 billion have been frozen,
the chamber added. AFP
JPMorgan reaches
US$388m accord in suit
NEW YORK: JPMorgan Chase
& Co agreed to pay US$388 million (RM1.47 billion) to settle a
suit by investors who claimed
the bank misled them about the
safety of US$10 billion worth of
residential mortgage-backed
securities, a lawyer said. The
suit, brought by the Fort Worth
Employees Retirement Fund
and other investors in nine offerings made before the financial crisis, claimed JPMorgan
misled them about the underwriting, appraisals and credit
quality of home loans underlying the securities. Bloomberg
Vietnams govt approves

US$2.5b port project
HANOI: Vietnams government
has agreed on a port project in
the southern province of Ca
Mau, costing some US$2.5 billion (RM9.5 billion), according
to media reports and which
would be able to host some
of the worlds biggest ships.
The Hon Khoai port would be
built under a public-private
partnership, the government
said in a statement on Saturday. Reuters
W O R L D B U S I N E S S 27
China must learn lessons from market rout

BY KA RI N STROHECKER &
S A RA H YOU NG
LONDON: China must learn lessons from its stock-market rout,

the countrys vice-finance minister
Zhu Guangyao said on Saturday,
signalling his intent to focus on
supervision and the development
of new frameworks to make it possible to weather any future market
turbulence.
Chinas stock market plunged
by nearly a third at one stage earlier this month from a mid-June
peak, wiping around US$4 trillion
(RM15.22 trillion) from share values as investors were spooked by
Zhu gesturing during an interview with Reuters at the Chinese embassy in London on
speculation that Chinas central
Saturday. He says Chinas intervention to stabilise the market is justied given the level
bank was about to end its moneof turbulence. Photo by Reuters
tary-policy easing.
The slide sparked Chinas biggest rescue effort of its equity mar- companies and their executives
There is a mismatch for superket, with the government launch- from selling shares.
vision, and that is a real challenge,
ing a series of moves that included
Zhu told Reuters Beijing was he said in an interview at the Chihalting flotations and banning considering new policies.
nese embassy in London. After
Indonesian
infrastructure
derailed
BY EVEL I N E DA N U B R ATA &
C I N DY SI LVI A NA
JAKARTA: Investors hoping for President Joko Widodo (Jokowi) to speed

up work on Indonesias infrastructure
projects have been disappointed, with
a plan for a US$2 billion (RM7.61 billion) airport railway line in the capital
spotlighting the delays and bureaucratic infighting involved.
Nearly half the 10 projects to which
Jokowi gave priority when he took office last year are languishing for lack
of cooperation among ministries he
has been unable to whip into line.
Somebody has to coordinate
the orchestra of stakeholders, said
Emma Sri Martini, head of government-owned infrastructure finance
firm Sarana Multi Infrastruktur. If
decisions for infrastructure are slow,
there wont be activity in any sector.
Jokowi is racing against time to create sufficient jobs for the two million
Indonesians who enter the workforce
annually, as he struggles to revive
economic growth that has fallen to
the weakest pace in around six years.
His promised splurge on roads,
ports and power plants is critical
as Indonesias traditional engines
of growth, consumption and commodity exports are faltering, while
businesses are shedding jobs fast.
Reuters
the big up and the big down we

saw, we need to learn from other
countries, mature stock markets
including the US and UK.
The market has bounced in recent sessions and the CSI300 index
of the largest listed companies in
Shanghai and Shenzhen rose 3.9%
last Friday to 4,151.50, up 1.1 on
the week.
Zhu said Chinas intervention
to stabilise the market was justified given the level of turbulence
and that there would now be an
evaluation of what had happened
to help draw up policies to handle
any future market turmoil.
However, he did not say what
other policies might be considered.
Some investors have said market reforms and a move towards
a market-driven economy, rather than short-term steps such as
limiting share sales, are what will
nurse markets back to health.
Reuters
US$483b unleashed
to stem stock turmoil
Shanghai Composite Index jumped 3.5% last Friday
SHANGHAI: China has created
what amounts to a state-run margin
trader with US$483 billion (RM1.84
trillion) of firepower, its latest effort to end a stock-market rout that
threatens to drag down economic
growth and erode confidence in
President Xi Jinpings government.
China Securities Finance Corp
(CSF) can access as much as 3
trillion yuan (RM1.84 trillion) of
borrowed funds from sources including the central bank and commercial lenders, according to people familiar with the matter. The
money may be used to buy shares
and provide liquidity to brokerages, the people said, asking not to be
named because the information
wasnt public.
While its unclear how much CSF
will ultimately deploy into Chinas
US$6.6 trillion equity market, the
financing is up to 25 times bigger than the support fund started
by Chinese brokerages earlier this
month. Thats probably enough to
restore confidence among Chinas

90 million individual investors, says
Bocom International Holdings Co.
The Shanghai Composite Index
jumped 3.5% last Friday, capping a
two-week rally thats turned it into
one of the worlds best-performing
equity gauges.
It doesnt have to use up all the
money, as long as it can make the
rest of the market believe that it
has enough ammunition, said Hao
Hong, a China strategist at Bocom
International in Hong Kong. It is a
game of chicken. For now, it seems
to be working.
CSF, founded in 2011 to provide
funding to the margin-trading businesses of Chinese brokerages, has
transformed into one of the key government vehicles to combat a 32%
sell-off in the Shanghai Composite
from mid-June through July 8. At 3
trillion yuan, its funding would be
about five times bigger than the
new proposed bailout for Greece
and exceed Chinas 2.3 trillion yuan
of regulated margin financing during the height of the stock-market

boom last month.
What the authorities are
demonstrating to the market is
that if panic does take hold, they
have the resources at their disposal
to deal with that, said James Laurenceson, the deputy director of the
Australia-China Relations Institute
at the University of Technology
in Sydney. Monetary authorities
around the word regularly send
the same signal in credit and foreign-exchange markets.
CSF had 2.5 trillion yuan to 3
trillion yuan of funding available as
of this week, with the exact amount
constantly changing, the people
familiar with the matter said. No
comment was immediately available from CSF, while the central
bank didnt respond to a fax seeking comment. Caijing magazine
earlier reported that banks had
given credit lines of as much as 2
trillion yuan to CSF. Bloomberg
WTO deal could cut US$1 tril tariffs in technology trade

BY ROS KRA SN Y
NEW YORK: Trade negotiators tentatively agreed on Saturday to eliminate

tariffs on an array of technology products valued at US$1 trillion (RM3.8
trillion) worth of global commerce.
The breakthrough toward the
World Trade Organizations (WTO)
Information Technology Agreement
took place at an ambassadors meet-
ing at the European Union (EU) embassy in Geneva.

Very optimistic that well have
a final successful deal by the end
of next week, Roberto Azevedo, director-general of the WTO, said on
Twitter. We have the basis for an
agreement.
The United States Trade Representatives (USTR) office hailed a
major breakthrough in what would
be the first significant tariff-cutting

deal at the WTO in 18 years.
This will open overseas markets
for some of Americas most competitive companies and workers, USTR
Michael Froman said in an emailed
statement. We are confident that all
parties will now give formal approval
to their participation in what would
be the first tariff-elimination deal at
the WTO in 18 years.
In talks that started last Tuesday, members took on the question

of various tariffs, notably on LCD
screens, which were contested by
Taiwan and China, and an EU request concerning car radios. South
Korean negotiators withdrew their
opposition to an extended agreement, and members agreed to consider a draft list of covered products.
Bloomberg
IN BRIEF
Miramax explores sale as
content demand grows
NEW YORK: The investors behind Miramax, the studio that
owns Oscar winners Shakespeare in Love and Pulp Fiction,
are exploring a sale, people with
knowledge of the matter said, as
demand for content has grown
with the rise of online viewing.
Miramax, which owns more
than 700 films, could fetch as
much as US$1 billion (RM3.8
billion), said one of the people,
who asked not to be named because the discussions are private. The company, controlled
by billionaire Thomas Barrack
Jrs Colony Capital and Qatar
Holding, is interviewing banks,
the people said. Bloomberg
China issues Internetnance guidelines

BEIJING: Chinas central bank
on Saturday issued guidelines
promoting the development of
Internet finance, saying it would
support qualified financial
institutions to set up platforms
for online banking, insurance
and securities businesses. A
senior central bank researcher
said last month that regulators
should set up clear rules allowing banks to set up online
finance subsidiaries to fend off
rising competition from technology giants that have expanded into their territory. In recent
years, China has seen rapid development in Internet finance,
but some problems and hidden
risks have also cropped up, an
official with the Peoples Bank
of China, the central bank, said
in a statement. Reuters
Beijing gold holdings

jump 57% in six years
BEIJING: Chinas gold reserves
stood at 1,658 tonnes at the end
of June, the central bank said
last Friday, up 57% from the last
time it adjusted its reserve figures
more than six years ago. Despite
the tonnage increase, gold now
accounts for 1.65% of Chinas total forex reserves, against 1.8% in
June 2009. The figures make China the worlds sixth largest official
sector gold holder after the United States, Germany, the International Monetary Fund, Italy and
France. It last adjusted its reserve
figures in April 2009, when the
level was lifted to 1,054.1 tonnes
from 600 tonnes. Reuters
Xi: State industry is the

backbone of economy
BEIJING: Chinas state-owned
enterprises (SOEs) are the backbone of the economy and the
government must avoid the
blindness of the market even
as it pursues reform, President
Xi Jinping said in remarks published in state media. The government must have confidence
in the SOE system, Xi said on a
trip to the northeastern province
of Jilin, adding that reform also
meant following the rules of the
market economy to enable SOEs
to become more competitive
and contend with risk, according to an online report by the
official Xinhua news agency.
Reuters
28 WORLD
Cosby offered pills, payments

and mentorship to women
While trying to hide it from his wife, according to court documents
NEW YORK: US comedian Bill
Cosby said he offered pills and
payments to women he had sexual encounters with, and tried to
hide it from his wife, according to
court documents cited in the New
York Times (NYT) on Saturday.
The newspaper obtained a transcript from a deposition Cosby
gave 10 years ago as part of a lawsuit from former Temple University employee Andrea Constand,
who accused him of drugging and
molesting her.
Cosby said he acted as a mentor
to Constand, and wooed her by
inviting her to my house, talking
to her about personal situations
dealing with her life, growth, education, according to the deposition quoted in the NYT.
The pair remained in contact
for several years, and one night at
his house in Pennsylvania he said
Filepic of Cosby
at the American
Comedy Awards in
New York on April
26, 2014. He was
accused of drugging
and molesting
Constand 10 years
ago. Photo by
Reuters
he gave her one and a half tablets

But Constands lawyer said
of Benadryl to relieve stress. They she believed he gave her a much
reportedly kissed and had sexual stronger drug.
contact afterward, according to
Constand maintains she was
the newspaper.
not seeking money from Cosby,
but the actor said his wife would

have likely thought support he provided her was for her education.
My wife would not know it
was because Andrea and I had
had sex and that Andrea was now
very, very upset and that she decided that she would like to go to
school, he is quoted as saying in
the deposition.
Cosby channelled funds to another woman through her agent
so his wife would not find out, according to the newspaper.
Cosby, now 78, maintains any
sexual relations he had with Constand were consensual, and accuses her of lying.
I think Andrea is a liar and I
know shes a liar because I was
there. I was there.
Constands lawsuit was settled
with Cosby on undisclosed terms,
the NYT reported. AFP
Five detained over China Uniqlo sex tape

BEIJING: Chinese police have
detained five people including a
young couple over a sex tape shot
in a Beijing clothing store which
went viral in China, media reports
said yesterday.
Those detained include the couple suspected of shooting the video
showing a mostly clothed man
and a naked woman apparently
having sex in the changing room
of a Uniqlo store in the capital.

The clip rapidly spread on Chinas Twitter-like Weibo and mobile
messaging service WeChat, with
scores of people taking selfies outside the outlet, some mimicking the
poses seen in the footage.
Police held the couple last
Wednesday night, just hours after the footage went viral, media
said yesterday, citing an earlier
report by state-run broadcaster

Beijing Television.
Five people were taken away
by police including the man and
woman who played the main role,
the channel said in a report broadcast late last week.
The police investigation has
two main parts: who published
this unsavoury video, and was it
an example of hype by the busi-
ness (Uniqlo), it added.

Chinas online regulator the Cyberspace Administration of China
(CAC) said late last Wednesday
that distributing the footage was
against socialist core values.
The CAC ordered senior managers of Weibos operator Sina and
Tencent, owner of WeChat, to cooperate in an investigation, the agency
said in a statement. AFP
South Korea intelligence ocial dead Elite Group of Eight universities

in growing hacking scandal
outperformed on graduate earnings
SEOUL: A South Korean intelligence official has been found dead
in an apparent suicide amid a growing political scandal over a covert hacking programme used by the countrys spy agency, police
said yesterday.
The 45-year-old from the National Intelligence Service (NIS)
was discovered dead in his car on Saturday on a mountain road in
Yongin, about 40km south of Seoul.
Police said the man, identified only by his family name Lim, apparently took his own life after leaving a handwritten will in his car giving
details of how the NIS had used a controversial hacking programme.
Government and NIS officials have admitted purchasing the
programme from an Italian company but say it was only used to
boost Seouls cyber warfare capabilities against Pyongyang and not
for any domestic monitoring.
Opposition legislators, however, argued the NIS has used the
programme to spy on South Koreans.
Lee Chul-Woo, a ruling party legislator who heads a parliamentary intelligence committee, said Lim had purchased and run the
hacking programme, which allows users to track smartphones and
computers by installing spyware.
In a copy of his will released by police, Lim insisted the NIS had
not spied on South Koreans and apologised for deleting files relating to the programme.
There was no monitoring of people at home, he said.
I deleted information that created misunderstandings about
our counterterrorism and covert operations on North Korea ... it
was a mistake on my part. But there is nothing to be worried about
over any of my actions. AFP
SYDNEY: There is no earnings advantage to attending a sandstone

university compared with less prestigious institutions, a major economic study has found, The Sydney
Morning Herald reported.
The latest Household, Income
and Labour Dynamics in Australia
(HILDA) survey found graduates
from the elite Group of Eight universities earn no more on average
than those who attended regional
universities and less than those
attending other universities. The
controversial finding has been disputed by the Group of Eight universities, which tend to require higher
entrance scores and perform better
on international rankings.
The HILDA survey found that,
when controlled for cognitive ability, there is a 10% earnings premium
for attending a technical university
such as the University of Technology, Sydney or Melbournes RMIT
University compared with Group of
Eight universities such as the Uni-
versity of Sydney or Melbourne.

There is an even bigger 15%
earnings premium for attending
a university that is part of the group
known as Innovative Research Universities, such as La Trobe University or Griffith University, compared
with the Group of Eight, the survey
found, The Sydney Morning Herald
reported.
Overall, a bachelors degree increases earnings by 41% for men and
32% for women compared to those
who completed year 11 or below.
HILDA is a respected annual
survey of more than 7,000 households conducted by the Melbourne
Institute of Applied Economic and
Social Research.
Group of Eight executive director Vicki Thomson said the group
was disappointed and perplexed
that the results had been accepted
for publication.
We absolutely question the veracity of the methodology adopted,
Thomson said.
IN BRIEF
Suspect texted link to
Islamic verse before
Tennessee rampage
CHATTANOOGA, Tennessee:
Hours before the Tennessee
shooting that killed five US
servicemen, the suspected
gunman texted a close friend
a link to an Islamic verse that
included the line: Whosoever shows enmity to a friend of
Mine, then I have declared war
against him. The gunmans
family said in a statement late
on Saturday he had suffered
from depression, and that
they had experienced shock
and horror over the violence.
The suspects friend said he
thought nothing of the text
message at the time, but now
wonders if it was a clue to last
Thursdays rampage in Chattanooga, which has reignited
concerns about the radicalisation of young Muslim men.
Reuters
China police shoot

one man dead at
construction site dispute
BEIJING: Chinese police shot
dead one man and injured
another during an apparent
protest at a construction site
in central China, police said
yesterday. Around a dozen
people on Saturday gathered at a construction site
in the city and blocked construction vehicles amid disputes, said police in the city
of Luoyang. Officers killed a
man after some of the group
who were not carrying firearms assaulted the police,
and attempted to grab their
weapons, they added, saying
two warning shots had been
fired. AFP
AC/DCs drummer
Phil Rudd arrested again
in New Zealand
WELLINGTON: AC/DC drummer Phil Rudd has been arrested again in New Zealand
and was behind bars yesterday night, his lawyer said.
Details of the charges were
unclear and police refused
to confirm the 61-year-old
had been arrested, less than
two weeks after he was sentenced to home detention after pleading guilty to threatening to kill and drugs charges.
However, his lawyer Craig
Tuck told journalists Rudd
would be appearing in court
today. AFP
Rescuers search for

girl after four-storey
building collapse
NEWE DELHI: Rescuers in
the Indian capital yesterday
scrambled to find a little girl
in the ruins of a four-storey
building after its collapse
killed four people and injured
several. Dozens of people in
neon orange safety vests and
hard hats used earth-moving
equipment, shovels and bare
hands to shift mangled heaps
of steel and concrete after the
residential building caved in
late on Saturday in New Delhi. AFP
S P O RT S 2 9
Arum slams Pacquiao for skipping rehab

BY DA N I EL H I CKS
MACAU: Veteran boxing promoter Bob Arum has blasted the injured Manny Pacquiao for missing
a planned rehab visit to his doctor
and says he has no idea when Pacman might return to the ring.
After watching Argentinas Cesar Cuenca beat Chinas IK Yang
to lift the IBF junior welterweight
Tevezs Boca
return put
in shade by
teammate
BUENOS AIRES: Carlos Tevez was
overshadowed on his return to Boca
Juniors after 11 years away on Saturday when teammate Jonathan Calleri
scored a spectacular rabona goal in
the 2-1 win over Quilmes.
Sebastian Palacios gave Boca a
first-half lead before Calleri grabbed
the crucial second for the league
leaders after his first attempt was
blocked.
Alexis Canello reduced the arrears
later in the game for the visitors at a
packed Bombonera stadium.
Tevez, 31, had spent the last decade in Europe, playing for Manchester City, Manchester United and Juventus.
Last season, he scored 29 goals in
Turin, earning a second Serie A title
and a runners-up spot in the Champions League.
Tevez played for his beloved
Boca from 2001 to 2004 before
moving to Corinthians in Brazil.
From there he joined West Ham
in England in 2006 and then played
for Manchester United before moving to rivals Manchester City for
more than 40 million in 2009.
He joined Juventus in 2013 after
four seasons at City, and last season was the Italian leagues second
top scorer with 20 goals as Juventus
won the league and reached the
Champions League final where they
lost to Barcelona. AFP
title in Macaus Cotai Arena on Saturday night, the 83-year-old toprank chief Arum responded angrily
when asked when Pacquiao might
fight again.
As far as Im concerned hes not
an active fighter, said Arum, adding
that Pacquiao had not been acting
very professionally.
Pacquiao had surgery on May 7
to repair a torn right shoulder rota-
tor cuff sustained in the unanimous

points defeat against Floyd Mayweather in the richest fight of all
time in Las Vegas five days earlier.
But Arum confirmed the Philippines congressman cancelled a
planned check-up with his surgeon
Neal ElAttrache at the Kerlan-Jobe
Orthopaedic Clinic in Los Angeles
on July 4.
Pacquiao was supposed to
come over to see the doctor and

for some reason he decided to cancel it, Arum told AFP.
So hes not acting very professionally.
Just days after he had been due
to see the surgeon, Pacquiao instead travelled to Indonesia in a
much-publicised trip to film a television advertisement and visit a
Filipina on death row. AFP
F1 driver Bianchis
funeral tomorrow
He had spent nine months in a coma after Japan crash
PARIS: The funeral of Jules Bianchi,
the French Formula One (F1) driver who died after spending nine
months in a coma following a crash
at last seasons Japanese Grand
Prix, will be held in his home city
of Nice tomorrow.
Bianchi, 25, who died last Friday, had been fighting for his life
under controlled medical conditions in the Centre Hospitalier Universitaire hospital in Nice, southern France.
He is the first F1 driver to perish
from a racing accident since triple
world champion Ayrton Senna in
San Marino in 1994.
His funeral will be held at 0900
GMT at the Sainte-Reparate cathedral in the old part of Nice city.
The gifted young drivers death
sparked a flood of tributes from his
pitlane colleagues and the world
of politics.
Bianchi joined Marussia in 2013
and competed in 34 Grands Prix,
notching two world championship
points still the teams best result.
Bianchi suffered a traumatic
brain injury when his car careered
KUALA LUMPUR: The Malaysia

Basketball Association (Maba) is
beefing up efforts to attract more
non-Chinese basketball players to
the professional level.
Maba secretary-general Chey
That Woon said that though the
game has been stereotyped as a
Chinese sport, about 550,000
non-Chinese are involved in the
game at non-professional level
throughout the country.
We can see a lot of non-Chinese playing in tournaments like
the three-on-three, but when it
comes to open championships,
even at state and district levels,
their numbers are low.
Every year, we are organising
this non-Chinese national championship known as Maba Cup to en-
courage more players but, after that,

nothing for the whole year. The main
reason for the lack of non-Chinese
players is very less exposure towards
the game during the primary school
years, he told Bernama.
Besides, Chey also noted, the lack
of infrastructure for the game in rural areas, especially in Malay settlements or villages was another root
cause for the lack of participation.
You can hardly see a basketball
court in non-Chinese areas, so the
kids choose to go for other games.
They play football in the villages
instead, he said.
To solve the problem, Maba came
out with a long-term programme to
develop more non-Chinese basketball players in the country.
Sixteen players chosen from the
Maba Cup this year were placed under the development programme,
Froome and Sky getting

used to negativity
MENDE (France): Chris Froome
and his British Sky team have resigned themselves to the negative
atmosphere surrounding them at
the Tour de France. Ahead of yesterdays 15th stage from Mende
to Valence, Froome and Sky have
been getting used to an increasingly hostile enviroment. Race
leader Froome was doused with
urine by a spectator on Saturdays
14th stage while Australian Richie
Porte said he was punched by
someone in last Tuesdays 10th
stage summit finish in the Pyrenees. If this is part of the process
we have to go through to get the
sport to a better place, then Im
here doing it, said Froome defiantly. AFP
PSG in bid for

Galatasarays Telles
ANKARA: French giants Paris
Saint-Germain (PSG) have offered Turkish club Galatasaray
10 million (RM41.21 million)
for Brazilian defender Alex
Telles, Turkish media reported
yesterday. The 22-year-old left
back joined the Istanbul team
last year from top Brazilian club
Gremio in return for 6.1 million. PSG had initially offered 8
million but then raised it to 10
million, making a deal possible
in principle although no contract has yet been signed, the
Haberturk newspaper reported. Galatasaray have reportedly
been keeping an eye on PSGs
33-year-old Sweden striker Zlatan Ibrahimovic. AFP
England set 509 to win

second Ashes Test
Bianchi speaking at a news conference at the Suzuka circuit on Oct 2, 2014. He is the
rst Formula One driver to perish from a racing accident since triple world champion
Senna in San Marino in 1994. Photo by Reuters
off the rain-drenched Suzuka circuit

during the Japanese Grand Prix on
Oct 5 and smashed into a recovery
truck at around 200km/h.
His death ended a promising
career that he hoped would see

him join the elite ranks of Ferrari,
something the young driver said he
felt ready to do three days before
the race in Japan. AFP
Maba to attract more non-Chinese basketball players

BY R VI K NESWA RA N
IN BRIEF
where they train with the national

coaches twice a week to develop
their skills.
According to Chey, the players
would play with the national juniors
for training purposes and there are
plans to send the team for competitions in less-developed basketball
nations such as Vietnam, Brunei and
Cambodia for exposure.
Hopefully this group of
non-Chinese players that we develop will then go back to their
hometowns and promote basketball there, he said.
Meanwhile, coach Paul Advincula said cagers under the programme
were going through training at the
Maba Stadium in Jalan Hang Jebat here.
He hopes to significantly increase
the number of trainees as well as
add the womens team into the pro-
gramme list to unearth more basketball talent in the country.

For now, we just have the mens
team which was established in
April. I would like to increase the
number of the players, but am still
not able to churn out more talent.
For the womens team, we are not
able to find any non-Chinese teams
playing out there.
All talented and committed
young basketball players are welcome to attend trials with me to get
into the training programme for the
betterment of the game, said Advincula, who is from the Philippines.
Currently, Nur Izzati Yaakob
and R Kalaimathi are the only two
non-Chinese players in the national womens team that won the
gold medal at the 28th Singapore
Southeast Asian Games last month.
Bernama
LONDON: England were set

a mammoth target of 509 to
win the second Ashes Test after
Australia declared their second
innings on 254 for two shortly before lunch on the fourth
day at Lords yesterday. Australia captain Michael Clarke
was 32 not out and Mitchell
Marsh 27 not out after David
Warner (83) and Steven Smith
(58) both made brisk fifties.
Off-spinner Moeen Ali, with
two for 78 in 16 overs, was the
only England bowler to take
wickets in the innings. England will now have to produce
a record-breaking effort if they
are to win this match. AFP
Liverpool agree 32.5m

deal for Villas Benteke
LONDON: Liverpool have
agreed to sign striker Christian
Benteke from Premier League
rivals Aston Villa for 32.5 million (RM192.94 million), the
BBC and other British media
organisations reported yesterday. The 24-year-old Belgium
international is now due to have
a medical, with Liverpools club
doctor set to return home from
the teams preseason tour of
Australia to conduct proceedings. It is not expected, however,
that Benteke himself will join the
tour. The forward arrived at Villa
from Genk in a 7 million move
in 2012 and has since scored 49
goals in 101 appearances for the
Birmingham club. AFP
30
live it!
MO
WELLBEING . THE ARTS . WINE+DINE . STYLE+DESIGN . LEISURE
Personal
ASSISTANT
COMPI L ED BY S U ANN QUAH
WORK. LIFE. BALANCE
START the week with a massage at Thai

Odyssey. The 60-minute traditional Thai
massage is said to mobilise joints and
free trapped energy. Available from from
Monday to Thursday from 10am to 3pm,
there is a promotion price of RM88+. For a
full lists of Thai Odyssey massage centres,
please visit www.thaiodyssey.com .
More than
JUST SONGS
TREAT yourself to a ne dining express
lunch today at Nobu Kuala Lumpur which
oers dishes such as seared salmon
tataki with matsuhisa dressing, beef
kushiyaki, spicy tuna cut roll, white sh,
langoustine and vegetable tempura as
well as miso soup. This express lunch is
a condensed version of the restaurants
bento box oering and is the best choice
to have if you are running on a busy
schedule. Priced at RM128, it is available
from noon to 2pm on weekdays. Nobu KL
is located at Level 56, Menara 3 Petronas,
Persiaran KLCC, Kuala Lumpur. For
reservation call (03) 2164 5084.
TAKE your loved one for a special meal

for two at La Bodega. You will enjoy
a paella with Mediterranean prawns,
scallops, French beans, peas & peppers
and it comes with two glasses of Casas del
Bosque Reserva, Sauvignon blanc. The set
meal is priced at RM138. The promotion is
on until the end of July and is currently on
at the La Bodega outlets in Jalan Telawi,
Pavilion KL and Empire Shopping Gallery.
For more information, please visit www.
gastrodome.com.my .
The Philharmonic Society of Selangors choir is not just about

entertaining but allows individuals to collectively give back to society
BY M AE C HAN
S I stepped into the elevator behind a mature lady,

she turned and smiled at
me before asking, Are you
an alto? It was not a random topic of conversation,
considering that we were both headed to
Harmony Hall, the space where the choir
group of the Philharmonic Society of Selangor (PSS) rehearses.
I replied that I was not, and we parted
ways at the door as she joined a large group
of men and women to begin their warmup vocal exercises with the choirs band
director, Nish Tham. I, instead, stepped
into a makeshift office, with chairperson
and choir director Cheryl Teh, to have a
chat about one of the oldest community
choirs in the country.
Having voluntarily helmed the Society
since 2009, the full-time Knowledge Management practitioner has been instrumental in growing the choir to over 100 members today. Its quite a feat, considering
that PSS was almost shut down in 2008.
The choir was born in the 1980s, and
was long-running, but when it came to
their 50th anniversary in 2008, it was down
to 30-odd members. So what the choir
head did was to call all the old boys for
a reunion concert. And after the concert,
then had planned to just dissolve the society, explains Teh.
She was asked to direct the last show,
and agreed to. But instead of the 100 people
or so they expected to attend the concert, a
few hundred came. We were bursting out
of the seams and the members who came
back said lets start this again, laughs Teh,

recalling her surprise, I said okay, but we
give it one year and see how it goes. Six
years later, were still here.
Today, the community choir has become a passion of sorts for her something she hopes to broaden and strengthen
as a model for other platforms. Her dedication and experience in running the choir
and society has earned her a spot in the
Eisenhower Fellowship where she will be
working on a paper entitled community
building through singing.
The scholarship programme connects
its recipients to key people or groups that
will enable them to further their choice
of field or theme for seven weeks in the
United States. Teh is one of two Malaysian
recipients this year.
When I go to the US this October, I
want to meet other choirs, see how they
run things, I want to see how they manage
it from an administration and governance
standpoint, [how they handle] funding,
she adds. This is a worthwhile theme and
I would like to think we can expand on it
as well. I want PSS to be a model, not just
for community singing says Teh who
started learning how to play the piano
when she was three years old.
According to her there is still so much
more to tap on. She cites major movements in Australia where suburban or care
home choirs are making positive impacts
on a community. In the United Kingdom,
British choirmaster Gareth Malone has introduced Singing in the Workplace, where
companies are using it as a successful form
of bonding activity for employees that enhances communication and team work.
H E A RT & S O U L
Performing the first of their two
shows annually, the Philharmonic Society of Selangor choir will be
presenting their fourth Heart & Soul
Charity Concert 2015, themed Lets
Rock, from July 24 to 26 at the Kuala Lumpur Performing Arts Centre.
Conceived by choir director and society chairperson Cheryl Teh in 2003,
the biannual programme features
a selection of songs from different
genres of popular music. This years
show will see a throwback to rock favourites and soothing classics from
both sides of the Pacific Ocean, from
Queen to Bon Jovi, Bette Midler, The
Carpenters and even Culture Club.
Proceeds will go to Assumption
Orang Asli Ministry (July 24, 8.30pm),
The Befrienders Kuala Lumpur (July
25, 3pm) and towards the Societys
upcoming joint-charity concert in
India. For more information, visit
www.klpac.org or call (03) 4047 9000
to purchase.
Personally, I have seen it work. Ive
done three months of what they call workplace singing with a company here
they are now continuing on their own.
The company has said its the best activity theyve invested in. Anyone can do it,
points out Teh.
The diversity in PSS is testament
enough, with the age of the current choir
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M O N DAY J U LY 20 , 20 15 T HEED G E FINA NCIA L DA ILY
SCENE
BY E LAI NE LAU
Fever Pitch: The movie-inspired musical is set to hit the stage in Kuala Lumpur.
Chairperson
and choir
director
Cheryl Teh.
Photo by
Izwan
o
e
ul
s
e.
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t
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,
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iviit,
ent
oir
members ranging from 10 years old to 83

years old. We are a non-audition choir now.
Anybody and everybody can join, she says.
Influenced by her studies and experience in
Australia, where she found other musicians
who play beautifully yet have never taken an
exam in their lives, Teh stresses that the community model thrives because it is inclusive.
On why she decided to make the choir a
non-audition one, Teh explains: Coming from
a business background, I did a SWOT analysis
on the survival of the society and realised that
there is lots of competition out there, so why
should people join us? We must have an edge
over the others and offer something different.
Some people come in and they never
want to do a show, thats fine. Some come to
listen, maybe open their mouths for one song,
and then go home. But it feeds them, its like
a fuel and really, who am I to reject them?
And this model has worked very well for us.
On some of the impact shes seen with the
choir, she says the singing itself is beneficial
with some good physical elements. For the
more mature members, she says it a form of
physical and mental exercise. I stress them
out here in a good way, she laughs, They
need to memorise songs initially they always complain and say they cant do it, but
its amazing what they can do after some
mentoring. They never fail to surprise me.
Intergenerational interaction is also one
of the strong points in a community choir,
as Teh says quite a few young people enjoy
coming. If its young children, they must be
accompanied by a parent, thats one of my
criteria. It also encourages two, sometimes
three generations to come together.
There are little groups now. Sometimes
they meet up to practice before rehearsals.
Or theyll go makan and jalan-jalan together.
Some go for outdoor activities. They end up
doing a lot of other things together, she adds.
Announcing that she will bring 50 members
to Chennai, India, for a Merdeka Friendship
Tour (coinciding with the Independence Day
weekend) in collaboration with Mellow Circle
Choir in aid of HIV-affected children, Teh says
one of the best things about PSS is it allows
individuals to collectively give back to society,
all while enjoying themselves. Youll never
leave this place unhappy, Teh sums it up.
Saturday Night Fever The Musical

heads for Istana Budaya
TO say that the 1977 film Saturday Night Fever was a
pop culture phenomenon is not at all an understatement it is the definitive movie on the disco era of
the seventies with its symphony-orchestrated tunes,
flashy retro clothing styles and groovy choreography. A
box-office success and critically acclaimed, the movie
turned John Travolta into a household name and ensured the already popular Bee Gees place in the annals
of pop music stardom.
The movie is based on a 1976 New York Magazine
story by Nik Cohn titled Tribal Rites of the New Saturday Night about the Saturday-night rituals of a group
of working-class Italian Americans in Brooklyn who
held dead-end jobs during the day but found meaning
at night dancing at a local disco. Saturday Night Fever
follows the tale of Tony Manero, played by Travolta,
a young Italian American who works as a paint store
clerk in Brooklyn and lives for the weekend, when he
and his friends would head to the local discotheque
and dance the night away. Tonys sole ambition is to
become the disco king. When a big dance competition
is announced, he wrangles the beautiful and talented
Stephanie Mangano to be his partner.
Tony Manero Saturday Night Live launched the

career of John Travolta.
The success of the film helped popularise disco

music around the world and the dancing craze. Who
can forget that iconic scene of Travolta executing the
point and strut with flair and feeling? The dance, do
the hustle, became all the rage; it is a dance move that
defined an era and is still replicated today.
Its cinematic merits and brilliant cast aside, what
made this film a work of lasting historical significance
is the pulsing disco soundtrack, from the opening sequence of Travolta strutting down a sidewalk to the tune
of the Bee Gees Stayin Alive to the dance numbers in
the discotheque. Even though most of the music was not
written specifically for the movie with the exception of
the aforementioned Stayin Alive and Night Fever, they
complemented the narrative perfectly. The soundtrack
garnered several Grammy Awards, and the songs continue to be covered today.
Twenty-one years after the movie came out, the
stage musical premiered at Londons West End in 1998
and New Yorks Broadway in 1999. Since then, over 10
million people in the world have seen Saturday Night
Fever, and it continues to be one of the longest running musicals.
Malaysian fans who have not had the chance to catch
the show or who want to relive the experience can do so
right here in Kuala Lumpur as a new production is set
to be staged from Sept 4 to 13 at Istana Budaya Kuala
Lumpur. Saturday Night Fever The Musical, brought to
Malaysia by Milestone Production, will be imbued with
a slight contemporary edge while retaining the films
grittiness and realistic portrayal of the disco era and
the entertainment value of its music and dance moves.
Saturday Night Fever The Musical will run from Sept
4 to 13 at Istana Budaya Kuala Lumpur. Tickets are
priced at RM568 (VVIP), RM398 (VIP), RM338 (CAT A),
RM268 (CAT B), RM138 (CAT C). Prices are inclusive of
6% GST but not inclusive of RM4 ticketing fee. For tickets
and more information, log on to www.milestone-production.com or call (03) 9222 8811.
PICK OF THE DAY

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aura of diamond, the scent is a subtle blend of oral
notes such as iris, violet, jasmine and rose petals. The
base of the fragrance contains vetiver and patchouli
which is balanced with musk and oud wood to create an
oriental feel. Designed to capture the spirit of Mouwad,
the Diamond Scent is one fragrance that will capture your
heart. The fragrance is available at the Mouwad Boutique,
Starhill Gallery and is priced at RM1,000.
32
live it!
Zen TODAY
Knowledge speaks, but wisdom listens.

Jimi Hendrix
BRIDGING
two crafts
BY PETRI N A FER NANDEZ
WC Schaffhausens respect for crafts

extends well beyond its own expertise in watchmaking, as verified by
a long commitment to the arts. The
Swiss luxury watch manufacturer
reaffirms this loyalty by coming on
board as the official partner of the Festival du Film Francophone dAngoulme.
Its new role will see the watchmaker promote French-speaking films from various
countries, including Luxembourg, Canada,
Switzerland, Africa, the Middle East and,
of course, France.
The French film festival will be held in
its namesake French city of Angoulme
for the eighth time this August as it celebrates the diversity and rich legacy of
French film-making. Since its inception
in 2008, it has established itself as an important platform for budding talent. IWC
comes in not to tap into this talent pool
for advertising purposes, but rather to
create joint projects with them that put
the spotlight on our watches.
The link between the wonders of watchmaking and film-making are inextricably
linked, according to IWC chief executive
officer Georges Kern. Art, emotion, passion
and craftsmanship are the elements that
will always link haute horlogerie timepieces
and the world of film-making. Every watch
tells a story about its provenance, culture
and tradition. Superficially, its job is to tell
us the time, but the message it emits goes
far beyond that. It is an individual means
of expression, a work of art that moves us.
IWCs support of the arts

include lm festivals in New
York, Beijing, London and
Dubai among others.
The interplay of its many parts reminds us

of the way actors, producers and the people
behind the camera painstakingly assemble
a cinematic work scene by scene.
John Malkovich starred in a short film
in conjunction with the relaunch of the
Pilots Watch recently while Kevin Spacey
and Jean Reno took the lead roles in similar movies for the relaunches of the Portugieser and Da Vinci lines respectively.
Cate Blanchett, meanwhile, animated the
story of the Portofino in films and a photo
shoot with celebrity photographer Peter
Lindbergh, alongside Emily Blunt, Ewan
McGregor, Christoph Waltz and Zhou Xun.
Already an ardent supporter of international film festivals in Beijing, New York,
Zurich, London and Dubai, IWC adds this
latest to its esteemed list. At the Festival
du Film Francophone dAngoulme, under
the chairmanship of Jean-Hugues Anglade, the jury will be handing out the Valois
award in a total of eight categories. IWC
awards the Valois IWC du Ralisateur (best
director award) with the winner being rewarded for his contribution to the industry
with an exclusive IWC watch.

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