Social injustice main cause of Malaysia’s brain drain-World Bank

I am copying  Asrul Hadi Abdullah Sani's article in the Malaysian Insider verbatim here.

KUALA LUMPUR, April 28 — Social injustice is one of the top three reasons behind the country’s brain drain, the World Bank said today, adding that Malaysians are only willing to return if the government shifts from race-based to needs-based affirmative action policies.

The World Bank conducted an online survey in February of 200 Malaysians living abroad in conjunction with the Kennedy School of Government at Harvard University.

In its fourth issue of the Malaysia Economic Monitor, the report stated that 60 per cent of the respondents found that social injustice as their main concern to migrate or return-migrate, citing unequal access to scholarships and higher education especially among the younger generation within the non-Bumiputera community.

Of those surveyed, 66 per cent found that lack of career prospects was a major factor and 54 per cent agreed that unattractive salaries as underlying factors in the Malaysian diaspora.

The report also showed that a large number of the diaspora migrated to Singapore, resulting in Malaysian-born individuals contributing to a quarter of the island nation’s population in 2010.

According to a census conducted in Singapore last year, there are currently 385,979 Malaysians-born residents comprising 47 per cent of all skilled foreign labour in the country.

The number of ethnic Chinese among Malaysian migrants in Singapore has also jumped from 85 per cent in 2000 to 88 per cent in 2010.

The World Bank also said that a large number of Malaysians obtained their tertiary education overseas, pointing out that those emigrating are getting younger as more of those below 23 are leaving the country.

The report concluded that the “Malaysian diaspora is large and expanding, as well as geographically concentrated and ethnically skewed.”

In a Bloomberg news service report earlier today, World Bank senior economist Philip Schellekens was quoted as saying that foreign investment could be five times the current levels if the country had Singapore’s talent base.

“Migration is very much an ethnic phenomenon in Malaysia, mostly Chinese but also Indian,” Schellekens told Bloomberg in Kuala Lumpur on Tuesday ahead of the report’s release today.

Governance issues and lack of meritocracy are “fundamental constraints” to Malaysia’s expansion because “competition is what drives innovation,” he said.

Malaysia’s growth fell to an average 4.6 per cent a year in the past decade, from 7.2 per cent the previous period.

Singapore, which quit Malaysia in 1965, expanded 5.7 per cent in the past decade and has attracted more than half of its neighbour’s overseas citizens, according to the World Bank.

Malaysia has in recent years unveiled plans to improve skills and attract higher value-added industries.

Prime MinisterNajib Razak has pledged to roll back the country’s NEP-style policies but he also told the Umno assembly last year that the government’s social contract of providing benefits to Bumiputeras cannot be repealed.

According to the Bloomberg report, Najib has eased some rules to woo funds, including scrapping a requirement that foreign companies investing in Malaysia and locally-listed businesses set aside 30 per cent of their Malaysian equity for indigenous investors.

Last year, he unveiled an economic transformation programme under which the government identified US$444 billion (RM1.3 trillion) of projects from mass rail transit to nuclear power that it would promote in the current decade.

Malaysia’s Brain Drain getting worse, says World Bank

I have attached Lee Wei Lian' s report written in the Malaysian Insider in verbatim on this very serious problem.

KUALA LUMPUR, April 28 — World Bank senior economist Philip Schellekens painted a gloomy picture of the Malaysian brain drain situation today saying that it not only grew rapidly but is likely to intensify, further eroding the country’s already narrow skills base.

Schellekens said that the number of skilled Malaysians living abroad has tripled in the last two decades with two out of every 10 Malaysians with tertiary education opting to leave for either OECD (Organisation for Economic Cooperation and Development) countries or Singapore.

“Brain drain from Malaysia is likely to intensify in the absence of mitigating actions,” he said at the launch of the World Bank report titled “Malaysia Economic Monitor: Brain Drain”.

The report defined brain drain as the outflow of those with tertiary-level education.

The economist said Malaysian migration was increasingly becoming a skills migration with one-third of the one million-strong Malaysian diaspora now consisting of the tertiary educated.

“Expect the trend to continue,” he said.

He added that the outflow of talent was not being replaced with inflows, thus damaging the quality of Malaysia’s “narrow” skills base, noting that 60 per cent of immigration into Malaysia had only primary education or less, even as the number of skilled expatriates declined by 25 per cent since 2004.

The report also noted that there was a geographic and ethnic component to the brain drain, with about 88 per cent of the Malaysian diaspora in Singapore being of ethnic Chinese origin.

“The numbers for US and Australia are similar,” said Schellekens.

Report figures also show that 54 per cent of the Malaysian brain drain went to Singapore while 15 per cent went to Australia, 10 per cent to the US and 5 per cent to the UK.

The top three drivers for brain drain identified by the report were career prospects, compensation and social justice.

“(Lack of) Meritocracy and unequal access to scholarships are significant push factors and a deterrent to coming back,” said Schellekens. “Non-Bumiputeras are over-represented in the brain drain.”

He suggested that Malaysia implement important structural reforms in tandem with introducing targeted measures such as income tax incentives to reverse the brain drain.

“Once the highway is built, you must compete for traffic,” he said. “One suggestion is to hold a competition among members of the diaspora to get ideas on what can be done to attract them home.”

He added that while this report estimated the Malaysian diaspora at one million compared with about 1.4 million in a previous World Bank report, it was due to the lack of Singapore government information on the breakdown of its non-resident population.

“This is a conservative estimate and the diaspora could well be larger,” he said.

KFC-Another 25 New Outlets in the Offing

KFC's AGM yesterday saw the announcement of 25 new outlets-15 standard ones and the balance 10 drive-ins.

“Each standard outlet would cost RM1mil while the one with drive-through facility would be around RM3mil so it seems.

Currently, the company has a total of 515 outlets nationwide.

  

Internationally, another nine outlets will open in India by year-end from the existing eight outlets there.

Contribution from India is still be insignificant to the company's earnings this year as KFC have just started there about eight months ago.Currently positive contributions come from Singapore and Brunei.

KFC is currently not impacted by the rising poultry price as the group is involved in integrated poultry business where chickens were bought at a fixed margin.

KFCH is 50.6% owned by QSR which in turn is 57.5% controlled by plantation company, Kulim. Joho Corp holds 53% of Kulim.

JCorp is a public enterprise entity controlled by the Johor state with more than 280 companies under its stable and eight publicly-listed companies with businesses like oil palm plantation, healthcare, food and poultry in Malaysia and overseas.

JCorp, which was saddled with debts totalling more than RM6bil as at Dec 31, 2009, has been in the media limelight lately. Some RM3.6bil is due for repayment next year.JCorp had been reported as saying that it would not embark on any “fire-sale” involving the sale on any of its prize assets for its bond redemption.

It was said to be in the midst of evaluating ways to ensure the redemption of the bonds including the disposal of land it directly owned to settle the debts.

Do you think Johor Corp will dispose QSR and KFC and yet have indirect ownership?

That will be one finger-licking proposition,wouldn't it?

YTL-Will it Pay?

This is Day 3 of the ex-split. Not much magic has been spun.

That is good and that is also not so good.

Let us look at the not so good and see whether there exists a silver lining before we look at the good.

The price has only risen 11 sen since YTL Corp (YTL) went ex. For those who wanted to see a spike in price, it was downright disappointing. Many expected it to race to the moon. That did not happen. It did not come close even to touch RM1.80.

Right now it is languishing around RM1.70. Hopefully the fantastic Wall Street overnight performance can translate into something for YTL today. As always, expect sellers to come in drove if prices move up too rapidly. Then gestation will have to set in before price can really firm upwards.

So, where is the silver lining? Can anyone see it? I have not.

The good news. There is also none in the short term until something appears before YTL holds its AGM sometime in late November. That is another 7 months to go. By then, we should know what dividend will be paid up too as well as revenue generated.

As the market is buoyed or stymied by sentiments,I would say there is good sentiments for a blue chip such as YTL. Chances are there will be more investors than speculators in YTL and so I see more chance of a price rise in the offing in the medium term.I expect most fund managers to buy in and lock it for the long term. Not many such opportunity for a blue-chip counter such as YTL. This is the prime buying period and so I believe more buying is on which is seen by the incessant bargain hunting and the huge block transactions.

There was no magic today with YTL shares touching a low of RM1.68 before ending flat at RM1.70.

The shares goes split officially tomorrow.

YTL Corp-Gestation,Digestion and Indigestion

Today is the second day of the 5 for 1 share split for YTL Corp(YTL). The morning was great as it start off for a 3 sen gain. Pushing against the heavy selling gravity, it punched through at RM1.74 but could not hold its ground and slipped to a low of RM1.69.

At about closing time, volume hit  close to 1,300,000 shares and  gain a paltry 2 sen to RM1.70 {I thought it would hit RM1.74. Fat hopes!}

As expected, there is a time called the gestation period. YTL is at that stage. There is a deluge of sellers who have made their money and are looking to exit. These are the speculators who has made a fast buck. The buyers are most likely YTL buying back its shares into the Treasury because of its under value status and the long term institution funds ranging from EPF, Pensions Fund,SOSCO, Public Trustees and perhaps even PNB.

I also think that some foreign funds might be taking small bites.

Once gestation is over and digestion is complete, the share should go up. Before that, expect indigestion and selling pressure from weak holders one more round but at a higher level.

Until then, expect YTL to go for marginal price increases but no big push!

YTL Corp-More Pre-push than Post Push

Today the 26 th of April saw YTL Corp(YTL) go ex-share split. There was some numerological placing looking at the favoured heavenly number of RM1.68 before the start of trading. Pre-trading also saw it pushed down by weak sellers to RM1.62. Then buying pressure came in to push  the price to RM1.75. I think this is another marker that they wanted established.

With that  done, they let the market the free-play to trade. Many saw profits as there was a pre-push of 17 sen yesterday when the shares were cum. So they sold. Right now on heavy volume of 1,730,000 shares it is trading at RM1.66 for a 7 sen gain.

As today is the first day of its ex, I think YTL will conduct a mopping up operation to buy up all those weak buyers off the trading radar before the 'real' price of the market can be fathom.Also Treasury buying may come in sometime today or tomorrow.

My best guess is it will yoyo all day before settling down at possibly RM1.68.
(PS: How true! It settled at RM1.68 when the last purchase was 20,000 shares clinching a 9 sen gain for the day. Now let us watch the RM1.75 marker tomorrow.)

I think many who made money has left. After all tomorrow is another day....

Those who are holding will likely be long term investors and institutional buyers.

So what is in store?

This, we should ask Francis as he said his shares are undervalued. At the current price, it is still lower than the original 2010 peak price of RM8.60

Looking at the further horizons, I think cash rich YTL may be in for some strategic acquisition.

If not, I am sure a bonus issue may be somewhere in the pipeline or a capital repayment,perhaps?

YTL Corp-The Eleventh Hour

Before trading this morning, there was a hidden hand fixing the price upwards. Just when the bell rang for trading, YTL Corp (YTL)'s price went up 20 sen and before you knew it, YTL was trading up to RM8.05.

That was the marker price they wanted to show for the day. After that genuine traders came in. As it was the last day cum trading before YTL goes ex-share split tomorrow, not many sellers sold down except those that had already made profit the last week or so.

Buying during the last 30 minutes was mostly buy-ups, taking off the  sellers at RM7.99. The final count was 1,853,600 shares done and the counter ended with a 17 sen gain.

At an easy to calculate price of RM8.00, that would mean the theoretical ex-price is RM1.60 tomorrow.

Will we see handsome premiums tomorrow?

Let us watch YTL's new price trajectory tomorrow (26 April 2011)