DISCOUNTS GALORE: MALAYSIA AIRLINES LAUNCHES 3-DAY FLASH DEALS

KUALA LUMPUR – Malaysia Airlines launched its three-day flash deals campaign on Thursday and the promotion is valid for travel from July 27 until Sept 30, 2017.

The national carrier said on the campaign offered customers a chance to enjoy up to 35% savings on economy class to selected routes .

The air fares are from as low as RM359 to Phuket, RM369 to Jakarta, RM899 to Manila while for flights to Beijing, the fares start from RM1,009 to Beijing and RM1,299 to Mumbai. These fares are for departures from KL International Airport (KLIA).

MAS added that fares from Kota Kinabalu International Airport (KKIA) start from RM839 to Taipei, RM999 to Perth and from as low as RM 1,269 to Tokyo.

It is also offering all-in, one-way promotion from RM99 to all domestic destinations, during selected periods throughout the year.

The promotion comes with no hidden charges or credit card fees and include a baggage allowance of 30kg and complimentary meals.

Customers can book their tickets https://www.malaysiaairlines.com/my/en.html or at participating travel agents, through its mobile app, MHmobile or call centre at 1 300 88 3000.

– ANN

Bumiputera status: To be or not to be

How do we reconcile the proposal for Indian Muslims to be recognised as Bumiputera with the justification for the original creation of Bumiputera status?

COMMENT

By Murugesan Sinnandavar

My initial reaction when I read the news report on the prime minister’s remark that the government will study in depth the request from the Indian Muslim community to be recognised as Bumiputera was to ignore it.

As someone who was in politics, I know sometimes requests will be made to a politician at a function and the safest way to deal with it is to say “I will consider it”. That way, you won’t offend anyone and it will give you time to think about the request. It’s a safe answer for a politician.

At the practical level, granting Bumiputera status to Indian Muslims will have very little impact on the country as whole as they are a minority within a minority.

However, at the principle level, I have trouble reconciling the proposal with the justification for the original creation of Bumiputera status.

This article is written purely for the purposes of discussing the principles involved and not to offend anyone, least of all the Malaysian Indian Muslim community. They are hardworking, disciplined and united as a community. Some of the best scholars of the Tamil language come from this community and I have great respect for them.

This article is also not a debate on the benefits and disadvantages of affirmative action which is known as the New Economic Policy (NEP) in Malaysia, or the existence of the Bumiputera status itself.

Who is a Bumiputera?

The term “Bumiputera” is a Sanskrit word which was later absorbed into Malay and can be literally translated as “son of the land” or “son of the soil”.

The term “Bumiputera” cannot be found in our constitution. The closest we come to it is in Article 153 where reference is made to “Malays” and “natives”.

Article 153:
“(1) It shall be the responsibility of the Yang di-Pertuan Agong to safeguard the special position of the Malays and natives of any of the States of Sabah and Sarawak and the legitimate interests of other communities in accordance with the provisions of this Article.”

The term “Bumiputera” was first introduced by the father of our prime minister, Abdul Razak, when he formulated the NEP. The NEP recognised the “special position” of the Malays provided in the Constitution of Malaysia, in particular Article 153.

In the “Buku Panduan Kemasukan ke Institusi Pengajian Tinggi Awam, Program Pengajian Lepasan SPM/Setaraf Sesi Akademik 2007/2008” (Guidebook for entry into public higher learning institutions for SPM/equivalent graduates for academic year 2007/2008), the higher education ministry defined “bumiputera” as follows, depending on the region of origin of the individual applicant:

Peninsular Malaysia
“If one of the parents is Muslim Malay/Orang Asli as stated in Article 160 (2) Federal Constitution of Malaysia; thus the child is considered as a Bumiputera.”

Sabah

“If the child was born in Sabah or the father was domiciled in Sabah at the time of birth, and one of the parents is an indigenous native of Sabah as stated in Article 161A (6)(b) of the Federal Constitution of Malaysia; thus his child is considered as a Bumiputera.”

Sarawak
“If both of the parents are indigenous natives of Sarawak as stated in Article 161A (6)(a) of the Federal Constitution of Malaysia; thus their child is considered as a Bumiputera.”

The above definitions more or less reflect what most of us commonly understand as Bumiputera. In a nutshell, it grants Bumiputera status to indigenous people or children of either parent who is indigenous. There is no mention of religion here.

It is apparent that Indian Muslims don’t qualify under any one of the above categories.

There are other minorities such as Peranakan and the Portuguese-Eurasian community in Melaka which are also considered Bumiputeras. Most of these constitute communities that were established prior to the arrival of the British colonialists.

The question is, under which category is the government to consider granting Bumiputera status to Indian Muslims?

Is it because they originated from India? Obviously not! If that’s the case, then all Malaysian Indians will be considered Bumiputeras, leaving the Chinese to fend for themselves.

Is it because they are Muslims? Now this gets a little more complicated.

Bumiputera status is not granted based on religion. If it was, it would run foul of Article 8 of our constitution which states that all Malaysian citizens shall be equal under the law, and “except as expressly authorised by this Constitution, there shall be no discrimination against citizens on the ground only of religion, race, descent or place of birth”.

If an Indian Muslim is granted Bumiputera status because he is a Muslim, then the question arises on the status of a Hindu or Christian Indian who converts to Islam. What happens to him and his children? If that’s the case, won’t this then be seen as an inducement towards conversion to Islam?

What about Chinese Muslims, then? Don’t they deserve equal treatment as the Indian Muslims?

Should the Indian Muslims be granted Bumiputera status because they are disadvantaged socio-economically? This too can’t be the case. If it was, then the Malaysian Indian community as a whole deserves Bumiputera status.

I don’t have any statistics to support this, but any Malaysian observer will tell you that the average Indian Muslim is better off economically then the average Malaysian Indian.

Its noteworthy that the Melaka Chittys, who have been in this country for more then 500 years, have still yet to be granted Bumiputera status. They speak only Malay and have forgotten to speak even their mother tongue, Tamil. They are a very small group and are struggling socio-economically. What about them?

These are some of the square pegs that don’t fit into the round holes.

It is therefore good that the prime minister has given us the assurance that the government will study the request first. Whatever the final decision, it must be based on merit and be fair to everyone. It must not be due to political pressure. After all, we are all citizens of this country and love this country.

As I stated at the beginning of this article, the practical implication in terms of the economic pie of the nation might be small, but the message of such a decision will be loud and clear to all Malaysians. Think about it.

Murugesan Sinnandavar is former MIC secretary-general. -FMT

Will China investments improve Malaysia’s economy?

A research house says the large Chinese investments raise questions that will have an impact on the gross domestic product and the value of the ringgit.

KUALA LUMPUR: China is investing heavily in Malaysia, and the government continues to woo Chinese firms.

According to Citi Research these large investments have significant implications for the growth of the economy and the ringgit.

There is a suggestion that the impact may not be as good as appears on paper.

It said: “Overall, foreign direct investment from China may understate the extent of Chinese involvement in the Malaysian economy, but overstate the impact on GDP growth or ringgit demand.”

The Edge quoted it as saying that the announced railway and port projects with Chinese interest could make up between 24% and 32% of Malaysia’s 2016 nominal gross domestic product, spread out over the next 10 to 20 years.

Chinese FDI inflows remained on course to meet or exceed the 2016 figure of RM18.7 billion, The Edge quoted Citi Research as saying.

It said, however, that these large investments raised many questions.

“First, there are concerns that these projects are motivated more by geopolitical than commercial considerations, especially given concerns of existing overcapacity in Malaysian ports.

“In particular, Chinese interest in the ports along the west coast of the peninsula stems from China’s desire to secure access to the Straits of Malacca. The East Coast Rail Line (ECRL) and the recently proposed trans-peninsular oil pipeline would serve as the land bridge between these ports facing the South China Sea.”

It said the mode of Chinese involvement was not completely clear.

“Major government-led projects would be funded primarily by loans from Chinese state-owned banks rather than greenfield FDI, which could lead to a further rise in contingent liabilities for the Malaysian government.”

Chinese involvement, it said, could also come via construction contracts to Chinese state-owned enterprises.

Citi Research said there were also questions over the spillover to Malaysia’s GDP, “given concerns that the materials, companies and even labour involved in the projects will be Chinese”.

It added: “Data from the American Enterprise Institute’s China Global Investment Tracker shows US$14.6 billion worth of investments between 2013 and 2016, but less than half of these — US$6.6 billion — were greenfield investments, with the rest mainly merger and acquisition transactions, which merely represent a transfer of ownership, rather than the addition to GDP growth, but will still be represented as FDI inflows (and support ringgit demand).

“Even with greenfield FDI, the impact on growth will depend on the extent of leakages due to imports of capital goods and labour.”

It noted that at US$12.6 billion, construction contracts awarded to Chinese firms during the same period were almost twice as large as greenfield investments, and comparable in size with the total investments in the same period.

“All else equal, such contracts represent service imports. The gross impact of such contracts is to subtract from headline GDP growth and ringgit demand.”

Net impact on ringgit demand, it said, would depend on the funding mechanism. - FMT

Another Tongkat Ali coffee product recalled in the US

Bestherbs Coffee is voluntarily recalling its product due to undeclared ingredients including desmethyl carbodenafil, which is structurally similar to the active ingredient in Viagra.

PETALING JAYA: A company in Texas is recalling its “New of Kopi Jantan Tradisional Natural Herbs Coffee” after the United States Food and Drug Administration (FDA) voiced concern over the presence of Tongkat Ali in the ingredients.

The Washington Post reported that Bestherbs Coffee was voluntarily recalling all batches sold between July 2014 and June 2016 due to undeclared ingredients including desmethyl carbodenafil, which is structurally similar to sildenafil, the active ingredient in Viagra.

Although Viagra is an FDA-approved prescription drug used to treat erectile dysfunction, the agency said it was concerned over the potential of desmethyl carbodenafil to lower blood pressure to “dangerous levels”.

In a statement carried by the daily, it also expressed worry over interaction with the substance and nitrates found in prescription drugs like nitroglycerin.

“Men with diabetes, high blood pressure, high cholesterol or heart disease often take nitrates,” the FDA was reported as saying.

Bestherbs Coffee owner Albert Yee told the Washington Post he expected to receive anywhere between a few hundred to a thousand bags from customers after the recall which began last week.

According to the report, however, both Yee and the FDA said there have been no consumer health issues related to the coffee.

This is not the first time that coffee products containing Tongkat Ali have been recalled.

In May, instant coffee distributer Caverflo.com voluntarily recalled its “natural herbal coffee” which purportedly contained Tongkat Ali extract following the reported death of one of its consumers.

The FDA said then that Caverflo.com was recalling all lots of its Caverflo Natural Herbal Coffee packaged in 25-gramme foil packs.

This followed FDA laboratory analysis that confirmed the presence of sildenafil and tadalafil in the products. - FMT

Yet another factory closes, 237 out of jobs

Announcement that Tien Wah Press Holdings is closing its printing plant in Malaysia follows reports that Seagate and Western Digital are relocating to Thailand.

KUALA LUMPUR: Tien Wah Press Holdings Bhd plans to close its 57-year-old printing business in Petaling Jaya under its wholly-owned subsidiary Tien Wah Press (Malaya) Sdn Bhd (TWPM).

It told Bursa Malaysia in a filing that this followed the closure of the Petaling Jaya factory of its major customer, British American Tobacco Group.

Tien Wah will now shift printing done here to its factories in Vietnam and Indonesia. The company said 237 employees would be made redundant.

News of this latest closure comes on the heels of the planned closure of two major factories in Penang.

It was reported on July 15 that hard disk maker Seagate Technology Plc and computer data storage firm Western Digital Corp (WD) planned to relocate the bulk of their operations to Thailand.

Seagate is expected to close its plants in Penang and Negri Sembilan, affecting more than 3,000 Malaysian staff. WD is expected to lay off 400 Malaysian staff and 800 foreign workers from its Penang manufacturing site.

Tien Wah told Bursa Malaysia: “Following the cessation of its major customer’s operation in Malaysia and [its] subsequent shifts in production facilities to Singapore, Korea and Indonesia, the group acknowledged that there is no requirement for duplication of a printing base in Malaysia.

“Hence, [the group] had initiated transfers of its majority production volumes from TWPM to Vietnam and Indonesia to improve its strategic position to service the customer and reduce the group’s operating cost over the longer term.

“The board is of the view that the re-organisation of its production footprint which involves the cessation of TWPM’s printing business is therefore timely.”

TWPM constitutes about 13.6% of Tien Wah’s latest audited net assets of the group as at Dec 31, 2016.

TWPM specialises in printing cigarette cartons and consumer goods packaging, cartons, labels packaging and advertising materials.

In March last year, British American Tobacco announced it would close its factory by the second half of this year following a difficult business environment. It said it would lay off 230 workers. -FMT

Is China in ‘investment’ mode or ‘loan’ mode?

It is probably true that China lends to us generously but the loan is tied to China being in charge of implementation.

COMMENT

By TK Chua

The second finance minister, when responding to CIMB Group Holdings Bhd chairman Nazir Razak’s comment to be cautious of investments from China, said China is the only major economy in “investment mode” now.

He sees no other country doing the same thing as China, implying that Malaysia has no choice but to rely on China.

I think the response by the second finance minister was too simplistic and sweeping.

For any investment, including infrastructure investment, viability is the key. We do not invest simply because loans are readily available. We do not invest simply because our revenue projection is good and we are able to pay back the loans when due, what more as Malaysia is not in the best financial position right now.

We invest when a project is viable and feasible. Feasibility studies will ensure that both costs and benefits are properly and meticulously worked out.

How did we work out that the East Coast Rail Link (ECRL) is going to cost RM55 billion? How did we work out that the potential benefits, including nebulous social benefits, are worth more than that? Did we have international tender and bidding on this project?

China may be in “investment mode” (although I am not quite sure what exactly this term means), but did China “invest” or “lend” us the money for the project? As a qualified accountant, I am sure the second finance minister knows the difference between project ownership and risk burden.

It is probably true that China lends to us generously but the loan is tied to China being in charge of implementation. Hence, what employment and multiplier effects are we talking about here when we have Chinese engineers, technicians and managers on the higher end and Bangladeshi workers at the lower end? Yes, Malaysians will probably get some “benefits” by selling sand, granite, food and drink to them.

Loans are not investments. Ultimately, loans must be repaid, regardless of the feasibility. If loans are wasted, misused or squandered in nonviable projects, creditors still expect repayment. China will expect repayment, whether or not the ECRL is a white elephant.

TK Chua is an FMT reader

Prudential, Great Eastern to sell stakes, offer IPOs to Malaysians

The stakes sale to locals, which Bank Negara wants done by the end of June 2018, is expected to raise RM8.6 billion.

KUALA LUMPUR: Overseas insurers, including Prudential Plc, are pursuing plans to sell stakes in their Malaysian units, in deals that could raise at least a combined US$2 billion (RM8.6 billion) and help them comply with foreign ownership limits, people with knowledge of the matter said.

Prudential has asked banks to pitch for a role advising on a domestic initial public offering (IPO) of its Malaysian unit, an option it is considering alongside a potential stake sale to an investor, according to the people.

Singapore’s Great Eastern Holdings Ltd is also exploring cutting its local holding to 70% through a sale or IPO, the people said, asking not to be identified because the details are private.

A sale of a 30% stake in Great Eastern Life Assurance (Malaysia) Bhd could raise about RM5 billion (US$1.2 billion), while the disposal of a similar stake in Prudential Malaysia Assurance Bhd would fetch at least RM3 billion, the people said.

Japan’s Tokio Marine Holdings Inc has appointed a bank to advise on options for cutting its stake in its local unit, which could raise around RM1 billion.

Foreign insurers have until the end of June 2018 to reduce their holdings in local firms to 70% at most, one person said.

The country’s central bank has been weighing tougher enforcement of a cap on foreign ownership as it seeks to boost local participation in the industry, people familiar with the matter said in April.

Representatives of Great Eastern and Prudential declined to comment, while a representative of Tokio Marine didn’t immediately answer emailed questions.

The central bank will continue to engage with the insurers on their plans, Bank Negara Malaysia said in a statement, declining to comment further.

Any companies that opt to pursue IPOs would join Manulife Holdings Bhd and Allianz Malaysia Bhd, the only local insurers with majority foreign ownership that are traded on the Kuala Lumpur exchange.

The deals would help extend a rebound in Malaysian first-time share sales, which have raised US$1.7 billion (RM7.3 billion) this year, up from US$255 million (RM1.1 billion) during the same period in 2016, according to data compiled by Bloomberg. -FMT