September 29, 2010

Casual, Part-time or Full-time

Effectively on October 1, part-time workers will be legally defined as those who work between 30% and 70% of full-time employees' working hours.

They will also be eligible for incentives in the form of insurance and other rights such as annual leave, sick leave and rest day as well as overtime pay.

As an example-

 "If the normal working hour is eight hours a day, for part-time workers, their working hour is between 2.4 hours and 5.6 hours a day."

As with most things, there are exclusions.

Employees working from home or those involved in tele-working (telecommuting) is not included.

This move is expected to attract some 6.8 million latent workforce comprising mostly  housewives, including single mothers, university students, retirees as well as the disabled into the labour market.

Those working less than 30% of the normal working hours are defined as casual workers and not included under the new regulations.

As for those working more than 70% of the normal working hours, they are considered full-time workers and covered under the Employment Act 1955.

"The reason for this is we want to avoid people who work casually to come under the ambit of this regulation as this would create problems for the employers.


On the issue of rest days, part-time workers are eligible for it if they work at least five days or 20 hours a week and they are also entitled to the Employees’ Provident Fund and SOCSO coverage on a pro rate basis.

So, for those who are working from 30% and 70% of normal working hours,do know your rights under
the new Work Regulations (Part Time Workers) 2010.

September 25, 2010

Combustion Engine Breakthrough?

A car powered by compressed air. Interesting.

Sounds too good at first glance. Questions like this one will definitely be asked- 'What kind of efficiency do you get for converting electrical energy to mechanical energy, then to energy stored in compressed air and then back into mechanical energy?  Are Indian electricity costs subsidised?'

Tata Motors is ready to introduce Air Car - Will it be the next big thing?
      

Developed by ex-Formula One engineer, Guy Negre, Tata is on-stream to produce the first commercial air-powered vehicle, 'The Air Car'for Luxembourg-based MDI.

It uses compressed air, as opposed to the gas-and-oxygen explosions of internal-combustion
models, to push its engine's pistons.  Some 6000 zero-emissions Air Cars are scheduled to
hit Indian streets by August 2010. [Is this old fodder?]
      
The Air Car, called the "MiniCAT" could cost around Rs. 3,475,225 (RM8,177.00) and refuels after every 300 kilometres. Per refill cost is only Rs. 85 (RM2.00)

What exactly is the MiniCAT? In gist, it is a simple, light urban car, with a tubular chassis that is glued, not welded, and a body of fiberglass powered by compressed air.

Microcontrollers are used in every device in the car, so one tiny radio transmitter sends instructions to the lights, indicators, etc.

There are no keys - just an access card which can be read by the car from your pocket. 

According to the designers, it costs less than 50 rupees per 100 Km (about a tenth that of a petrol car).  Its mileage is about double that of the most advanced electric car (200 to 300 km or 10 hours of driving), a factor which makes a perfect choice in cities where 80% of motorists drive at less than 60 Km.  The car has a top speed of 105 Kmph.
     
Refilling the car will, once the market develops, take place at adapted petrol stations to administer compressed air.

In two or three minutes filling time, the car will be ready to go another 200-300 kilometers.

As a viable alternative, the car carries a small compressor which can be connected to the mains (220V or 380V) and refill the tank in 3-4 hours.

Due to the absence of combustion and, consequently, of residues, changing the oil (1 litre of vegetable oil) is necessary only every 50,000 Km).

The temperature of the clean air expelled by the exhaust pipe is between 0-15degrees below zero,which makes it suitable for use by the internal air conditioning system with no need for gases or loss of power.

Will the Air Car revolutionise motoring forever?

English-Fast and Easy

I have just finished reading an illustrated English book.


Written by Marianna Pascal,an international teacher teaching English as a second language,this book is really a primer for those who wants to quickly learn the contextual use of the language in everyday situations.


This book is mostly of English expressions and phrasal verbs. It makes interesting reading and the illustrations and sample dialogues are not only effective but amusing as well.


I recommend this book for those in lower secondary schools as well as adults.

The Artistic Side of Adolf

The person who painted these pictures below wanted to attend the Viennese Academy of Fine Arts to become  famous as an artist.  If he had been accepted by the academy, world history would have been much different. 

His name was Adolph Hitler.

September 22, 2010

Captains of Hope

The new projects in the trillions to be launched to make Malaysia an advanced country included an assortment of projects ranging from a high speed train to a potential casino integrated resort in Karambunai, Sabah.

Captains of industry such as these are looking forward gloatingly to amass more wealth for the company and themselves in the process.


Question is-who is going to fund these high octane projects? The EPF? Woe betide us!

We need to call the Ghosbustsers !

September 20, 2010

High Speed Rail to Singapore


The Government of Malaysia has resurrected the High Speed Rail (HSR)project to Singapore again.

Same song. Old wines in new bottles.

I do hope this time it will be for real and not another pipe dream rainbow-chasing  wish.

According to an Economic Transformation Programme (ETP) unveiled today, this high speed link will connect Penang, KL and Singapore.

A feasibility study will be conducted on the HSR system by January 2011.

“We are looking at speeds of about 280km per hour,” said Ahmad Suhaimi, the deputy lab leader for Greater KL at the ETP open house here today.

According to information provided by the lab, the door to door journey from KL to Singapore will take about 2.4 hours as opposed to 3 hours by air.

An intercity service to Seremban, Ipoh, Ayer Keroh, Muar and Batu Pahat has also been proposed.

So these intercity stops will boom if this project takes off at all.

September 18, 2010

Say Goodbye to 60


To date, the government have yet to make a  decision on raising the retirement age of civil servants to 60 years as vociferously clamoured by CUEPACS.

The Human Resources Minister  spoke on this on the sideline of the 5th Apec Human Resources Development Ministerial Conference in Beijing.

To him, no decision has been made even though the matter is at the highest level of deliberation at his Ministry.

He brought out a few cogent points.

Firstly, Malaysia has the biggest civil service in the world. Most of them are teachers.

Secondly, they have just increased the retirement age to 58.

Thirdly, he said they cannot just increase the age willy-nilly. If old people stay on longer, what will happen to young people who wants to get into the civil service?

Meanwhile look at some of the statistics.

Malaysia, which has a population of 26 million, has a public sector workforce of 1.2 million people.

The retirement age for public sector employees in Malaysia was increased from 56 to 58 in 2008 and Cuepacs  had proposed to the government to further raise it to 60 to be on par with other countries in the region.

The retirement age of civil servants in Thailand, Brunei and Indonesia is 60 while in Singapore, it is 62.

PHEIM Unit Trust Magic?


It must come as a surprise to many when the Singapore High Court found Pheim Asset Management & its CEO Dr Tan Chong Koay to have contravened market rigging provisions under the Securities and Futures Act by trading with the intention of creating a false or misleading appearance in the price of United Envirotech (UET) shares.

They were ordered to pay civil penalty to MAS to the tune of S$250,000 and legal costs to the Monetary Authority of Singapore (MAS).

This is a landmark judgement.

Those who attempt to do year-end window dressing of therir stocks better take heed of this  I guess it will be a matter of time when Securities Commission of Malaysia and Bursa KL  will adopt this to ensure market stability on this side of the Causeway.

In the case of Pheim, Dr Tan was found to have placed large orders to buy UET shares through Pheim Malaysia from 29 December to 31 December 2004. He did this within the last half an hour of trading on each of those days.

The trades accounted for 88 per cent of all UET shares traded over the three days, causing the share price to increase by 17 per cent.

Previous media reports also said this had triggered performance bonuses totalling S$50,790 to be paid to the company.

The court ruled that Dr Tan's sole purpose of the trades was to raise and set a higher market price for UET shares.

This act of "window dressing" then led certain funds managed by the Pheim Group to outperform their respective benchmarks, said MAS in its statement.

MAS Capital Markets Group assistant managing director, Mr Leo Mun Wai, said in a statement that "fund managers should not engage in window-dressing practices that would mislead investors as to the performance of securities and the funds under their management."

He added that MAS will not hesitate to pursue perpetrators, local or foreign, who attempt to rig Singapore's capital markets.

Pheim Unit Trsut was the doyen of unit trusts for many years. Now it has to come to this.

So, after this landmark case, wouldn't you be worried about taking stakes in unit trusts?

September 17, 2010

Black September in Reverse as Potential Upside Expected

In a trend analysis in the online STAR, KM Lee provided a across the board report of the mood of global equities and what the coming week should look like. He headlined his article with bold-faced words,"Bulls Poised to Patch up the Gap".

Back home, Bursa Malaysia started out the week on a solid ground, with the FBM Kuala Lumpur Composite Index (FBM KLCI) rising 1.48 points to 1,439.26, boosted by strong overseas performance.

Overnight Wall Street gained 47.53 points to 10,462.77 the previous Friday, as investors’ worst fears about the US economy slipping back into recession waned after economic data, while still sluggish, has beaten consensus forecasts since September began.

Elsewhere, equities in the Asia-Pacific region soared between 0.9% to 1.9% on optimism that Chinese growth would underpin global recovery.


Riding on the bullish ambiance, blue chips, especially finance-related stocks attracted significant interest on foreign and institutional buying, thus propelling the key index to close at the day’s high of 1,456.96, up 19.18 points on Monday.

Then, the Dow extended the upward thrust, climbing an extra 81.36 points to 10,544.13, the highest in five weeks, on upbeat Chinese factory data and less onerous new bank rules while the black commodity surged 74 cents to US$77.19 per barrel amid bright prospects.

Most regional bourses joined the rally on sustained buying interest and given the positive setting from overseas, the big boys gained more confidence, snapping up the quality issues.

Second and lower liners were also actively traded, with more retail players turning aggressive after the recent healthy consolidation phase.

In brisk business, Bursa Malaysia scaled an additional 17.48 points to a 32-month high of 1,474.44 on Tuesday.

Sadly, after two days of handsome gains, as investors took the excuse of a slightly lower Dow and a minor retracement in crude oil prices overnight to lock in gains. The mixed performance in Asian stocks was another factor weighing on the local market.

However, the pullback was pretty shallow, as some accumulations in certain blue chips on weakness helped check the slide and keep the local bourse within a tight range in the negative zones throughout the day.
At the end of Wednesday’s session, the FBM KLCI only shed 1.49 points to 1,472.95.

After a holiday on Thursday, Bursa resumed trading yesterday where the overall sentiment took a change for the better, lifted by positive offshore tone.

Blue chips topped the winners list, navigating the key index to a new 32-month high of 1,479.59 in early business, but investors opted to sell into strength and consequently, the momentum fizzled out.

At the end of the day, the key index reversed early advances to close down 5.98 points to 1,466.97.

Statistics: On a weekly basis, the FBM KLCI advanced 29.19 points, or 2.0% to 1,466.97 yesterday, compared with 1,437.78 at the close on Sept 9.

Total turnover for the holiday-shortened week amounted to 3.576 billion units valued at RM7.462bil, against 2.442 billion shares worth RM4.493bil traded during the previous week.

Technical indicators:

The oscillator per cent K tripped below the oscillator per cent D of the daily slow-stochastic momentum index to trigger a short-term sell at the top yesterday, but it could not be confirmed for now, simply because they remained flirting above the 80% bullish line.

On the contrary, the daily moving average convergence/divergence (MACD) histogram continued to expand positively against the daily trigger line to stay bullish. It flashed a buy on Aug 17.

The past week saw the 14-day relative strength index hitting a high of 91 points on Tuesday before turning sideways to settle at around the 88 points level yesterday.

Separately, weekly measurements were promising, with the weekly slow-stochastic momentum index stretching at the bullish extended-move area and the weekly MACD ascending steadily in tandem with the weekly signal line.

Outlook:

The local bourse extended the upward momentum amid follow-through interest the past week, which witnessed the FBM KLCI hitting a fresh 32-month high of 1,479.59 during intra-day session yesterday.

The market has risen a quite a bit recently. Despite trading at such a high level, we continue to see encouraging and concrete buying momentum taking place. This may indicates that investors are more optimistic and confidence of the existing trend going forward.

For now, the bulls are still dominating the floor and they appear pretty sure on the right track to fill the 1,490-1,497 points gap that they left out in mid-January 2008, according to the chart developments.

From the technical point of view, the growing overbought position of the short-term indicators may entice jittery investors to book profit, thus leading the market to greater volatility in the immediate term.

If the bulls are able to patch up the 1,490-1,497 points gap, a re-test of the historical peak of 1,524.69, established on Jan 14, 2008 would be imminent.

Initial support is seen at 1,450-1,452 points, followed by the 14-day simple moving average (SMA) of 1,440 and the 21-day SMA of 1,425.

The next lower floor is resting at the 1,400-points mark.

Nicole Goes Back to Broadway

Oscar-winning actress Nicole Kidman is due to return to Broadway next year to star in a revival of the Tennessee Williams play “Sweet Bird of Youth,” a production spokesman said yesterday.

“It’s something that’s in the works (and) there’s an intent to move forward,” the spokesman said.

Kidman, 43, first appeared on Broadway — with mixed reviews — in 1998 in David Hare’s sexually explicit play “The Blue Room”, which included a brief nude scene.

The actress, who was raised in Australia, went on to win an Oscar for her role as writer Virginia Woolf in “The Hours” in 2002.

“Sweet Bird of Youth” was first staged on Broadway in 1959. This revival is due to be directed by David Cromer.

Will she have a better reception this time around as 'The Blue Room' only brought the blues.....?

Details of the KFC Warrants

These are free warrants issued to shareholders in conjunction with the recent share-split and bonus issue exercise. So if you have  100 shares ex the corporate exercise, you are entitled to 4 free warrants.

 
Let us now look into the details

Listing Date:    20/09/2010

Issue Date:    15/09/2010

Issue/ Ask Price: MYR 0.0000

Issue Size:   31,723,949

Maturity Date  : 14/09/2015
  
Exercise/ Conversion Period:    5 years
   
Exercise/Strike/Conversion Price: MYR 3.00

Exercise/ Conversion Ratio:

1 Warrant: 1 Ordinary Share of RM0.50 each

Mode of satisfaction of Exercise/ Conversion price   
:
    Cash

Settlement Type/ Convertible into   
:
    Physical (Shares)

Remarks :

The Warrants are issued to the entitled shareholders of KFC Holdings (Malaysia) Bhd (“KFCH”) on the basis of one (1) Warrant for every twenty-five (25) ordinary shares of RM0.50 each in KFCH (“KFCH Shares”) held after the subdivision of every existing one (1) ordinary share of RM1.00 each in KFCH into two (2) KFCH Shares in KFCH and bonus issue of 396,549,364 KFCH

Shares.

Each Warrant carries the entitlement to subscribe for one (1) new KFCH Share at the exercise price (as indicated above) and at any time during the exercise period (as indicated above)

(“Exercise Period”), subject to the adjustments in accordance with the provisions of the deed poll dated 8 September 2010, constituting the Warrants.

Any Warrants not exercised during the Exercise Period will thereafter lapse and cease to be valid for any purpose.

The  announcement was made to the Bursa on17 September 2010.

September 16, 2010

Malaysia: Least Favoured Investment Destination


Oh, this is truly sad.

To be shunned by the majority of the investors. What has happened to Malaysia that it has come to this?

 A Bank of America Merrill Lynch report has reported that Malaysia is now the “least favoured market” in Asia Pacific for investors after nearly doubling its underweight rating only last month.

The country slipped two spots — from 10th place to dead last — in the investment bank’s latest Fund Managers Survey, even as the Najib administration in the process of unveiling ambitious economic reforms meant to boost investor confidence.

This appears to be the latest indictment of Malaysia’s inability to compete with rival regional markets. In the past decade, the once roaring Asian Tiger has seen its dominant position as an investment destination in Southeast Asia crumble even as neighbouring countries push to the fore.

A survey last week by the World Economic Forum (WEF) of 139 nations showed that Malaysia had slipped two places in global competitiveness rankings to 26th in the past year, while Indonesia surged 10 places to 44th.

The government is nonetheless optimistic that reforms under Prime Minister Datuk Seri Najib Razak’s New Economic Model (NEM) — details of which will be revealed next month — will revitalise the economy and help Malaysia achieve developed nation status by 2020.

However, Najib’s economic transformation is hinged on the government’s ability to galvanise RM2.2 trillion in investments over the next 10 years — 92 per cent of which is to come from the private sector — and it remains to be seen if the prime minister can overcome investors’ muted response to his plans so far.

Najib also faces stiff opposition from Malay rights groups who feel such reforms threaten what they perceive to be Malay “special rights”, and seems unable to push them through without significant compromise.

Elsewhere in the region, China remained the favourite market by far despite an uncertain global outlook. A net 11 per cent of investors expect China’s economy to strengthen, up from -39 per cent in July, according to Merrill Lynch.

Indonesia, slightly underweight last month, jumped to second place on an overweight call, edging out Hong Kong in the process. New Zealand, Taiwan, South Korea and India remained neutral.

Emerging markets outperformed developed markets this year and remain the preferred destination for investors, although emerging market allocations have been trimmed due to growth uncertainty and risk aversion.

Brazil and Russia continue to be favourites, but appetite for Turkey has fallen in the past two months.

The consumer discretionary sector is still the most popular among emerging market investors, followed by industrials, telecoms and financials.

Defensive sectors like utilities, staples and healthcare remain least favoured but have reduced their underweight positions from last month.

September 15, 2010

2011- A Time to Reflect


Next year marks an important milestone in the history of this country, for it will be 500 years since the fall of the Malacca sultanate and the start of colonisation.

Yes, half a millennium ago. Five centuries. Quincentennial. Twenty- five score years. Whichever way we look at it, that turn of events should not pass unnoticed for some special and most significant reasons -- the lessons from history as they all say.

It was in 1511 that the thriving port city of Malacca fell to the Portuguese, forcing its ruler, Sultan Mahmud Shah, to flee to a neighbouring state and ending more than a century of the dominion of the mighty Malay sultanate which started with Malacca's founding by Parameswara around 1400.

The invasion also marked the start of Western colonial rule in the country, at that time referred to as the Malay states or Tanah Melayu.

Malacca and, better still, the whole of Malaysia, should officially commemorate the occasion -- not to celebrate defeat but rather to reflect and learn from the past over what had contributed to the total subjugation of a flourishing Malay empire.

In fact, there were many things in the lead-up to the invasion that sounded so eerily familiar with what's going on in Malay or Malaysian politics now.

What was most glaring about the Portuguese conquest in 1511 was that it came as a revenge attack that struck the soft underbelly of Malacca, at a time when the sultan's administration and his people were so vulnerable as they were split.

There were also reports that the Western force, despite being grossly outnumbered, were aided by turncoats and double-crossers from within the local fraternity.

According to history books, the Portuguese armada which attacked Malacca that year consisted of 18 ships and more than 1,000 men led by Alfonso de Albuquerque. Launched from Goa in India, they were out to revenge the attack on a Portuguese naval and trading party two years earlier led by Francisco de Almeida.

That earlier offensive on the foreigners was interestingly instigated by Gujerati and Chinese traders and others doing brisk business in Malacca at that time.

Almeida managed to escape to India in the aftermath, but some of his men were captured as prisoners in Malacca.


J. Kennedy in A History of Malaya said the Malaccans were already politically disunited by the time the second Portuguese wave came and one of the main factors was the split over the choice of Tun Mutahir as bendahara (equivalent to today's menteri besar or prime minister).

"For the Portuguese, it had not been an easy victory," Kennedy wrote. "In manpower, they were greatly outnumbered. The defenders of Malacca used a variety of weapons, from firearms to bows and arrows and poisoned darts.


"Yet, certain advantages lay on the Portuguese side. Their strategy was helped by a description of the Malacca site sent to Albuquerque earlier by one of the Portuguese prisoners through a friendly merchant (the turncoat)."

Kennedy added that many merchants in Malacca at that time just stood by, ready to support whoever that won as long as their properties were not taken away and their interests safeguarded. And this included the Chinese.

"Some merchants, especially the Chinese, had at that time positive grievances against the Malay administration," he wrote.

Sounds familiar? That's because there are traces of the same scheme of things being repeated in the present.

Five hundred years may have passed but the similarities and parallels emerging in situations in the country today is uncanny -- the political squabble over who has the power (the choice of bendahara), the split in the ranks of the common people, the low morale despite outnumbering the enemy and so on.

Then, there were the traitors and turncoats, the business people who were not patriotic at all but only interested in their own private businesses and the Chinese who had "grievances against the Malay administration".

History, as they say, has a funny way of repeating itself. But only if we allow it to. For this reason alone, the momentous 1511 should be remembered and the anniversary duly commemorated.

It is, after all, just about 100 days to 2011.

It is time to reflect.

Hair Management: Myths and Facts

Sheila Chandran wrote this in the online STAR today. I though it was interesting. So, I am pasting in here for our general knowledge.

THE question of the day is: to use or not to use hair conditioners? London-based hair expert Thomas Taw unravels some hair myths and sets the story straight.

Myth: Shampooing is enough to keep hair healthy.
Fact: That is not true. Shampoo only cleanses grime, dirt and oil. Conditioners help nourish hair ends, keeping it smooth and tangle-free.

M: Hair care involves caring for hair roots.
F: Not always. Hair ends need the most attention because it is older and nourishment usually doesn’t reach the tips.

M: Hair oil helps you maintain healthy and beautiful hair.
F: Oiling is great for scalp, but hair ends need special nourishment as it’s rougher. Oiling is not enough to de-tangle hair. Only a conditioner can do that.

M: Conditioners require a lot of time and effort to use.
F: With a good conditioner, you just need to leave it on for a minute or two before rinsing off. Minimal fuss, maximum benefits.

M: Conditioner is only for “troubled hair”.
F: Hair consists of dead proteins and can’t rejuvenate itself. The healthiest hair will eventually dry out if uncared for. Hair needs to be conditioned to prevent dryness and tangles.

M: Conditioners should be applied on the scalp.
F: Conditioners are meant to care for hair ends, not the scalp.

M: Conditioners make hair limp and greasy.
T: Excess oil in scalp causes limp and greasy hair. Conditioners nourish and keep hair strands tangle-free.

M: Conditioners cause dandruff.
F: This is not true. Dandruff is a complex problem and there are many factors that cause it, such as an unhealthy scalp. Dandruff is unrelated to the use of conditioners.

So, do you think you know more about hair management after reading this news-item?

Happy Malaysia Day!


It has been 47 years since Sabah,Sarawak,Singapore came together with Malaya to form Malaysia on 16 September 1963.

Singapore departed to become independent in 1965.

Since then, Malaysia Day was never officially recognised or celebrated.

The people of Sabah and Sarawak were denied their celebrative rights to celebrate their day of independence from the White Rajah. They had to kowtow to to wishes of their brothers in Peninsular Malaysia to celebrate Merdeka Day instead which falls on 31 August yearly.

The new political awareness of what these two states can do to Federal politics have made the powers to be at Putrajaya to provide political space in the country to celebrate Malaysia Day which is truly our day of independence as Malaysia.

Yes, better late than never!

Today we celebrate Hari Malaysia for the first time officially as a country. It is indeed a milestone in the nation's history.

Happy Malaysia Day, everyone!

September 14, 2010

No Double-Dip!



Some of the biggest names in business said that they see a bright future for the US economy, with famed investor Warren Buffett declaring the country and world will not fall back into the grips of the recession.

"I am a huge bull on this country. We are not going to have a double-dip recession at all," said Buffett, chairman of Berkshire Hathaway Inc. "I see our businesses coming back across the board."

Buffett said the same things that worked for the country through a century of two world wars, a depression and more — all while increasing the standard of living — will work again. 

He said banks are lending money again, businesses are hiring employees and he expects the economy to come back stronger than ever.
"This country works," Buffett said and added ,"The best is yet to come."
His opinion was shared by Microsoft Corp, CEO Steve Ballmer and General Electric Co,Jeff Immelt .
Ballmer said there soon will be more technological advancement and invention than there was during the Internet era. "That will help drive business growth", he said.

"I am very enthusiastic what the future holds for our industry and what our industry will mean for growth in other industries," said Ballmer.

He envisions new technologies that move beyond the Internet to tie together computers, phones, televisions and data centers to create amazing new products. And the pace of innovation will increase as technology makes workers more productive.

"All areas of science today are moving forward more quickly," Ballmer said. "The speed of scientific breakthrough is accelerating." He said business at GE, one of the world's largest companies, is improving.

Immelt said the country is going to need to adjust, though. The economy since the 1970s has been driven by consumer credit and a misguided notion in building a "lazy" service economy, he said, and manufacturing, with an aim to reduce the trade deficit, is the key.

"It was just wrong. It was stupid. It was insane," Immelt said of the push for a service -based economy. "The future of the economy has to be as an exporter."

He said GE is now finding it profitable to build manufacturing and service centers in the United States rather than overseas, because it is more competitive to do so.

More investment is needed in technology innovation, exports need to be rejuvenated, and clean energy and affordable health care need to be given top billing for policymakers, Immelt said.

But the corporate leader said he recognizes a polarizing environment in Washington makes it unlikely a national energy policy and other helpful guidance will ever take hold. Instead, he urged local business leaders and government officials in the audience to come up with their own local solutions.

"Anger is not a strategy. Anger does not create growth. Only optimism creates growth," he said. "Be the contrarian. Everyone is mad today. Be happy."

BLand Goes East To Japan

Berjaya Land (BLand) through the purchase of a 100% equity share in Berjaya Kyoto Development (S) Pte Ltd (BKyoto) from Madam Teow Gek Keo for a cash consideration of SGD1.00 or approximately RM2.33 (“Acquisition”)has set its sights to invest in Japan.

BKyoto, a private limited company, was incorporated in Singapore under the Companies Act on  25 May 2010 with an issued and paid-up share capital of SGD1.00 comprising one (1) ordinary share of SGD 1.00 each. The principal activity of BKyoto is investment holding whilst its 100%-owned subsidiary, namely Berjaya Kyoto Development Company Limited (“BKDJ”), incorporated in Japan, is intended to be principally involved in real estate development activities. BKDJ has an issued and paid up share capital of JPY1.50 million (or about RM55,890) comprising 30 ordinary shares of JPY50,000 each. B-Kyoto will be B-Land’s investment arm in Japan.

This Acquisition has no effect on the issued and paid-up share capital of BLand as well as the major shareholders’ shareholdings in B-Land. It also has no material effect on the consolidated earnings and net assets of B-Land Group for the current financial year ending 30 April 2011.

None of the Directors, major shareholders and persons connected with a Director or major shareholder of B-Land has any interest, directly or indirectly, in the Acquisition.

Apparently BLand's Board of Directors are of the opinion that this acquisition is in the best interest of B-Land Group.I do hope they are right.

It looks like BLand must have some projects brewing in Japan to suddenly want to take interest in this company.

BJRetail-Bold Plans


Newly listed Berjaya Retail Bhd (BJR), the listing vehicle for Singer (Malaysia) Sdn Bhd and 7-Eleven Malaysia Sdn Bhd, is gearing up for the expansion of both companies in 2010.

For the second half of 2010, Singer Malaysia plans to open another 10 to 20 new stores, adding to the more than 400 stores nationwide currently.

Each store could cost an average of RM150,000 to RM200,000, depending on its size.

As for 7-Eleven Malaysia, it expects to open more than 100 new stores by end year-end, with 40 to 50 per cent to be located in the Klang Valley.

"The capital expenditure is about RM250,00 per store. The initial fee for franchise will be RM100,000 with the remainder for the shop. For franchised stores, we will get about RM25 million," so said a spokesperson.

Currently, 7-Eleven has 1,157 stores with 58 franchisees.

Currently both companies do not see any early prospect of a synergistic link up as they have different businesses and customers.

"We are two separate entities and customers are not exactly the same (but) given the fact that 7-Eleven can do a lot of things like accepting payments, so there is a possibility," he said.

"In other words, we can help to collect bills for Singer if our system allows us but currently we cannot do it. We need to invest in the system," he added.

BJR has been performing extremely badly on the Bursa since its IPO listing.

Vincent, what a shame!

Resorts World New York Start-Up

All hurdles have been overcome by Genting Berhad to create a presence in the USA.



All approvals are now in the bag.

The process started with New York State Division of Lottery (“New York Lottery”) giving its thumbs-up for the Genting bid to the Governor of New York  to be selected as the developer and operator of a video lottery facility at the Aqueduct Racetrack in New York. The buck went up further to obtain approvals from New York State leaders and offices of the New York State Attorney General and Comptroller.

On 13 September 2010, the Office of the New York State Comptroller formally announced its approval for Genting New York to  develop and operate the video lottery facility. The final approval required is now in the bag.

So, what's next?

Upon delivery of the approved Memorandum of Understanding by the State of New York to Genting New York, Genting New York will make a payment of US$380 million as the upfront licencing fee to the State of New York within ten (10) business days. The licence is for a duration of 30 years and the construction of the Project (to be known as Resorts World New York) will commence as soon as practicable, with the opening of the preliminary phase expected by Spring 2011.

Let us read a write up of the Genting achievement titled,"At long last, a winner at Aqueduct".

" After nearly a decade of botched races, NY state comptroller makes it official, gives nod to Genting for racino expected to generate $1.5M a day; $380M check in the mail.

 It's official— Genting New York has crossed the finish line and will bring video slot machines to the rundown Aqueduct Racetrack.

As expected, New York state Comptroller Thomas DiNapoli announced Monday that he has signed off on the lucrative contract with Genting New York, part of giant Kuala Lumpur-based casino operator Genting Malaysia Berhad, for a video lottery facility at Aqueduct. Mr. DiNapoli was the last state official needed to approve the contact, which is effective immediately.

“After nearly a decade of false starts and broken promises, the VLT contract is done,” Mr. DiNapoli said in a press statement. “This is one of the most important vendor contracts New York has ever signed. The contract involves hundreds of millions of dollars. It's a 30-year license that carries the future of New York's racing industry on its back.”

Genting now needs to deliver its check for $380 million, the promised upfront licensing fee, to the state. Assuming all goes as planned, 1,600 video slot machines will be open by this spring. Genting expects to generate $1.5 million per day in revenue for the state once it has all 4,500 video slot machines in place in about a year.

“Genting Malaysia Berhad is honored to have earned final approval to begin building a new facility at Aqueduct," said K.T. Lim, chairman of Genting Malaysia Berhad, in a press statement. "We are eager to immediately begin investing, creating jobs, sparking economic activity and bringing New York a one-of-a-kind iconic, entertainment destination.”

The final sign-off comes a week after reports came out that Mr. DiNapoli was concerned over the selection of Genting. Mr. DiNapoli's office confirmed that it had more questions for New York Lottery regarding Genting but declined to elaborate.

“My office did this right and we did it expeditiously without sacrificing thoroughness. We took every step to ensure the taxpayers are safeguarded in this contract,” said Mr. DiNapoli. “It's New Yorkers' money; it's my job to protect it.”

This latest, and now officially the final round of bidding to build and operate a racino in Ozone Park, Queens, has been deemed more transparent and faster than the four previous rounds.

In addition to slots, Genting intends to open a 200-seat high-end Chinese restaurant, a sports bar with a 280-seat lounge, other buffet-style restaurants, and even a water show. The company said it expects to complete the restaurants, food court and 2,200-space parking garage within one year of its contract start."

So, what can one say except to wish all the best to Genting Berhad and Genting M.

September 13, 2010

No,They are Certainly not Hassasins!

It looks like the poster of a movie. The leads do not ring a bell though their attire may.

No, those are not weapons but domestic equipment.

Well, that is another of my nephew getting married very soon.

Kinda creative, don't you think?

Patrick's Convocation

My nephew Patrick graduated recently from the Multi-Media University recently. I recollect my own graduation some 35 years ago.

He must have felt the same euphoria,I am sure.

Is there still Upside in PPB?



Is there still upside in PPB?


This is an independent appraisal of a blogger on PPB.

Let us hear his arguments.

At the current price of RM17.70, he is still calling for a buy. Caveat emptor.

Apparently, many quarters have sort of ‘written-off" PBB counter with HOLD or SELL recommendations since its disposal of its sugar business with most favouring direct investment into Wilmar International.

PPB after hiving off a chunk of its profits as dividends to shareholders (RM600million)still have in its coffers the balance of RM600 million. This they intend to use to expand the flour business which is very lucrative. The Indonesian plant commenced operation during the last quarter of 2009. Coming on-stream in this financial year is the bakery business.

So, according to this blogger, earnings per share will be in the region of RM1.30 or better for fiscal 2010. His calculation was based on the following premises.

Roughly an earnings per share (eps) is going to be in the same region of RM1.30 or better for FYE 2010. The calculation of the eps of 2009 of RM1.36 is based on the breakdown of contribution from Wilmar at RM1.04; from the flour revenue at RM0.14 and from sugar at RM0.18 respectively.

According to our blogger friend, at RM17.70, the PER of PPB  works out to be a conservative 13X which he deems relatively low when compared to its peers in KLK,IOI and Sime all at the 16X level.

At RM17.70, the market capitalisation of PPB is RM21 billion.

He then drew our attention to PPB’s intrinsic asset value.

Contribution from Wilmar (its 18.4% associate) -  at current SGX quote of S$6.85; PPB's share is worth RM19.2billion. The TP of Wilmar is expected to move up possibly  to S7.50 next

Contributions form other segments - such as flour, cinema, engineering, chemical, livestock, property & others @ book value. This will be approximately RM2.9billion.

Using simple arithmetics, our blogger friend is of the opinion that PPB’s market capital is worth RM22.1billion or translated to a potential price of RM18.62 (13.7X current year eps).

He added that PPB’s balance sheet is also healthy where NTA is RM11.88 on a net cash position of RM468 million.

So, anyone willing to take a bet on this blogger?

PPB-Furtive Moves

Two historic milestones of PPB happened in 2009.

The First Milestone:

Last year on September 2009, shares in PPB saw its biggest single-day decline as investors reacted to speculation that its affiliate Wilmar International Ltd may delay the sale of shares of its China operations in Hong Kong due to soft market sentiment. PPB’s share price fell as much as 4.6% before closing down 54 sen, or 3.4%, at RM15.40 after hitting a record RM16.04 on Sept 24 and had risen 65% year-to-date.

The local planter, controlled by tycoon Tan Sri Robert Kuok, owns an 18.4% stake in Singapore-listed Wilmar – the world’s biggest palm oil trader. “PPB is a proxy play to Wilmar,’’ a dealer at a local stockbroker said. Shares in Wilmar closed 2.9% lower yesterday at S$6.32 in Singapore – its lowest in almost a month. It had earlier fallen by as much as 6% after a financial website said the company may postpone the listing date for its China operations.

“The listing of Wilmar China Ltd on The Stock Exchange of Hong Kong Ltd is still in progress and has reached an advanced stage but no decision has been taken as to the specific timing of the listing,” Wilmar said in a statement to the Singapore Stock Exchange yesterday in response to media reports. “The company and Wilmar China are monitoring market conditions’’ to decide on the initial public offer (IPO) structure and timetable, Wilmar said. The statement said Wilmar would proceed with the EGM to be held on Oct 2 in Singapore to consider the disposal of its stake in Wilmar China in connection with the listing.

Analysts at UBS and BoA-Merrill Lynch said in research reports on Wednesday that Wilmar would delay the IPO from an end-October schedule, because of a volatile or weak Hong Kong IPO market, Reuters reported. In May, Wilmar was reported to have said it planned to sell between 20% and 30% of its China unit to the public.

Wilmar China supplies about half of China’s cooking oil needs. The unit accounted for about half of Wilmar’s revenue of US$14.3bil achieved last year and about 40% of its net profit.

Meanwhile, PPB’s 18.4% stake in Wilmar contributed more than 70% of the group’s net profit in the first six months of this year. AmResearch analyst Gan Huey Ling believed that the listing of Wilmar’s China operations would proceed, albeit at a later date. “In any case, we reckon that the listing will be completed by year-end,’’ she said.

The Second Milestone:

A massive disposal was announced by PPB  on October 30 that it was is selling its sugar refining operations, under Malayan Sugar Manufacturing Co. Bhd (MSM) to Felda Global Ventures Holdings Sdn Bhd for RM1.22 billion. It added it was always throwing in its 50% stake in Kilang Gula Felda Perlis Sdn Bhd also to Felda Global ventures for RM26.31 million.

It also added that  it was disposing of parcels of land measuring 5,797 hectares in Chuping, Perlis for a cash consideration of RM45 million.

Apart from that, its 49% associate Grenfell Holdings Sdn Bhd was also selling a 20% stake in Tradewinds (M) Bhd, representing 59.29 million shares also to Felda Global Ventures for RM207.53 million or RM3.50 per share. The cash consideration of RM3.50 per TWM share is 25.90% and 21.95% over RM2.78 and RM2.87, being the five-day volume weighted average market price (VWAP) of TWM shares and three-month VWAP of TWM Shares up to Oct 29, 2009 respectively. Felda Global Ventures is a unit of the Federal Land Development Authority and it is the group's integrated commercial arm.

On the disposal of MSM, PPB said it would be the sole beneficiary of all profits after tax of MSM from Jan 1, 2009 up to Dec 31, 2009. It added the price tag for the sale of MSM represented price-to-earnings ratio of 9.78 times and price-to-book ratio of 2.46 times. PPB said its cost of investment in MSM was RM50.79 million, made from 1976 to 1999. It would stand to gain RM1.17 billion and RM723.81 million at company and group level respectively.

"The proposed disposals present an opportunity for PPB to realise its investments in MSM, Kilang Gula and the Chuping land at a substantial gain.”The net disposal proceeds will be used to finance other strategic investment options and opportunities that may be available to the group both domestically and overseas with the ultimate objective of providing optimum benefits and returns to the company and its shareholders," it said.

To date, PPB has paid interim dividends two times in 2010. The first one for the first quarter of 2010 of the current fiscal year was 18% and the current pay-out after the second quarter results are a one-tier dividend of 65 sen and another special one-tier dividend of 5% as reward to loyal shareholders.

September 10, 2010

Tan Chong on the Move

AMRESEARCH has maintained its "Buy" call on Tan Chong Motor Holdings Bhd (TCM) with a target
price of RM6.20 after the company announced a tie up with Xi'an Silver Bus Corp (Xi'an) this week.


"TCM will initially utilise its Segambut plant to assemble chassis and engine components during the first year of production. In addition, TCM will utilise existing UD 3-S centres as after-sales centres for Silver Bus. This explains the small RM100,000 investment required for this foray, which is mainly for purchase of jigs and fixtures for the assembly lines.

"By 2012, however, TCM expects to set up a body manufacturing and assembly plant for commercial vehicles at APM's (a sister company of TCM) plant in Seri Kembangan (which will be vacated by next year-end) via a RM20 million investment. This plant will cater for both Silver Bus and UD commercial vehicles assembled and distributed by TCM.

"TCM expects to sell 80 Silver Bus vehicles next year (expected commencement in the second quarter) - which adds circa 4 per cent to its commercial vehicle total industry volume of 1,800 (based on financial year 2009 figures). Chassis and engine sales of luxury coaches typically fetched a price of RM270K/unit, but a coach complete with body and interiors can fetch a price of RM500,000 per unit.

As such we would expect margins and topline from sales of commercial vehicles to expand quite significantly once TCM's body manufacturing plant comes on stream in 2012," it said in a research report this week.

Tan Chong Motor (TCM) announced it had entered into an agreement with Xi'an Silver Bus Corp for a 10-year sole and exclusive right to assemble and distribute completely knocked down buses under the brand of Silver Bus in Malaysia."Notably, Malaysia will be Xi'an's first foray into the Asean market and we do not rule out further expansion in the region, especially in Vietnam where TCM expects to complete construction of an assembly plant by the third quarter of next year.

We understand that production of Silver Bus chassis and engine will eventually be shifted to TCM's Vietnam plant (from Segambut), where Vietnam will eventually become the key market of the group (versus Malaysia which is more passenger vehicle-centric)," it said.

Is the property market bubbling over?


Prices of residential property have surged by as much as 35 per cent in the past year despite a growing overhang in supply, far outpacing income growth and giving rise to concerns that the market is becoming unsustainable.

Figures provided by the National Property Information Centre (Napic) show that average prices for homes in Malaysia rose a whopping 19 per cent to RM273,000 in the first half of this year, from RM220,000 in the same period last year. For Kuala Lumpur, the increase has been even more dramatic, rising an eye-watering 35 per cent to more than RM700,000 in the first half of the year, up from RM523,000 last year.

The market, however, may be starting to lose its appetite for properties due to the high prices.

 Napic’s Property Overhang reports show that unsold properties in Malaysia rose to 22.6 per cent of new launches in the second quarter of this year, from 19.5 per cent

in the fourth quarter of last year. For Kuala Lumpur, unsold properties rose to 16.1 per cent from 15.8 per cent, while for Selangor it rose to 14.6 per cent from 12.4 per cent.

Checks on developments completed this year also show that vacancy rates remain at 50 per cent or higher.

The Edge business weekly reported recently that the government is mulling capping mortgages to 80 per cent of value in a bid to keep the market from overheating although MCA has come out strongly against the move.

This comes as Singapore introduced a series of measures to reign in investors and speculators, such as a 70 per cent mortgage cap for buyers with more than one property and launching 36,000 public housing units this year and next.

While Napic does not have a housing affordability index, a rough calculation shows that the average price of RM273,00 is about 5.6 times that of an average annual household income of RM48,000. The average price of a KL home is now a steep 13 times that of the average urban household income of RM54,000 and a possible sign that the market is headed for a bubble.

The sharp increase in prices is said to be at least partly due to speculative demand as investors snap up multiple properties in the hope that prices will keep on spiralling upward — despite low occupancy rates that could affect rental yields.

Some real estate agents and developers have privately expressed worries that the market is already too speculative and the price escalation is not sustainable.


“I am all for sustainable price growth but the current market is too speculative,” one developer told The Malaysian Insider. “Most of the units are taken up by employees of the developer hoping to sell for a profit when the development is completed.”

Many developments completed in the past year such as Ameera in SS2 Petaling Jaya, Cova Suites in Kota Damansara and Challis Damansara in Sunway Damansara are experiencing only about 30-50 per cent occupancy rates, according to real estate agents. A check on new high-end condo Zehn in Pantai where sellers are asking for RM2.2 million per unit revealed the building to be almost completely dark at night.

Rental yields are starting to slide given that supply far outstrips demand.

A typical unit at Ameera is on the market for RM750,000. Given a 90 per cent margin of financing (MOF) over a 20 year tenure, the monthly loan repayment for a unit there works out to be about RM4,855. Rental rates at Ameera, however, are only about RM3,000 for a partly furnished unit.

A stand-off could be developing where buyers are now balking even as sellers are trying to hold out for higher prices.

Red FM DJ Terry Ong who has been on the lookout for a condominium said that housing has become “unaffordable” and has taken himself out of the market.

“I am not in a hurry,” said the DJ who is currently paying RM1,100 in rent at a less than full condominium complex, where sellers are asking for between RM350,000 and RM400,000.

Engineer Edward Seah said that while he would like to upgrade from his current condominium, he will not buy another house given current valuations.

“Are such high prices warranted?” he questioned. “I refuse to feed into the current property frenzy.”

Housing and local government minister Datuk Chor Chee Heung said that the high savings rate in Malaysia meant that there appears to be no shortage of takers despite the prices.

He added that there will be a limit although he was unclear as to how far prices will continue to rise.

“We have to continuously tell developers not to push the boundaries,” he said when contacted by The Malaysian Insider. “There is bound to be a maximum.”

Chor said that the government is building some 76,000 low cost units that cost about RM42,000 each in the next three years, but it is unable to tell private developers how much to build to boost supply of middle class housing in the market.

Real Estate and Housing Developers Association (Rehda) president Datuk Michael Yam said that the issue of rising property prices was partly due to an imbalance of supply and demand as more migrants move to land scarce Kuala Lumpur as well as higher cost of raw materials.

“Even if 50,000 new housing units are needed in KL, that is still a huge number to build,” he said at a recent Rehda media briefing.

Readers shun newspapers for Internet and scandal sheets

Sadly, the readership of broadsheets and tabloids have gone down with each passing month.

Let us read what Yow Hong Chieh, Shazwan Mustafa Kamal, Melissa Zavier and Lee Wei Lian from the
Malaysian Insider has to say about this.

Malaysian newspapers are experiencing a fall in circulation as readers turn to the Internet for hard news and tabloid-style scandal sheets for their diet of entertainment and sensationalism.

Circulation at the traditional mainstays of the local media landscape — The Star, New Straits Times, Utusan Malaysia and Berita Harian — has fallen over the past five years, in some cases dramatically so. The only exception is Chinese daily Sin Chew which saw circulation jump.

Figures from the Audit Bureau of Circulations (ABC) show that during the period 2005 to 2009, The Star’s circulation dropped from 310,000 to 287,000 (-7.4 per cent), the New Straits Times from 139,000 to 111,000 (-20 per cent), Utusan Malaysia from 213,000 to 169,000 (-21 per cent) and Berita Harian from 204,000 to 155,000 (-24 per cent).

Sin Chew, however, saw circulation rise from 324,000 to 382,000 (+18 per cent).

The downward trend has continued for this year with NST’s circulation going below 100,000 copies on several days recently.

Apart from the drop in circulation, mainstream newspapers are also not selling much outside the Klang Valley, which leads to questions about whether they can shape public opinion as hoped for by the Barisan Nasional (BN) government.

The Malaysian Insider understands that senior editors at many newspapers would like to give the opposition and alternative views more airing but control from Putrajaya and UMNO remains severe.

A combination of changing tastes and competition from the Internet have contributed to the decline.

Many corporate readers have switched to going online and reduced the number of subscriptions for their offices.

The general public also appear bored with political drama and suspect that mainstream media is controlled by the government and tends to filter the news.

A recent poll by the independent Merdeka Center found that 54 per cent of Malays polled and 55 per cent of Chinese surveyed did not trust reports in the mainstream media.

College students, meanwhile, either feel distrustful of mainstream media or are ignoring it entirely, preferring to get their information and entertainment from multiple sources.

One Malaysian, who heads the local office of an MNC, said he has stopped subscriptions for The Star and New Straits Times at his office and buys one personal copy of The Star for the business coverage and the advertisements.

He also reads The Sun which distributes about 300,000 free copies around the nation daily.

“There seems to be more propaganda than anything else,” said the frustrated country manager who spoke on condition of anonymity. “A lot of people buy newspapers just to look at supermarket and job advertisements.”

One country manager of an international transportation company said he has stopped reading news in print but has switched instead to accessing the Internet via his mobile phone.

“Getting updates via the mobile phone is so fast,” he said. “People prefer to get business and political news from the Internet but buy tabloids to read gossip to pass the time.”

One media analyst with a local research house said the Internet is now the “longest running medium” in most people’s lives, given that practically all offices have computers that are hooked up to the Internet all day.

“Mainstream publications are also moving towards more lifestyle and sensationalist news because they put their hard news online the day before,” said the analyst.

Fortunately for traditional print media, despite the falling circulation, advertising expenditure continues to grow although more slowly than other channels such as free-to-air television (FTV), point of sales (POS) and the Internet.

Figures from market research firm Nielsen show that print media revenue grew 18 per cent during the first six months of this year compared with 55 per cent for the Internet, 29 per cent for FTV and 27 per cent for POS.

The Star alone — which dominates the valuable urban readership market with 178,000 copies sold in the KL/Selangor region, far ahead of No. 2 Harian Metro at 120,000 — sold RM497 million in advertisements in the first half of this year, up 28 per cent.

“The circulation trends don’t affect advertising,” said Margaret Lim, executive chairman of Carat Media Services.

Bucking the trend, however, are the so-called “light reading” newspapers such as Harian Metro, China Press and Kosmo.

A large chunk of the reading public have been drawn to the “hot” gossip stories, catchy headlines and large sensational photographs in the light reading titles as evidenced by the surge in circulation.

ABC’s figures show that from 2005 to 2009, Harian Metro’s circulation shot up from 250,000 to 350,000 and Kosmo went from 101,000 in 2006 to 172,000 in 2009.

Jamal, an insurance executive attached to a motor workshop, said he likes Harian Metro due to the “hot news”. He is also an occasional reader of Sinar Harian and Kosmo and buys The Star to scan job advertisements.

“There is too much political news and I feel the coverage isn’t very neutral,” he replied when asked why he doesn’t buy Utusan Malaysia or Berita Harian.Malas nak beli (I don’t feel like buying).”

One Utusan reader, who works in the 3D animation industry, said one reason the paper’s circulation has dropped is that he has switched to the online version instead of buying a copy.

“I just pick and choose which stories I want and it’s easier to go online,” he said.

Sin Chew, which saw circulation rise, could be the beneficiary of the move of the majority of Chinese parents to shun national schools in favour of Chinese schools.

Rita Sim, executive director of Sin Chew media, said 85-90 per cent of Malaysian Chinese can now read Chinese.


“The Chinese language has gone mainstream,” she said. “And we’ve got the pulse of the Chinese community.”

She also said English titles had suffered as English is the language of the Internet.

“It is easier for English readers to switch to the Internet,” she said.

September 09, 2010

Competitveness: Low Down Limbo



Sadly, we are doing the limbo rock once more, falling by another 2 spots in the World Economic Forum (WEF) competitiveness index. We came in  26th out of 132 countries, with security, productivity and higher education identified as areas for improvement. How obvious given what is on the news, day in and day out!

This is the second year in a row Malaysia has dropped in the rankings after falling from 21st to 24th spot last year.

The WEF noted in its report, however, that the country’s four-year decline in the quality of institutions that pushed Malaysia from 17th in to 43rd has finally come to a halt, with the country remaining stable at 42nd place in that category this year.

“The main drag within this pillar remains the security situation (80th, up five),” said WEF.

“In order to improve its competitiveness further, Malaysia will need to improve its higher education system, with particularly low enrolment rates at the secondary and tertiary levels.”

The report also pointed out that Malaysia would be well-served by encouraging greater technological adoption — particularly the use of ICT — for productivity enhancements.

Malaysia’s aggregate score also remained fairly stable, up slightly to 4.88 from 4.87 last year.

Switzerland continued its reign as the most competitive country in the world, followed by Sweden, Singapore, US and Germany. Among the Asian giants, Japan climbed from eighth to sixth position, while China improved from 29th to 27th. Korea, however, fell from 19th to 22nd.

RAM Ratings chief economist Dr Yeah Kim Leng said that this year’s ranking will be a baseline to see if Malaysia’s transformation efforts will boost its competitiveness globally.

“Given that we launched the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP), we should see ranking improve over the coming year,” Yeah told The Malaysian Insider. “If there is no improvement next year, that means we are not even harvesting any low-hanging fruits and we need to relook at policies.”

Yeah pointed out that the index was useful as it allowed Malaysia to assess its global standing.

However, he expressed concern that Malaysia’s ranking slipped even though initiatives to improve governance like Pemudah have been launched. So, are they calling our bluff?

“It shows other countries are improving and there is greater urgency to implement transformation initiatives quickly and arrest the continuing decline.”

He said that a look at the top ten most competitive countries confirmed that they had become developed by being competitive.

“The bottom line is we need to redouble our efforts to address the critical challenges,” he said. “Malaysia’s issues are long term structural challenges that require policy consistency to address.”

WEF said that Switzerland retains its first place position thanks to an excellent capacity for innovation and a very sophisticated business culture, noting that it is ranked fourth for its business sophistication and second for its innovation capacity.

Public institutions in Switzerland are among the most effective and transparent in the world (fifth), receiving an even better comparative assessment this year than in past years,” said WEF. “Governance structures ensure a level playing field, enhancing business confidence; these include an independent judiciary, strong rule of law, and a highly accountable public sector.”

WEF said that Singapore’s institutions continue to be assessed as the best in the world, ranked first for both the lack of corruption in the country and government efficiency.

“Singapore also has world-class infrastructure (ranked fifth), with excellent roads, ports, and air transport facilities,” said WEF. “In addition, the country’s competitiveness is buttressed by a strong focus on education, providing individuals with the skills needed for a rapidly changing global economy.”

Japan continues to enjoy a major competitive edge in the areas of business sophistication and innovation ranked first and fourth, respectively in the categories.

Company spending on R&D remains high and the country benefits from the availability of many scientists and engineers buttressing a strong capacity for innovation,” said WEF.

China’s two-place jump is mostly due to its better performance in the financial market (up 24 places to 57th) category, historically its weak spot.

“This is the result of easier access to credit and financing through equity markets, banks, and venture capital, which has been accompanied by a slight improvement in the perceived soundness of the banking sector (60th, up six places),” said WEF.

The US fell two spots to fourth place this year due to its deteriorating of its institutions, lack of public trust in politicians and concern about the ability of the government to maintain arms length dealings with the private sector.

“There is also increasing concern related to the functioning of private institutions, with a measurable weakening of the assessment of auditing and reporting standards (down from 39th last year to 55th this year), as well as corporate ethics (down from 22nd to 30th),” said WEF.

It noted, however, that the US still enjoys an economic structure that makes it highly competitive — including companies that are highly sophisticated and innovative, supported by an excellent university system that collaborates strongly with the business sector in research and development.

Responding to the report, Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said while the ministry acknowledged there were a number of areas for improvement, it was happy to see the report highlighted a number of positive elements about the Malaysian economy.

Mustapa said Malaysia was also assessed to have a well-developed financial market development with ease of financing through local equity, ranked 11th from 15th previously, and ease of access to loans position at 10th.

“Venture capital availability, soundness of banks, transparent regulations of security exchanges have also contributed to financial market development in Malaysia,” he said.

On the concerns which contributed to the country’s slide, he said, the government has already launched nationwide initiatives to tackle them.

“Among the proactive measures to enhance Malaysia’s competitiveness are the New Economic Model, which emphasises achieving high income, the Government Transformation Programme to enhance government efficiency, and the implementation of initiatives under the 10th Malaysia Plan.

“As these initiatives begin to take effect, we can expect to see improvements in Malaysia’s overall competitiveness soon,” he said.