Khazanah Nasional Bhd used to own about 70% of TNB (Tenaga Nasional Bhd). Now they own about 30%. Over the years they have been selling billions of Ringgit worth of TNB shares to show a profit on their books.
I just heard from someone that TM (Telekom Malaysia) has also begun to subdivide some of its land holdings in urban areas, repackage them and sell them off to developers and such. (The person I heard it from is involved in such deals). Not surprisingly TM is 30% owned by Khazanah Nasional as well. The same virus.
Selling the family silver seems to be the ultimate fallback for the GLCs and the NEP (New Economic Policy) in general. Now with the Ringgit below US$4++ and the economy in such dire straits, more GLCs will be resorting to selling the family silver.
Just the banking industry alone is retrenching staffs by the thousands. Give or take three months used car prices will plunge - retrenched people will be downsizing their cars as well.
Just a couple of hoodwinks ago the gomen said that GDP growth would be 4.9%. Then the PM / FM / 1MDB guy said in the Budget that GDP growth will be 4.5%. They are playing with numbers.
Folks, between 4.5% and 4.9% means many hundreds and thousands of shops, offices and apartments are going to be empty. Factories will become bird's nest farms.
The more serious analysts who live in the real world are saying that our GDP growth will be around 3.3% only. THAT IS 1.2% BELOW WHAT THE GOMEN SAYS. Whole towns are going to shut down.
In either case if we nett off inflation, the real GDP growth will be even less. The gomen says (talking through their collective @$$e$) that inflation is about 3%. They are lying.
Toll rates alone (set by the gomen) have jumped 50% to 80%. The latest news is that rice subsidies have been abolished.
Even if you use 3% inflation, then nett of inflation, the real growth in the economy will be 0% to 1.5% only. We are in deep sh*t. In comparison the Philippines (with no oil resources) is going to hit 6% - 6.5% growth.
We are NOT creating new wealth (new technologies, new services, new industries). We are not opening up new areas of wealth generation (opening space in existing industries, deregulating tightly controlled sectors). And our economy does not create space for people with the talent and the skills to realise their maximum potential. That is why the country is becoming poorer. And poorer.
For a while I thought Air Asia would buck the trend and create a whole new growth area. For a while (about 10 years) they did. But here is some sad news from Reuters about Air Asia and Tony Fernandez:
AirAsia boss begins buyout talks as share fall puts loans at risk
30 October 2015
Tony talks with bankers to take Asia's No.1 budget airline private
plunge in stock price put RM859.57m loans against AA shares at risk - Reuters
Tony and Kamarudin borrowed money against 19% holding in AirAsia
from Credit Suisse and CIMB to help fund private ventures
fall in AirAsia's share price led to breach of loan collateral terms
reason why two businessmen begun talks for management buyout
loans show how future of AA tied to other investments of founders
loans to finance Queens Park Rangers and Caterham Formula One
Share-backed loans subject to market volatility
asked by lenders to provide more cash
Caterham sold, went into administration
loss-making Queens Park Rangers relegated from league
GMT Research said AirAsia used associate companies to inflate earnings
trigger sell-off, shrunk value to around US$100 million
caused Fernandes to discuss privatisation / restructuring plan
AirAsia's market value currently about US$1b
privatisation plan to allow them to pay off loans
AirAsia in talks to sell stake in leasing subsidiary
selling related businesses - half of online travel company Expedia Inc
Fernandes' Tune Group - budget hotels, insurance, mobile phone, school
AirAsia under pressure from slowing tourist flows
Dec '14 air crash - Indonesian affiliate killed 162 people
report push airline's shares to lowest levels since 2008
Reuters
- See more at: http://www.themalaysianinsider.com/malaysia/article/airasia-boss-begins-buyout-talks-as-share-fall-puts-loans-at-risk#sthash.jmAMy8Be.dpuf
My comments : In the long run all those people who depend on the controlled environment (the 'license' environment, the 'AP' environment, the monopoly environment, the 'who-you-know' environment, the 'if I cannot do it then you also cannot do it' environment) will all go broke. You will end up selling the family silver to survive.
You do not really create new wealth or generate new wealth that can last. Lets look at Air Asia. Other than MAS, they were given a huge license to do what they wanted. This was because people very close to the CPO (Chief Pirate Officer) running the country at that time were major shareholders in Air Asia.
So they were off to a flying start. They dictated whatever they wanted. And made many, many enemies. Worst of all their service really sucked.
But they made money. Of course they made money. They made very easy money.
Then a few things happened. There was a new CPO (Chief Pirate Officer) running the country. New budget carriers were licensed to fly.
Air Asia had bought all those Airbus planes and they had to find new routes for them to fly. So Air Asia went aggressively into unchartered territory ie highly open markets (Indonesia etc) without any friendly pirates to provide bully services.
Other budget carriers started cutting into the turf quite seriously and provided better services. SilkAir advertises on Astro and allows free baggage and meals as well. Not bad.
In short Air Asia's load factor went down. That air crash in Indonesia further dented the airline's reputation.
Their share price went from RM3.80 (about three years ago) to 80 sen earlier this year !! Now back up to about RM1.50.
Buoyed by highly explosive hydrogen balloons (masquerading as helium balloons) Tony and Kamaruddin went off on a tangent into football and formula one racing, in good ole England where there is no protection from anyone or anything at all. The boys were on their own.
Under their obviously poor management skills, both Queens Park Rangers and Caterham Formula One have now bitten the dust.
When you shield or protect people from real world competition you create losers, generations after generations of losers. People who drop like flies the moment the situation turns against them.
Eventually they will sell the family silver to survive. After they sell the family silver, where will they go? What will they do? I hope the ketuanan folks can read and understand this.
You cannot sit inside your syiok sendiri cocoons or tempurungs, with people who made easy money like you and really expect to be world class business people. It does not work that way - http://syedsoutsidethebox.blogspot.my/
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