RPGT, Oxbridge, Economy and National Unity

The busy speaking engagements continue, and for those interested, here are the list of upcoming talks where I would be showing up in the next couple of days ;). Venues include Seremban, Petaling Jaya, Kuala Lumpur and Penang. ;)

• Abolishing Real Property Gains Tax (RPGT): Its Impact on Malaysia's Economy
  
  I've been invited to speak by the Negeri Sembilan Chinese Assembly Hall to share my views on the above. Sharing the stage with me will be Dr Ho Kee Peng, a prominent entrepreneur and academic who will be speaking on other related developments in the Malaysian economy.
  

Date: 30 March 2007 (Fri)
Time: 8.00 pm
Venue: NS Chinese Assembly Hall, Seremban
Language: Chinese (Mandarin)

• Life & Experiences @ Oxford University
  
  This is the 2nd of the series of higher education talks organised by not-for-profit Descartes Education Counselling Centre. I'll be sharing my personal experience at the university, as well as updating the audience on the latest entry requirements and application process. I'll be sharing the stage with Allen Ng, a Bank Negara scholar who did time at Cambridge University. ;) For more information, see here.
  

Date: 31st March (Sat)
Time: 4.00 pm
Venue: DECC, 55-1 Jalan SS21/1A, Damasara Utama (Uptown), 47400 Petaling Jaya

• Dinner: Issues with the Malaysian Economy
  
  This is a 50 Years of Nation-Building Dinner event, organised by the DAP Kampung Kolam branch, Penang. I'll be speaking along side many other leaders, including YB Chow Kon Yeow, DAP Penang Chairman, YB Phee Boon Poh, Penang State Assemblyman for Sungai Puyu, YB Teng Chang Khim, Selangor State Assemblyman for Sungai Pinang, YB Violet Yong Wui Wui, Sarawak State Assemblywoman for Pending, YB Nga Kor Ming, Perak State Assemblyman for Pantai Remis as well as Ng Wei Aik, Political Secretary to DAP Secretary-General.
  

• Date: 1 April 2007 (Sunday)
  Time: 7.30 pm
  Venue: Wonderland Restaurant, Komtar, Penang.
  Language: Chinese (Mandarin)
  

For those interested in attending, you can buy dinner tickets from Wei Aik @ RM30 each. You can reach him at nweiaik(at)gmail.com. Your contributions and attendance are much welcome. ;)

• Government’s Education Policies: Are they Successful Instruments of National Development?
  
  This Young Malaysians National Unity & Development in Malaysia forum is organised by the Centre for Public Policy Studies and the Bar Council (through its National Young Lawyers' Committee). It is a full-day event, where my session will commence around 10.45 am. The other speakers in my panel include Dr Oh Ei Sun, a lecturer at Help University College and Universiti Malaysia Sabah and my favourite UM academic, Dr Azmi Sharom.
  

Other topics discussed include:

• Ethno-Religious Politics in Malaysia: Impact and Implications on Nation Building
  
  
• Forging a Young Malaysian Identity towards National Unity

Roundtable details:

Date: 3rd April 2007
Time: 8.30am - 4.00pm
Venue: Bar Council, Kuala Lumpur

So, that looks like a major round the country tour within a short 2 weeks ;). After that, I'll be busy with the by-elections campaigning in Machap, probably my maiden rally speech there, plus plenty of practice for my Mandarin as well as Malay ;). I'll also be making a trip to Kuching, Sarawak on the 21st April share views and ideas with our DAP leaders and comrades there.

Also, as I've mentioned previously, I'll do my best to start recording these talks so that I can share them here on this site.

So, if you are at any of these places, rememer to say hi! ;)

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Floods & The Environment

OK, I know I've been a little last minute with my announcements on where I'm speaking. ;) Much apologies about, will certainly try to be earlier next time round. Well, I've got one more last minute announcement, but this time it isn't really my fault, for I've just managed to get the full details yesterday ;)

I'll be speaking on the impact of the environment on the floods in Malaysia, particularly in Johor Bahru this evening ;). Yes, I'm now wearing the environmentalist hat. ;)

Topic : Flood Disaster 2006/2007
Date : 25th March 2007
Time : 8:00pm
Venue : Johor Bahru Chinese Chamber of Commerce and Industry
(No. 89A & 91A, Jalan Glasiar, Taman Tasek, 80200 Johor Bahru, Johor)

We'll be discussing the flood risk in Malaysia, which has increased alarmingly in recent decades largely due to changing physical characteristics of the hydrological system caused by human activities: continued development of already densely populated flood plains, encroachment on flood-prone areas, destruction of forests and hill slopes development.

Flood losses are high but disastrous flood events which occurred in the past as a consequence of rapid development and environmental degradation are forgotten quickly, people choosing to see only the positive benefits of a booming economy while turning a blind eye to their negative effects.

Within a climate of sustained economic boom, policy makers as well as Malaysians from all walks of life are understandably less concerned about floods than they are about the financial gains that can be reaped from a booming economy. Official solutions for flood control are largely engineering based and are ineffective to combat extensive monsoon floods.

So for readers in the south, do drop by for a visit ;)

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More Talks on the Economy

Yes, I'm certainly doing a lot of talks this days!

So for those who are still interested in hearing me speak, particularly on the economy, I've been invited by the Open Dialogue Centre for a talk tomorrow evening in Petaling Jaya. I will be speaking on comparative economic policies between Malaysia and Singapore, with a specific reference to the New Economic Policy (NEP) in our country.

The details are as follows:

Date : Friday, 23rd March 2007
Time : 8pm-11pm
Venue : Shah Village Hotel, No. 3 & 5 Lorong Sultan, 46200 Petaling Jaya

For those interested, the is part of a series of 12 economic lectures organised by the Open Dialogue Centre. This programme was made with the intention of exposing the public, particularly youth, as well as the corporate sector the myriad aspects of economy while simultaneously promoting open market, in order to empower the mass to be well-informed.

It should prove to be beneficial as we gave them first-hand knowledge from the experts and authorities on this field. This project is made with collaboration from Freidrich-Naumann Foundation of Germany, and fully supported by Malaysian Institute of Economic Research (MIER).

See you there! ;)

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Royal Address on Inequality

The Yang Di-Pertuan Agong, Sultan Mizan Zainal Abidin in his maiden address when opening the first meeting of the Fourth Session of the 11th Parliament, said the implementation of the distribution strategy must be continued so as to eliminate the income disparity among the races which is still wide. He said that “the Government must ensure the target to reduce the income rato between bumiputra and Chinese to 1:1.5 by 2010 is met. The ratio between bumiputra and Indians is to be reduced to 1:1.15 over the same period.”

I believe that income inequality, whether amongst Malaysians or between races must be reduced significantly or eliminated altogether. However, the mechanism to achieve such a result must be based on a needs-based affirmative action policy and not a race-based one, such as the New Economic Policy (NEP).

While there may be significant income inequality between bumiputras and the other ethnic groups, a race-based policy will inadvertently perpetuate inequality between the various races, and further accentuate the income inequality within the bumiputra ethnic group.

When a policy specifically targets a racial group instead of those who are specifcally in need, those who are best able to take advantage of the affirmative action policy will naturally be those with better education, better connections with the political elite as well as those with greater financial power. Hence, a policy such as the NEP will only serve to benefit parties like UMNOputras as epitomised by the Selangor state assemblyman, Datuk Zakaria Mohd Deros.

The continuation of the existing policy will also exacerbate the already widening ">income gap within the bumiputra community. As highlighted in the 9th Malaysia plan, the Bumiputra community not only have the highest income inequality in the country, the inequality has also grown by the fastest between 1999 to 2004.

If the government is serious about raising the plight of the bumiputras, the affirmative policy has to be needs-based. Only then will all the necessary benefits go to the poor bumiputeras, as well as the poor of other communities. This way, it will eliminate leakage to the already wealthy and powerful amongst bumiputras, and hence becoming more effective in raising the income levels of the poor, meeting the objectives set out by the King.

Therefore even though the King has called for redressing the ethnic income disparity between the various races in the country, it is critical for the Government to terminate its affirmative action policy based on race, such as the NEP, and focus purely on merit and needs. It is the most effective and practical way not only to raise the income of the poor bumiputras, but also the poor of other neglected communities like the Indians and Chinese.

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Feeling Good about the 'Feel Good' Economy?

The Barisan Nasional Government led by Datuk Seri Abdullah Ahmad Badawi has over the past 2 months inundated the local media and press with news of supposed economic achievements by the current administration.

The long list which has included factors such as record combined import-export trade figures, record 'approved' foreign investments, near-record stock market performance as well as GLC turnaround case studies, is meant to build up the all important 'feel-good' factor for the fast approaching General Elections.

This factor is so important that the Prime Minister has openly declared that the elections will not be within the next 2 months because he needed the feel good factor to feel even better.

The DAP believes that the Economy certainly plays a crucial role in any general elections. Hence, we have invited a panel of speakers to share with you their thoughts on the state of the Malaysian economy, which will cover a wide range of hotly debated topics such as the stock market, foreign investment, corporate governance and not least the New Economic Policy.

The panel of speakers for the forum include:

• Dr Ho Kee Peng, prominent entrepreneur and academic
• YB Lim Kit Siang, Parliamentary Opposition Leader & MP for Ipoh Timur
• Mr Lim Guan Eng, Secretary-General of DAP
• Mr Tony Pua, Economic Advisor to DAP Secretary General (yes, that's me! ;))
  

PKR Treasurer, Tan Sri Khalid Ibrahim was originally slated to speak. Unfortunately, he was not able to reschedule his return trip from overseas.

The details of the forum are as follows:

Date : 21 March 2007 (Wednesday)
Time : 7.30 pm
Venue : KL & Selangor Chinese Assembly Hall

Invite your friends and family along, and forward this post to others who are interested ;). So come, let us know if you feel the feel-good factor. And don't forget to say 'hi!'

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Invitation to Damansara Community & Service Centre Launch

Hey all, here's your official invite to the official opening of the DAP Damansara Community & Service Centre, where I will be based from next week onwards. Planning and setting up this centre and it's launch defintely took up plenty of time over the past month. It's a modest outfit but certainly we hope it'll help meet the needs of the residents of the greater Petaling Jaya vicinity.

Click image for a larger view

So come say hello, and bring your friends along! ;) See you!

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Coffee Table Talk

Hi guys, OK, some of you readers out there have been asking for economic affairs sessions to be conducted by DAP to exchange views among all of us. Well, we heard you and we are doing just that (so you better turn up! ;)).

We plan to have a weekly "Coffee Table Talk" sessions with regards to the economy and related current affair issues. This event is organised by the DAP Petaling Jaya Action Team.

The very first session is tonight, where I will be speaking and chairing the session. It's an open, casual and informal affair, so please come, and yes, bring your friends along too. ;) If the turnout is good, we'll likely hold it on a weekly or at least a fortnightly basis.

Details are as follows:

Date: 15/3/2007
Time: 8:30pm
Venue: DAP Headquarters, 24 Jalan 20/9, Taman Paramount,
46300, Petaling Jaya, Selangor.

Speaker: Sdr Tony Pua, Economic Advisor to the Secretary-General.
Moderator: Sdr Lau Weng San, Chairman of PJ Action Team.

Medium of Language: English

All are invited! See you there! ;)

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EPF Track Record

Both the Prime Minister, Datuk Seri Abdullah Badawi, who is also the Finance Minister as well as the Employee Provident Fund (EPF) CEO, Datuk Azlan Zainol have argued that they will employ banking professionals to run RHB Bank which EPF has acquired, subject to approvals.

In addition to issues relating to higher risks which have been raised earlier, EPF's decision in this case raises a few additional questions.

• Firstly, why does the EPF Board believe that they are the best judge of banking professionals to operate and manage the Bank? Wouldn't an existing banking institution, with the necessary expertise be a better judge to do so?
  
  Hence wouldn't the interest of EPF and its contributors be better served if another banking institution which has the necessary expertise and experience, has taken over the stake from Utama Banking Group (UBG)?
  
  
• Secondly, it is worth noting that the EPF Board has no proven track record to speak of, in recruiting the best candidates to operate its own subsidiaries. In fact, in its 63% owned subsidiary, Malaysia Building Society Berhad (MBSB) which is a financial institution in itself, has performed terribly in recent years.
  
  One of the key reasons for EPF’s poor investment returns are due to EPF’s involvement in questionable projects and bad loans given out by MBSB. MBSB is notorious for giving huge loans to politically-connected companies such as to the failed Perwaja Steel Bhd. In Melaka alone, such bad loans by MBSB amount to more than RM 150 million.
  
  Non-performing loans by MBSB reached a high of RM 4.45 billion in 2002 and is at RM 4.33 billion in 2003. MBSB achieved the dubious distinction of having the highest non-performing loan ratio of 62% amongst all banks in the country, against the banking average of 7.4% in 2002. MBSB lost almost RM 1 billion in profits from 1998-2002, reducing its shareholder funds of RM 1.1 billion to only RM 70 million.
  
  If EPF is unable to find the “right” banking professionals to manage an existing subsidiary which suffered such heavy losses, why does the Prime Minister and the EPF board believe that it can do any better for a much larger financial institution in RHB Bank?
  

EPF should stick to its charter to prudently manage the retirement funds of Malaysian workers utilising low risk strategies such as a diversified portfolio in equities to generate safe and reasonable returns. EPF has no business attempting to be a “business owner” which leads to re-aligned objectives and incentives as well as significantly higher risks.

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EPF Sacrificed Returns for Control?

In a press conference by Employee Provident Fund (EPF) CEO, Datuk Azlan Zainol on Friday, he was reported to have given several reasons for the acquisition of Rashid Hussain Berhad.

He said that EPF wanted to “increase exposure to a sector that has good long term prospects”. He also expects a 6% - 7% return on capital over one to two years. Beyond that, the returns could be as high as 8% to 10%. In addition, he cited that the decision was made to “protect EPF investment” rather than “let it go”.

Are these good or credible reason to take on significantly higher risks posed by the acquisition of a commercial bank?

• Firstly, as a prudent investment fund, the manner in which one should “increase exposure” to the banking sector is to make an evaluation of the various banks and invest in them according to their performance as well as the strength of their existing management. EPF should not be acquiring an entire bank, which is widely recognised as not among the leading performers, and then appoint new managers for the bank (because EPF itself has no expertise).
  
  In addition, Datuk Azlan has stated that EPF intends to dispose its current interest in other, possibly better performing banking groups. Clearly the acquisition of RHB Bank has placed EPF in the awkward position of being a owner of a bank which conflicts with its charter as an objective fund manager seeking to invest in the best performing companies.
  
  He added specifically that EPF will be disposing its equity holdings in other banks to avoid conflict of interests. This means that the decision to invest or divest is no longer a function of likely investment returns. Hence, has EPF sacrificed returns in exchange for the control of a bank?
  
  A good and prudent fund manager does not increase its exposure to a sector by betting all its eggs in one basket, in this case, RHB. The RM10 billion new investment represents more than 20% of its RM49.6 billion equity allocation based on its 2005 Annual Report. Such disproportionate amount of investment in a single stock clearly represents poor portfolio allocation and diversification.
  
  
• Secondly, it is curious how Datuk Azlan came up with his 6%-7% over one to two years, and as high as 10% thereafter. With no concrete plans presented as well as so much uncertainty over the future management and other new potential shareholders, did he pluck his estimates from thin air? Datuk Azlan also failed to mention that such aggressive returns also mean substantially higher risks for EPF which may very well result in equally substantial losses.
  
  Datuk Azlan claimed that he could not remember that EPF's prior investment in RHB Bank which averages around RM10 per share, is worth only about RM4.60 today. And at its low, was worth only RM0.50, a 95% paper loss just two years ago. At the same time, despite predicting the higher returns, he refused to give an assurance that the life savings of the people will be protected, claiming that there is “no guarantee in business”. Will Datuk Azlan be prepared to resign as the CEO of EPF if the RHB investment does not generate the “expected returns”?
  
  
• Thirdly, it is a very poor investment strategy to simply acquire the entire bank to protect its existing 31.7% stake. Such a strategy could easily backfire on EPF and its contributors. Any attempts to average down the cost of EPF's stake in the bank without an independent look at where RM10 billion will be able to generate better and less risky returns will just be a case of throwing good money after bad.

What is most baffling is EPF's argument that after the acquisition exercise, it will then seek to reduce it stake in the Bank by selling some 35% stake to 2-3 strategic investors. If these investors are crucial to improving the performance of the bank, why aren't EPF teaming up with them in advance to bid for the Bank? If EPF claims it can place out the shares of the Bank at higher prices to interested parties hence making a quick profit, why didn't these parties participate in the competitive bid for the bank? And if EPF hasn't identified the new strategic investors, isn't the Board of EPF putting the cart before the horse, placing great risks to the retirement funds of Malaysian workers?

Clearly the above questions demonstrate that the entire acquisition by EPF Board was a “buy first, think later and hope for the best” exercise. EPF should stick to its charter to prudently manage the retirement funds of Malaysian workers utilising low risk strategies such as a diversified portfolio in equities to generate safe and reasonable returns. EPF has no business attempting to be a “business owner” which leads to re-aligned objectives and incentives as well as significantly higher risks.

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Loose Screws

On the fateful day of 8th March, or International Women's Day, our Minister in-charge of the all important Visit Malaysia Year 2006, lashed out at all bloggers, and in particular, female bloggers as reported in Sinchew Daily.

The Minister of Tourism, Dato' Tenkgu Adnan Tengku Mansor lashed out that all bloggers on the Internet are liars, out of which 80% are unemployed women.

“All bloggers are liars, they cheat people using all kinds of methods. From my understanding, out of 10,000 unemployed bloggers, 8,000 are women.”

He said that bloggers spread rumours, disrupt social harmony and many bloggers are slanderous and are cheating people with their blogs.

“All bloggers are not in favour of national unity. Our country has been successful because we are very tolerant with each other, if not, there will be civil war, the Malays will kill the Chinese, the Chinese will take revenge and kill the Malays, and the Indian will kill everyone.”

He urged the rakyat not to simply trust bloggers, and gamble our future away because the achievement we gain in the 50 years of independence is not an easy task.

I don't even think my personal comments are needed on the issue. The loose screws are clear for all to see. So beyond the Court Jesters , those who always blames the rakyat and those who think we are stupid, we also have some who are just not quite "there".

And why was "Tengku" apparently so upset? Just because a female TV journalist didn't have a good experience while covering Flora Festival 2007. What a clown.

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EPF Takes On Big Risks

On Thursday, it was announced that our Employees Provident Fund was successful in acquiring Rashid Hussain Berhad, which owns RHB Bank. As a response objecting to the EPF acquisition which implies a very significant increase in the risks undertaken by the EPF board which may jeopardise the hard-earning life savings of Malaysian workers. The reasons are many, and the arguments are straightforward.

Interestingly the Prime Minister, Datuk Seri Abdullah Badawi, who is also the Finance Minister responded directly to my statement, appearing on the frontpage of the Star yesterday. His key message of assurance was that "the Employees Provident Fund was aware that it is dealing with public funds when it considered investing in the RHB banking group... Don’t tell me they are playing around with money." Judge for yourself if such an assurance is sufficient.

• No Expertise
  
  EPF has neither experience nor expertise in owning or managing a commercial bank. While the other competing offers originates from existing banking institutions seeking to enhance and optimise their current branch network to enjoy economies of scale, the EPF will enjoy no such benefit from acquiring RHB at premium prices.
  
  Both owning and managing a commercial bank are complex tasks requiring competent and experienced professionals. It wasn't too long ago in 1999, one of Malaysia's leading conglomerate, Sime Darby Bhd was left red-faced as they were forced to sell Sime Bank, which they took over a mere 4 years earlier. Sime Bank was left with nearly US$500 million of non-performing loans during the Asian financial crisis.
  
  Sime Darby's acquisition of Sime Bank, formerly known as UMBC Bank, is a clear example of the risk in owning and managing a bank without the necessary expertise and experience. Prior to disposing of the Bank in 1999, Sime Darby Bhd recorded losses of RM541 million in 1998.
  
  
• Disproportionate Amount of Risks to EPF Contributors
  
  Based on EPF's 2005 Annual Report, out of its total fund size of RM260 billion, 19.1% or RM49.6 billion was allocated to Equity investment. Hence EPF's RM9 billion RHB acquisition venture represents more than 18% of its total equity investments, without even taking into accounts its existing investment in RHB. Such disproportionate amount of investment in a single stock clearly represents poor portfolio allocation and diversification. The EPF has put at risk our workers' funds by 'betting' heavily on a single large investment.
  
  In addition, the total risk of the bank is 12.5 times its equity value based on a minimum capital-assets adequacy ratio of 8% in Malaysia. This means that in the event of a crisis, for every ringgit investment, up to RM11.50 may be required to bail out the bank and keep it afloat. Will EPF, acting as the owner of the bank, be committed to pump in additional monies from EPF to “rescue” the Bank in the event of another financial or banking crisis?
  
  The Malaysian Government has spent more than RM3.5 billion to bail out Bank Bumiputera on 3 separate occasions in 1984, 1990 and 1998. Will EPF in effect, act as a bail out fund for the bank it now owns?
  
  
• Distraction from Fund Management
  
  The acquisition of a Bank by EPF will not only change its charter and increase the risk to the fund contributors, it may also cause poorer performance in its fund management objectives. By redirecting the Fund's attention to the onerous responsibility of owning or even managing a commercial bank, fund management may inadvertently become a secondary concern for the EPF management.
  
  
• Throwing Good Money after Bad
  
  As it stands, the EPF's existing 31.7% RM2.3 billion stake in RHB is worth no more than half that amount today, even after the recent rally in RHB stock prices fuelled by the competing bids for the Bank. At its low in 2005, EPF's investment was worth only about RM115 million!
  
  Any attempts to average down the cost of EPF's stake in the bank without an independent look at where RM9 billion will be able to generate better and less risky returns will just be a case of throwing good money after bad.
  
  Is EPF telling us that RHB Bank is the only bank worth investing in, with the best prospective returns amongst all banks in Malaysia? Is RHB so attractive an investment that EPF must make an attempt to acquire all of its shares and take on the risk of ownership themselves? In addition, will owning RHB taint the Fund's independence when valuing shares of other Banks, raising potential conflict of interest issues?
  
  
• Regulatory Uncertainty
  
  Under Malaysian laws no Corporation can own more than 20% of a banking institution. RHB owns 65% RHB Capital, which in turns own RHB Bank. With EPF acquiring up to 100% of RHB, it will mean that at some point of time, it will have to divest as much as 45% of its investment in RHB Capital to other interested and approved parties.
  
  There is no guarantee that EPF will be able to secure buyers of this substantial stake higher than or at its GO prices. Any negative turn of events in our stock market may very well result in EPF suffering immediate losses if the block had to be placed out at lower than its GO prices.
  
  To a large extent, the EPF is risking a substantial portion of our funds to the whims and fancies of our stock market.
  
  
• Supported by EPF's Investment Panel 'Professionals Representatives'?
  
  Finally, it should be noted that EPF's 7 member investment panel comprises of 3 “Professional Representatives”, two of whom are Datuk Amirsham Abd Aziz, CEO of Maybank Berhad and Datuk Mohammed Nazir Abdul Razak, CEO of CIMB Bank.
  
  Can we confirm if the 2 key investment panel members are in agreement with the EPF board's decision to acquire RHB Bank? And if not, is the EPF board acting recklessly in its investment process by refusing to take heed of advice provided by CEOs of Malaysia's top two banks?

Hence on behalf of DAP, we have called for the Ministry of Finance to block the deal, which still requires its approval to protect the interests of Malaysian workers.

The returns from its existing 31.7% stake may be better if the bank is owned by another competent financial institution, than if they were to own it in its entirety themselves. EPF has absolutely no experience or expertise in managing (or owning) large corporations, much less highly complex financial institutions.

The EPF is not an “aggressive growth fund” seeking to generate 30% returns with equally daunting risks in its investment. The EPF is meant to be an income fund to generate reasonable investment returns and protect the capital of its contributors by taking minimal or at most measured risks in its investments.

We will certainly try to take this matter further.

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International Women's Day

Ah, roses, the ladies certainly loved them ;)

I was at the SS2 morning market on Thursday, International Women's Day, to distribute roses to womenfolk together with YB Teresa Kok, our MP for Seputeh as well as the DAP Petaling Jaya Action Team. Here's some photos for your viewing pleasure ;)

That's me, coping with the demand ;)

That's Lau Weng San, DAP Selangor state secretary
& political secretary to Lim Guan Eng

(From left) Weng San, Ean Yong Hian Wah (DAP Selangor State Chairman),
yours truly, YB Teresa Kok, Thomas Goh and Lim Ai San

In addition, I also issued a statement calling on the government to take immediate steps to make the streets of Malaysia, particularly in urban centres in Malaysia like Petaling Jaya.

The recent crime statistics makes for some ugly reading. The Royal Police Commission report had stated that violent crime grew from 16,919 cases in 1997 to 21,859 in 2004. That's an increase of 29.2% over the 8 years.

However, as recently announced, the past 3 years alone saw violent crime soaring by an unbelievable 93.7% from 21,859 cases in 2003 to 42,343 cases in 2006. The number of women raped increased from 4 to 6.7 victims daily from 2003 to 2006. And that is only the reported cases, as we are fully aware that rape cases are significantly under-reported in this country.

Women should certainly be able to walk our streets without fears for the safety at any time of the day. The ratio of 1 policeman for every 5,500 citizens in PJ for example, is far too high compared to recommended international standards of 1 to 250 citizens. It's time to sit up and take notice.

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Hitting Women

The Menteri Besar of Kelantan, and PAS spiritual leader, Nik Abdul Aziz Nik Mat made an off the cuff comment with regards to the use of force by the Police yesterday. Essentially he said that the public cannot blame the police if they are forced to resort to such measures. While his comment leaves room for ethical debate, his subtantiation for his argument however, leaves a bad taste in the mouth (to say the least).

He argued that "Islam itself permits a father to hit a child, a husband to hit a wife in certain situations. This is practiced throughout the world."

Umm... excuse me, Tok Guru, which "world" are you talking about? The medieval world of the 13th century?

There is absolutely no reason for a husband to hit a wife, or a man to hit a woman under any circumstances. There is no situation I can think of in which violence is necessary or even justified.

A relationship between a husband and wife is built on trust, mutual respect and love. This relationship cannot be strengthened through fear and violence. We are not even talking about human rights here. The simple fact is a marital relationship breaks down with a physically abusive spouse.

No man or woman is without shortcomings. In a loving marital relationship, we learn to live and work around these shortcomings to strengthen our understanding of our partners better. In matters of dispute, a gentle discussion focused on the objective of resolving the issue at hand should be carried out instead. Hitting the wife does not resolve the dispute, it merely postpones and snowballs the problem.

And even when the disagreement cannot be resolved to the total satisfaction of all parties, there should be tolerance and forgiveness in the hearts of both parties.

I hope that Tok Guru will clarify his statement to protect the interest of women, and not have his words used as by unscrupulous men to abuse their wives.

Today is International Womens' Day to celebrate and promote the interest of womenfolk young and old, irrespective of race or religion. Hitting women is a big no no.

Now, hitting on women? That's a different matter altogether ;)

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"Excessive Profits"

We have always been griping that the Government compensates the toll concessionaires too much, or the toll rates are set at unreasonably high levels. But no one is really in the know as to how much these toll concessionaires make in terms of profits, not exactly anyway, even though many of these companies are listed entities.

So when I got my hands on a copy of the Lebuhraya Damansara-Puchong (LDP) concessionaire, Litrak's stock exchange listing prospectus issued in November 1996, I (figuratively) fell off my chair.

Here's a little background about listing prospectuses. They are issued firstly not only as information with regards to the prospective company, but also a document to protect investors from unscrupulous businessmen. That means that all information contained in the prospectus must be fair and true, with all statements and forward projections verified and validated by lawyers, accountants, market researchers as well as regulators. Non-compliance or provision of information found to misleading or untrue will land the various parties, including the directors of the company itself into hot soup.

Within the prospectus itself, there is no other piece of information more important than earnings projections, for it is the key benchmark by which investors can make reasonable evaluation on the worth of the company. Companies seeking listings without earnings certainty, need not make such forecasts or projections. Hence, when Litrak made their 30 year earnings projection based on their LDP concession agreement, you can be certain that it was almost as good as gold.

Well, lets get to the juicy details:

Cost of building LDP: RM1.327 billion

The total capital cost of construction of the Highway is currently estimated at RM1.327 billion inclusive of capitalised interest of RM142.3 million.

Projected Profit after Tax (PAT) over 30 year concession period: RM18.865 billion

Projected PAT 1997-2006: RM1.222 billion
Projected PAT 2007-2015: RM3.826 billion
Projected PAT 2016-2029: RM13.817 billion

Yes, you've read it right. Over a short period of 30 years, Litrak is practically guarateed of RM18.7 billion profits, relative to an initial cost of RM1.3 billion. That's more than 14.2 times return on capital. The LDP concession agreement signed by our elected Barisan Nasional government virtually guaranteed “excessive profits at the public's expense”.

Even if the Government had funded the construction of LDP by issuing generous high yielding treasury bonds at 5% rate, the overall cost of construction taking into account interests payable would only have amounted to no more than RM5.75 billion.

More than RM10 billion of our hard-earned tax payers' monies are literally siphoned off for the benefit of the few politically connected. There was no open or competitive tenders made for the concession rights..

And this is only for a single highway project. Can you imagine the cumulative impact of the tens of highway concessions in this country? Is it "excessive (guaranteed) profits"? You decide.

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Credibility Gap II

I've released a media statement last Thursday, essentially blaming the Prime Minister, Datuk Seri Abdullah Ahmad Badawi, not for the fall in the stock market, but for causing thousands of retail investors to be 'burnt' during the Chinese New Year period. You can check out my statement here, or as reported in Malaysiakini here or Oriental Daily here.

The Prime Minister, Datuk Seri Abdullah Ahmad Badawi made a bold prediction that the Kuala Lumpur Composite Index (KLCI) might hit record highs of 1,350 points and strongly encouraged Malaysian retail investors to “push hard” to achieve it on the 2nd day of the Chinese New Year.

...with the confidence and encouragement publicly expressed by the Prime Minister himself, the “retail participation was back in earnest” from the first day of trading after the Chinese New Year break.

...the KLCI rose 1.3 percent to 1,278.22 points on a record high volume of 4.7 billion shares traded. The volume was [a whopping] 32.8% higher than the previous high of 3.54 billion shares recorded only the week before. The transaction volume hit another record of 4.78 billion shares on Thursday.

The Star reported that “penny stocks and low-priced warrants saw brisk trading – an indication of retail participation – with the top 10 most active counters clocking a combined volume of more than one billion shares”.

The rest, we know is history. Within 3 days, retail investors who participated in earnest, particularly those with margin accounts or those speculating on contra gains, were forced to sell their stocks with huge losses - contributing to a RM100 billion loss in market capitalisation last week.

What was however more interesting is the continued attempts by the Prime Minister to shore up confidence in the market, and his continued failure to do so.

After 2 days of record-breaking fall for the KLCI of more than 6% on Tuesday and Wednesday last week, government officials rushed to make statements to "calm" investor fears with regards to the stock market.

"Malaysia’s economy remains robust and there is no cause for anyone to worry about the dip in the KL Composite Index," said Second Finance Minister Tan Sri Nor Mohamed Yakcob on Wednesday. As a result, the market responded by dropping another 16.23 points (1.37%) on Thursday.

And on Thursday, the Prime Minister himself asked Malaysians to "have faith in the KLSE".

Malaysians should have confidence and be prepared to invest in the KLSE to attract bigger foreign participation.

"When Malaysians show their confidence and their preparedness to invest in their own stock market or in their own country, this will give a signal to investors to come in bigger numbers to Malaysia."

I won't dwell into such skewed rationale for investing in our stock market here. What is of note is that the investors responded to his statement with continued selling, causing the KLCI to drop by another 17.05 points (1.46%) on Friday.

This morning as at 9.25am, the KLCI is down 29.7 points.

There is hence a strong case for our Prime Minister to stop giving comments on the Malaysian stock market for the more he talks about it, the worse it appears to be.

To quote OSK Securities research chief Kenny Yee, “our only concern is that the sharp fall would have an effect on retail investors. Some of them entered the market just last week and it is not good to be hit like this.”

In Pak Lah's eagerness to convince the electorate that the economy is extremely rosy in a pre-election year, he has gone overboard causing untold damage to the average investors who are already hit by significantly higher cost of living such as up to 60% rise in toll rates.

Is this a case of the Prime Minister losing all credibility with the retail investors? Did he almost single-handed caused these investors to lose total confidence in the local stock market?

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Credibility Gap I

In Datuk Seri Najib Abdul Razak's keynote address at the Jeddah Economic Forum (JEF 2007) on 27th February, Najib outlined the lessons Malaysia has gained from the privatisation exercises since the 1980s.

Judge for yourself if our Deputy Prime Minister, as well as the Barisan Nasional government has a 'credibility gap' like Mr Bush on the left.

• Firstly, whenever and wherever possible, Government should allow for competitive bidding for privatised assets or concessions and ensure that the process is transparent and fair.
  
  Even when there is a national agenda of preferential treatment in favour of disadvantaged economic groups, there must be enough competition within this group to ensure that only those with the necessary skills, capabilities and resources are selected, he added.
  
  Sufficient safeguards must also be in place to ensure that when there is default or non-compliance, the Government can reclaim privatised assets and concessions without disadvantaging the taxpayer.
  
  
• Secondly, avoid a "first come first serve" approach. The deputy prime minister admitted that “our experience has also shown that by providing exclusivity to one party, this approach has the real potential to escalate the eventual costs and burden to consumers and the taxpayer.”
  
  
• Thirdly, make sure the Government and private sector are on equal footing at the negotiation table, to protect taxpayers' and national interests.
  
  
• Fourthly, be mindful of public concerns over tariff rates and tariff increases. He said that “in designing contracts, we must avoid in-built automatic escalation of tariffs that are not linked to performance and quality of services provided.”
  
  
• Fifthly, he said that the “onus is on Government to ensure on one hand, the viability and sustainability of projects, and on the other hand, prevent the private sector from making excessive profits at the public's expense.”

The speech writer should certainly deserve a pay-rise. First or all, its an admission that our Malaysian privatisation policy since the 1980s is a failure in many aspects. It is certainly the first time I've ever heard a Malaysian governing party leader expressing such an opinion.

But secondly and more incredulously, it is amazing how our Deputy Prime Minister is able to deliver the above speech to an international audience with a straight face. Out of the five points raised, I'm certainly hard-pressed to find any examples of Pak Lah's administration practising what it apparently preaches. Check out "Open Tenders", for example.

It is plausibly forgivable if the Datuk Seri Najib Abdul Razak is pursuing the current misguided economic policies for Malaysia out of sheer ignorance. But as the above statement indicates, he, as a leader of this country, is knowingly pursuing policies antithetical to good governance, at the expense of ordinary Malaysians.

Is this the future Prime Minister of Malaysia? We should be worried.

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Hanoi, Here We Come!

Okay, I must really apologise to loyal readers out there for I really have been slacking in blogging for the past month or so. But its certainly not because I've lost interest in blogging. However, as you can tell from the recent announcements, I have been extremely tied up with various activities from attending press conferences, to preparing statements to giving interviews, to attending to the various needs of the political party I have just joined ;).

Last weeked was also a period of attending various open houses, as well as holding two of my own. What's more, I'm in the midst of renovating my community service centre, the counselling centre as well as a tuition centre, which is scheduled to be launched on the 18th March - all are welcome, and more details will follow. So for a first time in a fairly long time, I'm consistently lacking my much needed beauty sleep! ;)

Well, I'm at the KL LCCT at the moment awaiting my first visit to Hanoi, courtesy of super cheap tickets from Air Asia. Hopefully I'll get to catch my breath there during this short trip, and return recharged for more excitement next week.

There's really plenty plenty to blog about, and I'll certainly try to catch up on them if I can get proper access in Vietnam, and if the missus allow me the indulgence! ;) Will see if I get to shoot some photos worth putting up here as well.

Ciao! ;)

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