Genting: Now It's the USA!

Gentings is now looking for investments in the U.S.

Justin Leong, the investment head chief at Gentings said that  “Genting Malaysia is aggressively searching for opportunities to invest in the U.S. casino gaming market.” He indicated that the strategy is towards building a US presence.

Armed with $1.7 billion in cash and debt free, Genting Malaysia is seeking acquisitions , new markets and potentially a strategic partnership in the U.S.

Earlier this month, it also bid to develop a slots casino at Aqueduct Racetrack in New York City.

It's foray into the US started with it buying MGM Mirage bonds.

The company bought MGM Mirage ’s secured bonds in May 2009 when the Las Vegas Strip’s biggest casino owner raised cash to avoid a potential bankruptcy. Genting Malaysia has invested in every capital issue by Las Vegas-based MGM since its first foray into the U.S. casino market. Apparently  that relationship will continue.
Genting Malaysia is also looking at developments and new gambling jurisdictions opening in the U.S.

The bid for Aqueduct “is another step.”

Kerkorian’s Stake

The investments include $100 million of bonds secured by MGM’s Bellagio and Mirage properties in Las Vegas, 9 percent notes tied to MGM Grand and MGM Mirage’s recently issued convertible senior notes.

Kirk Kerkorian , who founded MGM Mirage and is its biggest shareholder, said in October that his Tracinda Corp. is exploring “strategic alternatives” for its 37 percent stake.

The investor, 93, said in regulatory filings that MGM Mirage is undervalued and he is open to proposals.

Leong wouldn’t elaborate on Genting’s interest or say whether there have been talks with Kerkorian, whose stake in MGM Mirage is valued at $1.9 billion.

The shares rose 14 cents to $11.60 on June 11 in New York Stock Exchange composite trading and have gained 27 percent this year. Winnie Lerner , an outside spokeswoman for Tracinda, and Alan Feldman , a spokesman for MGM Mirage, declined to comment.

MGM Mirage and partner Pansy Ho hold one of the six casino licenses in Macau, the southern Chinese city that is the world’s largest gambling hub. Ho is the daughter of Macau casino billionaire Stanley Ho .

‘Faster, Sooner’ revenue from the Malaysian casino, a gambling monopoly held for almost four decades, helped build the Genting Bhd. empire that includes hotels, Star Cruises and Norwegian Cruise Lines, power generators and palm oil plantations.

In February, a Genting affiliate opened Singapore’s first casino, a $4.7 billion resort with a Universal Studios theme park , adding to the group’s Resorts World casinos in Malaysia’s highlands and the Philippines capital of Manila.

Genting also is the biggest casino owner in the U.K., operating under the Circus, Maxims and Mint brands.

There is competition for deals in Las Vegas as the city recovers from its worst economic slump on record.

Hedge fund billionaire John Paulson is acquiring a 9.9 percent stake in Harrah’s Entertainment Inc. In May, his New York-based Paulson & Co. said it owned 9.1 percent of MGM Mirage and 4.6 percent of Boyd Gaming Corp.

Genting Malaysia has held investment talks with large U.S. casino companies since December 2008, Leong said, declining to specify them. “I wish I had worked faster and done something sooner,” Leong said.

Leong, a nephew of Genting Chairman and Chief Executive Officer Lim Kok Thay and grandson of founder Lim Goh Tong , joined the family company in September 2004 after about four years at Goldman Sachs Group Inc.

Aqueduct Auction Genting is one of six potential bidders vying to renovate Aqueduct Racetrack and operate a slot machine-style “racino” with 4,500 video-lottery terminals in Queens. The latest round of proposals, which require a minimum $300 million up front, are due June 29. The family’s closely held Kien Huat Realty previously invested in three U.S. casino ventures, and last month partnered with the Mashpee Wampanoag Tribe to finance a proposed casino resort in Massachusetts.

In the early 1990s, Kien Huat financed the Foxwoods Resort & Casino in Connecticut, whose tribal owners defaulted on about $2.5 billion of debt last year, and the Seneca Niagara Casino in New York. In August, Kien Huat paid $55 million for 50 percent of Empire Resorts Inc. , owner of the Monticello Casino & Raceway in Monticello, New York, helping Empire to restructure some debt.

So,where do you think Gentings is heading? They have tentacles all over the world, so it seems!

Nipple Power!

Did it show or did it not?

That is the USD 64,000 question.

Apparently, while doling out autographs, beauty queen Lara Dutta's low cut evening dress decided to go its own way. The strap gave way and revealed more than her bra. Some said they saw a nice nipple peeping out in public.

Flip,Flop and Flip Again!

This is definitely a first.

Flip-flop-and then flip back again!

So, it was not a double u-turn as originally thought of.

Know what I am referring to?

Yes, the ban on the 12 stick cigarette in the so-called 'kiddy-pack' box.

Sadly , the Health Ministry today confirmed that enforcement of the small pack has yet to begun though the ban took place on June 2nd.

Why are cigarette companies not taking this ban seriously?

Oh, yes, our Rokok Minister says that instructions have been issued but cigarette companies say that they have yet to receive those directives. So, who is playing poker here?

First, our Rokok Minister says it will be enforced in a few months, very likely in January 2011. Then he was railroaded by the imperial Cabinet to start the ban on June 1st. It must have embarrassed the Cabinet no end to know that Rokok Minister has yet to enforce the ban! What is Rokok Minister up to?

This flip-flopping has also invited the ire of Philip Morris which intends to sue the Malaysian government for revenue loss.

Tobacco firms, in obeying with the ministry’s directive issued in December last year, had stopped producing 14-stick packs to keep with the June 1 deadline.

The small packet ban has already been deferred thrice — first in 2005, then in 2006, and most recently, in May of this year.

The government, under Prime Minister Datuk Seri Najib Razak’s administration, has come under fire for indecisiveness in the execution of its policies, with critics even dubbing the nation’s premier as “the father of all flip-floppers”.

Other policies recently reversed by the government include the implementation of the Goods and Services Tax and the two-tiered fuel subsidy mechanism.

In Malaysia Semua Boleh, what else is new?

Feel the Pinch? Ouch!

These policy makers earning stratospheric pay packets do not know what is happening at the lower income group brackets. They yakked and yakked about policy imperatives. What do they know about pocket pains?

My friends, it has already gone to shove from push and the government is still needling the people with its VAT proposal implementation.

Let us read what is happening in Petaling Jaya.

Read how some of the families are affected by rising prices brought about by unimpeded inflation.

"Petaling Jaya;13 June 2010:

Administrative clerk Zainab Suboh wants the Government to take into consideration the reality on the ground when formulating policies as the rising cost of living is putting a heavy constraint on her household budget.

“Every time I go to the supermarket I find that I can only buy less and less items with my RM200 monthly budget for groceries,” she said.

Zainab, 32, said the Government must put the rakyat first when implementing policies.

“The interest of the people should come first. Right now we are not feeling it because we are overwhelmed by financial constraints because of the rising cost of living,” she said.

Zainab and her husband Md Fadzli Adnan, 33, earn a total of RM4,000 a month.

“We live in a low-cost flat with three children aged two, nine and 10. I also have to spend RM300 a month on diapers and baby formula,” she added.

She said that the baby formula was quite expensive, adding that the Government should look into providing subsidy for baby formula because infants need good nutrition for healthy growth.

Lawyer Ron Tan, 44, said he and his wife Tan Su Yin, 40, who is a bank officer, find that their monthly savings keep decreasing by the year.

“This is because of the higher inflation rate. We have to pay for essential goods and that substantially cut into our savings.

“We are spending RM200 a week on groceries. Comparatively, we paid less than RM100 about 18 months ago for the same number of items,” he said.

Su Yin said people could not cope with a minimal increase in salary, high inflation rate and low interest rate.

“We are opting to invest rather than putting the bulk of our savings in fixed deposits,” she said, adding that their combined income totalled RM25,000.

“We are investing for our retirement. Most of the working class people will have no money for their retirement,” she added.

A single mother, who only wants to be known as Mellycka, 43, is feeling the pinch even with earning RM5,000 a month.

Mellycka, a writer with two children aged three and eight, said the bulk of her salary went to housing loan and car instalments, and children and household expenditure including utility bills.

She said she hardly had money left and found herself resorting to using credit cards after settling her bills.

Mellycka finds it an arduous task to cut down expenses because prices of goods had gone up by 15% to 20%.

“I just can’t afford to go out. Once I step out of the house, I have to pay for everything from petrol to parking fees to meals.”

Vivek, a human resource manager, said despite having a household income of RM7,000, he and his wife were feeling the pinch.

“We have to service loans for two cars and a house, which account for 45% of our total monthly income. We spend about RM1,200 on groceries,” said the 43-year-old father of one child."

We are crying..................

10MP: Blast from the Brain Trust

This is a good article from By Lee Wei Lian in the Malaysian Insider.

KUALA LUMPUR, June 12 – The former head of one of Asia’s premier economic think tanks blasted the continued influence of the New Economic Policy (NEP), saying that it is distorting the market and blocking serious reforms.

In a strongly worded presentation at a forum on the 10th Malaysia Plan (10MP) yesterday, Professor Datuk Dr Mohamed Ariff, the former executive director of the Malaysian Institute of Economic Research (MIER) said that the NEP which ended in 1990 appears to have mutated into new policy incarnations including Najib Administration’s New Economic Model (NEM) and is distorting the Malaysian economy.“Malaysia’s markets are highly distorted,” said Ariff at a forum organised by the Malaysian Economic Association. “The distortions are related to the NEP and the NEP remains the backbone of the 10MP document. The NEP looks like it is mutating to the NDP and NEM and stands in the way of bringing about serious reforms.”

Ariff, who is now an MIER distinguished fellow, said that 75 per cent of households earning less than RM2,000 a month were Bumiputera ones.

“I don’t understand — after 40 years of NEP why are 75 per cent of households earning less than 2,000 a month from Bumiputeras. That shows that the NEP is just not working,” he said.

Prime Minister Datuk Seri Najib Razak who is trying to make Malaysia a developed high income nation has found himself under pressure from vocal segments of the Malay population to preserve race based preferential economic policies.

Due to political considerations, Najib has not had a free hand in designing truly competitive economic policies. As a result, the public has been getting mixed messages over economic reforms and remain ambiguous over how much of a role ethnicity will have in the economy especially in areas such as government procurement, education and scholarships.

The 10MP document credits the NEP for reducing income disparity, specifically between the Bumiputeras and the Chinese from 1:2.29 in 1970 to 1:1.38 in 2009 as well as the creation of a Bumiputera professional middle class.

It also includes several NEM recommendations on making race based affirmative action more “market friendly” including stressing genuine economic participation instead of mandatory corporate equity quotas and introducing elements of meritocracy when helping the Bumiputera community.

Asked after the forum if he felt that making NEP type policies more market friendly would help, Ariff replied that the NEP would have to be rejected wholesale.

“It has to be cut off, just like how Alexander cut the Gordian knot,” said Ariff referring to the metaphor for solving an intractable problem with one bold stroke.

Earlier in the forum Ariff also said that for the economy to grow by 6 per cent per year as aimed for in the 10MP, investment would have to grow by 12.8 per cent per annum.

He pointed out that during the 9MP, investment growth was just 2 per cent.

“That (12.8 per cent investment growth) is a tall order,” he said. “I am not sure if we can bring this about.”

He said that while foreign direct investment FDI) levels had fallen due to the global financial crisis, it was particularly striking in the case of Malaysia which experienced just 1 per cent growth in FDI as compared with 10 per cent in China and 9 per cent in Singapore.

“Something is seriously wrong,” he said.

He however said that he liked the 10MP’s emphasis on enhancing the nation’s human resources but said that for that to happen, there needed to be a “revolution” in Malaysia’s education.

The director general of the economic planning unit, Datuk Noriyah Ahmad also spoke on the 10MP at the forum and said that unlike previous plans, the 10MP was a “rolling plan” and allocations would be done every two years to take into account the financial resources of the government.

For the first two years of the 10MP, RM44 billion has been allocated for 2011 and RM47 billion in 2012 and the amount beyond that will be determined later.

Another speaker at the forum, DAP MP Tony Pua said that there were too many contradictions between what Najib has said and what was actually carried out. He cited the case of a lack of open tenders for the development of the new convention centre near Jalan Duta, KL which was given to auto conglomerate Naza Group’s property unit.

“When I asked about it in parliament, the minister said that Naza asked for it first,” said Pua to laughter from the audience.

He also said that the government should focus on cutting down the sizeable subsidies to private corporations rather than just removing subsidies to the man on the street.

He citied the case of government interest free loans to the private water utility company Syabas that he claimed had cost the government RM250 million as it had to borrow the money in order to lend it interest free.

“Why are we hitting the man on the street?” said Pua.

He added that his worry was vested interests would derail the 10MP.

“We have a very nicely written document,” he said. “My fear is that people won’t follow it because of vested interests even though the prime minister says he won’t tolerate rent seeking and patronage. I hope the 10MP and the NEM will be carried out to the dot.”

EPF: Quarterly Investment Holdings Display

Beginning today, EPF will be showing its op 30 equity investments in companies listed on Bursa Malaysia on a quarterly basis.

This action is in conformance with its corporate governance stance, where members could see in which companies their savings were invested.

“Besides, by periodically disclosing its investment performance, it will help to reassure members that investment decisions undertaken are in the best interest of growing their retirement savings and in accordance with best practices in investment and governance,” says EPF.

This is a first step towards enhancing EPF’s transparency and it would review periodically if there was any further information on its investment that could be disclosed without jeopardising its investment strategy.

However,  “not everything regarding EPF’s investments could be revealed”.

The investment highlights can be viewed at
 
www.kwsp.gov.my.

The website includes media releases on quarterly financial performance, a compilation of annual reports, advertorials on annual reports and dividend rates.

As of March 31, the EPF’s top three shareholdings were 67.33% stake in Malaysian Building Society Bhd, 56.14% of RHB Capital Bhd and 41.54% of Malaysian Resources Corp Bhd.

The Berjaya Corp Sting

Was it a sting and Vincent Tan made a bundle from his Bursa pronouncement ?

We may never know.

One thing is for sure, many people chased the shares subsequent to the pronouncement of Berjaya Corp buying 70% of Ascot Sports which purportedly was re-issued a sports betting license.

The share price went beyond RM1.80 sen.

Today, with all the finger pointing and mystery surrounding the status of this pronouncement, the share is sliding down below RM1.40. Some analysts are predicting it will fall to the 90 sen mark when Sarawak became the first BN led state to ban the opening of sports betting centres there.

How sad!