Is the Genting Juggernaut Feeding?

Whatever news it was that fuel the buying frenzy for Genting Berhad did not really matter from hindsight. Was it the fantastic revenue from the 2nd Q of 2010 for RWS or was it the 'almost in the bag' NY Racino project bidding?

Truth be told, the buyers came out from the woodwork and devour fervishly until the counter ended up 48 sen to RM8.18 at its close on 13 August.

AmResearch has reportedly raised its FY10F net profit forecast for Genting Berhad to RM2.8 billion from RM1.3 billion due to higher contributions from Genting Singapore.

'New fair value for Genting Bhd is RM10.67/share versus RM7.66/share previously,' it said.

Will there be a price shoulder build above RM8.00 so that there will be a  breather before Genting climbs purportedly to the new price of RM10.67?

This we will have to see.

Strength in diversity, beyond the Rhetoric

This is a very interesting speech by Nazir Razak, brother of the current PM.

His speech, while confined to corporate directions do have lessons for Najib Razak to bring beyond corporate boundaries. Cut the rhetoric, PM and be your own man.

As the Bard says, " To thine own self, be true."

I so wish that this kind of speech be provided on a national platform with an action plan to follow that do not pander to the wishes of opportunists and extremists.

I am sure this speech by Nazir Razak will be dissected and put under the national microscope by the policy holders for the vaue it really is and has to offer.

This is Nazir.

" It gives me great pleasure to address all of you here today.  I must confess that when I was invited to speak at this forum with the theme: "The Role of the Chinese Community in Achieving the NEM”, my initial thoughts revolved around how to politely decline, for I have neither the oratory prowess of a politician or any direct involvement in the NEM or the 10th Plan for that matter to speak on them with any authority.

After thinking about it however, I decided to accept because the organisers have been kind enough to allow me to share my perspectives on “strength in diversity”, a subject which has great relevance for my firm, and is of great interest to me because I have always found the saying attractive yet the substance rather elusive.

At the recent Malaysian Law Conference I argued that the key strength and competitive edge of Malaysians and Malaysian companies lie in the diversity of our people and how they are able to operate across cultural, racial and religious barriers.

Consequently our people are highly sought after all across the world, and companies from Malaysia have been more successful internationally than those of any other Asean country.

Today, I would like to take this thought further. If diversity is our strength then we should nurture and celebrate diversity and methodically, as a nation, harness diversity as the competitive strength of our companies and of our nation.

One  of  the  mega  trends  of  our  times  is the increasing diversity of the societies we live in, the organisations we work in, and the clients and customers we  serve. The world grows ever more inter-connected. This enables the diversification of global economic activity like never before; economic value is now created across value chains that span the globe and investment flows too, are becoming more diverse in their source.

Fifty years ago, flows were almost entirely from the developed to the developing world. Today, we’re seeing the rise of foreign direct investment from trans-national corporations (TNCs) from emerging and transitional economies.

A growing number of these TNCs are emerging as major regional, sometimes even global, players; and the links they are forming with the rest of the world are redefining the global corporate landscape.

Malaysia and Malaysians enter this fray with unique advantages, because in a very real way, diversity is our “home ground”.  We are ourselves the product of successive waves of “globalisation” emanating from Asia well before the colonial era. Malaysia sits at the nexus of trade and travel between Southeast Asia, China and India.

The society that we know today is a product of the confluence of cultures, races and religions of peoples brought together in search of opportunity and security. Most of us grew up with diversity as a normal condition of life. Unlike many other societies, our ability to manage diversity is innate, our grasp of its challenges, instinctive.

There is thus great demand and scope for Malaysians in the new management landscape in which diversity is a key capacity.

Malaysia has been a beacon of stability for the past 50 years, some setbacks notwithstanding.  Our success over these years has not been in spite of, but because of, our cultural diversity. But now the time has come to go beyond merely managing it, as if it were a problem, but actually tapping it for the power it is.

Diversity is not an accidental feature of Malaysia; and while some people may want it to go away, it is here to stay. We need to climb out of the confines of the view that race is always a problem to be managed with “race relations”, into the freedom of a new national mindset in which we all understand that diversity has become the distinctive economic advantage of our people, and we seek to systematically tap that advantage to make our mark in the global economic arena.

The value of diversity is well-understood in the business world. Diversity in portfolios can mitigate risk, diversity in the sales force translates into better client coverage and diversity in thinking broadens the range of our solutions. Diversity fosters the creativity and cultural adeptness needed to build and grow regional businesses.

CIMB has been a great beneficiary of Malaysian diversity.

Our organisation has grown from a predominantly Malaysian investment bank in 2005 into a leading Asean universal bank in just five years. Over this period our market capitalisation went from RM5 billion to RM50 billion; our staff strength has grown from 1,000 to over 36,000 and today, we have over 20 different nationalities within our ranks. Our customer profile too, has changed dramatically, both in number and geographical make-up – CIMB  now serves over 10 million customers across Southeast Asia from large corporates  to  SMEs  to  individual  retail  clients.

The diversity of our people, and their very Malaysian ability to adapt to create value across a range of cultural settings, have been key to our success.

Most of you would have probably heard the joke that CIMB actually stands for Chinese, Indian, Malay Bank.  We actually love the unofficial moniker, because it so aptly describes what we are.  Jokes aside, CIMB really is an amalgamation of Chinese, Indian and Malay banks – Ban Hin Lee/Southern Bank, United Asian Bank and Bumiputra-Commerce Bank.

Hence CIMB is truly 1 Malaysia!  CIMB today is an example of a truly Malaysian achievement. Our regional expansion has been built on a distinctively Malaysian ability to build an effective network across Asean, one of the most culturally complex regions in the world. Diversity has been an essential and productive component of our success.

When we merged Bank Bumiputra and Southern Bank four years ago, many said that it was impossible, that the respective working cultures were too different, and  that the transition from the predominantly mono-racial setting of each entity into a combined multi-racial environment would be too combustible. Surely we have proven them wrong.

We have demonstrated beyond the shadow of a doubt that the integration of contrasting cultures, divergent methodologies and different values is not only possible but also a source of strength of our franchise today. That integration is held together by people with a distinctively Malaysian capacity to work across cultural difference.

For me, it was the experience of managing the Malaysian CIMB that enabled me to then build and lead a regional CIMB.  Malaysia and this Malaysian capability were my bridge to the region.   Thus a most Malaysian company has become possibly the truest Asean company. A made-in-Malaysia capability to manage and lead multi-racial and multi-cultural teams is now the kernel of our capacity to build a trans-national business across the larger diversity of Southeast Asia.

How do we nurture and take advantage of diversity? At CIMB we say that promoting diversity requires people to go against what comes naturally to them. We learn to identify our group and our personal biases and we tell our leaders to fight against them constantly.
As a personal example, when I took over the helm at CIMB, I resisted the tendency to surround myself with people who thought the same way as I did or with whom I was socially comfortable.  Instead, I selected a very diverse management team, in age, race and gender, so that I could draw from our varied perspectives and arrive at better solutions than a homogenous team could have achieved.

Today, if I see an all-Chinese team, or an all-Malay team in the organisation, I ask why; and the leader of the team is set a target of diversification. I insist that at the office we only speak English or the national language (Bahasa Malaysia, Bahasa Indonesia, or Thai) to facilitate diversity.

We have a strongly meritocratic culture in regard of individual performance. This is a basic requirement of a talent-based competitive strategy that can hold its own against the best international competition.

The very same strategy, however, requires that we continually challenge ourselves to build diverse teams in which individual talent can find its best expression.

Group diversity is a goal in itself.  The best universities and schools in the world have policies in place to foster diverse academic communities because they know that a more diverse population is likely to be more interesting and more creative.

The demands of meritocracy are balanced with the requirements of diversity and inclusion to create communities that are in fact more productive. Individual merit alone does not get the work done. Results are created by teams, and diverse teams tend to be better teams. In our entry level recruitment we set a specific goal of increasing bumiputra talent so that we have a bigger pool to rebalance our teams at the managerial levels.

Is this NEP at work? Yes. But does it conflict with good business strategy? No. And one day, if the bumiputra content is too high, you may see a policy of higher Chinese or Indian intakes.

From  CIMB’s  point  of  view,  to  serve  a multicultural and multi-racial client base, its staff and its leadership too, have to be equally diverse, because  our  success  is  ultimately  predicated on how well we understand and provide for the needs of our clients.

Diversity and economic transformation (1 Malaysia and the NEM).

The unstoppable forces of globalisation, and the eastward shift of the global economy’s centre of gravity, are playing into our hands. The global economic game is moving onto our home turf.  The need to rebalance global trade requires that emerging economies find ways to expand domestic markets, and we find that our backyard is Asean, with its population of 580 million people, that is our true domestic market.

Emerging economies need to participate in the economic resurgence of China and India, and we find that we are located not just geographically, but also culturally, at the meeting point between the South China Sea and the Indian Ocean. We are a lucky country, but we need to do a few things before we can realise our luck.

In recent months the political discourse in our country has become more racial than I ever remember. I hope it is merely the dying spasms of retrograde worldviews, a reflection of anxiety at imminent structural change that we know in our hearts must and can happen; structural change that would catapult us from our present uncertainty to the fore of economic competitiveness.

We need an economic transformation that harnesses the energies of our diversity to our competitive advantage. We are in critical need of a New Economic Model.

Malaysia has the largest number of successful home-grown trans-nationals in Asean. Using the example I know best, I have tried to suggest why this is so, and how it is testimony of the value of our diversity. Malaysian companies are successful abroad because of capacities born of a diverse society. Let us, in pursuing a new economic model, build on that success.

The New Economic Model should leverage our diversity in a methodical way by providing support for more Malaysian companies to expand regionally. What has worked for CIMB and Axiata, YTL and AirAsia can work for Malaysia. Such companies draw on the talent of Malaysians wherever they are located. This, concretely, is how we tap the advantage of having Asean as our backyard. We need even more Malaysian companies, even at the SME level to go trans-national. They can.

So I look forward to the NEM creating a framework for spurring growth and the proliferation of Malaysian trans-national companies:  It is not, for instance, clear today how private companies can access co-investment capital or other government support in their international activities.

To state the obvious, the Malaysian Chinese community has a crucial role to play in this strategy.  You are no strangers to regional business networks. That network, however, is becoming increasingly diverse, open, international and competitive. Embrace diversity; work with all communities, not only in formal compliance with affirmative action but in building, shoulder to shoulder with them, the regional companies of the future.

Our new and positive mindset about our diversity, expressed as “1 Malaysia”, must be harnessed and developed in the New Economic Model as an engine for the regional growth of the Malaysian economy.

The vehicle for this is the company of the future, a future being built in our region and in which we have a key role to play because if we put our efforts together as Malaysians we have a real talent for building the region’s most successful trans-national companies. These companies can in turn anchor our centrality in the new pathways of global economic activity developing around us.

So, can we really put our best foot out for diversity?

That should be the challenge to the current government. Do you dare lead?

Go! Go! Go! Axiata

Yes, that's the way to go about it. Refinance your debt whenever you can. Take advantage of longer payback periods and lower fund costs. Hopefully, minority shareholders will benefit on the long -run from these deft market maneuvers.

And so this week,we have an announcement that Axiata,owner of Malaysia’s second-biggest mobile phone operator, has deferred an Islamic bond sale to the week beginning Aug. 16 to complete documentation, according to a person familiar with the matter.What gives?

It plans to sell RM4.2 billion (US$1.3 billion) of five-, seven- and 10-year sukuk to refinance debt, and the greatest news of all-walla! the Employees Provident Fund (EPF)will buy most of the notes.How convenient!

Axiata, Malaysia’s best-performing index stock this year, has RM6.7 billion of group bonds and loans due to mature through 2020, according to data compiled by Bloomberg. It raised US$300 million in April from its first sale of dollar notes.


So let us hope that Axiata's share prices will move beyond RM5.20 because that is the price the shareholders have been saddled with after TMI split away from TM some years back. From RM8.80, the share price fell after a billion payback to parent TM and the news of an impending rights killed whatever was left of TMI's goodwill.

Those who successfully  subscribed for excess shares or bought it at low, low prices are just beginning to see some worthwhile pofits now. I do hope the latest Axiata's corporate maneuvers can bring it back to its heydays as a market leader!

We await the return of the phoenix!

Wanna BAT?

The new cess of a half sen for every cigarette stick sold to be borne by the manufacturer will not change British American Tobacco's earnings forecast, according to Kenanga Research.

The stockbroking research firm has recommended to "maintain hold with unchanged target price of RM40.10" for the company's shares.

"The impact on financial year's bottom-line is only two per cent cess  decrease to RM766.8 million (RM780.2 million without cess) as the new tax is only effective for the remaining four months of this year," so says Kenanga.

"We believe the bottom-line impact is moot given that any duty and/or excise hikes are usually passed on to end customers, leaving tobacco manufacturers' bottom-line intact," it said.

Yes, there will not be any disagreement here, I am sure!

Gentings News Release: NY Racino

This is their release :

We refer to our announcements dated 10 June 2010 and 30 June 2010, wherein we had announced that GENM’s indirect wholly-owned subsidiary, Genting New York LLC (“Genting NY”) had submitted a formal bid to the New York State Division of Lottery (“New York Lottery”) to develop and operate a video lottery facility at the Aqueduct Racetrack in the City of New York, United States of America (“Project”).

On 3 August 2010, New York Lottery announced that its evaluation committee has unanimously recommended to the New York Governor that Genting NY be awarded the New York video lottery licence for the Project. Genting NY’s proposal included US$380 million as an upfront licencing fee.

The recommendation will have to be approved by the New York Governor, the Temporary President of the New York State Senate and the Speaker of the New York State Assembly before the video lottery licence can be awarded.

The video lottery facility at the Aqueduct Racetrack, to be called Resorts World New York, will contain 4,500 electronic slot machines, also known as video lottery terminals. Resorts World New York will also include a grand entrance featuring a three-story atrium with a spectacular water show, enclosed skyway pedestrian bridge linking to the mass transit system of New York , 450-seat two-storey festive casual dining promenade, two high-end restaurants, a sports bar restaurant and lounge and parking facilities for 7,000 cars including a 2,200 car garage.

Genting NY will work closely with the relevant parties, including the operator of the Aqueduct Racetrack, the New York Racing Association and expects to open the preliminary phase of Resorts World New York 6 months after the licence has been awarded.

Why Don't Kien Huat Just Privatise GenM?

The way Lim Kok Thay has been playing footsie with minority shareholders of GenM speaks much of his 'hoity-toity' disregard for their sentiments.

The RM6 billion cash hoard of GenM has been systematically whittled down for his grandoise excesses.

First, he flirted with Walker and then on the home stretch dumped it onto GenM just when the going gets rough. Then,he did a number on the minority shareholders again by selling Oakland and the office block to GenM for cash to take on the savaging ravages of the Sentosa Resort World cost overruns.

Yet again, he gave MGM a huge USD50 million loan through taking their promissory notes. Then there is this NY Aqueduct racino thing where again he fished out USD1 million from the coffers of GenM for the bidding deposit. More funds will be 'whaled out' if the racino project gets going,I am sure.

Then we have this 'daylight robbery' of making GenM the whipping boy to take on loss-making GentingUK.

To date, he has given nothing to minority shareholders. He has also changed the door-gifts for AGM minority shareholders to be vouchers only tenable up in Genting food outlets way,way above sea level.

Over the years, there was no capital return and no special dividends or bonus issues. Year in and year out he hawks the less than 7% dividend less 25% tax.

The frequency and rate he is dipping into the coffers of GenM is mighty suspicious. He is definitely up to no good. There is a precursor here.

So, I think there is all likelihood that he would take GenM private sometime soon. He should as the way he is doing it leaves a 'bad taste in the mouth'

Discipline in School-Why bother at all!

Are teachers really scared of imposing discipline in class even though the cardinal principle of discipline is central to a good teaching and environment in schools?

On the surface, off the cuff,I would say,"No". Every good teacher knows that. Without a measure of discipline in class,you just cannot teach.

So, why is indiscipline a major issue these days?

The most obvious reason is politics.It has crept into the classroom to instill fear into the teachers.Parents do not see two sides of the story. They do not emphatise with the teachers.

They only see their children that 'could do no wrong'. Their negative retaliation are oftentimes unfounded. Then you have the 'golden child' of politicians in class that must be given that arm's length treatment as far as punishment goes. They are the untouchables. A new culture emerges when teachers know that they will get no where disciplining unruly students these days. Apart from the parents, you may get the backlash from students who are wont to vandalise your car or even beat you outside the school compound.

Yes, you can say that again.Gone are the days when children are afraid of telling their parents about the punishment they received in school, for fear of being scolded at home.

A casual talk to retired will give you an insight ointo the more “relaxed” attitude in disciplining students amongst teachers today.

Many years ago, there used to be pin-drop silence in classrooms on report card day. Today, teachers and parents struggle to hear each other over the chaos caused by noisy students.

Teachers don't do much except say, "keep quiet!" and this, too, is usually ignored.There is just no respect for teachers even in class.

I had the rare privilege of attending report card day when my son was at school. Not only was the din created unbearable but also a bunch of students were gambling right under the very nose of the teacher! Imagine that!

Today, potential fears of litigation emanates the air. There will be no such punishment like  standing on the chair.What if the child should fall? What happens if a child starts vomiting after he or she is made to run around the school field as punishment?

Then we have the new gurus who will say that such punishments represents mental torture and lowers the
self-esteem of students in front of their peers.

You hardly hear of students being punished by the pulling of ears or the rapping of hands or knuckles.

During staff meetings, teachers are told not to touch the students. If there is a problem,it should be the principal who handles things. This is the usual advice, especially to new male teachers who may get angry very fast. Students can be corrected verbally "without using harsh word,"


Principles will always caution teachers that proper guidelines should be followed when disciplining students.

The rules may differ from one school to another. Basically, teachers can take action but they must follow the rules. For instance, girls are not to be hit with the rod. Boys who have disciplinary problems should be warned a few times and their parents consulted. If there  are still problems, they can be caned in the headmaster or discipline master's room, but never in public.

All warnings, be it verbal, should be recorded officially.Whenever there are action that needs the police
to intervene,they also asked that step-by-step administrative rulings be conducted first.


Retired teachers say the method of disciplining now is different for a number of reasons.

Firstly,the current system does little to support teachers.

If a teacher takes action against a child who has misbehaved, there is usually someone who files a complaint, resulting in the teacher being demoralised. Discipline has not deteriorated over the years, but interference from outside has increased. That's why some teachers have adopted a tidak apa (don't care) approach.

Teachers are also under a lot of pressure. Most teachers have to move between six classes of 40 students each, that is a total of 240 different minds to handle. Some schools have over 3,000 students. How do you control that?

"There needs to be a separate department to handle registration and disciplinary issues. A teacher's task is to impart knowledge, not to stand at the front gate to catch students who  come late or penalise those who are not wearing name tags."

Some retired principals  are of the opinion that problems in schools have not changed, but the nature of discipline has.

Normal offenses such as stealing, gangsterism, cheating during exams, destroying property,truancy and distribution of porn have been around for decades, but now it's more widespread.

Moreover, these days,students are indisciplined in a more sophisticated way. Their minds and hearts have not changed, but they have become bolder.

There are many factors contributing to this and the problem is "almost irreparable".

The social scenario in schools is evolving. Everything is exam-oriented, sometimes at the  expense of discipline. Many teachers focus their attention on academic results instead of moral values. Often, discipline is left to the disciplinary board when it should be the duty of every teacher.

Parents, media and the Internet are also partly to blame for the rise in school disciplinary problems.

Many parents have neglected teaching their children on the importance of social etiquette.

Children are not taught to respect their elders or property, causing many to be rebellious.

There is also an increasing number of parents who criticise teachers in front of their children. Calling teachers bodoh (stupid) causes children to lose respect for teachers. Many websites and television programmes don't teach good values. As a result, children are more boisterous and answer back."


If this is so, should discipline methods be more "harsh"?

Major Tarlochan Singh,a counsellor, believes that the emotional well-being of a child should always be taken into account.

He believes punishment should be based on the severity of the problem. Caning should only be carried out
 if the child has done something really bad.

Furthermore, parents should be notified based on proof and they must be informed of the type of
 punishment. I believe that punishment should be done in a controlled environment. Done by correct people and in the right setting, the punishment will be accepted by the child and parents."

As we can see, the process of disciplining takes a long time. It has become bureaucratic and fraught with possible litigation,political interference as well as office politics.

It is little wonder why teachers do not want to impose discipline. Why should they?