The Resorts World AGM

Monorail stopped in front of Wisma Genting and so it was good for me this morning.

Then I witnessed a real classy act by the organisers of the AGM held today at Wisma Genting(16 June).

Signages were good. The guards were at hand. We were directed to the registration area. We passed a mineral water station. All shareholders were given a bottle. A guard quickly directed me to a registration personnel who swiftly registered me. I was orange-tagged as a shareholder.

We then proceeded to Level 25 for the AGM. After collecting our Annual reports, we went for a cup of coffee. Introduced myself to a Mr Wong, Mr Tony and another gentleman. We spoke about other AGMs, the crazy greedy food busters,life and health in general.

I then proceeded to the 26th Floor for the AGM. Hall was okay size to fit in the shareholders. Genting staff were at hand to help those infirmed to climb the stairway to the meeting room.

I met Dr. Gan, ex Vet Dept in Ipoh and spoke of old times.

The same people got on the floor to ask Kok Thay questions. As usual, they wanted more dividends and wanted to know about the possible forays of the Genting group into Macau via the MGM route.

Door-gifts?

RM30 of KFC vouchers and RM30 McDonald vouchers. Good one!

Uneven Recovery for Singapore

I paraphrased a Morgan Stanley Research appraisal for the Singapore economy released on June 16.

This research report expects the Singapore economy to expand by 3% in 2010, albeit 'unevenly'.

Their anticipation:

i) Business investments will be slow in coming. Say bye-bye to the go-go growth years of 2006-2007

ii) The property boom will be back but without the full gusto and turbo impact of 2007 and 2008.

iii) Capacity built-up utilisation in financial markets will take some time to be digested as the economy stabilises and keel even.

Interestingly, based on how the global fallout is affecting home economies, and the various governments' ability to respond to the downturn,the bank’s order of preference for investment puts Indonesia on top, followed by Malaysia in second place and Singapore, in third. Thailand was placed fourth place.

Morgan Stanley is happy policy-wise with Singapore which has taken cognizant of its limitation-its dependence on external demand. As such, turnaround must be export-led. So far, they like the government's moves in striking a balance between intervention and when to leave growth engineering to market forces.

A potential policy scenario painted by Morgan Stanley:

In the event the G3 economies (United States, Europe and Japan) fail to see a quick-V-shaped recovery or continue to suffer a prolonged downturn,then Singapore must find new ways to buttress the export-driven model by scouting and looking at new sectors and new geographies. This is wise advice from Morgan Stanley but not easy to do.....

"One way out: restructure the economy to respond in the new, more sober environment post sub-prime." This is apparently the parting shot from Morgan Stanley.

Tongue-in cheek?

Berjaya Sports Toto's Huge Payoff

So, there you have it.

After the capital return, this is again the second time that Berjaya Sports Toto (BST) rewards minority shareholders.

It announced today(15 June) that it posted net profit of RM107.25 million for the fourth quarter ended April 30, up 76.5% from RM60.76 million a year ago.

Announcing a strong set of results on June 15, it also proposed share dividend via distribution of 89.71 million treasury shares on the basis of one treasury share for every 14 shares held.

On top of that, much to the chagrin of all, it declared an interim dividend of 19 sen per share (comprising nine sen per share tax exempt dividend and 10 sen per share single tier exempt dividend) for the financial year ending April 30, 2010. The books closure date for both the interim dividend and the share dividend has been fixed on July 15 while the payment date for the interim dividend is July 27.

Based on the number of 10 sen shares in issue as at June 15, 2009 of 1.256 billion, the fourth interim dividend distribution for FY ended April 30 was RM138.16 million.

This will bring the total net dividend distribution for the financial year ended 30 April 2009 to about RM316.7 million or &7.1% of the attributable profit of the Group for the financial year ended 30 April 2009.

On the fourth quarter performance, BST said the better financial results were due to its principal subsidiary Sports Toto Malaysia Sdn Bhd. The higher increase in pre-tax profit compared to the increase in revenue was mainly due to the previous year corresponding quarter ended April 2008 having incurred a higher prize payout.

For the full year, its net profit was RM410.49 million compared with RM348.66 million in the previous fiscal year. Revenue was RM3.69 billion from RM3.27 billion.

Wunderbar,BST!

Economic Models-What Alternatives to consider?

Malaysia has always depended on foreign direct investment(FDI).

That is the main model. It's that classic OPM concept-use other people's money for the development of the country. Let them bring in the capital, the technology and to give jobs to our people who will then spend in an assumed closed economy, to bring about growth for the nation.Hopefully, there will also be technology spin-offs in the form of component manufacturing and the development of knowledge intensive workers.

This concept works if our country is cost-competitive, the labour regulations are flexible and the tax incentives are great. Above all there must be political stability,low corruption,transparency and public safety.

If not, there will my a drop of FDI and the investments already in the country will also go away.

The other problem we have is the export economy model.

Every thing we produce must be premised on economies of scale to bring in good returns. Example: producing our cars. If we need to keep our plants going, we must sell enough cars overseas. If our car quality is not up to par, we lose!

Then there is the export of raw and refined commodities. These are subjected to the supply and demand of commodities and its substitutes. Prices in the world market fluctuates. Currency exchange can affect trade and profits.

So, how do we get on the good side of the world economy?

One-by making this country a great country to invest-good administration of laws, weeding out corruption and transparency.

Two-produce better and cheaper.

The Wishes of Man!

The wishes of man can best be summarised in this cartoon.

Enjoy!

Pump-priming Failure?

So, it came as no surprise when PM informed Parliament today (June 15) that less than one-sixth of the RM17 billion allocated for fiscal spending between Malaysia's two stimulus packages has been spent.

Just RM1.4 billion of the RM7 billion first package has been spent and a further RM1.2 billion from the second package — a RM60 billion plan of which only RM10 billion is government spending for 2009 — is on the ground.

This is despite 99 per cent of the first package having been allocated and a further RM4.2 billion of the second injection.

It has been seven and three months respectively since the first and second packages were announced.

The current disbursement found bottlenecks in an emasculated civil service where power continue to lay in the hands of a coterie of top civil servants of ministries and departments. Middle managers are often given no powers to approve, only to push recommendation papers upwards. It is now dubious whether the intended effect can be felt in the second half of this year.

A 6.2 per cent contraction in the Malaysian economy in the first quarter of 2009 prompted the government to draw a more dismal picture for growth-a 6 month technical recession from January to June 2009. Gross domestic product (GDP) growth has been revised from 1 to negative 1 percent to negative 4 and negative 5 percent blaming "softening external demand." PM Najib added that Singapore was not doing any better at negative 9 percent growth rate.

To him, the worse off scenario is due to a drop in global trade and the fact that America's remedial steps have not gone according to plan.

Is this nitpicking?